NOT OF THIS EARTH: THE EXTRATERRESTRIAL NATURE OF STATUTORY PROPERTY IN THE 21 ST CENTURY

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1 51 NOT OF THIS EARTH: THE EXTRATERRESTRIAL NATURE OF STATUTORY PROPERTY IN THE 21 ST CENTURY Mathew Storey The paper considers the characterization of natural resource titles through focussing upon the objects of such characterization. Historically, two objects are suggested: the ability to create interests in rem; and, protection against arbitrary deprivation of property. The paper suggests that concentration on these issues has clouded accurate characterization of natural resource titles. This theme is developed by exploring a taxonomy of statutory titles and examining how the law has treated various forms of statutory right with regard to the two identified issues. The latter section of the paper then considers some common forms of natural resource title in light of this taxonomy. The paper concludes by querying whether regard to notions such as known to the general law and radical title of the Crown are an apt basis for managing property in contemporary society. 1. INTRODUCTION Characterization of natural resource titles in Australia has been described as a vexed issue. 1 This conclusion would be hard to dispute. However the basis for the interest in the topic of characterization is easier to identify. Essentially characterization has been relevant to two issues. First, does a natural resource title constitute property the acquisition of which gives rise to a requirement for just terms compensation pursuant to s 51(xxxi) of the Constitution? 2 Second, is a natural resource title proprietary in nature such that an interest in the title can be asserted as a right in rem. While these two issues may be quite distinct, common to both of them is the fact that if a natural resource title is characterised as an interest in land it will almost as a matter of course be both compensable and an interest in rem. This fact has perhaps tended to cloud the real purpose of inquiry as to the characterization of a natural resource title (which generally has been the two issues identified above). When considering characterization it must be remembered that the acquisition of all property is compensable (provided it is in fact acquired) and rights in rem can exist in any property be it realty, personalty or other forms of property. However, this paper is not intended to be a further contribution to the is an exploration title an interest in land debate. Rather, the paper suggests that the inevitable focus on interest in land as a route to compensation for acquisition and as a basis for the existence of rights in rem has distorted consideration of the nature of resource titles. The central contention of the paper is that characterization of a resource title should stem from an assessment of the attributes of the interest in question and not from a comparison of these attributes to an interest known to the general law. 1 2 BEc, LLB (Hons) (CDU), GDLP (ANU), LLM (Macq). Senior Solicitor NT Department of Justice and Adjunct Lecturer in Law, Charles Darwin University School of Law and Business. The views expressed are entirely those of the author and do not necessarily reflect those of the NT Department of Justice. The article was originally prepared as part of the course requirements of the University of Melbourne Law School subject Petroleum Law. The author would like to thank Professor Michael Crommelin for his useful comments on an earlier draft of the article. M Crommelin, The Legal Character of Resource Titles (1998) 17 AMPLJ 57. Or equivalent just terms compensation provisions such as s 50 of the Northern Territory (Self Government) Act 1978.

2 52 Articles (2006) 25 ARELJ An almost compulsory starting point in a discussion such as this is the following oft-quoted passage from the judgment of Mason CJ, Deane and Gaudron JJ in Georgiadis v Australian and Overseas Telecommunications Corporation: 3 Acquisition in s 51 (xxxi) extends to the extinguishment of a vested cause of action at least where the extinguishment results in a benefit or financial gain (which of course includes liability being brought to an end without payment of other satisfaction) and the cause of action is one that arises under the general law. The position may be different in a case involving the extinguishment or modification of a right that has no existence apart from statute. That is because prima facie at least and in the absence of a recognised legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course. A law which effected the modification or extinguishment of that kind would not have the character of a law with respect to the acquisition of property within s 51 (xxxi) of the Constitution. The foregoing passage from Georgiadis illustrates the two key points that will be explored below. First (at least in a s 51 (xxxi) context) property known to the general law is privileged and that this privileging clouds analysis. Second, an interest arising from statute does not have to be an estate or interest in land to be property. In exploring these points the balance of this paper is divided into three sections. The first (and major) section of the paper (after this introduction) suggests the existence of a (hierarchical) taxonomy of statutory property and considers the juridical treatment (largely in the context of s 51(xxxi) ) of each class so identified. The next section of the paper assesses various contemporary statutory resource tiles against the taxonomy so identified. This process takes place particularly against the backdrop of recent native title cases such as Wik Peoples v State of Queensland 4 and Western Australia v Ward 5 which provide contemporary evaluation of the notion of property arising under the general law as discussed in Georgiadis. The paper concludes by suggesting that the approach, illustrated by Georgiadis, of ranking titles according to their perceived familiarity to the species of property known to the general law is less than desirable in the context of a contemporary technological society. 2. THE TAXONOMY 2.1 Definitions Before commencing to suggest a taxonomy of statutory property it is worthwhile to examine some definitions. To commence with property. A common starting point in this regard is National Provincial Bank v Ainsworth 6 where Lord Wilberforce stated: (1994) 179 CLR 297 ( Georgiadis ). at (Footnote omitted, emphasis provided in the citation contained in Commonwealth v WMC Resources Limited (1998) 194 CLR 1 ( WMC ) per Brennan CJ, 16, [15]. (1996) 187 CLR 1 ( Wik ). Western Australia v Ward (2002) 76 ALJR 1098 ( Ward ). [1965] AC 1175 at pp ( Ainsworth ).

3 (2006) 25 ARELJ Not of this Earth: The Extraterrestrial Nature of Statutory Property 53 Before a right or an interest can be admitted into the category of property, or a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties and have some degree of permanence and stability. In a similar, but not identical, vein Blackburn J in Millirpum v Nabalco, 7 focussing more specifically on land, opined: I think that property in its many forms generally implies the right to use and enjoy, the right to exclude others and the right to alienate. I do not say that all these rights must coexist before there can be a proprietary interest or deny that each of them may be subject to qualifications. Thus, from these two frequently cited cases, six potential attributes of property are suggested. Property ideally is: definable; identifiable; permanent (to some degree); connotes a right to use and enjoy; connotes a right to exclude; and is alienable. Obviously this check list is not comprehensive. 8 Other attributes can be legitimately suggested and, as noted by Blackburn J, there may well need for flexibility in the application of these attributes although it would be hard to imagine a set of rights that contained the above attributes and was not property. To move from the noun to the adjective, it is not proposed to define statutory, but merely to clarify in what context it is employed. To this end it will be recalled that as a result of Australian colonial constitutional history the grant of an interest in land may only be pursuant to authority derived from statute. 9 This is not to say however that all interests in land are statutory interests. Crown lands legislation may provide authority for the grant of, for example, a common law fee simple interest. The legislative basis for the authority to grant the interest does not make the interest itself a statutory one. This point aside, probably the majority of interests in land are in fact statutory. This phenomenon arises as a result of the prevalence of Torrens System titles throughout Australia. For, as Barwick CJ famously reminded us, Torrens System title schemes are not a system of registration of title but a system of title by registration. 10 That is to say the title itself (as opposed to the authority to grant it) exists by virtue of the statute, absent satisfaction of the relevant statutory requirements, there is no title. Of course one notable feature of a Torrens System is that the statutory (legal) title can co-exist with a general law (equitable) title (1971) 17 FLR 141, 269. Fisher, who also considers the notion of statutory property in a somewhat different context, suggests nine attributes of property: definition; identification; assumption; permanence; stability; transferability; value; protection; and, lastly exclusivity as fundamental to the concept itself : DE Fisher Rights of property in water: confusion or clarity (2004) 21 EPLJ 200, 211. Cudgen Rutile (No 2) v Chalk (1975) 49 ALJR 22, 24. Breskvar v Wall (1971) 126 CLR 376 (Breskvar v Wall) per Barwick CJ, 387. Barry v Heider (1914) 19 CLR 197.

4 54 Articles (2006) 25 ARELJ 2.2 The classes Armed with these definitions let us consider the classes of statutory property identified in the case law which is described below. Broadly speaking, the cases examined appear to suggest there to be five such classes of which only the first three appear to satisfy a description of property and the second and third of which can at times be difficult to distinguish. The suggested classes are: Statutory replication of a common law title Defeasible statutory replication of a common law title Statutory property bearing no common law parallel Statutory licence A public right created by statute Statutory replication of a common law title The most obvious example of this suggested class of statutory property is that already discussed being the Torrens freehold. If case authority be needed to illustrate the class, then Breskvar v Wall serves well. Clearly Torrens freehold displays all six characteristics of property described earlier and in addition, also as discussed above, is property derived from statute. However, from the cases, this class of property would appear to extend further than the brightline of Torrens freehold. An example of this is found in Newcrest Mining (WA) Ltd v The Commonwealth. 12 Newcrest involved the purported acquisition of rights under mineral leases granted pursuant to the Mining Ordinance 1939 (NT) and renewed under the Mining Act 1980 (NT) 13 by virtue of the operation of Commonwealth conservation legislation prohibiting mining in the area the subject of the leases. Most relevantly for the current discussion, the judgment of Gummow J 14 recites authority on the nature of a mineral lease at common law. 15 Although never explicitly describing the Northern Territory statutory mining lease as a common law mining lease, at his Honour proceeds to distinguish the acquisition affected by the Commonwealth legislation from various precedents based variously on the nature of the acquisition and the nature of the property acquired. Thus the Newcrest acquisition is distinguished from: that considered in Health Insurance Commission v Pecverill 16 where what was in issue were rights derived purely from statute and of their nature inherently susceptible to the variation or extinguishment which had come to pass. 17 a statutory privilege under a licensing system such as that considered in such decisions as Minister for Primary Industry and Energy v Davey 18 and Bienke v Minister for Primary Industries and Energy Notably for the discussion below in relation to the third class of property, one reason that the Mineral Lease was so distinguished was that it involved the use of statute to carve out interests from the particular species of ownership [ radical title in the ( ) 190 CLR 513 ( Newcrest ). Hereinafter Mining Act At Gowan v Christie (1873) LR 2 Sc &Div 273 at 284 (Gowan), Wade v New South Wales Rutile Mining Company Pty Ltd (1969) 121 CLR 177 (Wade) at 193, Commissioner of Stamp Duties (NSW) v Henry (1964) 114 CLR 322, 330. (1994) 179 CLR 226. Newcrest at 634. (1993) 47 FCR 151 ( Davey ). (1996) 63 FCR 567 ( Bienke ). Newcrest at 635.

5 (2006) 25 ARELJ Not of this Earth: The Extraterrestrial Nature of Statutory Property 55 sense known to the common law ] enjoyed by the Commonwealth and after self-government by the Territory. 21 a case where there was merely an impairment of the bundle of rights constituting the property of Newcrest [such as] found in Waterhouse v Minister for the Arts and Territories. 22 The distinction here seemed to be a question of degree, in Waterhouse the proprietary right that was impaired was the right to export a painting. The other rights associated with ownership of the chattel were left intact. On the facts of Newcrest the company was denied the right to mine in under a 1000m from the surface but otherwise its rights were left intact. His Honour held though that the prohibition had the effect as a legal and practical matter, of denying to Newcrest the exercise of its rights under the mining tenements. 23 Thus, more by way of implication and deduction then express assertion Newcrest would appear as an example of the first postulated class. The final example of the first class is of course Georgiadis; the quotation from which commenced the current discussion. That passage, while reinforcing the notion of property interests known to the general law, also illustrates that such interests need not necessarily be interests in land. The chose in action in Georgiadis may well be property recognised by the common law but it owes nothing to the Crown s radical title Defeasible statutory replication of a common law title The clearest illustration of this class is found in the Full Federal Court decision of Bienke and that decision s reference to the earlier High Court decision of Harper v Minister for Sea Fisheries. 24 The following passage is from the joint judgment of the Full Court: 25 Legislation which prohibits the public from exercising a common law right so as to prevent uncontrolled exploitation of a resource and confers statutory rights on licensees to exploit the resource to a limited extent, might in one sense be regarded as creating a right analogous to a profit a prendre: Harper at 355. However the right is not a common law right but rather a new species of statutory entitlement, the nature and extent of which depends entirely upon the terms of the legislation. This appears from the judgment of Mason CJ Deane and Gaudron JJ in Harper at 325 The right of commercial exploitation of a public resource for personal profit has become a privilege confined to those who hold commercial licences. This privilege can be compared to a profit a prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving a limited public natural resource Thus the fact that the holder of a boat licence, on one view, might have a privilege comparable to a profit a prendre does not mean that he or she has an entitlement based on antecedent proprietary rights recognised by the general law. It also does not mean that the licence is incapable of modification or extinguishment without constituting an acquisition of property if that course is permitted by its terms Newcrest at 635. (1993) 43 FCR 175 ( Waterhouse ). Newcrest at 635. (1989) 168 CLR 314 ( Harper ). Black CJ, Davies and Sackville JJ, 585.

6 56 Articles (2006) 25 ARELJ There would appear to be no issue as to the proprietary nature of the right represented by this class. Although not addressed in the reproduced passage, the fishery right in question displayed (to a greater or lesser degree) all six of the proprietary characteristics identified earlier. 26 The essence of this class of statutory property then would appear threefold. First, the form of the property replicates a known common law interest (in this case a profit, but there is no suggestion in the cited passage of limitation of the principle to profits). Second, the subject matter of the right created by the proprietary interest must be something unknown to the common law (an exclusive fishery in tidal waters). Third, the statute establishing the regime would appear to need to contemplate an ongoing regulatory control over the exercise of the right Statutory property bearing no common law parallel This class is best illustrated by the WMC example. WMC involved the cancellation of Exploration Permits (EP) under the Petroleum (Submerged Lands) Act 1967 (Cth) (PSL Act). An EP while bestowing a right to the grant of a Production Licence bestows only the most limited right to petroleum itself. 27 A similar (onshore) mineral interest (a prospecting area ) has been held to be a bare licence. 28 Thus, the EP in question in WMC would struggle to be recognised as property at general law (although this is not to suggest an EP does not display most (in fact all) of the six proprietary attributes already identified). The following passage from Gummow J illustrates that it was not the proprietary nature of the EP that was problematic nor, (by omission from discussion) its novelty. Rather his Honour focussed upon its defeasibility: [194] Further, any proprietary rights which were enjoyed by WMC by reason of the interest it acquired in the Permit in 1984 were inherently unstable. By reason of this nature of the property concerned there could be no acquisition within the meaning of s 51(xxxi). [195] To accept this proposition is not to assert that the defeasible character of the statutory rights in question denies them the attribute of property in the traditional sense of the general law. The point of present significance is that in some circumstances, of which the statutory rights in this case are an instance, the nature of the property may be such that its defeasance or abrogation does not occasion any acquisition in the constitutional sense. [196] The present case has an affinity to, but is not on all fours with, those cases involving gratuitous payments, whether as pensions or otherwise, made by the Executive Government under statutory authority. It has been said that the rights to receive such payments are the creation of the legislature and are always liable to alteration or abolition by later legislation. [197] Rather, the flexible statutory schemes considered in [Davey] and [Bienke] are more directly in point. In the present case, it was apparent from the terms of the legislation as it stood when the Permit was granted in 1977 that the Permit was inherently susceptible to variation in accordance with amendments which might be made to the statute from time to time See Davey at pp The matter is briefly considered by Gummow J in WMC at 64 (footnote 203). Bowen v Stratigraphic Explorations Pty Ltd [1971] WAR 119 (Bowen). WMC per Gummow J, (footnotes omitted).

7 (2006) 25 ARELJ Not of this Earth: The Extraterrestrial Nature of Statutory Property 57 The passage must raise some question as to the validity of distinction between the previous (second) class and this class. The distinction has earlier been noted as problematic. Quite plausibly both should be considered as one class the defining characteristic of which is the defeasible nature of the statutory right. However, given the significance attached to the notion of an interest known to the general law the distinction has utility. This continued utility is illustrated by the judgment of Brennan CJ in WMC as follows: It is erroneous to regard the PSL Act as the off-shore equivalent of those provisions which, in Australia, authorise the Crown to alienate interests in the waste lands of the Crown (provisions which I shall call Land Acts ). If it were the equivalent of Land Acts, it would be arguable that the extinguishing of a permittee's proprietary rights relieves the Commonwealth of a reciprocal burden on its title to land within the permit area and thus constitutes an acquisition of property. The Land Acts assume the existence of the Crown's radical title to land lying above the low water mark, a title which is sufficient to support the alienation of interests in that land and to found the Crown's full beneficial title to that land when there are no other interests or when other interests have been extinguished or are exhausted. In Mabo v Queensland [No 2] 30 I examined the nature of that radical title and it is unnecessary now to repeat it. It is sufficient to note that the extinguishing of an interest in land above the low water mark necessarily results in the enhancement of the title which was subject to the interest extinguished. The position in relation to interests in or over the continental shelf is quite different. The crucial point to note in regard to this passage is that the relevance of whether or not property constitutes an interest in land lies in the fact that if it is so then its acquisition will enhance the radical title of the Crown (and thus constitutes an acquisition by the Commonwealth). Other than this though, whether or not the statutory property is an interest in land is completely irrelevant to whether it is property. The same conclusion can be drawn from the decision of Gummow J in Newcrest discussed above. It is the enhancement of the Crown s radical title that leads to acquisition not the fact of the radical title that leads to property. The final case to be considered in respect of this class is Australian Tape Manufacturer Association Ltd v The Commonwealth. 31 At issue here were amendments to the Copyright Act 1968 (Cth) that created a regime whereby the private recording by the public of copyright material ceased to be an infringement of copyright and copyright owners were paid a royalty from the sale of blank tapes. 32 The Court divided on the issue of whether the royalty was in fact a tax 33 however there was unanimity on the issue of whether there had been an acquisition of property. The view of the Court in this regard is best summarised from the following passage from the decision of Dawson and Toohey JJ: Copyright consists of the exclusive right to do all or a number of acts with respect to the subject-matter of the copyright. For present purposes the most important is the right to make a reproduction or a copy. Copyright is capable of ownership and is designated by (1992) 175 CLR 1. (1993) 176 CLR 480 ( Australian Tape ). The amendments were contained in Part Vc of the Copyright Act which was inserted by the Copyright Amendment Act 1989 (Cth.) (the Amendment Act). The matter was ultimately decided on the basis that the royalty was in fact a tax and that therefore the Amendment Act offended s 55 of the Constitution. Mason CJ, Brennan, Deane and Gaudron JJ finding that it was. Dawson, Toohey and McHugh JJ that it was in fact a royalty.

8 58 Articles (2006) 25 ARELJ the Act as personal property which is transmissible by assignment, by will and by devolution by operation of law. There can be no doubt that copyright constitutes property within the scope of s 51 (xxxi) of the Section 135ZZM(1) [inserted by the Amendment Act] provides that copyright is not infringed by the copying of a sound recording on to a blank tape for private and domestic use. The effect of that section is to diminish the exclusive rights conferred elsewhere in the Act by way of copyright but it does not result in the acquisition of property by any person. All that the section does is to confer a freedom generally to do something which previously constituted an infringement of another's proprietary right. Section 135ZZM(1) confers nothing upon any person which may be described as being of a proprietary nature. If the immunity which the section confers can correctly be described as a right, it is a right which is applicable to all but arises only on the occasions upon which copying takes place. It is not a right which is of a permanent character or capable of being assigned to third parties, those being usual characteristics of a right of property. 34 Copyright is explicitly property (though not an interest in land), created by statute and of a form unknown to the general law. More significantly though the legislative scheme by which it was created is not suggestive of a flexible statutory scheme in the nature of Bienke. The content of the property rights were fixed and permanent, the only flexibility arose through an express legislative amendment to those rights. The weakness in copyright though arises because the diminution of the rights of the owner did not lead to the creation of property in another. A legitimate analogy is that if a public highway is compulsorily opened over Blackacre there has been no acquisition of the rights of the owner of the fee because the rights of the public to cross and recross the highway are not proprietary in nature. Of course this is not the case 35. The implication then is that the weakness in copyright is its novelty and its statutory origin Statutory Licence In WMC Gummow J refers to the repeated notion that a mere licence does not create any estate or interest in the property to which it relates and that it only makes an act lawful which without it would be unlawful. 36 His Honour also cites R v Toohey Ex parte Meneling Station Pty Ltd. 37 Meneling is particularly useful in the current context because it considers whether a statutory grazing licence under the Crown Lands Act 1931 (NT) constituted an estate or interest in land for the purposes of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth.). Mason J, making reference to already quoted passage from Ainsworth, determines that the grazing licence was not an estate or interest because it did not satisfy the description of property as it was terminable on three months notice being given by the Minister and because it was not assignable Australian Tape, (footnotes omitted). The majority determine to similar effect and with specific endorsement of the above views at 499. It is accepted that this arises because of the notion that the surface stratum of a public highway vests in the Crown, however, such vesting is in reality a vehicle upon which to found the public right. WMC at 71 [189] citing Banks v Transport Regulation Board (Vict) (1968) 119 CLR 222 and Thomas v Sorrell (1673) Vaugh 330, 351. (1982) 158 CLR 327 (Meneling) with particular reference to 352. Meneling,

9 (2006) 25 ARELJ Not of this Earth: The Extraterrestrial Nature of Statutory Property 59 Wilson J in reaching the same conclusion on the same basis 39 comments in the process: The right which is under consideration here is a statutory creation. It is more than a mere licence. The answer to the problem must be found in the view taken of the totality of legal rights conferred by the statute set against the question, not whether a grazing licence confers a right corresponding to a common law category of profit a prendre but whether it is an estate or interest in land within the meaning of the Act. I find the resolution of the issue more than ordinarily difficult. On the one hand, the licence confers a right on the licensee to graze a specified number of a type of stock on the land and this necessarily implies a right to remove certain of the natural produce of the land. The fact that it does not confer exclusive right to possession, essential as that is to distinguish a tenancy from a licence is not essential in the case of a licence of this kind. 40 For Mason J then the absence of the indicia of property denied the licence the character of property and thus by definition it could not constitute an estate or interest in land which is a subset of the broader class of property. Wilson J though would appear more sympathetic to the notion that the license may be property but absent the key indicia could not constitute a more select class of estates or interests in land. This is despite the recognised connection between the licence and the land. However, Wilson J even accepting the licence as property would not necessarily accept it as property which could be acquired for the purposes of s 51(xxxi) nor of course would he accept that assignment could give rise to interests in rem Public Right The final class to be considered is what will be termed public right. The example of this right has already been provided in Tape Manufacturers. It will be recalled that Dawson and Toohey JJ commented Section 135ZZM(1) confers nothing upon any person which may be described as being of a proprietary nature It is not a right which is of a permanent character or capable of being assigned to third parties, those being usual characteristics of a right of property. 41 The absence of permanence and assignability was the same basis upon which Mason J dismissed the grazing licence as property. The distinction between this and the previous class it is suggested is that the statutory licence requires specific grant to an individual to be enlivened (the licensee). A right such as that bestowed by s 135ZZM(1) flowed to all without need for grant. As such a right is not property it is neither compensable nor able to support rights in rem. Having thus suggested some classes of statutory property and considered how the issues at the core of this paper are addressed in the context of those classes, the next step is to consider the allocation of some common natural resource title against these classes. For the sake of brevity three titles will be considered a mineral lease a mineral exploration licence and a pastoral lease. 3. MERE BUNDLES OF STATUTORY RIGHTS 3.1 Wik Wik is renowned for having fundamentally altered the manner in which a pastoral lease granted under Crown lands legislation was construed. Brennnan CJ stolidly maintained that while the Meneling, Meneling, 352. Australian Tape, 528.

10 60 Articles (2006) 25 ARELJ construction of the nature of the interest granted under Crown lands legislation was a question of statutory construction, where the statute used technical legal terms such as lease, the ordinary principles of statutory construction suggest that is exactly what was meant. 42 As his Honour goes on to say of the alternate construction: To regard interests derived from the Crown as a mere bundle of statutory rights would be to abandon the whole foundation of land law applicable to Crown grants. 43 The Chief Justice was in the minority. By contrast the majority suggest: [T]o approach the matter by reference to legislation is not to turn one s back on centuries of history nor is it to impugn basic principles of property law. Rather it is to recognise historical development, the changes in law over centuries and the need for property law to accommodate the very different situation in this country. 44 After Wik a pastoral lease, and many other statute derived titles, are mere bundles of statutory rights. That is to say these are not common law titles granted pursuant to statutory authority. Rather, they are statutory titles. It remains to consider though where such titles fit within the taxonomy developed earlier. 3.2 Pastoral lease A first step in this process is to determine whether these are statutory titles (defeasible or no) that replicate a common law title. However, for the very reason that a pastoral lease has been relegated to the status of bundle of statutory rights (the absence of a right to exclusive possession) it cannot be considered to replicate a common law lease 45. This noted, the subject matter of a pastoral lease is something that has been known to the general law for centuries. As to the issue of ongoing regulatory control - the Pastoral Land Act 1992 (NT) (PLA) does indeed contemplate a program of remedial plans for pastoral land and includes provision for the Minister to enforce these if the lessee does not. In addition, there is ability for the Minister to alter the conditions of the lease once every ten years. 46 Of course these explicit regulatory controls are in addition to the possibility of unilateral legislative variation to the nature of the interest in the manner of Australian Tape. In summary, a statutory pastoral lease would appear to be either a class two defeasible replication of a common law profit or a class three statutory interest unknown to the general law. Notably though it would appear certainly to be property and, as its extinguishment would enhance the Crown s radical title, compensable in any circumstances. 3.3 Mineral lease A similar analysis applies with respect to a mineral lease. This conclusion is supported by the decision of the High Court in Ward. At 1163 ([285]-[287]) the majority (which includes Gummow J) trace through the Gowan and Wade and the common law of mineral leases. Citing Toohey J in Wik, Wik, 84. Wik per Toohey J, 112. Of course some statute derived leases may do so and thus could be considered to replicate common law title (for example a Crown Lease Term under s 26 (a) Crown Lands Act 1992 (NT). Also note the possibility remains that a statutory pastoral lease (cf a grazing licence) in fact replicates a common law profit for pastoral purposes. Se PLA ss 39, 42 and 43.

11 (2006) 25 ARELJ Not of this Earth: The Extraterrestrial Nature of Statutory Property 61 Wik the implication is that a mineral lease is also a mere bundle of statutory rights. This implication is supported by the reference at 1164 ([291] ) to examples of the exercise by equity of its jurisdiction to enjoin interference with the enjoyment by the plaintiff of rights (not necessarily proprietary in nature) conferred upon it by or under statute. Later in that same a paragraph the majority equate the statutory rights of the holder of a mineral lease with the statutory interests of a pastoralist identified in Wik. Further, similarly to a pastoralist, the minerals title holder is subject to ongoing regulatory control (in addition to the possibility of unilateral legislative variation). For example, s 166(1B) of the Mining Act 1980 (NT) imposes as a condition of a mineral lease the requirement that the grantee hold the necessary Authorisation before carrying out any mining activity. The Authorisation is pursuant to s 35(1) of the Mining Management Act 2001 (NT) and is based on acceptance by the Minister of a proposed Mining Management Plan which must include inter alia environment assessments. The Authorisation may be varied or revoked at any time. 47 Thus, the mineral lease does not necessarily convey a right to work and win but rather the exclusive right to propose a method to work and win. Given the management regime in place, the mineral lease would appear to be in the nature of the Bienke fishery regime a defeasible statutory replication of a common law profit. Arguably though, the magnitude of the potential defeasibility destroys the essential characteristic shared with the general law interest and suggests the mineral lease is a species of property unknown to the general law. Despite this, as demonstrated by Newcrest, acquisition of a mineral lease will enhance the Crown s radical title and thus be compensable. Further, there can be no doubt that a mineral lease constitutes property of some kind and is thus capable of supporting rights in rem. 3.4 Exploration Licence An exploration licence is in large part subject to the same regulatory regime as a mineral lease under the Mining Act 1980 (NT) and Mining Management Act 2001 (NT), 48 and thus must be considered inherently defeasible. Unlike the mineral lease there can be little scope to suggest that an exploration licence replicates any interest known to the general law. 49 Despite this, Brennan CJ in WMC was prepared to entertain the notion that a title in the nature of a PSLA EP if granted under (onshore) Crown lands legislation and extinguished would have a beneficial effect on the Crown s title and thus constitute an acquisition. 50 Certainly the Court accepted the EP was proprietary in nature. 51 By contrast, as noted above, there is authority directly suggesting that a (Western Australian) prospecting area (which is similar but not identical to an exploration licence) is a bare licence. 52 Similarly respected international publicists have considered the PSLA EP to be articulated entirely in terms of administrative rules and powers. 53 There would thus appear to be some conflict of authority. Certainly the issue of whether interests such as an exploration licence are property, capable of supporting rights in rem, has long caused undesirable levels of uncertainty in the minerals industry. Accordingly, the matter warrants some particular attention Mining Management Act 2001(NT) s 38 (2). One exception is that exploration activities that do not involve substantial disturbance do not require an Authorisation Mining Act s 166, Mining Management Act s 35. Even assuming a limited right to take property in samples. WMC, 18 ([20]). See for example Brennan CJ, 16 [14], Gaudron J, 38 [86], 48 [127], Gummow J 73 [196]. Bowen, supra. n 27. T Daintith, A critical Evaluation of the Petroleum (Submerged Lands) Act as a Regulatory Regime (2000) AMPLA Yearbook 91.

12 62 Articles (2006) 25 ARELJ An examination of the decision in Bowen reveals that Wickam J considered a prospecting area under the Mining Act 1904 (WA) originally to be a bare licence in large part because there was no right to take minerals. His Honour also notes the prospecting area was not transferable. 54 His Honour goes on to draw a distinction between a mineral lease (as a sale of part of the land); a licence coupled with a grant; and, areas which are portions of land, subject to certain rights. Thus, as the incidents of the prospecting area evolved over time and became coupled with a right to take without permission mineralised earth (up to 50 tons) his Honour considered that the interest then constituted a licence coupled with a grant. 55 A licence coupled with a grant has been considered an interest in land, a profit a prendre. 56 Thus read, Bowen would suggest only that interests such as an exploration licence are not an interest in land. It is submitted that it was on having reached this conclusion, that his Honour considered the interest a bare licence 57 without considering whether the nature of the interest itself was proprietary, irrespective of whether or not it was an interest in land. The issue (in a Western Australian context) has been more recently considered by Calder SM in Westover Holdings Pty Ltd v BHP Billiton Minerals Pty Ltd & Ors 58. In that matter his Worship after a comprehensive review of the authorities concludes (at [63]): I am of the opinion that the grant of an exploration licence confers upon the holder of the tenement more than a bare licence. I consider that it is a licence which confers on the holder an interest in the land the subject of the licence such as means it should not be characterised as a bare licence. Taking into account the authorities to which I have made reference, it seems to me that it is unnecessary to try to characterise the interest in land as being one which constitutes a licence coupled with a grant or a profit a prendre or is analogous to a profit a prendre or is one which confers a proprietary interest in land, although the latter is unlikely. Despite some uncertainty as to the exact nature of the interest, 59 his Worship concluded an exploration licence was (arguably) an interest sufficient to support an action in trespass or nuisance. Having examined the potential distinction between WMC and Bowen let us now consider the nature of a contemporary exploration licence against the six attributes of property described in section 2 above. An exploration licence under the Mining Act entitles the holder to enter the licence area with staff and equipment and undertake works for the exploration of minerals and remove material for sampling. The licence does not allow for production activities. 60 An exploration licence may be granted to a defined area not exceeding 500 granticular blocks. 61 The exploration licence is for a term of six years although the size of the licence area must be reduced Bowen, 124. Bowen, Stow v Mineral Holdings (Aust) Pty Ltd [1975] Tas SR 25, 49 upheld on appeal (on other grounds) in Stow v Mineral Holdings Pty Ltd (1979) 180 CLR 295. His Honour (at 124) also uses the term bare statutory licence to describe the interest. [2004] WAMW 12 (see also (2005) 24 ARELJ 295). In addition to the above passage, see [73] [78] where his Worship appears to suggest that an exploration licence has all the attributes of a proprietary interest. Mining Act s 23. Mining Act s 16. The term granticular block is defined Mining Act s 14 by reference to latitude and longitude but is approximately 3.24km 2.

13 (2006) 25 ARELJ Not of this Earth: The Extraterrestrial Nature of Statutory Property 63 by half after the first twenty four months and every twelve months thereafter. 62 Once granted no other exploration licence or mining tenement can be granted over the area, except with the consent of the exploration licence holder. 63 It is an offence to explore for minerals unless one holds an exploration licence (or other appropriate minerals tenement). 64 Subject to the Mining Act: an exploration licence, or an interest in an exploration licence, may be sold, transferred or otherwise encumbered (otherwise than by mortgage) or disposed of. 65 An exploration licence therefore displays the attributes of being definable, identifiable, to some degree permanent, alienable, and connoting both a right to exclude and to use and enjoy (for the licence purpose). Indeed the language of s 173(1)(a) of the Mining Act is not just evocative of property concepts such as an interest in sell and encumber can only exist in relation to property. This conclusion would appear to lend strong support to the notion that an exploration licence, like a PSLA EP, is indeed proprietary. It is submitted that the exploration licence controversy may well best be approached by appreciating that the value in an exploration licence is in the exclusive control of the information that can be generated regarding the land, 66 (and subsequent statutory rights) rather than in the direct relationship to the land. Adopting this approach, the proprietary tendencies of such interests become more apparent. It is not necessary (or even relevant) to characterize the ability to control the generation of information regarding land as an interest in the land itself. However, the grant of this ability may still constitute a manifestation of the Crown s radical title. Absent the radical title (or some title flowing from it), there is no ability to authorize entry upon the land to gather the information. An exploration licence would thus appear as a further, but clearer, case of a defeasible statutory proprietary interest not constituting an interest in land and unknown to the general law. Notably though even adopting this contemporary characterization of the exploration licence, its acquisition would still be compensable on the footing that extinguishment benefits the Crown s radical title. Several different forms of statutory natural resource title have thus been considered. It would appear from this consideration that the notion of a statutory natural resource title, perhaps akin to an interest known to the general law (generally a profit), but more likely displaying characteristics that make it a form of statutory property not necessarily an interest in land and unknown to the general law is somewhat commonplace. One feature of natural resource titles though is the use of statute to carve out interests from the particular species of ownership [ radical title in the sense known to the common law ] enjoyed by the [Crown] Mining Act s 26. Mining Act s 18, 161. Mining Act s 190(1). Mining Act s 173(1)(a). See Enterprise Gold Mines NL v Mineral Horizons NL (1988) 52 NTR 13. The dispute was heard by the NT Court of Appeal on the issue of the nature of a appeal from the Warden s Court. The Warden had inter alia ordered the return of samples and information unlawfully obtained from a mining tenement. While the issue of the orders made by the Warden was not in dispute, those orders were noted and no adverse comment made. Note also though the interest that had given rise to the matter was a mineral claim and not an exploration licence. Newcrest per Gummow J, 635.

14 64 Articles (2006) 25 ARELJ 4. CONCLUSION This paper commenced by considering the basis behind the desire to characterize natural resource titles. Two such bases were suggested: protection from acquisition and the desire to create durable assignable rights. With respect to both of these matters natural resource titles appear to have faired well. It has been suggested they are clearly property and thus supporting rights in rem. Further, whether or not they are interests in land, they are interests the extinguishment (or modification) of which will have a correlative effect upon the Crown s radical title (at least where they are geographically onshore ). This effect engages a process by which, despite the statutory nature of a resource title - often in a form unknown to the general law, a jurisprudence is enlivened which ensures such extinguishment will constitute an acquisition. However, in reaching this conclusion consideration was given to statutory titles unrelated to land (including off-shore resource titles). Whilst such titles were considered property, they did not fair so well in the context of acquisition. This was because of a number of factors. First, many such titles dealt with novel forms of property, or property situated in novel locations (offshore) and lead to forms of property unknown to the general law. Second, statutory titles are almost necessarily defeasible. Absent any notion of radical title, this defeasibility in combination with a xenophobic general law leads to a congenital infirmity 68 in statutory titles when it comes to acquisition. We live in a society where evolving technology demands the creation of new and novel forms of property in new and novel locations. In our society the market is increasingly recognised as an effective allocative tool for such disparate goods (and bads ) as pollution, plant varieties, information, clean air, water, intellectual property, ferae naturae, and the electromagnetic spectrum. Yet the core operating criteria for an efficient market is the presence of secure forms of property. This brings us back to the core thesis of this paper which is that an assessment of the attributes of the statutory interest in question should be determinative of whether it is considered property. Recourse to notions such as things known to general law and radical title as a safeguard against the arbitrary and inefficient intrusion of the state can no longer be justified. 68 WMC per Kirby J, 75 [203].