Native title holders have won a High Court appeal, overturning a massive water allocation granted for free to a cattle station to grow fruit and vegetables in the desert.
The Mpwerempwer Aboriginal Corporation challenged whether the Northern Territory government lawfully granted the decades-long water licence.
The licence authorised Fortune Agribusiness to extract 40 gigalitres of groundwater at Singleton Station, north of Alice Springs, every year for 30 years - equal to draining Sydney Harbour twice.
Traditional Owners argued the project threatened sacred sites, cultural survival and a fragile desert water system.
That argument failed in the NT Supreme Court and the territory's Court of Appeal.
The NT government said the courts had already correctly identified the law did not impose an obligation on a government minister to consider the impact on Aboriginal cultural values.
But the High Court on Wednesday ordered the water licence to be quashed, referring the water licence application back to NT decision makers, who will have to consider environmental approvals.
The court ruled the relevant NT minister did not address special circumstances to justify the water licence for an extended period of 30 years.
It ruled the minister also did not form a "state of satisfaction" that such special circumstances existed.
The decision "contravened express and implied limitations on the decision-making authority conferred on the delegate minister," the court ruled.
The making of the decision should have included the Aboriginal corporation being given notice of proposed conditions and an opportunity to be heard in a written submission.
However it ruled it was given "no such notice and no such opportunity".
The Mpwerempwer Aboriginal Corporation argued the water licence risked permanently damaging an ancient aquifer, at least 40 groundwater-dependent sacred sites and community water supplies.
