Taking as a starting point a 1550 debate held in Valladolid about the legality of the Spanish dominion over the American Indians, this article explores the rationale in Mabo for the extinguishment of native title in Australia. It was argued at Valladolid that the American Indians were slaves in the Aristotlean sense, which therefore justified Spanish dominion. This article argues that, historically, Australian Indigenous people were variously treated as both slaves and as citizens. This ambivalent status was reasserted by the Mabo decision. Native title was recognised, which aligned Indigenous property rights with those of the rest of the citizenry. However, the court also concluded that native title (absent the Racial Discrimination Act) can be arbitrarily extinguished by state parliaments. This result is highly problematic for the liberal-democratic conceptualisation of power and sovereignty. Either all titles can be arbitrarily extinguished by state parliaments, or only native title. The majority in Mabo attempted to avoid suggesting that native title was uniquely susceptible to extinguishment by claiming (along classical positivist lines) that parliament has supreme legislative power (that is to say, it has unlimited power), subject to express or implied constitutional limitations. This article challenges the classical positivist claim and posits instead a theory of limited sovereign power.