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6.1 [51(ii)&99, (xxxi), 92, 117] Express Federal Guarantees.doc

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Acquisition of Property on Just Terms: s51(xxxi) s 51. The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to:- (xxxi) the acquisition / of property / on just terms / from any State or person / for any purpose in respect of which the parliament has power to make laws; Remember to Identify Head of Power Nature of the Power • This is a dual provision: 1. Allows acquisition of property 2. Provides a right of acquisition • It may also be seen as a compound provision stating that if there is an acquisition then it must be on just terms Relationship with other sections • The acquisition must still be justified under another legislative power: ‘for any purpose in respect of which the parlt has power to make laws’ Other parts of s51 • Sole source of legislative power to acquire compulsorily W.H Blakely & Co Pty Ltd v Cth (1953) • Limits implied power of other subsections of 51 to acquire property for these purposes to ‘just terms’—exception to Engineers principle that parts of s51 cannot limit other parts— can limit where that provision would otherwise lose all meaning (if Cth could dodge ‘just terms’ limitation by going through other powers, (xxxi) would be meaningless) • EXCEPT where the acquisition falls within the core of the power: A-G v Schmidt (confiscation of all opposition equipment of captured soldiers during wartime—at core of defence power—directly through defence power, no need to go through (xxxi)—no need for ‘just terms’) Other examples • Forfeiture to the Crown of a prohibited import: Burton v Honan (1952) • Forfeiture of a boat used in breach of the law: Lawler • Payment of provisional tax: F.C of T. v Clyne • The imposition of a statutory lien on aircraft to meet unpaid airport charges: Airservices Australia v Canadian Airlines International Ltd [1999] Territories power (s122) The parliament may make laws for the government of any territory surrendered by any State and accepted by the Commonwealth • Old view: The old view was that because of s 122 (the Territories power) there is no need for just terms Teori Tau v Cth (1969)—s 122 is a separate, and plenary, power, and is not subject to just terms, separation of powers, etc • [Since Newcrest Mining WA v Cth it is accepted that any federal law operating in a Territory supported by another head of power (including supported solely by s122) is subject to s51 (xxxi)] Andrew Trotter LWB242 2009-1 • Since Wurridjal (2009) the territories power is definitely limited by the requirement for just terms in s51(xxxi) State Legislation • This requirement for just terms does not extend to State legislation: Durham Holdings • However, in practice there is still a requirement for just terms but it is not vested in the Constitution • The power does not have effect if there is a purely administrative arrangement for a state to acquire property Pye v Renshaw (1951) Agreements • An agreement is not an acquisition • s 51(xxxi) only operates when the legislation falls under that head of power 1A- Acquisition of Property Broad definition, including: • Land: Blakeley, Jones • Chattels and fungible goods - see war time cases: McClintock v Cth (pineapples) • “any tangible or intangible thing which the law protects under the name of property” - Dalziel (licence to use land to run a carpark, even where revocable at short notice) • “innominate or anomalous interests”: Banking case (effective control of a business through shares—Cth constitutionally acquired bank shares held in Australia | purported then to appoint directors even if overseas shareholders still in majority) • Choses in action: Georgiadis (common law right to compensation for tort—replaced by compulsory workers comp scheme) confirmed in Mewett • Information o intellectual property rights: Nintendo (although recovery denied on other grounds— not ‘acquired’) o confidential information: Smith-Klein v French Laboratories o • Chattels real - Newcrest Mining, (mining leases); cf WMC Resources (other grounds) 1A- Acquisition of Property • An acquisition may be temporary or permanent • It must be taken by one person to another, in effect some rights need to be acquired • Not limited to transfer of property to or by the Cth • transferring property from one person to another: Tooth, obiter • Acquiring land through the states: Magennis (expressly referring to acquisition by State on less than just terms) • Cf. Mere executive agreement—will not suffice: Pye v Renshaw (no agreement outlining less than just terms) • By an agent of the Cth: McClintock v Cth (pineapple crops acquired by committee formed under gov regulation—authorised by Cth—acquisition) • Property doesn’t need to be used by party connected to the Cth Nelungaloo Pty Ltd v Cth Limitations • Doesn’t apply to tax (s51(ii)), penalty (incidental to all powers), forfeiture: Gibbs J in Tooth v TPC; applied in— Andrew Trotter LWB242 2009-1 • Lawler v DPP (seizure of ship used in smuggling); • Theophanous v Cth (MP convicted of criminal offences losing parliamentary superannuation); • Airservices Aust v Canadian Airlines (forfeiting CA’s plane’s for non-payment of air navigation fees) • A-G v Schmidt (confiscation of all opposition equipment of captured soldiers during wartime—at core of defence power—directly through defence power, no need to go through (xxxi)—no need for ‘just terms’) • Only compulsory acquisitions • could a voluntary one be unjust anyway: dicta in Wartime Cases | British Medical Association Case, Poulton v Cth (1953) • Only acquisitions under Commonwealth law, not State law (Durham Holdings v NSW (NSW acquiring mines on less than just terms—not necessary) • BUT Need for just terms applies to laws of the 2 self-gov Territories: Self- Government Acts • Only acquisitions made under a C’th law • Mere executive agreement will not suffice: Pye v Renshaw (no agreement outlining less than just terms) • [Not where exec has a prerogative power to acquire] • but the only significant prerog. power is to seize property for defence purposes [Dicta in Schmidt suggest same power would exist here, for what it’s worth] • and that has been held (only in 1950) to be subject to a duty under the common law to pay compensation, unless property is seized/destroyed when in imminent danger of capture (R v Burmah Oil - immediately overturned in UK by statute) • Doesn’t apply to laws directed to a genuine resolution of competing claims to property, even if giving advantage to one party – Mutual Pools No 2 (imposition of sales tax on pools held invalid in Mutual Pools 1— dispute between pool company and customers over refunded tax—legislation giving compromise held to be valid), – Nintendo (rights to programmes—two companies threatening to litigate), – Air Services (charge on planes—(not property because a penalty)—also resolution of competing claims between Airlines) • Need for someone to acquire right—mere taking / extinguishing of property right will not suffice: No acquisition – Rights extinguished without any gain by anyone: ACTV v Cth (right to ad time— legislation provided specific amt of time to election ads) – Statutory entitlements—inherently susceptible to variation: Peverill (Pathologist fees retrospectively changed), A-G (NT) v Chaffey (Workers comp entitlements) • Cf. common law rights—must be compensated: Georgiardis (right to sue for damages had a common law nature, not just statute) – Property expressly subject to other rights Telstra (rights over communications along copper wires were always subject to original rights) Acquisition found – If Cth acquires interest in land by default by extinguishing that of another: Newcrest (mining lease extinguished—Cth regained land interest) • Cf. if it is off-shore, C’th has legislative power but no property, so extinction of mining permit is no acquisition: WMC Resources (East Timor) • Mere restriction of use will not suffice: Waterhouse v Min for the Arts (export prohibited— trying to sell art in English market rather than Australian market) Andrew Trotter LWB242 2009-1 – [unless perhaps it “sterilises” it: Deane J in Dam case (land rendered useless)] (maybe this’ll come back one day) Mining Cases Newcrest Mining Facts: • Mining leases were sold by the Cth for mining in Kakadu National Park • The boundaries of Kakadu were extended to Newcrest Mining land • This meant that they could not mine the area at all Held: • This was an acquisition of property due to reciprocal liability even though the company was losing statutory rights • That is the property of the Cth was enhanced by the land acquired Cth v WMC Resources Facts: • WMC Resources held a permit to explore for oil in the Timor Sea • Australia and Indonesia entered into a treaty over ownership of the Timor Sea • Split the sea into three sections, one owned by Australia, one by Indonesia and one shared between the two. • The lease extended into the middle of the shared zone • Subsequently the Cth removed the right to explore that area of land Held: • This was not an acquistion of property • Firstly, because there was no reciprocal liability o Brennan and Gaudron JJ – no reciprocal liability because the area was not Cth property, was shared (Gummow J agreed) • Secondly, Australia didn’t claim sovereignty over the land • McHugh J confirmed Newcrest and Georgiadis on the ground that statutes are always susceptible to alteration (Gummow J agreed) • Kirby J preferred to view s51(xxxi) as a constitutionally guaranteed right that should apply to statutory rights as well as common law rights 2. On just Terms Acquiring land not on just terms = not within s51(xxxi) = invalid (Banking case, Newcrest, etc) • Salvaging laws—courts can sometimes supply the procedure for just terms where (inadvertently) not supplied by the law (Dalziel at 290-1, Huon Transport at 297 - “court can supply procedure for giving effect to a substantive right”) Rules for Valuation • general principle—the price that would be agreed on by a willing but not anxious vendor and a w.b.n.a. purchaser (Nelungaloo) • Protection from speculators trying to cheat public fund: may backdate a few months to precede declaration of acquisition: Grace Bros (value of land had increased since the notice of the acquisition, but previous value paid) • Valuation date may be set back a few years to discount: Magennis (war veterans) • When an acquisition has a loss of good will then the compensation must be increased Johnston Printing Press v Cth Andrew Trotter LWB242 2009-1 • Particular quality of the goods must be considered where they are being pooled, eg in a compulsory marketing scheme: Australia Apple and Pear Marketing Board v Tonking • Amount may be reduced if it is for the protection of the community (& perhaps also if it is for the value of the community): Grace Bros • Interest may be included if there is a delay and there is a need for compensation: Grace Bro’s [conflicting cases] • Damages and costs seem not to be included (Banking case) Procedure of Valuation • Assessing body must be separate from body acquiring property—rules of natural justice: (Nelungaloo), – Eg—if the minister acquires | compensation decided by independent board – Doesn’t matter if the board reports to the minister • But must not be biased: eg. if minister can alter finding of the board: Australia Apple and Pear Marketing Board Case – Must be an ability to appeal to a court Nelungaloo Pty Ltd v Cth – There must be a reasonably timely determination of just terms considering the rights and duties of both parties • and can’t make assessment without hearing Apple & Pear Bd v Tonking – But doesn’t require Ch III court - admin body ok as long as rules require nat. justice (Nelungaloo per Dixon J) 3. From any State or Person • The Cth can acquire property of the States (as well as people) on just terms NSW v Cth  Although note that they could just reduce State funding in the budget to compensate 4. For any purpose in respect of which the Parliament has power to make laws • The acquisition must have two heads of power, para (xxxi) plus one other P J Magennis Pty Ltd • The acquisition must be for some purpose in respect of which the parliament has power to make laws Schmidt • Statement of purpose required by s22 Lands Acquisition Act (Blakeley, Jones (No 1: or the ABC—X | No 2: for the provision of broadcasting services—O) • Possibly only valid where acquired for an actual use, merely as a method to deprive the current owner of the property (Clunies Ross - based on stat interp but dicta suggesting qual also applies to head of power) Andrew Trotter LWB242 2009-1 Residency Discrimination: s117 s117. A subject of the Queen, resident in any
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