Minister for the Army v Dalziel
68 CLR 261(Judgment by: McTIERNAN J)
Between: MINISTER FOR THE ARMY
And: DALZIEL
Judges:
Latham CJ
Rich J
Starke J
McTiernan JWilliams J
Subject References:
Constitutional law
National security
Acquisition of property
Just terms
Validity of Regulation
Legislative References:
Constitution (Cth) - s 51(xxxi)
National Security Act 1939 No 15 - s 5
National Security (General) Regulations 1939 SR No 87 - r 54; r 60G(5); r 60H
Acts Interpretation Act 1901 No 2 - s 46(b)
Judgment date: 10 March 1944
MELBOURNE
Judgment by:
McTIERNAN J
The main question to be decided is whether the compensatory terms upon which the National Security (General) Regulations provide that possession is to be taken of land under the authority of reg. 54 are valid. The purpose for which this regulation was made is plainly within s. 51 (vi.) of the Constitution. But because of the contention which the respondent makes as to the nature of the action which is authorized by reg. 54, the foregoing question cannot be decided by reference solely to s. 51 (vi.). For if the taking of the possession of land under the authority of reg. 54 is in its nature an acquisition of property, the power of the Governor-General in Council to make the regulation depends finally on s. 51 (xxxi.); and the validity of the provisions made regarding compensation for loss or damage suffered in consequence of the operation of reg. 54, would depend on their conformity with the standard of just terms with which s. 51 (xxxi.) hedges the legislative power it vests in the Parliament to make laws with respect to the acquisition of property by the Commonwealth. This approach to the decision of the case is necessitated by the statements on the limitations of the legislative power with respect to the acquisition of property which appear in the cases of Andrews v Howell [F49] and Australian Apple & Pear Marketing Board v Tonking, [F50] and by the reasons upon which the majority relied in Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth. [F51] This body of authority establishes that the Commonwealth Parliament has no power, either in peace or in war-time, to legislate on the subject of "the acquisition of property" (situate within any State) except the power conferred by s. 51 (xxxi.). The specific and explicit limitation on the power with which this placitum vests the Parliament would be frustrated by an interpretation of the Constitution which attributed to it any concurrent implied power to legislate which was not subject to the same limitations.
To avoid this result it is necessary to adopt the interpretation that the only power with which the Constitution vests the Parliament to legislate on the subject of the acquisition of property is the express and limited power in s. 51 (xxxi.). Hence there is no legislative power either inherent or implied in s. 51 (vi.) or added to it by s. 51 (xxxix.) to provide for the acquisition of property even as a means for carrying on the war. The Australian Constitution differs in this respect from the United States Constitution: this does not explicitly confer power on the legislature to make laws appropriating property for public use: but it exists as an inherent or implied power Kohl v United States; [F52] The Mississippi and Rum River Boom Co v Patterson; [F53] United States v Gettysburg Electric Railway Co; [F54] Chicago, Burlington & Quincy Railroad Co v City of Chicago [F55] ). The Fifth Amendment provides safeguards on the exercise of this power. The final part of this Amendment says that property shall not be taken without just compensation. This expresses a rule of political ethics akin to that which is recognized by the limitations in s. 51 (xxxi.). But whereas this placitum is a power, the Fifth Amendment is a restraint on power. These differences between the Australian Constitution and the United States Constitution would suggest a need for caution in the application of the American decisions regarding the power of eminent domain and the safeguards upon its exercise.
The primary question, therefore, is whether the executive action, which is authorized by reg. 54, is in its nature an acquisition of property. If it is of this nature, the terms upon which the Regulations provide that it is to be taken must be just terms according to the intendment of s. 51 (xxxi.).
Reg. 54 empowers the Commonwealth to take possession of land and, while the land is in its possession, to use it, or authorize it to be used, for the purposes which are specified.
The word "property" in s. 51 (xxxi.) is a general term. It means any tangible or intangible thing which the law protects under the name of property. The acquisition of the possession of land is an instance of the acquisition of property. In my opinion the Parliament exercised the power vested in it by s. 51 (xxxi.) in authorizing the Governor-General in Council to make reg. 54.
It is necessary, therefore, to consider whether the terms upon which the Regulations provide that possession is to be taken of land in respect of which an order is made under reg. 54 satisfy the condition of the power that the acquisition must be made upon just terms.
Reg. 60H provides, firstly, that the Minister may, by order, make provision regarding the basis on which compensation is to be awarded in any class of case. The taking of possession of land under reg. 54 is one of these cases. Reg. 60H, secondly, provides that "any such order relating to the acquisition of property shall provide just terms to the person from whom the property is acquired." This regulation lastly provides that every Compensation Board and the court are to be bound by the provisions which the Minister may make under the terms of this power.
If the expression "the acquisition of property" is used in the same sense in this regulation as it is used in s. 51 (xxxi.), there could be no doubt that this regulation is within that power. But s. 5 of the National Security Act 1939-1943 draws a distinction between "the taking of the possession of property" and the "acquisition of property." This distinction does not govern the meaning of the expression "acquisition of property" in s. 51 (xxxi.). It is made only for the purpose of the National Security Act 1939-1943. Section 5 of this Act confers power to make regulations for authorizing the taking possession of any property and the acquisition of any property other than land. The direction in reg. 60H to provide just terms is to be construed as applying only to such acquisitions of property as are authorized by the Regulations; but as these do not include any acquisition of land, the direction could not have been intended to apply to an acquisition of land made pursuant to the Regulations. It seems to me that reg. 60H is governed by the assumption that the taking of the possession of land is not an acquisition of property within the meaning of s. 51 (xxxi.); and that it is within the authority which the regulation intends to confer on the Minister in the case of a taking of possession of land pursuant to reg. 54, to make an order regarding the basis of compensation which does not conform with the constitutional standard of just terms.
Reg. 60H therefore exceeds the constitutional power of the Commonwealth. There is no lawful foundation for any order regarding the basis of compensation for loss or damage by reason of the taking of the possession of land under the power contained in reg. 54. These orders fall with the power under which they were made and have no legal effect.
It is unnecessary to examine the provisions of any such order to determine whether it would, if lawfully authorized, provide just terms. If that inquiry were undertaken it would be useful to consider the case of Backus v Fort Street Union Depot Co. [F56]
But the invalidity of reg. 60H does not, in my opinion, affect the validity of the other regulations. It is not essential for the operation of the scheme of compensation provided in the Regulations that the Minister should exercise the discretionary power which reg. 60H purports to confer on him. The existence of an order under reg. 60H is not a condition which is necessary for the operation of the scheme.
The conclusion which follows is that the basis on which compensation should be assessed by the court in this case is that contained in reg. 60G (5), the court proceeding without reference to the provisions of any order which the Minister made under reg. 60H. Reg. 60G (5) provides that the court may determine whether any compensation is payable upon a claim and, if so, the compensation which it thinks just and may make an order for payment of the compensation so determined. This basis of compensation clearly conforms with the constitutional standard of just terms. It is within the discretion which reg. 60G (5) confers on the court to determine under the ordinary established principles of the law of compensation for the compulsory taking of property the compensation which is payable to the claimant.
Roper J., from whose decision this appeal is brought, decided that the court should determine the compensation under these principles and without reference to the basis of compensation which the Minister laid down pursuant to reg. 60H. In my opinion the decision is correct and the appeal should be dismissed.