Minister for the Army v Dalziel

68 CLR 261

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(Judgment by: LATHAM CJ)

Between: MINISTER FOR THE ARMY
And: DALZIEL

Court:

Judges:
Latham CJRich J
Starke J
McTiernan J
Williams 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)

Hearing date: SYDNEY 2 December 1943; 3 December 1943
Judgment date: 10 March 1944

MELBOURNE

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Judgment by:
LATHAM CJ

The National Security (General) Regulations were made under the National Security Act 1939-1943, s. 5. Reg. 54 relates to the taking of possession of land by the Commonwealth, and other regulations provide for the ascertainment and payment of compensation for loss or damage suffered by reason of things done in pursuance of the Regulations. The Supreme Court of New South Wales (Roper J.) has held that taking possession of land in pursuance of reg. 54 amounts to an "acquisition of property" within the meaning of these words where they appear in s. 51 (xxxi.) of the Constitution, whereby the Commonwealth Parliament is empowered to make laws with respect to "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." It has been held that laws enacted under this power must, in order to be valid, provide for just terms (Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth ^[F1] ).

Reg. 60H authorizes the Minister administering the Regulations to make orders providing the basis on which compensation is to be awarded in any class of case. The Minister has made an order in pursuance of this authority. Roper J. was of opinion that the order did not provide just terms because it contained a provision that "in assessing compensation loss of occupation or profits shall not be taken into account." It was held therefore that the order was invalid and it was declared that the compensation payable to the claimant, Arthur Dalziel (the respondent upon this appeal) "shall be determined without regard to the basis of the compensation order made under reg. 60H of the National Security (General) Regulations and shall be determined under the ordinary established principles of the law of compensation for the compulsory taking of property." This decision was given in an application to the Supreme Court for review of the amount of compensation fixed by a Compensation Board acting under the Regulations. Special leave to appeal from the order was granted by this Court.

The only question which the Court is called upon to decide at this stage of the proceedings is whether the decision of the learned judge that the Minister's order is invalid is right. If it were held that the order was invalid it would then be necessary to decide whether the Minister of the Army, in taking possession of the land of the respondent, was a trespasser, or whether he lawfully took possession but was bound to pay compensation according to some other (and what) standard relating to compensation for property taken. As at present advised I would not be prepared to hold as of course that, if the regulations authorizing the taking were invalid because no provision was made for just terms, the Commonwealth authority was entitled to remain in possession upon paying compensation. Taking possession of land belonging to another person may be authorized by the royal prerogative or under a valid statute (or regulation), but I know of no principle of law which would allow a person (whether that person be a Minister or any other person) who without authority took possession of land belonging to another person to remain in occupation upon paying "compensation." The act of taking possession, if in invitum, would prima facie be a trespass and the trespasser would be liable as such. But this question does not arise in these proceedings.

The respondent Dalziel conducted a parking station for motor cars on vacant land in the business quarter of the City of Sydney. The land is owned by the Bank of New South Wales and it is obviously very valuable. Dalziel paid a rent of PD8 a week under a weekly tenancy. He made a net profit out of his business of about PD15 a week. The Minister for the Army required possession of the land for defence purposes and, after notice given in pursuance of the Regulations, took possession of the land. After consideration of the question by the Hirings Committee, the Minister made an offer of compensation which was not accepted and the matter went before a Compensation Board appointed in pursuance of the Regulations. The Compensation Board assessed compensation and both parties applied to the Supreme Court for review of the assessment. Upon an application for directions, Roper J. made an interlocutory order in the terms already stated.

At the outset it is important to observe that the Commonwealth has not acquired the fee simple in the land, which remains in the Bank of New South Wales, nor has it acquired the weekly tenancy from Dalziel. The Minister has acted under the Regulations and can exercise the rights for which the Regulations provide.

Reg. 54 contains the following provisions:

"54.(1)

If it appears to the Minister of State for the Army to be necessary or expedient so to do in the interests of the public safety, the defence of the Commonwealth or the efficient prosecution of the war or for maintaining supplies and services essential to the life of the community, he may, on behalf of the Commonwealth, take possession of any land, and may give such directions as appear to him to be necessary or expedient in connection with the taking of possession of the land.

(2)

While any land is in the possession of the Commonwealth in pursuance of a direction given under this regulation, the land may, notwithstanding any restriction imposed on the use thereof (whether by law or otherwise), be used by, or under the authority of, that Minister for such purpose, and in such manner, as he thinks expedient in the interests of the public safety or the defence of the Commonwealth, or for maintaining supplies and services essential to the life of the community; and that Minister, so far as appears to him to be necessary or expedient in connection with the taking of possession or use of the land in pursuance of this sub-regulation-

(a)

may do, or authorize persons so using the land to do, in relation to the land, anything which any person having an unencumbered interest in fee simple in the land would be entitled to do by virtue of that interest; and

(b)

..."

Under this regulation the Minister may, on behalf of the Commonwealth, take possession of any land for defence purposes and if he does so the land may be used for defence purposes as fully as if he, the Minister, had an unencumbered interest in fee simple in the land. The validity of this regulation has not been challenged. It is indeed obvious that the defence of the country may make it necessary or expedient for the defence authorities to take possession of and to use land.

The Regulations and the National Security Act itself (as will be seen later) are based upon the assumption that there is a distinction between taking possession of land for a temporary purpose, even though for an indefinite period, and the acquisition of an interest in land. The terms of reg. 55AA plainly show that this is a distinction which the Regulations assume to be real-an assumption which is denied by the order now under appeal. Reg. 55AA is introduced by the words: "Where any of the powers conferred by or under regulation 53, 54 or 55 of these Regulations has been exercised in relation to any land, and the land is later compulsorily acquired in pursuance of any law of the Commonwealth" etc These words show that the Regulations assume that possession of the land can be taken under reg. 54 and that the land may be used in pursuance of such a regulation without any compulsory acquisition of the land by the Commonwealth.

Other regulations, such as 53, 55, 55A, 56, 59A and 59D, confer rights on Commonwealth authorities to enter upon land and do things on the land for defence purposes, together with incidental provisions. Reg. 57 relates to the requisitioning of property other than land.

Reg. 60D is the regulation which defines the right to compensation. It is as follows:

"60D.(1)

Any person who has suffered or suffers loss or damage by reason of anything done in pursuance of any of the following regulations and sub-regulations, namely, regulations 53, 54, 55, 56, sub-regulations (1.) and (2.) of regulation 57, regulation 58 and sub-regulation (4.) of regulation 59 of these Regulations, or in pursuance of any order made under any of those regulations or sub-regulations in relation to-

(a)

any property in which he has, or has had, any legal interest, or in respect of which he has, or has had, any legal right;

(b)

any undertaking in which he has or has had any legal interest; or

(c)

any contract to which he is or has been a party, shall, if the compensation, or the method of fixing the compensation, in respect of the loss or damage is not prescribed by any regulations other than these Regulations, be paid such compensation as is determined by agreement or, in the absence of agreement, may, within one month after the commencement of this regulation, or, if the thing is done after the commencement of this regulation, within two months after the doing of the thing on which the claim is based, or, in either case, within such further time as the Minister allows, make a claim in writing to the Minister for compensation: ..."

The regulation deals with compensation for loss or damage, and does not purport to provide for the assessment and payment of the value of property acquired. In order to entitle a person to claim compensation, that loss or damage must have relation to some property in which the person has or has had a legal interest or in respect of which he has or has had a legal right or an undertaking in which he has or has had an interest or a contract to which he is or has been a party.

Other provisions of reg. 60D relate to procedure in making claims. Reg. 60E allows the Minister to make an offer of compensation which may be accepted by the claimant. If the claimant does not accept the offer, he may request the Minister to refer the claim to a Compensation Board. Reg. 60F provides for the assessment of compensation by the Board, and reg. 60G provides for an appeal by a party if dissatisfied to a court of competent jurisdiction "for a review of the assessment." The function of the court upon a review is defined in reg. 60G (5) in the following words:"the court may ... proceed to hear the application, and to determine whether any compensation is payable and, if so, the compensation which it thinks just, and may make an order for payment of the compensation so determined." The application referred to in this provision is the application for review referred to in preceding sub-regulations. The duty of the court is to hear the application and to determine whether any compensation is payable and, if so, to assess the amount of compensation. Under this provision the function of the court is, in my opinion, not limited merely to determining whether there was evidence to support the decision of the Compensation Board. The court must determine for itself whether any compensation at all is payable and, if so, the amount of compensation which is just.

Reg 60H is as follows:

"60H.(1)

The Minister may, by order, make provision regarding the basis on which compensation is to be awarded in any class of case.

(2)

Any such order relating to the acquisition of property shall provide just terms to the person from whom the property is acquired.

(3)

Notwithstanding anything contained in these Regulations, where a Minister has, whether before or after the commencement of this regulation, by order made any provisions regarding the basis on which compensation is to be awarded in any class of case, every Compensation Board and court shall be bound, in the assessment of compensation in any case of that class, to observe those provisions."

Sub-regs 1 and 2 again emphasize the assumption made by the Regulations as a whole, namely, that there is a distinction between acquisition of property and other acts which may be done by virtue of the Regulations, including taking possession and user of land which may cause loss or damage to persons interested in property. Sub-reg. 2 recognizes that the Constitution requires that laws under which property is acquired must provide for just terms. Sub-reg. 1, limited as it is by sub-reg. 2 in relation to, but only in relation to, "acquisition of property," assumes that in cases other than the acquisition of property it is for Parliament, by or under direct statutory enactment or regulation, to provide as it may think proper for the payment of compensation.

Sub-reg. 3 requires every Compensation Board and court to observe the provisions of a Minister's order in assessing compensation. If such an order relates to the acquisition of property and does not provide for just terms to the person from whom the property is acquired, the order is not authorized by sub-reg. 2 and can be disregarded as invalid. If, on the other hand, the order does not relate to the acquisition of property, then it is authorized by sub-reg. 1, and it is for the Minister, if he exercises his power of making an order as to the basis of compensation, to provide such terms of compensation as he thinks proper, irrespective of the opinion of a court as to whether such terms are just or not.

In pursuance of reg. 60H the Minister made an order dated 23rd March 1942, which has been subsequently amended in certain particulars. That order relates only to loss or damage suffered by the owner of land, and "owner" is defined in clause 2 of the order to include a lessee and a tenant for any term or at will and any person who has any estate, right or interest in or to the land. Clause 1 of the order provides that where the amount of compensation payable in respect of the loss or damage suffered by the owner of any land by reason of the taking possession of the land in pursuance of reg. 54 is not settled by agreement, the basis of compensation shall be as set out in the order.

The order provides that "the basis of compensation shall not, unless the Central Hirings Committee otherwise determines, exceed the aggregate" of certain sums "provided that ... (iii) in assessing compensation, loss of occupation or profits shall not be taken into account". This provision appears as a proviso. Roper J. has interpreted it as a substantive provision and has given it full effect according to its terms, and not merely as a limitation upon the preceding provisions of the regulation. As a general rule a proviso should not be interpreted as if it were a substantive provision independent of the provisions to which it is a proviso. Speaking generally, a proviso is a provision which is "dependent on the main enactment" and not an "independent enacting clause": Cf. R. v Dibdin, ^[F2] at p. 125. But though a provision framed as a proviso ought to be drafted and generally should be construed only as such, a consideration of both the main and the subsidiary provisions of an enactment may show that the proviso contains matter which is really "in substance a fresh enactment, adding to and not merely qualifying that which goes before" (Rhondda Urban District Council v Taff Vale Railway Co, ^[F3] at p. 258). In the present case it is difficult to give effect to the proviso as to loss of occupation and profits merely as a proviso and I think the learned judge was right in treating it as an independent substantive enactment.

His Honour said that "in a proper case loss of occupation or profits must be taken into account for the assessment of compensation on just terms for the resumption or taking of possession of land (See Pastoral Finance Association Ltd v The Minister ^[F4] )." Accordingly it was held that the order did not provide for just terms for the taking of possession of land, and as his Honour was of opinion that taking possession of land amounted to an acquisition of property within the terms of the Constitution, the order was held to be invalid.

It has already been shown that the Regulations proceed upon the basis that the taking possession of land under the Regulations does not amount to the acquisition of land. The National Security Act is based upon the same assumption. Section 5 of that Act provides that "the Governor-General may make regulations for securing the public safety and the defence of the Commonwealth and the Territories of the Commonwealth, and in particular ... (b) for authorizing-(i) the taking of possession or control, on behalf of the Commonwealth, of any property or undertaking; or (ii) the acquisition, on behalf of the Commonwealth, of any property other than land." (See the same provisions in the Emergency Powers (Defence) Act 1939 (2 & 3 Geo. VI. c. 62, s. 1 (2) (b) (i) and (ii)) and see also the Compensation (Defence) Act 1939 (2 & 3 Geo. VI. c. 75), s. 1.) The distinction between (i) and (ii) is the distinction between taking of possession of property and the acquisition of property. It will be observed that s. 5 does not contemplate the making of regulations thereunder in relation to the acquisition of land by the Commonwealth. There is reason for excluding this subject from the scope of the Regulations, because the Commonwealth Lands Acquisition Act 1906-1936 contains full provisions dealing with the acquisition of land. If, however, taking possession of land under such a regulation as No. 54 involves the acquisition of property in land, both the National Security Act and the Regulations have been based upon a false assumption, and the Commonwealth Parliament cannot give itself power by legislating upon such a basis. If the Parliament makes a law which is truly a law for the acquisition of property, it cannot evade constitutional requirements by describing that which is acquired as not being property.

In the present case the question arises as to the acquisition of land. The Commonwealth cannot be said to have acquired land unless it has become the owner of land or of some interest in land. If the Commonwealth becomes only a possessor but does not become an owner of land, then, though the Commonwealth may have rights in respect to land, which land may be called property, the Commonwealth has not in such a case acquired property.

It has often been explained by writers upon jurisprudence that the term "property" is ambiguous. As applied to land it may mean the land itself in relation to which rights of ownership exist, or it may refer to the rights of ownership which exist in relation to the land. See Williams, Real Property, Introductory Chapter-in the 23rd ed. (1920), at pp. 3, 4; Salmond, Jurisprudence, 9th ed. (1937), p. 342. In the former sense a man may say that his property consists of land. In the latter sense a man's property would consist not of land, but of rights in respect of land which were rights of ownership. I can see no reason why, so far as land is concerned, "property" in s. 51 (xxxi.) of the Constitution should not be interpreted so as to include land itself and also proprietary rights in respect of land. The provision in the Constitution is plainly intended for the protection of the subject, and should be liberally interpreted.

English law, in the interests of peace, has always protected a person who is actually in possession of land. Indeed, a person in possession, though wrongfully in possession, was for some centuries protected even against the true owner. It was held that such a person had a tortious fee simple which he could alienate and devise, while the disseised true owner had only a right of entry or, in some cases, something even lower-a mere right of action: See Holdsworth, Historical Introduction to the Land Law, (1927), p. 127; History of English Law, vol. II., 3rd ed. (1922). pp. 582 and following. This, however, is no longer the law (8 & 9 Vict. c. 106, s. 4, and, in New South Wales, Conveyancing Act 1919-1943, s. 22; Holdsworth, Historical Introduction, (1927), pp. 185 and following.; Challis, Real Property, 2nd ed. (1892), pp. 127, 371). The technicality of the remedies available to the true owner of land after he had been dispossessed led to the use of possessory remedies by indirect methods and by legal fictions for the purpose of enforcing the rights of a disseised owner (Holdsworth, Historical Introduction, (1927), pp. 137, 138, 170 and following). Possession has long been, and still is, prima facie evidence of title, and it is a substantive root of title.

But possession and ownership of land, though closely connected, are not identical. An owner has the right to maintain or recover possession of the land against all others (Williams, Real Property, first sentence in Part V.). A person who is possessor but not owner does not as such have such a right against the owner. The right of a possessor to be protected against wrongdoers no longer avails against the true owner as if he were a wrongdoer. When the true owner is out of possession of land, and a trespasser is in possession, there are not two owners of the land, but only one owner, though the trespasser may now, by the operation of statutes of limitation, become an owner. When it is said that a person in possession of land, even though wrongfully, has a sort of title to the land, this proposition does not and cannot mean that he has become the owner of the land by virtue of his trespass. It means that if a stranger interferes with his possession he will be protected against the stranger, and that he can transmit to another person this right to protection. But, if all the facts are known, including the identity of the true owner, the possession of a trespasser will not avail against the latter, and the distinction between possession and ownership becomes clear: See Holdsworth, Historical Introduction, (1927), pp. 185-187.

In English law no subject can own lands allodially-he can own only an estate in land. Possession is prima facie evidence of an estate in fee simple in the possessor. In one case the possessor may be the owner in fee simple in fact. In another case evidence may show that the person in possession is a tenant for years. If no evidence of tenancy had been given, the fact of possession would have been prima facie evidence of a fee simple in the possessor; but, as soon as it is shown that he is a tenant, then he is treated as that which he really is, namely, the owner of a term, and not as the owner of a presumed fee simple. The question of title is determined upon the whole evidence, and, where evidence displaces a prima facie presumption based upon possession, that presumption no longer has any operation or effect.

Accordingly, in my opinion, the facts that the right to possession is the most valuable attribute of ownership, that possession is prima facie evidence of ownership, and that possession may develop into ownership, do not justify any identification of possession with ownership, but, on the contrary, emphasize the distinction between the two ideas. The fact that the Commonwealth is in possession of land as a result of action under the Regulations does not show that the Commonwealth has become the owner of the land or of any estate in the land. If nothing more were known of the facts than that the Commonwealth was in possession, then, in such an imperfect state of evidence, the presumption would be that the Commonwealth was owner in fee simple. But when possession has been taken of land under the Regulations it is plain that the Commonwealth is not the owner of an estate in fee simple. There is no room for a presumption of ownership based upon possession. The Commonwealth has precisely the rights which the Regulations confer upon it and no more. The only question which arises in the present case is whether those rights, the existence and reality of which are undisputed and not a matter of inference or presumption, are proprietary rights, so that it can be said that the Commonwealth has acquired property.

The rights of the Commonwealth are to take and remain in possession of the land and to use it for purposes of defence. In such use, but only for the purposes of such use, the Commonwealth has the rights of an owner in fee simple. The Commonwealth can, at will, give up possession at any time. The rights of the Commonwealth, by reason of the terms of the National Security Act, s. 19, cannot last for longer than the war and six months afterwards. In my opinion the Commonwealth is unable to alienate these rights so as to entitle any other person to enjoy them. The right is limited to a right to the Commonwealth to use the land for defence purposes, and such a right cannot be transferred to any other person. The mode of such use may be as determined by the Commonwealth, but any use must be by or on behalf of the Commonwealth. The right may be said to be personal to the Commonwealth.

The only question is, as I have already said, whether these rights are proprietary rights. That which can be owned in respect of land is, as already stated, an estate. The Minister has not an estate in fee simple or any lesser freehold estate, nor, in my opinion, has he a chattel interest. The Bank of New South Wales is still the owner of the land and Dalziel is still the tenant under a weekly tenancy. No other tenancy has been created and there has been no assignment of Dalziel's tenancy. The Commonwealth is, in my opinion, in the position of a licensee with rights as stated in the Regulations. The Regulations permit the Commonwealth to do upon the land things which would otherwise be unlawful (Thomas v Sorrell ^[F5] ). "A ... licence properly passeth no interest, nor alters or transfers property in any thing, but makes an action lawful, which without it had been unlawful,"-and cf. Cowell v Rosehill Racecourse Co Ltd. ^[F6] In Daly v Edwardes, ^[F7] the Court of Appeal considered a document which described itself as an underlease and the parties to it as lessor and lessee. The lease granted to the lessee "the free and exclusive licence and right to the use of" certain refreshment rooms, etc, in a theatre. It was held that even if the lessee could exclude the lessor from those rooms the real substance of the agreement was not the granting of any interest in land, that no interest in land was granted, and that the "lessee" had only an exclusive licence to use the premises for the purpose of providing refreshments. ^[F8] The document was "really a grant of a privilege and licence merely masquerading as a lease". ^[F9] See also Frank Warr & Co Ltd v London County Council, ^[F10] where it was held that under a similar agreement (which used the words "grant" and "let" but not the words "lease," "lessor" or "lessee") no interest in land was created which could be the subject of compensation under the Lands Clauses Consolidation Act 1845 (Imp.). In Clore v Theatrical Properties Ltd and Westley & Co Ltd ^[F11] a similar agreement used the words "doth hereby demise and grant to the lessee the free and exclusive use" of parts of a theatre. It was held that no interest in land was created. In Commissioner of Stamp Duties (N.S.W.) v Yeend ^[F12] it was held that an agreement under which a person had the sole right to use premises for the purpose of providing refreshments did not vest any "property" in that person within the meaning of a definition of property which included any estate or interest in any property real or personal. These are cases of contracts creating personal rights to use land for particular purposes, in one case with and in others without a right to exclude the "grantor." In the present case the rights of the Commonwealth to use land for purposes of defence are created, not by contract, but by action taken by the Commonwealth under the Regulations. But the rights so created are, in my opinion, of the same character as those which were created in the cases cited-they are inalienable personal rights and the Commonwealth is not a grantee of property but a licensee. Such personal rights are not proprietary rights.

Upon these grounds of what may be called general reasoning, I reach the conclusion that the taking of possession of land under the Regulations does not amount to the acquisition of an interest in land so as to bring about an acquisition of property within the meaning of s. 51 (xxxi.) of the Constitution.

The opinion that there is a real difference between, on the one hand, taking possession of land for a temporary purpose under these particular Regulations, and, on the other hand, the acquisition of land, may be supported by reference to similar statutes and decisions of the courts thereon. English statutes relating to this matter are conveniently mentioned in Attorney-General v De Keyser's Royal Hotel Ltd. ^[F13] Lord Dunedin refers to the right under the prerogative "to take for use of the moment in a time of emergency", ^[F14] and discusses whether certain statutes, beginning with 7 Anne c. 26, related to permanent acquisition in times of peace, as well as of war, or to another subject matter, namely, the temporary use of land during war. ^[F15] His Lordship refers to provision made in statutes for "a temporary taking, and for payment; or, in other words, for getting by statute, with the concomitant obligation of payment, that very possession which, according to the view expressed above, it was the function of the prerogative to provide free of charge, leaving it to statute to provide for a permanent acquisition." So also in 38 Geo. III. c. 27 there is provision for treating with the owner of land "for the possession or use thereof, during such time as the exigence of the service shall require." Reference is made to the Act 44 Geo. III. c. 95, which provided for "temporary taking for such time as the exigence of the public service shall require". ^[F16] The latter phrase appears also in the Defence Act 1842, 5 & 6 Vict. c. 94, s. 16. Lord Moulton clearly distinguishes between acquisition of property and taking of possession of property when he says that he is satisfied that the Defence Act 1842 enables the Crown to acquire "either the property or the possession or use of it as it may need". ^[F17] Lord Sumner says that the Defence Act "enables the Crown to take lands under the Act in peace or in war, in absolute ownership and in perpetuity or for temporary occupation only". ^[F18] Lord Parmoor recognizes the same distinction, referring "to an entry upon, or to taking temporary possession of, or to the temporary occupation and use of the land". ^[F19] Lord Parmoor sets out and analyses the various statutes which enable the Crown to take possession of land during such time as the exigencies of public service may require. ^[F20] The statutes examined in this decision of the House of Lords thus recognize the distinction between acquisition of land and the temporary taking of possession of land, and the speeches of their Lordships show that this distinction is fully recognized as a real distinction.

In regulations made under the Defence of the Realm Consolidation Act 1914, 5 Geo. V. c. 8, the same distinction was recognized: See In re a Petition of Right, ^[F21] at p. 667, and see per Warrington L.J., ^[F22] the distinction between "taking and using land" under the prerogative and "taking of land by way of purchase or lease".

In Whitehall Court Ltd v Ettlinger, ^[F23] at p. 685 the Earl of Reading C.J., referring to the taking of possession of a flat for defence purposes, said: "There is nothing in the notice which was served upon the tenant to show that the Government required more than the occupation of the premises for an undefined period." The interest of the tenant remained unaffected by such occupation. A right so to occupy is, in my opinion, the right which is given when possession is taken of land under reg. 54 of the Regulations. Subject to the limitation contained in s. 19 of the National Security Act, the occupation to which the Commonwealth becomes entitled is occupation for an indefinite period, as the exigence of defence may require.

So also in the case of Matthey v Curling, ^[F24] at pp. 231, 232 Lord Atkinson, referring to the Defence Act 1842 (Imp.), emphasized the distinction between "the compensation to be paid either for the absolute purchase of the property desired to be acquired or for the `possession or use' thereof as the case may be." Lord Atkinson said, referring to the appellant, of whose land possession has been taken: "The lease under which the appellant held these premises was not in any degree, or to any extent invalidated. His title to the hereditament demised was not in any way weakened". ^[F25] Also his Lordship distinguished between the loss of use and enjoyment of premises and the deprivation of right and title to premises. ^[F26]

In the case of John Robinson & Co Ltd v The King, ^[F27] at p. 195 Bankes L.J., speaking of regulations made under the Defence of the Realm Act (Imp.), to which reference has already been made, said: "Reg. 2B deals with two quite separate matters, (a) taking of possession of goods by the authority, (b) the acquisition by the authority of goods, possession of which has been so taken. ... It is obvious that under this regulation the taking possession of goods need not necessarily be followed by any acquisition of them." On the other hand, as Bankes L.J. points out, there may be both taking possession of goods and an acquisition of property in goods. Reg. 55AA, to which reference has already been made, shows that the Regulations assume that in the case of land also possession may be taken under the Regulations without any acquisition of property, but that property in the land may subsequently be compulsorily acquired.

The Defence (General) Regulations 1939 made under the Emergency Powers (Defence) Act 1939 (Imp.) contain reg. 51, which is similar to the Commonwealth regulation No. 54. It authorizes a competent authority to take possession of land for defence purposes. In Swift v Macbean, ^[F28] at p. 379, Birkett J., referring to a taking of possession under this regulation, spoke of the question of compensation being negotiated "on the footing of requisition and not acquisition" and, referring to furniture, says: "Requisition of furniture does not amount to acquisition". ^[F29]

The authorities to which I have referred show, in my opinion, that the taking of possession of land under such an authority as that conferred by reg. 54 is different in legal significance from any acquisition of an interest in the land. In the present case the Commonwealth has not acquired any interest of any kind in the land. It has not acquired any interest either from the owner of the fee simple or from the tenant. The possession of the Commonwealth may, I think, properly be described as that of a licensee whose rights are defined by the Regulations.

For the reasons stated, I am of opinion that reg. 54, dealing with the taking of possession of land, is not a regulation with respect to the acquisition of property and that therefore there is no constitutional requirement that an order made in pursuance of the Regulations and prescribing the basis of compensation in such a case should contain provisions which, in the opinion of a court, constitute just terms for the taking. The matter is left to the discretion of Parliament. In my opinion, reg. 60H is valid, and the Minister's order made under reg. 60H is not invalid as infringing any constitutional requirement.

If I had been of opinion that the taking of possession of land under the Regulations involved an acquisition of property, I would not have been prepared to hold that the Minister's order did not provide for just terms. The Minister's order includes a proviso in the following terms:"(iv) in any case in which, owing to exceptional circumstances, the payment of compensation on the basis set out above would not provide just terms to the owner of the land, the compensation may include such additional amount as is just." This provision I would interpret as conveying a direction to assessing authorities to provide just compensation in every case. The view of the Minister, as expressed in the order, is that the basis of compensation set out in the order is just in ordinary circumstances. Any circumstances which would make it unjust in a particular case are, from the point of view of the order, exceptional. In many cases the application of the terms of the order would bring about a just result. Thus, for example, if a dispossessed person were carrying on a business on his land, but could readily obtain other suitable land without disturbance of his business, justice would not require that he should receive compensation for loss of profits. But if his business was disturbed or destroyed as a result of the Commonwealth taking possession, the proviso quoted would allow that fact to be taken into account in the assessment of compensation. I regard proviso iv as an overriding provision which gives a wide discretion to assessing authorities and enables them to give just compensation to owners of land in all cases.

By an amendment of the order published in the Commonwealth Gazette on 1st January 1943 a definition of "owner" was inserted in the order in the following terms:" `owner' includes a lessee and a tenant for any term or at will and any person who has any estate, right or interest in or to the land." Dalziel is an owner within the meaning of this definition. The Minister for the Army took possession of the land on 12th May 1942. But in my opinion it is not important to determine whether or not the amendment of the order which introduced the definition of "owner" applies to Dalziel because he is a person who, within the meaning of reg. 60D, is a person who has a legal interest in property of which possession has been taken under reg. 54. Other amendments, however, may be of importance. In my opinion, for reasons which I have stated in the case of Minister of State for the Army v Pacific Hotel Pty Ltd which was heard immediately before the present case, I am of opinion that the Court is bound to apply the provisions of the order as they exist at the time when the matter comes before the Court.

The order of the Supreme Court should, in my opinion, be varied by striking out the part thereof referring to the method of determining compensation and by inserting in lieu thereof a declaration that the compensation payable should be determined upon the basis of the order made under reg. 60H as amended prior to the determination of the matter by the Court. The majority of the Court is of opinion that the order of the Supreme Court should be affirmed. The appeal is therefore dismissed with costs.