Minister for the Army v Dalziel
68 CLR 261(Judgment by: RICH J)
Between: MINISTER FOR THE ARMY
And: DALZIEL
Judges:
Latham CJ
Rich JStarke 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)
Judgment date: 10 March 1944
MELBOURNE
Judgment by:
RICH J
The question which arises for determination in the present case turns upon the operation, according to its proper construction, of s. 51, placitum xxxi., of the Constitution. The facts are simple and not in dispute. Certain vacant land in the City of Sydney is owned, so far as land is susceptible of private ownership, by a bank. It was let by the bank to one Dalziel upon a weekly tenancy at a rental of PD8 per week. Dalziel carried on upon it the business of a parking station for motor cars, out of which he made a net profit of about PD15 a week. The Minister for the Army, purporting to act under reg. 54 of the National Security (General) Regulations, took possession of this land for defence purposes. He made an offer to Dalziel of compensation which was not accepted. The matter was then submitted to a Compensation Board appointed in pursuance of the Regulations, which assessed compensation in accordance with an order of the Minister which provides that in assessing compensation loss of occupation or profits shall not be taken into account. Both parties then appealed to the Supreme Court of New South Wales, which held that the taking of possession amounted to an acquisition of property from Dalziel, and that the terms of compensation provided for by the Regulations were not just, because they prevented compensation being paid in any case in respect of loss of occupation or profits, and justice required that in assessing the compensation payable to Dalziel his loss in this respect should be taken into account. It was ordered, therefore, that his compensation should be determined without regard to the basis of the compensation order made under reg. 60H and should be determined under the ordinary established principles of the law of compensation for the compulsory taking of property. This is an appeal by the Minister from that order.
The placitum which is in question is concerned with the legislative power of the Commonwealth Parliament. One of the characteristic features of a fully sovereign power is its legal right to deal as it thinks fit with anything and everything within its territory. This includes what is described in the United States as eminent domain (dominium eminens), the right to take to itself any property within its territory, or any interest therein, on such terms and for such purposes as it thinks proper, eminent domain being thus the proprietary aspect of sovereignty. The Commonwealth of Australia is not, however, a fully sovereign power. Its legislature possesses only such powers as have been expressly conferred upon it, or as are implied in powers which have been expressly conferred. The subject of eminent domain is dealt with by the placitum now in question (s. 51 (xxxi.)), which is in the following terms:"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-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." What we are concerned with is not a private document creating rights inter partes, but a Constitution containing a provision of a fundamental character designed to protect citizens from being deprived of their property by the Sovereign State except upon just terms. The meaning of property in such a connection must be determined upon general principles of jurisprudence, not by the artificial refinements of any particular legal system or by reference to Sheppard's Touchstone. The language used is perfectly general. It says the acquisition of property. It is not restricted to acquisition by particular methods or of particular types of interests, or to particular types of property. It extends to any acquisition of any interest in any property. It authorizes such acquisition, but it expressly imposes two conditions on every such acquisition. It must be upon just terms, and it must be for a purpose in respect of which the Parliament has power to make laws. In the case now before us, the Minister has, in adversum, assumed possession of land of which Dalziel was weekly tenant. With all respect to the argument which has been addressed to us to the contrary, I am quite unable to understand how this can be said not to be an acquisition of property from Dalziel within the meaning of the placitum. Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle. But there is nothing in the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it was expropriating. Possession vaut titre in more senses than one. Not only is a right to possession a right of property, but where the object of proprietary rights is a tangible thing it is the most characteristic and essential of those rights. "So feeble and precarious was property without possession, or rather without possessory remedies, in the eyes of medieval lawyers, that Possession largely usurped not only the substance but the name of Property; and when distinction became necessary in modern times, the clumsy term `special property' was employed to denote the rights of a possessor not being owner" (Pollock & Wright, Possession in the Common Law, (1888), p. 5). "Possession confers more than a personal right to be protected against wrongdoers: it confers a qualified right to possess, a right in the nature of property which is valid against everyone who cannot show a prior and better right." "Possession is a root of title" (ibid., p. 22). "The rule that Possession is a root of Title is not only an actual but a necessary part of our system" (ibid., p. 93). "The standing proof that English law regards, and has always regarded, Possession as a substantive root of title, is the standing usage of English lawyers and landowners" (ibid., p. 94). A vendor of land cannot require a purchaser to accept his title unless he can give vacant possession at the time for completion (Cook v Taylor [F30] ); and a lessee incurs no liability under his covenant to pay rent if the lessor cannot give him vacant possession (Neale v Mackenzie; [F31] Hughes v Mockbell [F32] ) - see also, as to the interest and title of a person in possession of land, Perry v Clissold, [F33] at p. 377.
It would, in my opinion, be wholly inconsistent with the language of the placitum to hold that, whilst preventing the legislature from authorizing the acquisition of a citizen's full title except upon just terms, it leaves it open to the legislature to seize possession and enjoy the full fruits of possession, indefinitely, on any terms it chooses, or upon no terms at all. In the case now before us, the Minister has seized and taken away from Dalziel everything that made his weekly tenancy worth having, and has left him with the empty husk of tenancy. In such circumstances, he may well say:
"You take my house, when you do take the prop
That doth sustain my house; you take my life,
When you do take the means whereby I live."
I am not impressed by the argument sought to be based upon the fact that in the expropriation legislation of fully sovereign legislatures a distinction is sometimes drawn between the permanent appropriation of property and the temporary assumption of the possession of adjacent property for use whilst works are being erected on the property which has been permanently appropriated. It was pointed out that in such legislation the two types of appropriation are differently dealt with, and that different language has been used to describe them by learned judges who have had occasion to refer to them. This is no doubt so. And it is to be found not only in the legislation of the Imperial Parliament, but also in the legislation of the Parliaments of the States of the Commonwealth, which, although not fully sovereign, are, in respect of their right of eminent domain, subject to no such restrictions as were imposed by the framers of the Constitution on the Federal legislature. But, with all respect, I fail to see how the practice of such legislatures, or the language used by judges in referring to their legislation, throws any light upon the construction or operation of placitum xxxi., occurring, as it does, in a Constitution which confers powers which are both limited and conditional. I venture to repeat what I said in Australian Apple and Pear Marketing Board v Tonking, [F34] at pp. 106, 107:
"It is by the Constitution itself that the acquisition is required to be on just terms, and, since Parliament is bound by the Constitution, by no artifice or device can it withdraw from the determination by a court of justice the question whether any terms which it has provided are just, that is, terms which secure adequate compensation to those who have been expropriated. ... This is not to say that a tribunal which is technically a court must necessarily be provided for the assessment of compensation. That is a question which does not arise in the case before us, and I prefer not to pass upon it until it does."
If the argument which has been addressed to us on behalf of the Minister were allowed to prevail, the Commonwealth Parliament could authorize the Executive to take possession of not only all or any of the private property of citizens but also the property of the States and keep it indefinitely without paying a farthing of compensation to any one. To accede to this argument would be in effect to strike placitum xxxi. out of the Constitution.
It has been suggested, although the point has not been taken in the grounds of appeal, that if the respondent is correct in his contention he may be seeking the wrong remedy. The true position may be that unless the Minister can assume and maintain possession of the land on his own terms he would prefer to be regarded as a wrongdoer and a trespasser rather than submit to just terms, and that the respondent's proper remedy may be an action in tort for unliquidated damages. A somewhat similar suggestion was made to the Privy Council in relation to a party to litigation in the case of Corea v Appuhamy, [F35] at pp. 235, 236, and in my opinion the present suggestion deserves a similar fate. In some cases, the language used may be such as to make this the correct method of approach, e.g., Johnston Fear & Kingham & The Offset Printing Co Pty Ltd v The Commonwealth; [F36] but, as at present advised, I do not think that it is so in the present case. Reg. 60D provides that any person who suffers loss or damage by reason of anything done in pursuance of reg. 54 (the regulation which authorizes the taking possession of land) in relation to property in which he had any legal interest or right, may, if compensation is not otherwise provided for, make a claim to the Minister for compensation. Reg. 60F provides for the assessment of compensation by a Compensation Board in case of difference, and reg. 60G for an appeal from the Board to a court of competent jurisdiction. Reg. 60H empowers the Minister by order to make provision for the basis of compensation, subject to the condition that any order relating to the acquisition of property shall provide just terms, and provides also that any such provision of the Minister shall bind every Compensation Board and court. It was in reliance upon reg. 60H that the Minister made the order which directs that in assessing compensation for loss or damage suffered through the taking possession of land, loss of occupation or profits shall not be taken into account.
There is nothing in all this to suggest that it was intended that assumptions of possession were to be dependent for their legal validity upon every jot and tittle not only of every regulation but of every order made thereunder turning out to be maintainable. On the contrary, the scheme of the Regulations is that the Minister may take possession of whatever he considers necessary, and that the appropriate compensation shall be paid. In these circumstances, I think that the proper course is that which was taken by the House of Lords in Nehterseal Colliery Co Ltd v Bourne, [F37] that is, to treat the transaction as generally valid and to give full effect to it, rejecting only the invalid condition which was sought to be attached to it: Cf. Lake View and Star Ltd v Cominelli, [F38] at p. 664; Kearney v Whitehaven Colliery Co; [F39] Vita Food Products Inc. v Unus Shipping Co Ltd, [F40] at p. 293.
This is in accordance with s. 46 (b) of the Acts Interpretation Act 1901-1941, which provides that where an Act confers power to make, grant or issue any instrument (including rules, regulations or by-laws) then any instrument so made, granted or issued shall be read and construed subject to the Act under which it was made, and so as not to exceed the power of that authority to the intent that where any such instrument would, but for this section, have been construed as being in excess of the power conferred upon that authority, it shall nevertheless be a valid instrument to the extent to which it is not in excess of that power. It has already been pointed out by this Court that the effect of such a provision is that such instruments, found partially invalid, must be treated as distributable or divisible, unless it appears affirmatively that it was not part of the intention of their authors that so much as might have been validly provided should become operative without what is bad (R. v Poole; Ex parte Henry (No. 2), [F41] at pp. 651, 652).
It is not in strictness necessary, in order to decide the matter now before us, to do more than determine whether the third proviso to clause 1 of the Minister's Order of 23rd March 1942, treated as invalid, is, upon the principles indicated, severable from the general scheme of which it forms a part, and I think that it is so severable. But I think it desirable that our decision should rest upon a broader basis than this. It is evident that the draftsman of reg. 60H proceeded upon an erroneous supposition, apparently shared by the framers of s. 5 (1) (b) of the National Security Act 1939, that the appropriation by the Commonwealth to itself, for an indefinite period of the exclusive possession of property did not constitute an acquisition of property within the meaning of s. 51 (xxxi.) of the Constitution, and that the Executive Government could therefore exercise an arbitrary discretion as to the compensation, if any, to be paid to persons deprived of the proprietary right of beneficial possession. Not only is reg. 60H designed to give effect to this erroneous idea, but it appears to be intended to confer upon the Minister an arbitrary discretion even when the Minister dispossesses a citizen not only of some, but of all, his rights of property in a particular subject-matter. The regulation is, in my opinion, wholly void, and the order of 23rd March 1942 is therefore also wholly bad.
For the reasons which I have stated, I am of opinion that the appeal should be dismissed with costs.