An unconstitutional acquisition of property?

John Quiggin has an interesting post on the progress (or perhaps lack of same) of the Brough/Howard intervention into NT indigenous communities. Both the post and comment thread are worth reading. John also asks:

One of the striking features of the governments intervention in Aboriginal communities, embodied in the Northern Territory National Emergency Response Act 2007 was how rapidly the ostensible motive of intervening to tackle social problems, most notably child abuse, was swallowed by the ideological push to refashion property rights, taking over land owned by Aboriginal communities, with the presumed goal of turning it into individualised private property

A question thats come up a couple of times and to which I havent seen an answer is how this squares with the Constitutional requirement for just terms in acquisition of land and other property, and also the statutory requirements of the Lands Acquisition Act (unless these have been overridden by the latest legislation). Is there anyone with a legal background who can comment on this?

I responded to John by email, because his question raises some interesting constitutional and general legal issues. I haven’t attempted to express my thoughts in non-technical jargon for a general audience, but hopefully most interested readers won’t have too much difficulty:

In Teori Tau v The Commonwealth (1969) 119 CLR 564 the High Court held that Constitution s51(xxxi) (the acqusition of property on just terms guarantee) did not operate to restrict s122 (the territories power). The latter was a “full and plenary” power allowing the Commonwealth to legislate for a territory on any subject matter, unconstrained by any constitutional restriction (including especially just terms on acquisition of property by the Commonwealth) applicable to the federation (from which the territories were seen to be excluded or “disjoined”).1

In Newcrest Mining (WA) Ltd v The Commonwealth 190 CLR 513, Gaudron, Gummow and Kirby JJ disapproved Teori Tau and expressed the view that s51(xxxi) did burden s122. However, Brennan CJ, Dawson and McHugh JJ regarded Teori Tau as still binding and did not think that Newcrest was entitled to compensation. Toohey J, by a slightly different reasoning process, agreed with Gaudron, Gummow and Kirby JJ that s51(xxxi) fettered the legislative power of the Parliament where property was sought to be acquired “for any purpose in respect of which the Parliament has power to make laws”. As the legislation in question in Newcrest (effecting an acquisition of Newcrest’s mining tenements in Kakadu Stage 3) was expressed to be partly supported by the treaties aspect of the external affairs power (s51(xxix)) as well as by the territories power, that was sufficient to attract the just terms obligation in any event. However, although Toohey J accepted the general reasoning of Brennan CJ, Dawson and McHugh JJ just outlined, he also expressly declined to overrule Teori Tau. Hence it remains the applicable authority where a Commonwealth law is supported solely by the territories power s122 (as is the case with the new intervention legislation – the Commonwealth could have but elected not to rely on the race power s51(xxvi), because that would have opened up the distinct possibility of a decision like Newcrest, where the company was held by majority to be entitled to compensation). My own assessment is that Teori Tau is unlikely to be overruled by a majority of the current conservative High Court. Thus the Commonwealth is probably not under any constitutional obligation to pay just terms when it acquires property in a Commonwealth territory.

As for ordinary legal requirements otherwise imposed by Commonwealth lands acquisition legislation, the current Brough/Howard intervention was effected by fresh legislation. As such, it would almost certainly be held to impliedly repeal the Lands Acquisition Act 1989 (Cth) to the extent of any inconsistency (where it didn’t expressly do so). In fact the new legislation does expressly provide for assessment and payment of compensation for the compulsory 5 year leases, although the provisions certainly don’t coincide with the Lands Acquisition Act 1989 (Cth), and thus would be held to repeal it to that extent. There are no compensation provisions for cancellation of the permit system. On one view, this might represent an acquisition of property, because the right to exclusive posssession of land (i.e. to exclude others) is a central attribute of freehold tenure. On the other hand, it would only be an “acquisition” (as opposed to a bare extinguishment of property rights) if someone (not necessarily the Commonwealth) acquired tangible benefits flowing directly from the cancellation of the permit system. It isn’t immediately obvious that anyone does, so it may not be an “acquisition”. Moreover, there are many cases which hold that it is possible for governments to alter some rights attaching to property without constituting an acquisition which attracts an obligation to pay compensation. Rezoning and heritage listing are examples.2

The bottom line is that my best guess is that the Commonwealth is not constitutionally or legally obliged to pay compensation to traditional owners, but that question might well be tested in court by the land councils.

All this brings into sharp relief the fact that Australian residents of Commonwealth territories (especially the more populous self-governing ones like Northern Territory, Australian Capital Territory and Norfolk Island) are very much second class citizens in a constitutional sense. Unlike citizens of the States, we have no constitutional guarantee that the Commonwealth must pay just terms when it acquires our property rights. Nor do we have constitutionally assured representation in either the House of Representatives or the Senate. When you consider that there are more than 500,000 Australians living in these self-governing territories, it’s a fairly stark anomaly. No doubt that’s why Justices Gaudron, Gummow and Kirby atempted in Newcrest to refashion constitutional doctrine about acquisition of property in the territories. However, it occurs to me that the High Court’s Vicki Lee Roach decision last week about prisoners’ voting rights might even have compounded the inequality of territory residents.3

Since there is strong High Court authority that territory residents do not have a constitutionally assured right to vote, presumably territory prisoners also don’t have that right. Are territory residents excluded from the implied definition of “the people” in Constitution sections 7 and 24? They’re not for the purpose of the implied constitutional freedom of political communication, and yet they would surely have to be excluded on some basis from a guarantee of a right to vote, because the Territory Senators and Territory Representation cases say that there is no such guarantee.

  1. A majority also suggested (albeit in obiter) in Kruger v Commonwealth (the first stolen generations case) that s116 freedom of religion applied to the territories power, and numerous cases have indicated that the implied constitutional freedom of political communication also applies to the territories power. Thus s122 is no longer regarded by High Court jurisprudence as completely “disjoined” from the rest of the Constitution. Nevertheless, it remains highly doubtful that the current bench would overrule Teori Tau. ~ KP []
  2. Actually, s60 of the Northern Territory National Emergency Response Act 2007 anticipates and guards against the possibility that some aspect of the federal scheme might be held to constitute an acquisition of property within the meaning of Constitution s51(xxxi). It provides: “(2) However, if the operation of this Part, or an act referred to in paragraph (1)(b) or (c), would result in an acquisition of property to which paragraph 51(xxxi) of the Constitution applies from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person. (3) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.” That should be sufficient to ensure that no constitutional invalidity arises ~ KP []
  3. It’s easy to reconcile the implied constitutional freedom of political communication with the two territory representation cases: they’re not guaranteed a vote, but to the extent that territory residents in fact are given a vote at federal elections, they’re entitled to the same rights as all other Australians to discuss matters relevant to their vote. It’s much more difficult to reconcile a general constitutionally implied right to vote for “the people”, and to find some “appropriate and adapted” basis for excluding territory residents from “the people” for that purpose. there are clearly rational bases for excluding children and lunatics, and even long term prisoners, from the right to vote despite their being part of “the people”. But what plausible basis is there for denying the vote to territory residents who are clearly part of “the people” and don’t have any evident characteristics that could lead a rational legislature to disqualify them from voting? I’m looking forward with great interest to the Justices’ reasoning in the Roach case ~ KP []

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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14 years ago

I thought that was a good clear analysis.

The simple answer to any lefty hoping to find their answer in the Constitution is: go back to watching the Castle.

When Labor gets power the same will apply to righties. Our Constitution is fundamentally about the sharing of power between polities and not the rights of individuals. When it does protect rights, it generally does so in an accessory manner to providing for that sharing of power (such as providing for freedom of political speech relevant to the election of the federal government with its Constitutional powers over the States).

Bingo Bango Boingo
Bingo Bango Boingo
14 years ago

I wouldn’t underestimate those ‘conservative’ High Court justices’ desire to kill this idea that property in the Territories is susceptible to confiscation at any time, Ken…


14 years ago

It’s fairly amazing that querying the Howard government’s land nationalisation in the NT apparently makes you a lefty. Time was when conservatives could be expected to oppose nationalisation.

Joshua Gans
Joshua Gans(@joshua-gans)
14 years ago

Unlike citizens of the States, we have no constitutional guarantee that the Commonwealth must pay just terms when it acquires our property rights. Nor do we have constitutionally assured representation in either the House of Representatives or the Senate. When you consider that there are more than 500,000 Australians living in these self-governing territories, its a fairly stark anomaly.

This brings home the arbitrariness of the original state boundaries. Why is Broome in a state called Western Australia, with all the implied privileges for its inhabitants, while the no-less-remote Darwin is not part of some state called Central Australia or Northern Australia?