LLB203 Final: Express limits that the Constitution places on exercise of federal legislative power
Express limits that the Constitution places on exercise of federal legislative
power
Acquisition of Property
when testing constitutional validity:
iii.1) identify a head of legislative power- s 51; and
iii.2) check if the consts places any limits or prohibitions on
the exercise of that legislative power- express or implied
The Parliament [has] power, subject to this Constitution, 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
Paragraph is the sole grant of power for acquisitions and a limit on all acquisitions
Constitution s 51(xxxi)
Introduction
Section 51(xxxi) is both:
a grant of power; and
a qualification of all Commonwealth powers.
In the absence of 51(xxxi), each other paragraph would contain an implied grant to acquire
for the relevant purpose.
However, if that was the case, the Commonwealth would be able to rely on another head
of power to avoid the qualification, so this must be seen as the sole source of power for
compulsory acquisition.
Attorney-General (Commonwealth) v Schmidt
This is an example of the qualification to the Engineers’ principle; namely, words
in one paragraph can limit those in other paragraphs if otherwise the former
words would become totally meaningless.
The main purpose of the provision is to ensure the Cth is able to acquire property not just
from citizens but also from the States. “On just terms” is included to prevent arbitrary
exercises of the power
Grace Bros Pty Ltd v Commonwealth (Dixon J at 290-1)
“Power conferred by 51(xxxi) is express, and it was introduced as a specific power, not, like
Fifth Amendment, for purpose of protecting subject or citizen, but primarily to make certain
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that Comm possessed a power compulsorily to acquire property, particularly from States.
Condition "on just terms" was included to prevent arbitrary exercises of power at expense
of a State or the subject.”
See also Bank of New South Wales v Commonwealth (the Bank Nationalisation
case)
‘’serves double purpose. It provides Comm Parliament with legislative power of acquiring
property: at same time as a condition upon exercise of power, it provides individual or State,
affected with a protection against governmental interferences with his proprietary rights
without just recompense. In requiring just terms s 51 (xxxi) fetters legislative power by
forbidding laws with respect to acquisition on any terms that are not just.” Dixon J, 350
If commonwealth has purported to acquire property under a law that fails to provide just
terms, these may be the outcomes:
1.1. the whole act declared invalid: Bank Nationalisation
case
1.2. specific acquisition can be declared invalid:
Newcrest Mining v Commonwealth: Commonwealth’s
proclamation of a National Park over Newcrest’s mining
leases was declared invalid
1.3. Acquisition may stand, but courts may adjust the
amount of compensation as in Dalziel
No codified rules as to which outcome will eventuate in particular cases
However the outcome may depend on what remedy the plaintiff has sought
Principle factors affecting the court’s decisions are the Parliament’s apparent intention and
the ease or difficulty of severing invalid provisions
Effect on States and Territories
Section 51(xxxi) only applies to the Commonwealth: does not
stop the States from acquiring property on a compulsory
basis
However state governments usually provide for
something similar to ‘’just terms’’ but aren’t required
to- they choose to
Pye v Renshaw
HC has held that s 51(xxxi) does not operate to restrict the territories power
in s 122
(the power under s 122 is a ‘purpose in respect of which the
Parliament has power to make laws’, just as much as any of the
powers in s 51.)
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Teori Tau v Commonwealth
However, Teori Tau was considered in Newcrest v Commonwealth and has since
been overturned in Wurridjal v Commonwealth. Therefore, s 51(xxxi) DOES operate
to restrict the territories power
Wurridjal v commonwealth
Elements
1. that what the Commonwealth has acquired is property;
2. that the Commonwealth has effected an acquisition;
3. that where property has been acquired, just terms compensation must be provided;
4. the Commonwealth can only acquire property for any purpose in respect of which the
Parliament has power to make laws.
Property
The HC has adopted a broad approach to the language of s 51(xxxi). As such, property
includes:
estates or interests in land recognised at law or in equity;
specific forms of property in a chattel or in a cause of action recognised at law or in
equity; extends to
innominate and anomalous interests not recognised at
law or in equity.
Bank Nationalisation case per Dixon J
FACTS: The Bank of New South Wales (and others) challenged federal legislation
that enabled the Commonwealth to acquire the business of all private banks in
Australia. The legislation authorised the Commonwealth Bank (an agent of the
federal government) to buy shares in private banks; authorised the Treasurer to
direct that shares in private banks be vested in the Commonwealth; and provided, on
a certain date, that all of the directors of private banks in Australia would no longer
hold office, and that the Governor of the Commonwealth Bank, on the advice of the
Treasurer, was given the power to appoint new directors to run the banks.
HELD: that the provisions constituted a compulsory acquisition on other than
just terms. These provisions removed effective control over the property of
the banks
Dixon J at 349 characterised the provisions as removing effective control over the
property of the private banks —the company and shareholders were, in a real sense,
stripped of the possession and control of the entire undertaking
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