Opinion Number. 260



Key Legislation

CONSTITUTION, s. 51 (xxxi) : PROPERTY FOR PUBLIC PURPOSES ACQUISITION ACT 1901, ss. 3, 5, 6, 49: LANDS ACQUISITION ACT 1906, ss. 5. 6, 13, 15, 16, 17, 21, 26. 27, 62, 63 : PUBLIC WORKS ACT 1900 (N.S.W.) : NEW SOUTH WALES CONSTITUTION ACT 1855 (IMP.), s. 2

The Prime Minister

The Prime Minister forwards for my consideration a memorandum by Mr C. G. Wade, Attorney-General of New South Wales, upon the provisions of the Eminent Domain Bill (now before the House of Representatives as the 'Lands Acquisition Bill(1)).

The most convenient way of considering Mr Wade's memorandum will be to set it out paragraph by paragraph, and to set [out after] each paragraph the observations that it appears to me to call for.

  1. I have been considering the provisions of the Eminent Domain Bill that has just passed the Senate, and is now before the House of Representatives.
  2. The main provisions of this Bill are so one-sided and unjust, both actually and potentially to this State, that I think in our interests representation should be made to the Federal Parliament, with a view to obtaining amendments in the direction I am about to indicate.

The provisions of the Bill affect the State of New South Wales in precisely the same manner as they affect the other States-without discrimination of any kind. I am not aware that they are one-sided, except in the sense in which any provision for compulsory acquisition must be initiated by one side, and if necessary for the public interest carried through, notwithstanding the objections of another. But even here I am unable to detect any injustice, because the fullest compensation is provided for. The same principle is embodied by New South Wales itself in its State Act for compulsory acquisition of land (Public Works Act 1900).

3. The justification for this Bill is section 51 sub-section 31 of the Commonwealth Constitution Act, which provides for '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'. This means that land may be acquired for certain public purposes, such as Custom House, Post Office, Defence, Quarantine, and possibly other purposes that do not occur to me at the present moment. Such matters as obtaining land from either a State or private individual for mining purposes are clearly outside the scope of the Constitution. On the other hand, the policy and practice of this State for many years on the alienation of Crown lands has been to reserve all minerals to the Crown. Bearing in mind these two propositions it is clear from many sections of the Bill that if it passes without amendment the Commonwealth will be empowered to compulsorily obtain mineral-bearing lands and work them as Commonwealth concerns.

I agree with Mr Wade that the acquisition by the Commonwealth of land from a State or person for mining purposes is outside the scope of the Constitution-and I am equally satisfied that it is outside the scope of the Bill. No indication can be found in the Bill that the Commonwealth is ever to take lands for mining purposes.

4. In the first place, section 14(2), which provides for the different modes of acquisition, simply speaks of land without qualification. Land, according to the definition of section 5(3), includes Crown land whether reserved or dedicated for any public purpose or not.

Thus the Commonwealth may compulsorily acquire land belonging to this State which has been dedicated to one of the many public purposes known to our law, and, according to section 14, that acquisition need not be for a public purpose as known to the Commonwealth Constitution. This same section empowers the Commonwealth to acquire land belonging to a private individual. That land may contain minerals which were reserved to the Crown on alienation by the State.

The title of the Bill, and the whole tenor of its provisions, show clearly that it applies only to acquisition for public purposes, as defined in clause 5, that is to say, national purposes. It is quite unnecessary to repeat those words in every clause of the Bill. Clause 14, for instance, is merely a clause specifying the two modes of acquisition-by agreement and by compulsory process. It has no relation whatever to the purpose of acquisition.

The clause certainly applies to any land, without exception-as the corresponding section in the existing Act of 1901 does.

5. In the next place, section Tft (b)(4) enables the Minister, on behalf of the Commonwealth, to sink pits and examine the soil of any land acquired; and finally, section 63(5) enables the Governor-General to authorise mining on any land, the property of the Commonwealth.

There seems to be some misunderstanding of clause 22 (b). It does not relate to land acquired-it being obviously unnecessary to empower the Minister to enter on land of the Commonwealth-but to land proposed to he acquired. It is a power to enter, survey, and examine to ascertain its suitability for a public purpose. A precisely similar provision (Property Acquisition Act, section 49 (1)) has been law for five years, and exists in State legislation.

6. It will be seen from the sections quoted that the Bill will enable the Commonwealth to acquire mineral-bearing lands, and to mine upon them, and to receive all the profits resulting from the operation.

If this criticism means that the Bill empowers the Commonwealth to acquire land for the purpose of carrying on the business of mining, I differ entirely.

7. In my opinion section 14 is ultra vires in not defining that the land to be acquired must be for some public purpose, within the meaning of section 51 of the Constitution Act. I am also inclined to the opinion that it is ultra vires of the Constitution for the Commonwealth to mine upon lands that they have acquired for a public purpose, assuming that public purpose does not cover such an operation as mining.

I quite agree that a construction of clause 14 which would extend its application to acquisition for other than a public purpose as defined would make it ultra vires to that extent. But such a construction is in my opinion impossible, and the notion that the Commonwealth would ever attempt to take land for other than public purposes is not to be attributed to it.

I cannot agree that when the Commonwealth has acquired land for a public purpose it has not full rights of proprietorship. The argument that it has not would apparently lead to the conclusion that the Commonwealth cannot e.g. give licences to depasture cattle on a rifle-range.

8. Again, let us see how this State is treated in respect of compensation. Take the case of land alienated by the Crown to a private individual, with reservation of minerals. His interest iri the land is consequently exclusive of the minerals upon the land. If the Commonwealth acquires that land by compulsory process, a notification in the Gazette of such acquisition vests the land in the Commonwealth (see section 17(6)). The legal estate therein with all rights and powers incident thereto or conferred by this Bill are vested in the Commonwealth. Section 18(7) provides that on the publication of this notification the estate and interest of the person entitled to the land is converted into a claim for compensation. Section 27(8) provides that the owner shall be entitled to compensation; thus, in the case stated, that private individual may be compensated for his interest in the land minus the minerals. There is nothing in the Act to enable the State to step in and establish a claim in respect of these minerals; and the general purpose of the Bill would seem to be, in the first place, to vest the property and the minerals in the Commonwealth to enable them to work these minerals subsequently without providing for any compensation to the State. It is absolutely essential that a provision be inserted in this Bill, reserving the right of the State to all minerals known to exist or to any minerals that may be discovered in the future. It is no part of the policy of the Commonwealth to carry on mining operations, and the giving of this power may lead in the course of time to the Federal authorities acquiring mineral-bearing areas belonging to this State and working them on socialistic lines.

There again appears to be a misunderstanding of the provisions of the Bill. 'Land' as denned means land in the legal sense, not in the geographical sense-i.e. it means estates, interests, etc. in land. There may be several owners of several estates or interests in respect of the same area. Each is entitled to full compensation for his estate or interest. The Commonwealth can acquire from an individual nothing more than the individual has. If it acquires from the State any interest reserved by the State, it must similarly compensate the State in full.

This is a distinct requirement of the Constitution itself (section 51, sub-section (xxxi)), which provides that the acquisition must be on just terms and which stands as a complete safeguard to the State.

9. Again, the whole method of compulsory acquisition is humiliating to the dignity of the sovereign State. According to section 16(9), it rests with the Governor-General to direct that any land may be acquired from the State by compulsory process; thereupon he may, by notification in the Gazette, declare that the land has been acquired under this Act. The publication of this notice vests the land in the Commonwealth. Moreover, under section 17 sub-section 2, the Commonwealth is empowered by a stroke of the pen to become the owner, by Proclamation, of Crown lands of the State, which are dedicated or reserved; in other words, they may acquire any of our public parks in this summary manner. I think a condition should be inserted making it incumbent on the Commonwealth to treat for the acquisition of Crown lands before they resort to compulsory methods, and in any case of difficulty between the two Governments as to the main purpose of the proposed acquisition, or as to the quantity of land proposed to be taken, the dispute shall be settled by a reference to the Supreme Court. As the Bill is now framed, there is no protection to the individual State against being robbed of its most cherished spots. The evil would not be so great were provision made that the Commonwealth should even return to the State any superfluous land not required for the purpose so claimed. I notice that section 64(10) declares that if any land acquired is not required for a public purpose, the Governor-General may authorise the disposal of it as he thinks fit. This to my mind scarcely covers the case of returning the land to the State from which it is taken.

I fail to see the humiliation. The State is not 'sovereign' as against the Commonwealth, within the sphere in which the Commonwealth has paramount legislative power.

The invariable practice is to treat before compulsory acquisition. But apparently the suggestion is that, if the treaty fails, no power of compulsory acquisition should remain, except by leave of the Supreme Court of the State. In other words, the determination of a question of Commonwealth public policy-the necessity of the acquisition-would be transferred to the State judiciary. The mere statement of this proposition is a sufficient answer to it.

I do not understand the suggestion that the power to dispose of the land does not cover the case of returning it to the State. Under a precisely similar provision in the present Act, it is a frequent practice to return land to the State.

10. There are several minor matters which are worth noticing. For instance, in dealing with compensation to a State for land acquired by compulsory process, the compensation shall be estimated as if the State were the owner in fee simple of the land subject to any estate or interest which any person had in the land at the time of its acquisition by the Commonwealth. That is to say, the land may be leased by the Crown, or there may be a contract whereby the State is under obligation to the other contracting party. As the land by resumption will vest in the Commonwealth absolutely, free from all obligations, the State will be compelled to pay its lessee compensation for loss sustained, but the State may not in its . turn recover money so paid as part of its compensation from the Commonwealth. I read section 28(11), sub-section 2, to mean that the interest created by lease is to be subtracted from the claim of the State to the land as owner in fee simple. In short, the Commonwealth takes the whole of the land, and, instead of paying the State full compensation, and the State being liable over to its lessee, the obligation is cast on the State of settling with the lessee himself without any consequent recourse to the Commonwealth.

This is a misunderstanding. In the case of a Crown lease, the Commonwealth, if it acquired the land, would acquire the lease from the lessee, the reversion from the State, and compensate both.

11.Again, the existing Property for Public Purposes Acquisition Act of the Commonwealth, No. 13 of 1901, section 5, provides that in the case of any Crown land of the State purchased under that Act the Government of the State may grant such land in the name of the King to the Commonwealth. Section 6(12) of the proposed Bill provides that the Governor of a State, with the advice of the Executive Council, may, notwithstanding anything to the contrary in the law of the State, sell or lease to the Commonwealth any Crown land of the State which is required for a public purpose. This last-mentioned section is clearly a violation of the terms of the Imperial Act, 18 & 19 Vic. Chap. 54(13) , which conferred the Constitution on New South Wales. Section 2 of the Imperial Act states the entire management and control of the waste lands belonging to the Crown shall be vested in the Legislature of this Colony. Moreover, I think this same section is ultra vires the Constitution Act of the Commonwealth, because section 51, sub-section 31, provides for the acquisition of property from any State. I am strongly inclined to read 'State' as meaning the Parliament of the State and not the Executive Government.

The Constitution of New South Wales must now be read subject to a later Imperial Act-the Commonwealth Constitution Act.

If the criticism means that the Commonwealth can only acquire land from a State with the consent of the State Parliament, I disagree. The Australian Constitution would in that case be singularly weak and defective.

Clause 6 of the Bill, which from the beginning practically did nothing more than formally recognise and emphasise the power of the State to deal with its own lands, if it so wished, has, since its introduction, been altered to a form which may probably be thought even less open to objection than at first. The object of the clause was, and is, to avoid the necessity of compulsory acquisition where the parties voluntarily agree.(14)

[Vol. 5, p. 355]

(1) Enacted as the Land Aquisition Act 1906.

(2) Enacted as section 13.

(3) Enacted as section 5.

(4) Enacted as section 21(b).

(5) Enacted as section 62.

(6) Enacted as section 16.

(7) Enacted as section 17.

(8) Enacted as section 26.

(9) Enacted as section 15.

(10) Enacted as section 63.

(11) Enacted as section 27.

(12) Enacted as section 6, with variations.

(13) New South Wales Constitution Act 1855 (Imp).

(14) This opinion was published in Commonwealth of Australia, Parl. Papers 1906, Vol. II, p.1153.