‘Property’ and acquisition on just terms

Diane Spooner, Law and Bills Digest Section

A Private Member’s bill

On 21 June 2010, a Private Member’s Bill was introduced into the House of Representatives by Bob Katter. The Bill was called the Constitution Alteration (Just Terms) Bill 2010.

The purpose of the Bill was to alter the Constitution to provide that Commonwealth and state governments’ acquisition of property and restrictions on the exercise of property rights can only be undertaken after the provision of compensation on just terms.

Section 51(xxxi) of the Constitution currently allows the Parliament to make laws 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. The Bill seeks to repeal and substitute section 51(xxxi) to extend the payment of just terms not just to the acquisition of property but also to any laws placing restrictions on the exercise of ‘property rights’.

Further, it adds a proposed section 115A to the Constitution which would prohibit state laws acquiring property or restricting the exercise of property rights of any person, except on just terms. This is because the states’ constitutions do not have a guarantee on just terms compensation.

Under section 128 of the Constitution the only way the Constitution can be altered is by way of a referendum. A Bill providing for constitutional change must pass both chambers of Parliament by an absolute majority, or by one House twice, and then the question posed by the Bill be agreed to by a majority of people as a whole, and in the majority of the states (that is, at least four of the six).

If Katter chooses to reintroduce his Bill, the 43rd Parliament has the option of passing it, thereby agreeing that the terms of the Bill be submitted to the Australian people for constitutional amendments. Other Private Members’ bills for proposing change may arise in this Parliament, including recognition of same-sex marriages, indigenous Australians, local government and possibly a Bill of Rights. Same-sex marriage legislation and a Bill of Rights could be achieved through ordinary legislation, without constitutional change, and this may be a preferred approach to these issues.

In his first reading speech, Katter put the context of his Bill into two specific instances. The first was Noel Pearson on the ‘theft’ of Aboriginal access to water, timber, and rocks without paying a ‘single cent in compensation’ (this is reference to the Wild Rivers legislation). Katter quoted Pearson threatening the Queensland government with the words ‘We’ll see you in the High Court. We have been there before and we beat you last time’. Mr Katter added ‘And I will be backing him this time’.

Recent court decisions

The second reference in the first reading speech was to the actions of Mr Peter Spencer who at the time was protesting NSW legislation and Commonwealth actions that diminished Spencer’s ability to clear his land as he pleased and which he alleged diminished the value of his land and this constituted an unjust acquisition of his property.

Spencer’s case will continue during the term of this Parliament. On 1 September 2010 he successfully won his case in the High Court for his right to have his matter heard back in the Federal Court of Australia. The Commonwealth and the states tried unsuccessfully to have Mr Spencer’s case not heard on the ground that he had no ‘reasonable prospect of success’. In the course of the judgment, the Chief Justice did say ‘that is not to say that … he has a strong case. It is sufficient to say that it is not fanciful …’

There has been a significant decision in the High Court since the Federal Court had found the Mr Spencer should not be heard. In ICM Agriculture Pty Ltd v Commonwealth (the ICM decision) the High Court held, in brief, that the legislative power of the Commonwealth does not extend to the grant of financial assistance to a state on terms and conditions requiring the state to acquire property on other than just terms. In essence this means that the Commonwealth cannot by way of section 96 (the grants power) or any other provision provide money for a state requiring the state to resume land on unjust terms.

Katter’s Bill does remain relevant even in light of the ICM decision. That case, and Spencer’s prospective case, relies on the existing section 51(xxxi), and the narrow expression ‘acquisition of property’. The proposed changes in the Bill widen this to include any restriction on the ’exercise of property rights.’ This attempts to pick up licence rights, access to land, water rights, and so on, that may not always gain the protection of the just terms provision. There would have to be an assurance that any change does not have a retrospective effect, otherwise some existing laws may be rendered unconstitutional.

Constitutional change

The Bill also seeks to restrict state powers of acquisition and interference with the exercise of rights without just terms compensation, which is the major complaint of persons such as Pearson and Spencer. Such a change has significant implications for state sovereignty and rights.

This issue raised by Katter’s Bill and in these court cases will continue to be very alive and relevant to the new Parliament and in all jurisdictions. Currently in Western Australia, the Premier is contemplating the compulsory acquisition of land in the Kimberley region for a gas precinct. While some form of compensation would likely be payable for the extinguishment of claimed native title rights, the proposed acquisition has been described by Professor Mick Dodson as being: ‘In a sense it’s another act of colonialism, it’s another theft of our land, it’s another invasion, it should never ever be contemplated at the political level.’

Should any legal challenges eventuate, Katter could potentially back Professor Dodson and Noel Pearson all the way to the High Court due to the enhanced significance of Private Members’ Bills in the new Parliament.

Library publications and key documents

Constitution Alteration (Just Terms) Bill 2010. http://parlinfo.aph.gov.au/parlInfo/download/legislation/bills/r4362_first/toc_pdf/10155b01.pdf;fileType%253Dapplication%252Fpdf

Constitution Alteration Bill First Reading Speech, House of Representatives, Debates, 21 June 2010, p. 5995. http://parlinfo.aph.gov.au/parlInfo/genpdf/chamber/hansardr/2010-06-21/0177/hansard_frag.pdf;fileType=application%252Fpdf

Spencer v Commonwealth of Australia [2010] HCA 28. http://www.austlii.edu.au/au/cases/cth/HCA/2010/28.html

ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51. http://www.austlii.edu.au/au/cases/cth/high_ct/2009/51.html

G Williams Property Rights and Just Terms Compensation, NSW Farmers Association Annual Conference,
20 July 2010