Government of the Russian Federation v Commonwealth of Australia

[2025] HCATrans 52

[2025] HCATrans 052

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Canberra  No C9 of 2023

B e t w e e n -

GOVERNMENT OF THE RUSSIAN FEDERATION

Plaintiff

and

COMMONWEALTH OF AUSTRALIA

Defendant

GAGELER CJ
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J
BEECH‑JONES J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 6 AUGUST 2025, AT 10.05 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend MR E.A.J. HYDE for the plaintiff.  (instructed by Adero Law)

MR S.P. DONAGHUE, KC, Solicitor‑General of the Commonwealth of Australia):   May it please your Honours, I appear with MS E.H.I. SMITH and MS C.M.R. ERNST for the defendant.  (instructed by Australian Government Solicitor)

GAGELER CJ:   Thank you, Mr Solicitor.  Mr Walker.

MR WALKER:   Your Honours, the exchange of written submissions and more recently of the parties’ outlines gives rise to the possibility that there is, so to speak, radical agreement on some propositions, but with no closer approach to a resolution of the difference between us.

I refer in particular to the significance of the provisions of section 51(xxxi) regulating, as we would put it, the acquisition by exercise of legislative power on the part of the Commonwealth of property falling within the terms of that provision on the one hand, and on the other hand, the significantly different and separate provision of legislative power in section 122 with respect to the Australian Capital Territory.

GAGELER CJ:   What about Commonwealth places, Mr Walker?

MR WALKER:   Your Honour, we were running a book on how long that would take.

GAGELER CJ:   Who won?

MR WALKER:   I think I did.  Section 52(i) rather leaps out.

GAGELER CJ:   It leaps out – bits of it, perhaps.

MR WALKER:   Yes.  The Commonwealth – who might be expected to have a firm hand on stewarding the position it takes in litigation concerning Commonwealth power – does not invoke section 52 as a provision to which, as it were, 51(xxxi) may subtend.  But let me complete my – I do not know whether it is concession or simply recognition of the obvious.  It is evocative, in this case, that the expression:

the seat of government of the Commonwealth –

appears in 52(i), no question about that.  For that matter, the second limb of 52(i) itself:

places acquired by the Commonwealth for public purposes –

must obviously gain real meaning with respect to 52, given the history under section 125, no question about that.  It may well also be that 52(ii), which concerns what I am going to call public service – as it happens, by the continuity from colonial days, that is not important – that might also be called in aid.  But it would be fatuous for me to say I have not come ready to deal with section 52.

But the Commonwealth, which has plainly given consideration to‑and‑fro with various matters, if we can compare previous correspondence with the latest manifestation of the Commonwealth’s serious position taken in litigation in this Court concerning the powers it calls in aid to justify legislation, the Commonwealth does not raise section 52.  I am, of course, in your Honours’ hands.  I am ‑ ‑ ‑

GAGELER CJ:   Mr Walker, I do not need to make a big deal of it, but it does seem to be squarely raised by the way in which the arguments are presented, by the location of the land.

MR WALKER:   Your Honour, I do not think I am at pains to dispute what you have just said except in one probably minor respect.  The nature of the dispute between the parties – the matter – unquestionably has all those attributes; all the more significance that a deliberate decision has been taken not to invite the Court to see section 52 as the source of power.  Now, this is not ‑ ‑ ‑ 

GAGELER CJ:   That can certainly be part of your response, Mr Walker, that is fine, but ‑ ‑ ‑ 

MR WALKER:   I accept this is not a sporting contest – this is the administration of justice.  I agree, it is concerning constitutional provisions about government.  I do not deprecate any of that but, on the other hand, I am counsel for a party in litigation with issues, and this Court takes pains – by directing the filing of submissions – to ensure that the issues are presented.  That does not mean there cannot be, gently or otherwise, indications from the Bench that that has not entirely carried out its intended purpose in a case which might be though to raise matters not covered by the submissions of the party with the burden of the argument.

Now, we could have been seen as a party that starts by an exhaustive trawl of everything in the Constitution to eliminate those things which we say could not be a bestow of authority – that is, legislative competence to enact the statute – but that is not the way this kind of case proceeds and it is, with respect, therefore – I was about to say not that I should not have to deal with it at all, but I am in your Honours’ hands and I would seek some clarity of direction as to what I do now with respect to the Commonwealth and section 52.  I would ‑ ‑ ‑ 

GAGELER CJ:   Mr Walker, if you are prepared to deal with the substance of the point, please do.  If you are not prepared to deal with the substance of the point, it will be something that I will raise with the Solicitor and you can deal with it in reply.

MR WALKER:   Could I try and compromise?  I will attend to it, but it is more than usually subject to what I may hear from my friend ‑ ‑ ‑ 

GAGELER CJ:   Of course.

MR WALKER: ‑ ‑ ‑ who, after all, has not embraced it yet. Yet. Might I complete the misery for me by pointing out that there are very important words in the second line of section 52, the words indicative of the significance of the power. Interestingly, they are not words found within section 122, and that might be important. And those are the words, of course, the familiar words of so-called plenary power, notwithstanding a limited Constitution:

the peace, order and good government of the Commonwealth with respect to –

In other words, it reproduces what you find at the beginning of section 51.  This is not a case which would either turn on or, on the special case, could involve the Court drawing cadastral limitations to the notion of “the seat of government of the Commonwealth” in 52(i) and, for what it is worth, we would concede that whatever that expression means, it either does not require translation to cadastral terms, or if it does, then it does not mean that the subject matter of valid legislation under 52(i) cannot affect what I am going to call areas beyond the curtilage.

The next thing is, whatever “seat of government” involves – and that involves the question of what does government involve – I would submit, for example, that what we are doing now is conduct in government – the locations that your Honours are familiar with from the special case, respectively, of the plaintiff’s leasehold site and of the defendant’s Houses of Parliament, building for the Parliament, are such as to bring to bear considerations not so far raised by the Commonwealth as to whether this law, whatever other character it may have for the purposes of appreciating the application of section 51(xxxi), is nonetheless a law falling within the ambit of section 52.

Now, it is at that point that I will refrain from going further into 52 because, as your Honours might appreciate, we argue that whatever head of power is available to support the statute in question – which really is a statute for determination of one leasehold – whatever head of power is available, we submit that it means there are only two questions, and this is all in what I have called in our outline, a fallback case.

In other words, if there is a head of power, then there is only a sequence of two questions to be asked and answered.  The first is whether the termination of our leasehold was an “acquisition of property” within the meaning of 51(xxxi).  Your Honours have seen that we give a peremptory response to that, which I will develop.  If we are wrong in that, then that is the end of the story in our fallback case, the fallback case being the case where there is a head of power authorising the legislation.

The second question, if we are correct that this is an acquisition, is the one raised by the issue joined between the parties concerning the provision of just terms.  Now, your Honours, the doctrine in this Court probably favours phrasing of the considerations relevant to that second question along the lines of the incongruence or the incompatibility with the evident purpose of 51(xxxi) of requiring just terms in certain cases.  Some of them are so obvious as to give rise to a doubt as to whether they do provide much of an informative basis for a doctrine.

The notion that 51(xxxi) would impose just terms on something which is ancient in governmental practice, namely, the forfeiture of property, mostly, obviously, by reason of its relation to criminal conduct, is really too silly for words.  There are others that have been extended that are perhaps not quite so obviously not within the embrace of 51(xxxi) just terms.  I do not need to catalogue them exhaustively, but fines and, surprisingly, even tax has been proposed as requiring some thought about that subject matter.

EDELMAN J:   What is – the just terms for a forfeiture, do you say that is the price of a release?

MR WALKER:   I am sorry, I am talking about a criminal forfeiture – deodand.

EDELMAN J:   Yes, I know, but a forfeiture of a lease – do you say here that the just terms would be the price of a release?

MR WALKER:   Probably, yes.  The 5 cent annual reserve would be an entertaining aspect of a valuation question but would not require much attention, really, because of the evident value of a leasehold for the purpose.  Yes, it is a 99‑year lease, that notoriously has significance in terms of the value of having the estate outstanding against the freehold proprietor.

If I could just return to the question of just terms.  Another way of framing the matter, of course – which I do not think it is the preferred position in this Court – is simply to say that the epithet “just” is the textual means by which the Court should examine cases.  Some as silly as criminal forfeitures, some surely peripheral to any possible application of 51(xxxi), such as tax – the idea of tax being accompanied by a financial reflex of the payment is really too silly for words – but there can be no justness in the imposition of any financial reflex by way of compensation for a taking – an acquisition – said to have been constituted by any such matter.

In our submission, this is a case where the Commonwealth, in answering that second question, saying if there be an acquisition and therefore 51 applies, nonetheless it does not require any compensation by way of just terms.

GORDON J:   One of the ways it has been put, I think, is to ask, in effect, the negative – that is, to pose the question by asking whether acquisition without just terms must be a necessary or characteristic feature of the purpose or objective of the law which is within power.

MR WALKER:   That is a way of – I am not sure that that is negative – but that is a way of approaching the matter.  We certainly agree that when you come to this question of accepting 51 applies but concluding that it requires no just terms or that just terms are zero, we certainly accept and indeed urge that attention has to be focused on the particular statute in question – no doubt about that.

The particular statute in question here is not a statute that identifies or seeks to alleviate anything with respect to defence of the Commonwealth or the national security – that being an overlapping concept.  The statute simply terminates an estate.  The statute does not remove the land from availability, according to planning regulation, for diplomatic premises.  Those are matters beyond the possible investigation of matters in this Court for the purposes of determining this matter.

What may or may not be done with the land in future cannot possibly affect the question of the validity of the statute that purported to terminate the leasehold.  If there be – by way of example – 52(i) invoked as, by its subject matter, authorising legislation concerning what I will call a buffer zone around the parliamentary premises, then in our submission, the question arises as to what is the supposed incongruity or incompatibility of such an acquisition authorised by such a law by way of just terms.

I have already invoked defence.  The Commonwealth does not invoke defence in this case.  I invoke defence because a sensible political science view would see defence as a function of government which is close to a peak significance.  No one doubts the existential importance of the Commonwealth providing adequately, according to decisions by Parliament and the Executive, for the defence of our territory.

And yet that significance, that existential significance, has never been supposed somehow to detract from the guarantee of just terms.  If my land is to be taken, for its superior location as an artillery position for the defence of the continent, the notion that I would contribute that gratis to the common good is, again, offensive.  It rather is at odds with the national significance of a defence power, that individuals or private corporations could be singled out for what I might call a compelled gift to the government for the public interest.

Or to put it another way, the significance of national security, a term which bespeaks its own importance, cannot possibly contribute towards making out the inaptness – by way of incongruence or incompatibility, et cetera – of just terms for acquisitions for the purpose of serving an interest of national security.

BEECH-JONES J:   Do you say part of this incongruity has to appear on the face of the statute?  So, if it was forfeiture of land for past conduct or something, there might be a debate, but all the references to national security are not there in the statute, so the means adopted is just a pure acquisition?

MR WALKER:   I probably do say that, but I would not bind myself ‑ ‑ ‑ 

BEECH‑JONES J:   To only that.

MR WALKER:   ‑ ‑ ‑ or those who follow me in other cases to the notion that things have to appear on the face.  It will be determined as a matter of substance, and we should await cases as to where, as it were, everybody knows why a statute has taken property from a certain person, and the question is whether they are circumstances which prevent the requirement of just terms from operating.

GAGELER CJ:   But most of the incongruity cases that I can think of over the years have concerned an incongruity between the provision of just terms and the means chosen by the Parliament in the law to effectuate a purpose.  There may be cases, but rarely, I think, would the incongruity be seen to be between the purpose and the provision of just terms.  I mean, this is a point, I think, in your favour, Mr Walker.

MR WALKER:   I want to put a submission which is, as it were, deliberately diffuse.  In my respectful submission, this case really cannot, given its highly particular circumstances, provide a vehicle for considering – perhaps I should more politely say reconsidering – what this doctrine of incongruity actually means or how it actually operates.

The examples I have already given are really quite disparate, one from the other.  The notion that a criminal forfeiture would attract just terms is, I say, too silly for words, but it may be that the notion of tax attracting a financial reflex is even sillier.  These are matters which ultimately turn upon discerning the intention, in the properly fictitious sense, of these words in the Constitution, and the notion that you could give a power of tax but you are going to always have to make it a net zero for the revenue is ridiculous.  That does not actually provide any general principle, given that the notion of interpreting by ridicule is not really a principle at all, it is simply part of the rhetoric of argument.

In our submission, for the purposes of this case, the Court should at least firmly reject the position that appears to be put against us with respect to just terms.  The answers to the second question which would arise if there is an acquisition and there is a head of power – which is what might be presented by section 52 – the answers that the Commonwealth gives, which this Court should firmly reject, is the idea that the importance of the purpose or the importance of the act of government, be it national security or defence or preventing foreign interference with democratic deliberations - - - 

GORDON J:   That seems to be what is put against you.

MR WALKER:   Yes, I think so.

GORDON J:   At paragraph 41 of their submission.

MR WALKER:   We think so – in other words, the importance of them doing the thing for the peace, welfare and good government of the Commonwealth is something which expels just terms.  That surely cannot be right.  With respect, within a Territory – and territories power now subject to 51(xxxi) – why would someone say it is not important that there be provision of a hospital, and land taken at an appropriate point for a hospital, or for a civilian airport in remote areas, or maritime facilities, et cetera?

These are obviously important, and in many ways, existentially so.  No one would dream, surely, of saying that the person whose property is acquired for that project has to volunteer it, gratis.  Of course there are just terms.  In our submission, acquisitions for defence are classic examples where the importance of the purpose could never be sensibly thought to require that any particular owner give it up.

Now, it may be, as Sir Owen Dixon noted, but we cannot pursue, because it does not matter in this case, it may be that when it comes to working out just terms, that is the content.  The identity of the former proprietor being, say, a polity in the Federation might affect things.  We do not have to worry about that, but in our submission, it simply does not arise.

STEWARD J:   Can I ask you, just as a matter of clarification, in this matter, the Russian Federation paid a lump sum in 2008, which is not a term of the lease – we do not have to be worried about that?

MR WALKER:   No, the Court, in its role as a court deciding this matter, will not use that in any particular way, either concerning acquisition or just terms ‑ ‑ ‑ 

STEWARD J:   All right.

MR WALKER:   ‑ ‑ ‑ or, for that matter, whether there is a head of power.  Should there be concern about the state of affairs where the leasehold came as a result of a transaction, part and parcel of which was the paying of a considerable premium.  Yes, of course, people should be concerned.  The premium has been wasted.

STEWARD J:   Can I ask, related to that, is there proposed to be a possible cause of action of unjust enrichment in relation to the payment of that lump sum?

MR WALKER:   I have to say, I do not know, your Honour.

STEWARD J:   All right, thank you.

MR WALKER:   I have no instructions.

STEWARD J:   Thank you.

GAGELER CJ:   Mr Walker, just so I understand the scope of the argument, there is a question, perhaps, about whether there is an acquisition, perhaps not; there is a question about a head of power; and there is a question about incongruity.

MR WALKER:   That is right.

GAGELER CJ:   In both sets of written submissions – pursued, perhaps, with not a lot of enthusiasm by either side – there is argument based on the decision in Clunies‑Ross.

MR WALKER:   Yes.

GAGELER CJ:   Is that really being pursued?  I have not heard it from you yet.

MR WALKER:   No, and I have not quite got to that yet.

GAGELER CJ:   Okay.

MR WALKER:   But let me respond properly.  One of the reasons why it may not occupy much logical space in the argument – and one hopes, therefore, not too much time in the argument – is that the radical common ground between us that may not reduce the difference between us is that the Commonwealth accepts that a purpose of Commonwealth use – active or passive – of this land is not available to them for the purposes of making out one of the skeletal features of resort to 51(xxxi).  That gives rise to considerable differences between the parties.

Can I say this about Clunies‑Ross?  It is quite an awkward fit in a legal argument.  It certainly does not answer any straightforward stare decisis approach.  There are suggestions about 51(xxxi), which was not in question in the case, which merely provided an incomplete textual precedent for aspects of the statute in question.  The case goes off, for the majority, on the interpretation of the statute in a fairly straightforward manner so as to hold the Commonwealth to the terms of the power.

But we have drawn it to attention because in the passages – I do not need to take you to them – in the passages in question that we have cited, there is certainly a more favourable view than to opposite views express of the proposition that the Commonwealth may acquire using the power under 51(xxxi) only if the property to be acquired is, in some sense, to be used.

These are very unstable notions to be conveyed by words as plain as that, bearing in mind the enthusiasm, if I may say so, with which the Court has refused to be cabined by conveyancing exactitude when it comes to the notion of property.  One need only raise one which seems, I hope, to be firmly established.  Namely, the abolition of litigation against the Commonwealth can be seen as the acquisition of the chose in action against it. 

The advantage is palpable, but the notion of use is not quite so easy in linguistic terms.  I think I, without being complacent, can say, well, that is an established taking acquisition governed by section 51.  Of course, it then spawned the subsidiary questions as to whether the chose in action was a creature of statute inherently susceptible of amendment, including retrospectively, or not including retrospectively.  That is jurisprudence we do not need to go to, and I think – I could well be mistaken – casts no light on anything relevant to today’s argument.

GAGELER CJ:   So, really, my question is:  you have articulated the proposition that one might draw from the obiter comments in Clunies‑Ross.  Are you putting that proposition as part of your argument?

MR WALKER:   Yes.  The proposition is simply that this is a case where the land remains available for what it was available before, as it happens, our lease and before the taking of our lease.  So, this is not an acquisition for the purpose of so‑called national land, as it was regulated to be – formerly open space.  It was already for diplomatic premises.  So, it is not for the purpose of it being used.  That is not the purpose of the statute.

GORDON J:   And you call that in aid of your contention of entitlement to just terms?

MR WALKER:   Ultimately, yes, but the point I have just made is at an anterior stage.

GORDON J:   I accept it is.

MR WALKER:   That is, I am still arguing that there is no head of power to support this statute.  Now, I know there is – what should I call it – the not so insubstantial spectre of 52 not yet raised against me, but leaving that aside for one moment, it is common ground between the parties that this statute cannot be said to have effected this acquisition for the purpose of Commonwealth use of the land.  We would go on and say:  and in particular in this case it is a piquant irony that the land remains as available for use as diplomatic premises, just not by us, as before either the lease to us or the acquisition of that lease.

BEECH‑JONES J:   The land is available for use for anything that the Commonwealth permits?  So, they can make it a park or a football ground?

MR WALKER:   They can reregulate; they can change the regulations.  In other words ‑ ‑ ‑

BEECH‑JONES J:   So, to say it is not used for a purpose – in a sense, the Commonwealth has the power to use it for any purpose it might decide in the future, does it not?

MR WALKER:   Your Honour, the antecedent of that pronoun “it”, we have to be careful we do not slip into thinking about the land, because the land has not been acquired.

BEECH‑JONES J:   You mean the acquisition.

MR WALKER:   Yes.

GORDON J:   Your short point is that it was regulated to be used for diplomatic purposes before the lease was granted – the lease was terminated or acquired ‑ ‑ ‑

MR WALKER:   And there has been not alteration to that ‑ ‑ ‑

GORDON J:   There has been no alteration to the regulation of the use of the land.

MR WALKER:   So, insofar as our interest in the land might be supposed by those asserting an orthodox resort to 51(xxxi), at the outset we say no.  Our property, the leasehold, cannot possibly be said, in accordance with this statute, to have been acquired for the purpose of providing diplomatic premises.  That is just not right.  It was already there for providing diplomatic purposes.  The statute does not do it for that purpose.

To put it another way, the project or intention said to be the purpose within the meaning of 51(xxxi) – you cannot supply a ground for legislation if that purpose had already been wholly effectuated by other means before the statute in question.  You cannot say the statute is for an acquisition for a purpose when your description of that purpose describes a state of affairs to which the statute makes no difference at all.

GAGELER CJ:   You say it is really on all fours with Clunies‑Ross, where the purpose of the acquisition is to deprive your client of the land, I suppose.

MR WALKER:   That is, if I may say so, to counsel at least an attractive aspect of Clunies‑Ross.  They are very odd facts, but then we say ours are odd facts, where acquisition of property – in this case acquisition of an estate by the reversioner – is not to advance the capacity of the Commonwealth to use the land, let alone the estate taken.  It is simply to deprive us ‑ ‑ ‑

JAGOT J:   Is that not advancing the Commonwealth’s – I am not sure.

MR WALKER:   As it was in Clunies‑Ross.

JAGOT J:   Leaving aside use for a purpose – of the Commonwealth’s argument about acquisition has to be a use for a purpose, let us put that to one side.

MR WALKER:   I think the answer to your Honour’s question is yes, but that was the minority view in Clunies‑Ross, that that would suffice.  This is not an argument about sincerity.

JAGOT J:   No, no.

MR WALKER:   This is certainly not an argument about merits.  Perish the thought either of those.  So, the answer to your Honour’s question may be:  of course this is legislation intended – in the fictitious sense of “intention” – by Parliament to advance a position which fits within the broadest ambit of peace, welfare and good government.

I accept all of that, but the question is, in a limited government, which head of power under the Constitution, starting with the resort to section 51 then going to 52, if I have to – 122 goes to 125, et cetera – and always remembering 51(xxxiv) – the question is which of those.  And in our submission ‑ ‑ ‑

JAGOT J:   Well, it may be multiples.

MR WALKER:   I am so sorry, your Honour? 

JAGOT J:   It may be multiples – 122, 52(i) – but I am struggling with that it is not for a purpose.  Then, logically, what would follow from that is it is a use for a purpose; that is still a legitimate use for a Commonwealth purpose for ‑ ‑ ‑

MR WALKER:   As long as we are not talking about the land, we are talking about acquisition of our property, which is a leasehold. 

JAGOT J:   Yes, the leasehold is for a purpose to ‑ ‑ ‑

MR WALKER:   So, when I am talking about ‑ ‑ ‑

JAGOT J:   ‑ ‑ ‑ prevent you from occupying ‑ ‑ ‑

MR WALKER:   I am sorry, your Honour.

JAGOT J:   No, no.  Obviously, to prevent you from occupying, so you do not have use of diplomatic premises there.

MR WALKER:   So, let it be assumed, we certainly assert – à la Clunies‑Ross – the purpose is that, of the whole world, we not use it.  That is it; to exclude us.  Now, in our submission ‑ ‑ ‑

GORDON J:   Can I ask one question?

MR WALKER:   Yes, your Honour.

GORDON J:   You challenge this identification of purpose on the face of the statute, but even if you accept that it is for national security interests ‑ ‑ ‑ 

MR WALKER:   I am not accepting national security interests as a purpose for which ‑ ‑ ‑

GORDON J:   No, no.

MR WALKER:   I am so sorry.

GORDON J:   But even if you identified a purpose for the legislation, and if for argument’s sake – and I am using this as an example for the moment – it is for national security, then I do not understand why it is not open for you to contend that a termination of the lease is any less effective of achieving that purpose, if just terms are paid.  In other words, you would succeed it on your argument, as I understand it, if that was the position.  So, what is the logic of taking issue with this? 

MR WALKER:   Your Honour, you mean taking issue with whether this acquisition answers the description of one:

for any purpose in respect of which the Parliament has power to make laws –

GORDON J:   Yes.

MR WALKER:   That is what I mean by the 51(xxxi) requirement.  The purpose – I will try not to use that word – my aim for my client is to render the law invalid so our leasehold still exists.

BEECH-JONES J:   If it does not fall within 51(xxxi) for that reason, does that mean it is not carved out from the other heads of power you have identified? 

MR WALKER:   Well, in a sense, that is right.  The fact that it is not a carve‑out ‑ ‑ ‑

BEECH-JONES J:   So, do they not then authorise it?  And you do not get a brass razoo.

GORDON J:   You do not get your money.

MR WALKER:   We have our leasehold, is my point.

BEECH-JONES J:   But what I am suggesting is if you embrace the obiter in Clunies‑Ross, that means you do not have an acquisition for the purpose of the Commonwealth under 51(xxxi), ergo ‑ ‑ ‑

MR WALKER:   I do not embrace Clunies‑Ross for the proposition that there is not an acquisition.  I embrace Clunies‑Ross for the proposition –which it can only be by way of tangential suggestion, of course – that 51(xxxi) does not contemplate that, within the meaning of purpose in 51(xxxi), is a mere expulsion of the owner from the land rather than use, in some sense, by the Commonwealth of the land if the land is the property in question.  That is Clunies‑Ross for us.

BEECH-JONES J:   And if that is right, 51(xxxi) is not engaged?

MR WALKER:   That is right, so there is – I am sorry.

BEECH-JONES J:   Do not the other then head of powers, which are otherwise carved out with 51(xxxi), carves out from – do not the other heads of power then authorise this Bill?

MR WALKER:   No, no, let me make it clear. 

BEECH-JONES J:   What would be left, then – if that is not right – is a little hole in Commonwealth power. 

MR WALKER:   I am not suggesting any hole in Commonwealth power at all. Section 51(xxxi) has this relation to every other head of legislative power in the Constitution, that it puts beyond doubt that there can be a taking by the Commonwealth, pursuant to or by the exercise of legislative power, and then comes the qualifying words:

for any purpose in respect of which the Parliament has power to make laws –

So, this is not a constitution in which a king can take something because he likes it, which is different from our history.  So, 51(xxxi) is not carved out.  It is, if you like, superimposed on every exercise of legislative power which purports to effect an acquisition of property.

BEECH-JONES J:   I thought we said it was carved out in Yunupingu?

MR WALKER:   I am sorry, your Honour?

BEECH-JONES J:   I thought we used the language of “carved out” in Yunupingu. 

MR WALKER:   They are not carved out in the sense of isolated like a shag on a rock, it then applies to everything which answers the description of an acquisition.

BEECH-JONES J:   And the other heads of power do not then authorise it.

MR WALKER:   Well, you look to 51(xxxi), rather than to the other heads of power.  What you looked for in the other – at Yunupingu and, for that matter, Wurridjal made this clear – what you would look for in the other heads of power is something which supplies an answer to the question:  what is the purpose in respect of which this acquisition is – to use the proposition in 51(xxxi) – for?  What is this acquisition for?

The answer to that has to be something which is a purpose in respect of which you will find somewhere – obviously not in 51(xxxi) – the Parliament having power to make laws.  I am sorry, it may be the figure of speech of “carve‑out” has led to cross‑purposes.

BEECH-JONES J:   Yes.

MR WALKER:   We are not putting anything we understand to be different from the orthodoxy, for example, in Yunupingu in that regard.  What we are saying in this case is that, subject to the question of 52, the Commonwealth has pointed to matters which, in our submission, do not answer the description of a purpose in respect of which the Parliament has power to make laws as that for which this acquisition was made.

Perhaps it is a straw man, but we started by saying it is not the purpose of providing diplomatic premises, which is a purpose for which the Parliament has power to make laws under a number of heads – (xxix) will do. So, it is not that. And we say – and this is where my answer to Justice Jagot perhaps needs to be resumed – that neither is it within an understanding of section 122 simply to remove us as the tenant of this land.

JAGOT J:   That is the bit I am not following. 

MR WALKER:   No, that is why I ‑ ‑ ‑

JAGOT J:   I can kind of understand it in the context of the specific legislation in Clunies-Ross, acquired for a public purpose and ministerial power; this is a statute.  I am just not following why that is not just a perfectly legitimate purpose authorised by whether it be 122, 51, 52(i).  Now, if that is so, it speaks against the Commonwealth’s argument about 51(xxxi) applying, but where is the analogy with ‑ ‑ ‑

MR WALKER:   Your Honour, the reason why I have just now gone back to the question you asked me is I do accept that 122 is not to be interpreted in a miserly fashion.  No doubt about that, but I am trying to make use of the very phrasing which makes that clear.  Namely:

for the government of any territory –

So, parliament making laws for the government is not, with respect, simply the same as the opening words of 51, or the opening words of 52:

peace –

welfare:

good government –

It refers to that relation between the Commonwealth and a territory, and for that matter, the people of a territory – to the extent that is a useful concept – in the nature of government.  In our submission, expelling a person from or depriving a person of a leasehold estate which would give them a right of exclusive possession of land, being land which the Commonwealth has already owned, does not fall within the description of:

laws for the government of any territory –

It is difficult to elaborate the argument beyond the way we have tried to write it.  I am not suggesting it is uniquely cogent the way we have written it, but what I am saying is a one-off act – the blow, the axe blow, we take your leasehold – is not, in our submission, within an ordinary and purposive and contextual understanding within this Constitution of the notion of Parliament making laws for the government of any Territory, providing for ‑ ‑ ‑

GORDON J:   Could you just explain to me again why that is so.

MR WALKER:   Because a one-off act, as it were – an executive act by a legislation, we take your leasehold – does not make any law for the government of the Australian Capital Territory.  It sets down no regime ‑ ‑ ‑

GORDON J:   For my part, I do not quite understand that, Mr Walker.  There seem to me to be a fortiori the very thing it was doing.

MR WALKER:  I suppose it might come down the argument to this. Can it be supposed that, under section 122, the phrase “laws for the government of any territory” is a category always supplied simply by the fact that anything done under section 122 is by legislation.

GORDON J:   For that purpose.

MR WALKER:   And the answer is no, but I understand the response to that is, well, obviously yes.  Then, well, I lose that point.

BEECH-JONES J:   Why is the law saying a particular government cannot open an embassy in a Territory?  Not a law for the government of that Territory?

MR WALKER:   Well, it actually – the law does not say that.  If there is an everybody knows applied, your Honour might be right.  But this is a law which ‑ ‑ ‑

BEECH-JONES J:   A law saying the lease of this property in the Territory is terminated, why is that not a law for the government of that Territory?

MR WALKER:   Well, it is a law by way of government of the Territory, it is not a law for the government of the Territory.

GAGELER CJ:   What about the granted lease?  Was that a law for the government of the Territory?

MR WALKER:   No.  So, the various means by which the land was – I will call it – dedicated, planned, by planning decision ‑ ‑ ‑

GAGELER CJ:   That resulted in lease.

MR WALKER:   ‑ ‑ ‑ designated for such a use, and then ultimately a lease.  The lease itself is not a law for the government, but the ordinance and laws authorising those leaseholds, they are very much “laws for the government”, yes.

GORDON J:   The reason why you ask, if you go to the special case book at 58, one has the very documents you have just been referring to, which is moving it from:

Open Space land use and substituting Diplomatic ‑ ‑ ‑

MR WALKER:   To national land.  All of that – those are pursuant to statutes which are unquestionably “laws for the government of”.

GORDON J:   Sorry, I just – you went from open space land use and substituted:

Diplomatic Mission land use.

MR WALKER:   Yes.

GORDON J:   Yes.  And then that was the vehicle by which the lease was then able to be granted.

MR WALKER:   In general terms ‑ ‑ ‑ 

GORDON J:   A necessary piece.

MR WALKER:   It was a precursor ‑ ‑ ‑ 

GORDON J:   Thank you.

MR WALKER: No doubt about that, no doubt about that. And those laws – so, either the laws authorising the making of ordinances when ordinances were effective, or laws pursuant to self‑government, or direct Commonwealth laws – one way or the other, they will all find their root in something which is a section 122 law.

No doubt about that.  So, laws about ordinances, laws about self‑government, laws about – directly – the Commonwealth saying this is how land use will be regulated in the Australian Capital Territory, or this is how land use in the vicinity of Capital Hill will be regulated – all of those are, we accept, laws for the government of the Territory, no doubt about it.  The point is only that this is not one of those laws, it does not provide for any regime, it is simply, à la the Executive – it is an executive, it just takes someone’s property.

GLEESON J:   Is it because it is an ad hominem law?

MR WALKER:   I am sorry, your Honour?

GLEESON J:   Is it because it is an ad hominem law?

MR WALKER:   Well, in a sense, yes.  I mean, that is a mark of it being ad hominem.  I do not want to suggest that ad hominem is a mark of Cain with legislation, though – some laws are all the better for being focused on only one subject matter and including, perhaps, persons affected by it.  We are not here talking about bills of attainder.

I am going to come to some aspects of that when I come back to the question of just terms but, so far as the 122 argument – and I am in grave danger of repeating myself – I think my answer to your Honours’ various questions about it is that it comes down to the question as to what in this statute, which simply takes our leasehold, can be said to provide for the Government of the Australian Capital Territory, as opposed to – be it a particularly brutal exercise of purported power – by way of government of the Territory.  And your Honours realise there is a history here.

GORDON J:   That is, in a sense, the questions I was asking you.  Do you accept we are entitled to look at that history?

MR WALKER:   Yes.  The history I am about to come to is, of course, the history that this leasehold has been a valuable item of property which has been the subject of litigation, which litigation concluded in what I might call a five‑year – I do not know, “amnesty” is, perhaps, too strong a word, but a five‑year period during which the Commonwealth would not purport to exercise any powers of termination.

So, the statute, lo and behold, should, within a fortnight of that being solemnised by consent orders – declaratory, so that the Court was actually involved – within a fortnight of that, this statute comes in to do the thing which they had agreed would not be done and, in fact, had consented to injunctions against it being done.

We are not suggesting there is an injunction against legislating.  What we are saying is this:  that there could not be a clearer demonstration that this statute is not providing for the government of the Territory; it is doing something by a statute that they had tried to do as an actor bound by the private law of leases, and had failed, and had given up.

BEECH-JONES J:   You just seem to be having a dichotomy of what is in the government of the Territory and, sort of, other things.  We do not do that with heads of power in 51.  Why would we do that with 122?

MR WALKER:   I may not have fully appreciated your Honour’s ‑ ‑ ‑ 

BEECH-JONES J:   Something affecting – whether it is for the good government of the Territory or the bad government of the Territory ‑ ‑ ‑

MR WALKER:   No, I am not worried about any of that.

BEECH-JONES J:   And it is not about – it is not limited to the governmental structures of the Australian Capital Territory.

MR WALKER:   No.

BEECH-JONES J:   So, what is the limit on “for the government of” the territory that is different to something operating within the Territory?

MR WALKER:   The laws in – 122, I am saying, cannot be read as the Parliament may legislate for territories.  It is:

may make laws –

that is, Commonwealth laws:

for the government of any territory –

Now, we know that can be direct or by self‑government.

BEECH-JONES J:   Could the Territory legislature under a grant of power from the Commonwealth say:  no lease here, not just to you or to any person in the Territory?

MR WALKER:   One needs, then, to go into questions about the limits that the Self‑Government Act imposes.

BEECH-JONES J:   Say they were given the full plenary power that the Commonwealth had.

MR WALKER:   The Commonwealth has full plenary power, tempered by section 51, is my point.

BEECH-JONES J:   So, no one could pass any law ‑ ‑ ‑ 

MR WALKER:   No, no, it would ‑ ‑ ‑ 

BEECH‑JONES J:   ‑ ‑ ‑ in the Territories saying:  no, but a person cannot have a lease?

MR WALKER:   Your Honour is talking, to use Justice Gleeson’s impression of it, about an ad hominem identification of a person?

BEECH-JONES J:   Maybe.

MR WALKER: Can there be planning regulation? Absolutely. So, can you conduct a casino next to a school, in an ordinary planning regime? I hope the Territory has some law like that; certainly, the Territory could have some law like that. The Commonwealth could provide such a regime under section 122 directly.

BEECH-JONES J:   I am just finding that there is an unstated lacuna in legislative power over territories that no entity has.

MR WALKER:   I am not proposing any gap at all, I am simply saying that one needs to identify, if you are going to make a law for the acquisition of property, a purpose which answers that description, because the control that this Constitution placed upon taking of property was that it has to be, if you like, for the purposes of the Commonwealth.  The phrasing of that, redolent of the republic of laws approach to the Commonwealth, was to tie it to things which lay within the legislative power of the Commonwealth. 

We know that is a very broad field indeed, particularly given 51(xxxix) and nationhood.  That there is a limit is clear, and all we are saying is, if you cannot show that you are taking this property – acquiring this property – for a purpose that itself falls within the legislative power of the Commonwealth wherever else provided, and whether provided multiply so or not, then you cannot pass that law for the acquisition.

We would dispute the proposition that that is some kind of lacuna for the purposes of interpretation, as Justice Beech‑Jones has proposed.  That is not a gap.  That is simply an attribute – intended attribute – of the requirement that acquisition be restricted to what I am going to call acquisition for Commonwealth purposes, and for purposes which can be the subject of government by the representative means of legislation as opposed to pure Executive conduct.

GLEESON J:   Is it important to your case that the language of 122 is “for the government” as opposed to “for the peace, order, and good government”?

MR WALKER:   Yes, it is.  That is a step in our argument.  It is also important – and I make no apology for this – but, as in 51(xxxi), the preposition “for” is important.  It is not “by way of”, it is making laws “for” the government – that is, laws which themselves provide for something that might be called government.  And that abstract noun “government” is, in our submission, not automatically supplied by all and anything which might otherwise be done by legislation.  That is our point, and I have repeated myself, I am sorry.

Your Honours, bearing in mind the not completely unanticipated intrusion of 52 as something against the background of which I have been trying to put these arguments, can I come back to the order of my propositions, which – a lot has been caught up now, but number 1 is important.  It divides the parties, and we submit that there is no good reason in principle shown by the Commonwealth, let alone by the citations of authority, to which I may or may not reply, by which you could say that when a reversioner promotes legislation by which an outstanding estate – “outstanding” in the sense of it being adverse to the reversioner, in this case, a leasehold – is abolished – terminated – that there has been no correlative disadvantage and advantage by which one can perceive an acquisition.

I have already given your Honours the chose in action example, but in musing on the other ways in which 51(xxxi) has been seen in this regard, one is reminded of Newcrest – so, something far less obvious in that case, the deprivation in practice of the outstanding rights of a mining lease seen to be substantively an acquisition by what I call the reversioner – that is, the landowner against whom those rights would have been adverse.  So, it is a familiar notion that the termination of an adverse interest in favour of the party – in this case, the polity – against which that interest or estate was adverse, amounts to an acquisition.

One need only think about one of the most important aspects of the rights with respect to land, namely, exclusive possession, to appreciate that exclusive possession is gained as a right – immediate right – by the reversioner who terminates a leasehold and, in our submission, it is for those reasons that we are correct in our proposition 1, which I will not further develop.

Our proposition 2 has already been caught up in the argument that pointed out that one thing you cannot posit as a 51(xxxi) purpose here is obtaining this land for use as diplomatic premises.  That is proposition 3 as well.  Proposition 4 notes, as I have already noted in opening, what appears to be what I called in opening the radical agreement between us that nonetheless does not shrink the differences.  Proposition 5, I think I have said what I want to say in chief to develop it.

Proposition 6, which concerns 51(xxix) very largely, in our submission, turns on the adequacy of the argument that we have put in the second sentence.  So, it cannot truly be – bearing in mind the application of laws to everybody within our territory, subject to diplomatic immunity – it cannot possibly be that a law binding foreign persons, entities or polities is enough to make it a 51(xxix) law.  Now, that does not mean that that is not a circumstance which will not contribute to a conclusion that it is a 51(xxix) law, but it will not be sufficient, in our submission.

In paragraph 7, we do say that there is nothing that this Court can properly take into account by way of discussion of this case which could alter that as a matter of constitutional characterisation.  We accept the conduct of the kind which, subject to 51(xxxi), might involve an acquisition, could call upon a 51(xxix) power, and we have given an example, which is an example of a very important aspect of 51(xxix), namely, Australia being subject to international obligations.  So, we note that this is not a case which could possibly be said by this Court to have been the subject of legislation pursuant to any such matter.  There is not a molecule of demonstration of that.

Now, in paragraph 8 we negatively note what I have already referred to in opening concerning this rubric of national security.  It is not invoked in the written submissions against us.  It is not invoked, if you like, as a freestanding or identifiable matter which translates to being a head of power within the meaning of 51(xxxi).

Now, that does not mean that we are so unrealistic as to suggest that national security is a concept foreign to the Constitution, including with respect to the legislative, not to mention executive powers of the Commonwealth.  That is crazy, and we do not say that all.  But you do still have to pass through the gate required by 51(xxxi) which limits acquisitions to those which can be said for a purpose within the legislative power of the Commonwealth, and the rubric of national security is not, as I speak in chief, is not argued against us as making that out.

That does not mean, of course, that national security may not be a perfectly handy way of describing a justification, which is not normally justiciable, for a law for the peace and good government of the Commonwealth falling within one of the various heads of power that might be involved – and I am forced to put in a marker at this point, in relation to 52(i), without saying more about it.  That is our point in proposition 9, that motivations or attempted justifications are, in our submission, not to be confused with purposes, which are within the phrase required by 51(xxxi).

In proposition 10 in particular, we resist the notion that this is a law, the constitutional head of power of which is supplied by a press conference.  Now, there is as difference, of course, between material which is available to the Court with respect to legislation, by reason of press conferences, or explanatory memoranda or the like on the one hand; and on the other hand, enacted preambles, et cetera, as in the Communist Party Case.

But the difference is not a difference when renders them foreign to each other as sources of understanding of the way in which the Court ought to appreciate an argument that asserts a particular head of power.  And in our submission, this is not a statute which can be said to have a head of power not by reason of anything in it, not by reason of anything which it does as a matter of law concerning rights and property, but rather by reason of a political explanation.  That, in our submission, does not supply a head of power.  It might give a perfectly sensible reason why a head of power was exercised.

In paragraph 11 we come back to something which obviously has already been raised in my attempted answer to a number of your Honours’ questions. If there is both an acquisition and a purpose within the legislative powers of the Commonwealth for that acquisition then, in our submission, 51(xxxi) applies. Now, that is true whether it is section 122 or not. In other words, there is no afterlife for the notion that acquisitions for the purposes of section 122 or purposes permitted under section 122 are bereft of the so‑called guarantee in 51(xxxi).

Then we come to 12, and we accept that the whole burden of both the terms of 51(xxxi) and this Court’s jurisprudence about it means that there can be an exercise of power under 51(xxxi) without a just terms requirement involving anything of worth.  In other words, whether the standard drafting at the moment matters or not, this is a case where if just terms are required and they have been legislated for, we have rights under it.

We accept – let me make it clear – that it is of course open to the Commonwealth to say:  yes, but the requirement for just terms has a content which is dependent upon the circumstances of the particular case.  In a sense, the epithet “just” makes that obvious.  And we accept that there is something in the nature of this incongruity or incompatibility doctrine.

For the reasons I have already put, that really does not apply here.  There is every reason why a planning decision concerning the suitability of a particular use in a suitable location ought to be the subject, if it can be imposed by the acquisition in question in this case, there is every reason why that should be accompanied by just terms, the content of which can be worked out but which can be comfortably said not to be zero.

Your Honours, before I sit down, could I apologise for an error. It is glaring but, nonetheless, in our reply submissions, on page 3, in paragraph 6, about line 6 on the page, we have – and I am sorry – cited the Overseas Missions (Privileges and Immunities) Act 1995.  We should have cited the Foreign States Immunities Act 1985, which you will find in the authorities booklet starting at 150.  It makes no difference to our argument, we think.

May it please the Court.

GAGELER CJ:   Thank you, Mr Walker.  We will take the morning adjournment.

AT 11.14 AM SHORT ADJOURNMENT

UPON RESUMING AT 2.15 PM:

GAGELER CJ:   Mr Solicitor.

MR DONAGHUE:   May it please the Court.  Your Honours, the plaintiff’s primary argument is that the Home Affairs Act is invalid on head of power grounds. That is question 1 in the special case. In order for that argument to succeed, the plaintiff must of course persuade the Court that the Act is not supported by any head of Commonwealth power, including section 51(xxxi) of the Constitution itself.

That is, it is the plaintiff’s burden to secure the answer they seek to question 1 to persuade your Honours that the Act is not a law with respect to the acquisition of property, and the plaintiff does say that.  They said it in writing and Mr Walker advanced that argument today, principally, I think, by reference to Clunies-Ross.

The Commonwealth agrees that the Act is not a law with respect to the acquisition of property supported by 51(xxxi), both for that reason and for the additional reason, the incongruity reason that your Honours have heard addressed.  The Commonwealth contends, though, that while the Act is not supported by 51(xxxi) in its primary guise as a head of power, it is supported by other heads of power, which I will come to in a minute.

GLEESON J:   You accept just terms are payable?

MR DONAGHUE:   No.

GLEESON J:   No?  Under section 6(1)?

MR DONAGHUE:   And I do not accept that in my primary argument, because if Mr Walker is right, and I am right in agreeing with him that the Act is not supported by 51(xxxi), we embrace the point Justice Beech‑Jones put to Mr Walker this morning, that 51(xxxi) cannot abstract from the other heads of power upon which we rely support the Act, because it has been clear, ever since the abstraction analysis was first articulated by Chief Justice Dixon in Schmidt, that the abstraction is only to the extent of the ground covered by the head of power. 

So, if we are both right, that 51(xxxi) does not support the Act, Mr Walker wins if none of the other heads of power do, but the Commonwealth wins if any of the other heads of power do support the Act.  Not only does the Commonwealth win on the Act being valid, but no compensation is payable.

BEECH-JONES J:   But I thought your heated agreement on 51(xxxi) is for different reasons.  You say, as I understand it, not an acquisition; Mr Walker says, not for the purposes of the Commonwealth.

MR DONAGHUE:   In the end, your Honour, that may be right, but it does not matter.  If 51(xxxi) does not apply, it does not apply to support the Act affirmatively, and it does not distract.

BEECH-JONES J:   I understand that, but the suggestion that we have agreement on 51(xxxi) is a bit – could be a bit misleading.

MR DONAGHUE:   It might depend, your Honour, on how exactly one reads Clunies-Ross, and I will come to that in due course, but ‑ ‑ ‑

GORDON J:   I had understood that you have put that 51(xxxi) did not apply because there was no acquisition. 

MR DONAGHUE:   Because there is no acquisition of property on just terms for a purpose for which the Commonwealth has power.

GORDON J:   Yes.

MR DONAGHUE:   So, the whole compound phrase, but where one situates the limit on the incongruity part of the case, we say this is an acquisition for which the notion of just terms is ill‑suited.

GORDON J:   Is incongruous.

MR DONAGHUE:   It is incongruous, so we focus on those words of incongruity at the level of ‑ ‑ ‑

GORDON J:   So just so I am clear, is that, in a sense, the high point of your argument on 51(xxxi)? 

MR DONAGHUE:   It is a twin‑peaked argument, your Honour.

GORDON J:   What is the twin peak?

MR DONAGHUE:   The other peak is the Clunies‑Ross argument.

GORDON J:   I see.

MR DONAGHUE:   So, either way, we get to the result that I seek, and they are not dependent on each other; they are different routes.

STEWARD J:   So, the other peak is no taking. 

MR DONAGHUE:   So, the no use is what I would call the Clunies‑Ross argument, and then the incongruity – by either of those pathways, I will seek to persuade your Honours that 51(xxxi) is not engaged.  If I lose on both of those arguments, then that is a further reason why I win on question 1, because ‑ ‑ ‑

JAGOT J:   And you lose on question 2.

MR DONAGHUE:   But I lose on question 2.  So, that is really where, as we put it, the debate lies.  I am going to seek to persuade your Honours that I win first on question 1 by reference to 122 of the Constitution, and then that I win on question 2 by persuading your Honours that 51(xxxi) does not apply.  But the worst I can do, in my submission – on the way the argument is mapped – is that if you reject those arguments, there is a compensation liability, and you answer questions 2 and 3 according with that.

That is how the issues fit together, as we see it. As to question 1, we propose to focus orally on section 122, but in doing that, I would not like to leave your Honours with the proposition that we have any lack of faith in multiple other heads of power that would be capable of supporting this law.

GORDON J:   So, in relation to external affairs, it is not the subject of your outline.

MR DONAGHUE: No, it is the subject of our written submissions, and I rely upon our written submissions. Your Honours, in my submission, the Commonwealth wins so clearly on section 122 that your Honours could rightly ask, well, why am I addressing you at length on external affairs, and seat of government and nationhood, or various other things that I could rely upon.

GAGELER CJ:   Can I just raise one other thing.  The seat of government is interesting, and it is somewhat esoteric, but the other part of section 51(ii) is places acquired by the Commonwealth.  This place was acquired by the Commonwealth, I think, for an estate in fee simple.  Am I wrong? 

MR DONAGHUE:   I think you are right, your Honour, but it was not acquired from a State.  For that reason, that this Court held in Svikart v Stewart, that that provision applied – sorry, I have to get this the right way around.

GAGELER CJ:   I am looking at the – why is it not like an airport lease, that kind of scenario?  Why are we not just talking about a Commonwealth place? 

MR DONAGHUE:   We would be talking about a Commonwealth place, which would just give us another possible head of ‑ ‑ ‑

GAGELER CJ:   Was it so clear‑cut?

MR DONAGHUE:   I would say the same of 122, your Honour; this is a law about land located within the Australian Capital Territory.  The creation or termination of interests in land, in my submission, is so obviously within 122 that I do not need the places. 

The Court held in Svikart v Stewart – if I recall correctly – that the Commonwealth places limb of 52(i) is engaged only in circumstances where the Commonwealth acquired the land for public purposes from a State.  Factually, I think the special case reveals that that is not what occurred with respect to this land.

So, that is why we have not focused on the Commonwealth places limb.  The seat of government limb, we submit, would be available, but to go there would require the Court to answer some questions that are not yet answered, and we did not feel that we should take your Honours into that territory if we did not need to.  So, 122 is where I propose to focus.

In our submission, really, the argument that you have heard against that – and your Honour Justice Gleeson brought this out in a question to Mr Walker – critically depended upon attaching a difference to the language for the government of the territory in 122 and the more familiar “peace, order, and good government” formulation, and this Court has said there is no such difference.

There is very clear law that that textual distinction does not produce the result that Mr Walker seeks, and there is equally clear law in many cases – and I am only going to take your Honours very briefly to a couple of them – which show that just being within a Territory, for example, is enough to engage the territories power; Work Choices being one of the illustrations that I will give.

Can I take your Honours – really, to clear the decks by confirming what we submit is clear that 122 applies – to three cases.  First, Bennett v Commonwealth (2007) 231 CLR 91, which is volume 3, tab 14. There is a passage in this case, the details of which need not concern your Honours, but in a joint judgment of five members of the Court, at paragraph 43, their Honours quote, with approval from Chief Justice Barwick in Spratt v Hermes in a passage that has also been approved in other places, including in Capital Duplicators.  If your Honours have that, at the bottom of page 110, the Chief Justice said:

“Section 122 gives to the Parliament legislative power of a different order to those given by s 51. That power is not only plenary but is unlimited by reference to subject matter. It is a complete power to make laws for the peace, order and good government of the territory – an expression condensed in s 122 to ‘for the government of the Territory’. This is as large and universal a power of legislation as can be granted –

So, Chief Justice Barwick characterised the phrase just as a condensation of the familiar “peace, order, and good government” formula.  It is:

as large . . . a power . . . as can be granted –

We have not given it to your Honours, but if I could give you a reference to Capital Duplicators which endorses that same passage of Chief Justice Barwick – Capital Duplicators (1992) 177 CLR 248. On page 271, Justices Brennan, Deane and Dawson said:

But the power conferred by s. 122 is to make laws “for the government of any territory”, not for the peace, order and good government of a territory. Though the power is no less than the power which would have been conferred if the “peace, order and good government” formula had been used, the terminology of s. 122 emphasizes that the Parliament may prescribe the constitutional arrangements for the government of a territory.

So, the Court said at least a couple of times that the power conferred by 122 is no less than it would have been had the “peace, order and good government” formula been adopted.  It is, as was said in Bennett:

as large and universal a power of legislation as can be granted.

Proceeding on that basis, the Commonwealth commonly relies, in part, on the territories power to support its laws in their operation with respect to a Territory, even when they are partly or largely supported by other heads of power, and Work Choices (2006) 229 CLR 1 is a good example of that. Can I ask your Honours to go very briefly to that case, as well. It is volume 4, tab 19.

When your Honours have that, if you could go to page 59, paragraph 8, where you will see the definition upon which the whole of the legislation there hung – a definition of “employer”.  Section 6 of the Act defined “employer” with multiple limbs, with each of those limbs engaging particular heads of Commonwealth legislative power.

So, it started, famously, with corporations; the person was employed by a corporation but then it picked up employed by the Commonwealth, employed in various ways that engaged interstate trade.  Then, in 6(1)(e) and (f), two links to the Territory were identified:

a body corporate incorporated in a Territory –

or:

a person or entity . . . carries on an activity . . . in a Territory –

Both of those links – incorporation in the Territory or carrying on an activity in the Territory – were held by the Court to support the operation of the Work Choices legislation.

So, we are nowhere near the territory of the kinds of examples that were put to you this morning, of 122 needing to be about laws for the Territory in some way, rather than just in the Territory.  All you need is a sufficient connection to the Territory and it was provided by incorporation there or employment there.

I do not think, your Honours, I need to take you to the paragraphs upholding those provisions, but you find them – there is a section of the judgment, part 5 of the judgment that starts at page 328, that addresses them and they are upheld with respect to paragraph (e) at 335 to 337 and with respect to paragraph (f) at 343.  So, in our submission, to embrace the limited view of 122 that was put to you this morning, you would need to overrule that aspect of the Work Choices Case.

Finally and most recently, your Honours in Yunupingu spoke of the nature of the power conferred by section 122. Yunupingu 99 ALJR 519 is in volume 5, tab 23, and in the joint reasons of your Honour the Chief Justice and Justices Gleeson, Jagot and Beech‑Jones, with your Honour Justice Gordon to similar effect at [179] – paragraphs [21] and [22] – discuss the scope of the power, emphasising that:

“all that need be shown to support an exercise of the power is that there should be a sufficient nexus or connexion between the law and the Territory”. 

[22] The plenary power conferred by s 122 of the Constitution has never been doubted to enable the Parliament to enact a law that provides for the “direct administration” of a territory –

Of course, that case is about mining leases granted by the Commonwealth, itself, prior to self‑government in the Territory.  If you could not grant a mining lease in reliance on 122, the whole discussion in this case of the relationship between 122 and 51(xxxi) would have miscarried.

I will not take your Honours to other examples, but I could give you many other examples.  One that seems quite close to the present – which, again, we have not given to you, but I will give you the citation – is the Northern Land Council v Commonwealth (1986) 161 CLR 1, where on page 6, in a joint judgment of six Justices, the Court said that the fact that the challenge at law regulates the carrying on of operations in an area within the Territory was enough to provide the link to 122.

In our submission, there is just, subject to the question of 51(xxxi) and whether it abstracts from 122, there is just no doubt that 122 supports this law.  That is, therefore, why I proposed to focus on that question.  But the submissions that I have just made, brief as they are, answer question 1, in my submission – your Honours should hold that the Act is valid.

I will not take your Honours – although if you still have Yunupingu open, perhaps I should ask your Honours to turn to paragraph 17.

BEECH-JONES J:   Are you still on question 1?

MR DONAGHUE:   Yes, I am still on question 1, but I am just covering off the point that your Honour Justice Beech-Jones put to my friend this morning about abstraction, because at the end of paragraph 17 in the joint reasons, your Honours did say, the last five lines or so:

Abstracted from, or “carve[d] out” of, every other legislative power is accordingly power to make any law that is properly characterised as a law with respect to an acquisition of property within the meaning of section 51(xxxi).

So, the carving out is coextensive with the ambit of the grant of power in 51(xxxi) – if it can be characterised as supported by 51(xxxi), the law is within that head of power and no other.  But that makes it impossible ‑ ‑ ‑ 

EDELMAN J:   That point in those terms was not actually argued.

MR DONAGHUE:   No, that is true.

EDELMAN J:   And it may cause other problems in areas in relation to self‑government if that is right, in those strict terms.  Certainly, in Yunupingu what was accepted was that section 122 was subjected to 51(xxxi), but whether the source of power became a 51(xxxi) source of power or a 122 source of power was not a point that was argued.

MR DONAGHUE:   I accept that, your Honour, and sometimes one finds in the cases statements along the lines of 51(xxxi) is the only power that can be used to acquire property, but it is not always put that way, and I accept what your Honour says.  It may be that the law is still properly characterised as a law with respect to the other head of power, but that it can only validly operate provided just terms are engaged.

But, as I think I have mentioned, ever since this abstraction analysis was adopted by the Court, it has always been recognised, and often been emphasised, that the abstraction is coextensive with the grant, so that you do not create the kind of gaps in power that Justice Beech-Jones raised with Mr Walker this morning.  For that reason, we submit that the real debate in this case is about questions 2 and 3.  It is not about whether the Act is valid.

There are, as your Honours understand, the two arguments that we advance as to why 51(xxxi) does not support this law, but before I come to address those, could I say something brief about the purpose of this Act.  I can probably short‑circuit it to some extent by asking your Honours to look at paragraphs 3 and 4 of our oral outline.  At least proposition 3, I think, is not controversial.

Your Honours, in quite a number of recent cases – NZYQ and Ravbar in particular – have emphasised the distinction between the purpose of a law and the means by which the law seeks to achieve that purpose, and in the same cases, have emphasised the importance of getting the level of generality correct in identifying the purpose of the law.  So, without taking your Honours to it, in paragraph 40 of NZYQ, the whole Court said:

The purpose of the law in this context, as elsewhere in constitutional discourse, must be identified at an appropriate level of generality . . . the purpose is that which the law is designed to achieve in fact.

And there are citations there to your Honour the Chief Justice’s judgment in Brown and your Honour Justice Edelman in Unions, both making that point and suggesting that the identification of the purpose can sometimes be found in the text but sometimes requires an examination of surrounding context.

In our submission, adopting that analysis and supported by the materials I am about to take your Honours to, the purpose of this Act was, as we have said in paragraph 4, to remove the national security threat presented by the plaintiff’s occupation of land very close to the Parliament.  That was the mischief; that was what the law sought to achieve in fact.  The means by which it sought to achieve that purpose was by terminating the lease that gave the plaintiff the right to occupy that land.

BEECH-JONES J:   And you agree that that means involved an acquisition?

MR DONAGHUE:   Well, I agree that it involved an acquisition in the sense that it took away a property right and the Commonwealth acquired a reversionary interest.  So, to that extent, yes.  That is not the debate between us, but ‑ ‑ ‑

GORDON J:   Just so I am clear, the debate is limited to the Clunies‑Ross purpose argument.

MR DONAGHUE:   Yes.

GORDON J:   And the second argument is directed at what?

MR DONAGHUE:   Incongruity.

GORDON J:   Incongruity.

MR DONAGHUE:   Yes.  And the Clunies‑Ross – while I agree that the Commonwealth acquired a reversion, if ‑ ‑ ‑

EDELMAN J:   The Commonwealth did not actually acquire – the Commonwealth always had the reversion.

MR DONAGHUE:   Sorry, yes.  All right.

GORDON J:   The Commonwealth got back its fee simple.

MR DONAGHUE:   The Commonwealth got ‑ ‑ ‑ 

EDELMAN J:   The Commonwealth got possession.

MR DONAGHUE:   Yes.  But it is an agreed fact between us – and your Honours will see this in paragraph 26 of the special case, on the top of page 40 of the special case book, that:

The Defendant’s purpose for terminating the Lease through the introduction of the Home Affairs Act was not related to it having a need for, or proposed use or application of, the Land –

And that is the agreed fact that underpins the Clunies‑Ross argument.

JAGOT J:   What is the status of that agreed fact?  It can be taken on its face – okay, you agree that – but where does that go?  I mean, these words do not appear in 51(xxxi), provided you have a need for, or whatever.  I mean, query whether if you wanting or to hold the land free from occupation by the plaintiff is not a need in fact.  I mean, why is that not a need in fact?  You want to hold the land free for occupation by the plaintiff.

MR DONAGHUE:   Of course.

JAGOT J:   And you have a present need – a present want, if that is enough for a need, that ‑ ‑ ‑ 

MR DONAGHUE:   Well, we had a present want to have the plaintiff not present on that land.

JAGOT J:   Yes, but that is your want ‑ ‑ ‑ ‑

MR DONAGHUE:   Yes.

JAGOT J:   ‑ ‑ ‑ of how the land should be held, free from occupation by the plaintiff.

MR DONAGHUE:   Yes.  And we otherwise did not care.  In terms of what this Act was – this Act was about getting the plaintiff off the land, removing their interest in their land, and we otherwise did not care what was to be done with the land.

JAGOT J:   That is a need for the land itself.  You could not fulfill that other than by what you did.  That is why – I suppose we could go round and round on that, but none of this language in 26 appears in 51(xxxi).

MR DONAGHUE:   The language in 26, your Honour, only matters if your Honours are attracted to the analysis that – provisionally attracted but, I accept, only as obiter in Clunies‑Ross, because as the Chief Justice put to Mr Walker this morning, these facts are quite unusual but quite similar in some respects to Clunies‑Ross, because there, the Commonwealth wanted Mr Clunies‑Ross off the land.

JAGOT J:   Correct.

MR DONAGHUE:   That was what they wanted.  They did not care what happened otherwise with respect to the land.  And the Court had real doubts about whether 51(xxxi) would support a law of that kind.  So, if those ‑ ‑ ‑

BEECH-JONES J:   Mr Solicitor, you said:  we otherwise do not care.  Now, that is not the subject of an agreed fact.  It may be that one might envisage other countries in the world who might want to use it for a diplomatic mission that the Commonwealth would care about ‑ ‑ ‑

MR DONAGHUE:   Would care about allowing, or care about preventing?

BEECH‑JONES J:   Would care about preventing.

MR DONAGHUE:   That may be so.

BEECH-JONES J:   But that is not subject to an agreed fact.

MR DONAGHUE:   No.

BEECH‑JONES J:   So, we do not – all that would bespeak to is the Commonwealth wants to exercise its rights of ownership. 

MR DONAGHUE:   Well, here we are concerned, in my submission, only with a very narrow law that does a very narrow thing:  it terminates a particular lease.  And the question is whether that that Act, in terminating that lease, in my submission, involved an acquisition of property within the meaning in 51(xxxi) or it did not.

GORDON J:   The question is a bit broader than that, though, because this is – and I put this to Mr Walker, one has to look at the history.  One has land which is designated for use as a diplomatic mission, having been regulated – formerly being used for open land.  It remains so.  A lease is granted to the Russian Federation.  The lease is terminated.  And the lease – as a result of that termination of the lease, you have now got possession of the land, so we have both the advantage and the disadvantage, and it remains able to be used for diplomatic mission.  So, the purpose effected or the need effected was evident from the steps that were taken.  What else do you need?

MR DONAGHUE:   Well, there is, in my submission, a difference between a consequence of the law, and the purpose of the law, and the means adopted to achieve it.  And here ‑ ‑ ‑

GORDON J:   Sometimes they are very closely related.

MR DONAGHUE:   Sometimes they are, but in this case – and I will propose to come to this near the end of my submissions, but the characteristics of a diplomatic mission and the international agreements that govern them and which have been implemented into domestic law include that the authorities of the host country cannot enter the premises without permission.

So, in practical terms, the options to prevent a nefarious use of this site once there is a mission on it, are extremely limited.  So, it might be the case that there was a consequence here – the Commonwealth acquiring possession of the land – which was just an inevitable result of the only effective way to address the national security risk that Parliament sought to address.  If we want to prevent the security risk, the only thing we can do to achieve that is to exclude the plaintiff from the land.

GORDON J:   Okay.  Just assume for the moment ‑ ‑ ‑

MR DONAGHUE:   Sure, we get it back, but that does not mean that we were seeking to get it back or that it was our purpose to get it back.

GORDON J:   It was your purpose to get it back, because you wanted it back, and that is what you did.

MR DONAGHUE:   Well, your Honour, I respectfully submit that we wanted the plaintiff off it.  Had the land belonged to someone else, so that the Commonwealth did not acquire possession of the land, there is no reason to think that that would have made the slightest bit of difference to the Commonwealth’s ‑ ‑ ‑

BEECH‑JONES J:   I was saying, I can think of a ‑ ‑ ‑ 

JAGOT J:   That is a really long bow, because if somebody else owned it and they could lease it to Russia – I mean, that is not what you want.  You want the Commonwealth to have sole control of this land.  At the level of generality, yes, you can say it is getting the plaintiff off, but that is no good to you if the plaintiff could come back on, because another owner could just give them a lease, just for another building, do not call it a diplomatic mission.  But you have to have sole control of the land.  That is the only way.

MR DONAGHUE:   The Commonwealth – having some control of the land and ‑ ‑ ‑

JAGOT J:   Sole control.  That is what you want.

MR DONAGHUE:   In my respectful submission, we want control to the extent necessary to keep the Russian Federation off the land.

EDELMAN J:   Mr Solicitor, I think the problem with that sentence is – and it a problem that may exist also in Clunies-Ross – there is a dangerous sliding between two very different concepts.  One concept is the rights to the land, and the other is the physical land and what actually, physically happens on that land itself.

What, as I understand the issue that is joined between the parties is, it is about the rights to the land, not the physical land.  What is being acquired or what may be acquired is by extinguishing or forfeiting the lease.  It is an extinguishment of rights to the land, not the physical land itself.  And rights to land are, as Justice Jagot says, they are rights to control, rights of exclusive possession.  It has nothing to do with what people physically do on the land.  It is concerned with – we are in the sphere of control of rights.

MR DONAGHUE:   I accept that, your Honour, and often in the acquisition of property cases, one sees a distinction between and the cases recognise that there can be a difference between the property that is taken and the property that is acquired.  So, it has to be proprietary on both sides of the equation but, for the reason your Honour puts to me, you might terminate one form of property, the lease, and you might acquire a different set of rights with respect to the land.

Clunies-Ross, drawing on a number of cases, mainly decided by Chief Justice Dixon, sometimes with and sometimes without the concurrence of other members of the Court, was evidently concerned that the notion that – concerned that 51(xxxi) was really about, consistently with the whole history of powers of eminent domain, about ensuring that the Commonwealth had power to get property that it needed to use for various public purposes.

EDELMAN J:   That is the slide.  That is sliding into the use of the physical land rather than what has been acquired, which is the rights.

MR DONAGHUE:   But to acquire the right to use the land in some situations ‑ ‑ ‑ 

BEECH-JONES J:   Which you did.

MR DONAGHUE:   But that case and the other cases do not focus ‑ ‑ ‑ your Honours, if all you need is someone to lose a proprietary right and someone to gain a proprietary right then, subject to the incongruity argument, the Commonwealth loses this part of the case.

GAGELER CJ:   That is what the later cases have said, is it not?

MR DONAGHUE:   They have sometimes said it, your Honour, yes, that is true ‑ ‑ ‑

GAGELER CJ:   And really held in the result.

MR DONAGHUE:   But not in cases where this requirement to be acquiring proprietary rights to use them have been in issue, because it is quite an unusual case.

GAGELER CJ:   The chose in action is a classic case.  Mr Walker mentioned that.  There are several cases where the extinguishment of a chose in action against the Commonwealth is ‑ ‑ ‑

MR DONAGHUE:   Results in the Commonwealth acquiring money or acquiring value, being relieved of that claim.

GORDON J:   Relieved of a claim which has value.

MR DONAGHUE:   Indeed.

GORDON J:   The breadth of the power which has been the subject of the later decisions just sits inconsistently with this submission.

MR DONAGHUE:   It only sits inconsistently with it if there are cases where – and the chose in action is one.  We accept that the notion of “use” here would clearly have to be a broad one and it includes, we accept, passive‑type uses.  So, to take one of Mr Walker’s examples, if we were trying to create a buffer zone around Parliament, so we cancelled all of the properties around Parliament just to make sure no one could live or reside nearby, then I accept that I could not say that that was not providing a benefit of the kind your Honour Justice Jagot is putting to me.  It is a passive use of the land but it is, nevertheless, a use of the land.  We distinguish that case from this case on the basis ‑ ‑ ‑

GORDON J:   How?

MR DONAGHUE:   Because we were not trying to create a buffer.  We had advice provided to the Parliament that this plaintiff occupying this site created a national security risk and there was no way we could address that other than to get them off the land.

BEECH-JONES J:   But if another country, who might pose a security risk, was to be considered, then, assumedly, you would do it again, would you not?

MR DONAGHUE:   Presumably we would.

BEECH-JONES J:   But you would not need to do any more Acts, you would have the rights.

MR DONAGHUE:   No, we would, because this Act would not do the job, because this Act terminates a – we could not grant it to them ‑ ‑ ‑

BEECH-JONES J:   Exactly.

MR DONAGHUE:   ‑ ‑ ‑ that is so, but that is ‑ ‑ ‑

BEECH-JONES J:   To pick up Justice Jagot’s point, you have now got – your ultimate concern about security, as you have just said, can only really be served by the Commonwealth having full ownership.

GORDON J:   And passive control over.

MR DONAGHUE:   Your Honours, my submission is that you cannot generalise, because – as our friends put against us – there are other sites nearby that are used for diplomatic missions and the Commonwealth is unconcerned with that.  If our concern was a general concern about controlling the land in this area, then this Act does not serve that purpose.

But this purpose – and the extrinsic materials make it crystal clear that this purpose was in response to its specific advice about this plaintiff’s occupation of this land.  So, we submit that looking at that, your Honours should find that the purpose was to remove a national security threat presented by this plaintiff, and no broader.

JAGOT J:   But that is to create a – yes, but if that purpose is to buffer – we will use that word – just because it is one parcel and not all the parcels, and just because it is one plaintiff, not everybody, does not mean it is not a buffer from Russian occupation of this particular parcel.  It has to be, because it would not serve the purpose unless you were getting back full control by the termination of the lease.  If, for example, you had not owned the land in the first place, what you would want is to stop – terminating the lease is to serve a higher generality purpose, which is to ensure you control the land so Russia cannot occupy it.

MR DONAGHUE:   But, your Honour, if someone else owned the land, all we would need to do is to prevent them leasing the land to Russia.  They could otherwise use it in any way that they liked, and we would have achieved the purpose of this law.

GORDON J:   But that is not the facts here.  The facts here is:  you had the land.

MR DONAGHUE:   And what I am seeking to put to your Honour is, that that being so, we had the land – let me go back a step.  If what I just said to Justice Jagot in answer to her Honour’s question is correct, so that if someone else had owned it, if we could validly have said:  we are terminating the Russian lease and we are prohibiting you from leasing it to Russia again, but otherwise your rights as fee simple or long-term lessee in the Australian Capital Territory are unrestrained – if that would have been valid, it would, in my submission, be a most odd result if we could not do exactly the same thing because we own the land.  We would have less power in relation to our own land than someone else’s.

JAGOT J:   No, you can do it, nobody is saying you cannot do it.  It is just that it does not make sense to say it is not a use of land or for your own purposes, that is all.  Well, subject to question 1 – focusing here on question 2 ‑ ‑ ‑ 

MR DONAGHUE:   Well, focusing – in my submission, everything I am saying now is about questions 2 and 3, because if you are against me, you should find that 51(xxxi) supports the law.

JAGOT J:   Of course.  I understand the point.

GAGELER CJ:   So, this is all just feeding into your Clunies‑Ross argument, is it not?

MR DONAGHUE:   That is right, it is.

GORDON J:   And you maintain it?

MR DONAGHUE:   I do.

BEECH-JONES J:   Can I just ask about that.  If this is meant to operate as a constitutional guarantee, what is to stop the Commonwealth acquiring land and, at the time, issuing a solemn statement that we do not intend to do anything with it?  On your argument, you fall out of 51(xxxi) but you fall into a head of power.

MR DONAGHUE:   Well, not if it has been done as a device, your Honour.  Very often – the Court should identify the purpose of the Act in the ordinary way, and in the large majority of cases it will be intended that the property will be used.  I am now taking things a little out of order, but your Honours will be well familiar with the fact that the modern 51(xxxi) case law of this Court draws a sharp distinction between a deprivation of property and an acquisition of property and holds that the deprivation of property is not protected.  And in our submission, that reflects a similar idea, in the sense that if all you are doing is taking someone’s property, the guarantee does not help you.

BEECH-JONES J:   But that is by law, that is by the actual terms of the Act.  By the terms of this Act, it was unambiguously an acquisition.  What is left is a statement as to an absence of any statement of why or what you want to do with it, and from that we are led to conclude the guarantee is not invoked.

MR DONAGHUE:   Well because, your Honours, if you accept that the purpose was to remove the security threat that had been identified in the security advice, what we wanted to do with it was no part of the objective purpose of this Act.  It was – I cannot deny and I do not deny that the result was to leave the Commonwealth in control of land that it might, in future, need to decide what to do with it.  But what I am putting to your Honours is if that was the result, if that was the purpose, if it was proposed to put the land to some use, then the Clunies‑Ross idea is not engaged and the acquisition would need to be on just terms.

GORDON J:   So, you accept that if it is clear that it is a passive use by the Commonwealth, i.e., we have taken back control and possession of the land, on which we are going to sit, to determine what is going to happen in the future, then Clunies‑Ross does not apply?

MR DONAGHUE:   If it was a passive use.  But, in my submission, if this is a passive use, Clunies‑Ross was a passive use and the doubt expressed by the Court in Clunies‑Ross was ill‑founded.  It was obiter, as your Honours know, but it was obiter by six members of the Court in circumstances where what their Honours said was “statements of high authority” suggest that, and they cite a number of cases where Justice Dixon had said that very thing.  Chief Justice Dixon was clearly of the view that this was a power – an eminent domain power – to acquire property to use it, and if you did not want to use the property, then 51(xxxi) did not empower you to do it.

GAGELER CJ:   But that is not right, is it?  I mean, it is just not the current doctrine of the Court.

MR DONAGHUE:   It is not right that he thought it, or it is not right as a matter of ‑ ‑ ‑

GAGELER CJ:   The second part of your sentence.  Of course, it is a power of eminent domain and it covers what his Honour was saying it covered in those earlier cases, but it is not so confined on the current doctrine of the Court.   Your predecessor, Sir Maurice Byers, argued along these lines in a case called Tooth & Co that I am sure you are aware of.  That was probably the turning point away from that doctrine.

MR DONAGHUE:   And, indeed, the Commonwealth argued the contrary in Clunies‑Ross and was somewhat slapped down by the Full Court.  So, to be perfectly frank with your Honours, we come to Court on this argument in circumstances where the Court had sufficient doubts about whether just depriving someone of their land was within the head of power, and referred to a number of authorities that do support that, and it seemed to us appropriate to submit the matter to your Honours for determination on that state of the authorities.

EDELMAN J:   Just as a matter of principle, even putting aside the modern position, the statement in Clunies‑Ross where the Court says that:

statements of high authority . . . seem to be framed on the assumption that . . . par. (xxxi) should be confined to the making of laws with respect to acquisition of property for some purpose related to a need for or proposed use or application of the property to be acquired –

Is not the problem, as a matter of principle with that, that it is sliding between the two senses of property that I mentioned earlier?  So, in one sense, the property that is being acquired, and in this case, is a right of exclusive possession.  The Commonwealth, having granted the lease, no longer had a right of exclusive possession; having forfeited the lease, obtains a right of exclusive possession.

Now, that right of exclusive possession is not something that is used by having people on the land or doing things on the land.  A right of exclusive possession is a right.  Rights are used by being sold, by creating further leases – that is what the Commonwealth wanted and that is what the Commonwealth has acquired.  All of the concept of use for a purpose is focusing on the physical activities, which is sliding from the idea of the property that is being acquired to the physical thing.

MR DONAGHUE:   Or the right to allow the physical activities to occur.

EDELMAN J:   The right of control.

MR DONAGHUE:   The right – so that, if the Commonwealth wanted to acquire somebody’s house to turn it into a post office, in my submission, they want the right of control so that they can utilise the exercise of control in a particular way to advance – and as long as that intended use of the rights that they have acquired is with respect to something that falls within any of the Commonwealth’s heads of power, then that would be permitted and supported by 51(xxxi).

BEECH-JONES J:   But if they do not – if they want to acquire it because they just do not like them and they do not want them to live there, that is okay?  There would be no compensation?

MR DONAGHUE:   So, the Commonwealth lost Clunies‑Ross – admittedly, on the statute rather than the Constitution, but lost Clunies‑Ross for that reason.

BEECH-JONES J:   But on your argument, then Clunies‑Ross could have been acquired under the territories power and they would not have got a cent.  Is that not right?

MR DONAGHUE:   Going back – yes, yes is the answer.  But the way it comes up in Clunies-Ross – so, Clunies-Ross was decided at a time when Teori Tau was the law, so one would ordinarily have thought, well, we do not need to worry about 51(xxxi) at all, but the case was actually about whether the acquisition was empowered by the Lands Acquisition Act using identical language to the Constitution, so the Constitution informed the interpretation.

The Court doubts whether 51(xxxi) supports a straight depravation with no intended use, but then says we do not need to decide, because we will construe the Lands Acquisition Act as not authorising that taking, thus, Mr Clunies-Ross wins because the Lands Acquisition Act, in identical terms to 51(xxxi), does not allow the Commonwealth just to take your house unless it intends to use it – as a post office, or for some other purpose – and we say we are doing the same thing here with the lease of the Russian Federation.

EDELMAN J:   But you use it – sorry to keep coming back – you use it by the right to exclude others.  Whether you build a post office on it or you do anything on it, that is just the liberty that you have because you have the right to exclude all others from it.

MR DONAGHUE:   You could ‑ ‑ ‑ 

EDELMAN J:   It has nothing to do with your right to exclude others, what you actually do on the land.

MR DONAGHUE:   Your Honour, in my submission, you could use it in that way, I accept that, but you might pass the Act not because you want that right of exclusive possession going forward but because you do not want the existing tenant to still be able to reside there.  And if that is ‑ ‑ ‑

GORDON J:   But they are the flipside of the same coin.

MR DONAGHUE:   Well, in my submission, one is a narrower coin than the other.  They are not flipsides.

GORDON J:   I will ask a different question.  If you want to exclude them as a tenant, you have to take possession.  In this case.

MR DONAGHUE:   Well ‑ ‑ ‑ 

EDELMAN J:   The only thing you are acquiring is the right of exclusive possession.  It is not a right of exclusive possession plus an ability to use it in the following ways.

MR DONAGHUE:   Your Honour, if I am sounding that I am disputing that, I am not disputing that.  In my submission, my point is solely about not whether we did acquire that right but whether Parliament’s purpose in passing this Act was to acquire that right, or whether it was something narrower.  I think I am starting to repeat myself, your Honours.

If the way one construes 51 – perhaps, your Honours, before I move on, I should alert your Honours to one other case that has not been touched on yet, which is W.H. Blakeleyv Commonwealth (1953) 87 CLR 501, which is in volume 4, tab 22, if your Honours could turn to that. Again, it is a case under the Lands Acquisition Act, using the same language as 51(xxxi), and one might have thought the rather ambitious argument was advanced that land that was acquired partly to be used for the purposes of providing office accommodation for the departments of the Commonwealth, and partly to be used for postal purposes was not said not to be within the purposes that were permitted.

The argument that was advanced by Mr Barwick was to the effect that, when one reads 51(xxxi) and the reference in particular to a “purpose” for which the Commonwealth “has power to make laws”, the word “purpose” there – and you can see this argument recorded at the bottom of page 506, it was submitted that the phrase:

“For any intended use which a valid law of the Commonwealth –

The words – the reference to “for any purpose”, particularly bearing in mind that most of the Commonwealth heads of powers are not purposive powers, meant:

“For any intended use which a valid law of the Commonwealth could authorise”.

So, that was the submission.  It was addressed in a joint judgment of seven members of the Court, relevantly, at the bottom of 518.  Mainly, the case was about an attempt to go behind what the Governor‑General said the purpose was and to say that it was actually something different.  That is not relevant to the submission I am now making.  But at about point 8 of the page there is a sentence in the middle of the paragraph that says:

The words “any purpose in respect to which the Parliament has power to make laws” were equivalent, so it was said, to “any use in respect to which the Parliament has power to make laws”. It may be doubted whether the substitution of the word “use” for the word “purpose” makes the meaning any clearer. It seems to be plain enough that the Constitution, in using the word “purpose”, is speaking of the object for which the land is needed.

So, it is contemplating that the land is needed for an object:

The word itself does not refer to any power or powers –

in the other sections:

it is referring to the object for which the land is acquired.  That object, however, must be one falling within Commonwealth’s power –

it does not matter which power.  Then their Honours say:

No doubt for practical purposes the word “use” would have the same meaning as the word “purpose” in par. (xxxi) of s. 51, but of course “use” must be given a very wide meaning.

So, that is a unanimous decision of the Court construing 51(xxxi) in a way that seems to say that, for practical purposes, the question that one asks is:  what is the object for which the land is acquired or used, given a wide meaning?  In our submission, that is consistent with what we are putting to your Honour.  I still ‑ ‑ ‑

BEECH-JONES J:   Hang on, but that purpose there is the purpose spoken of in 51(xxxi), which is related to the head of power.  And your purpose here, you are talking about, is national security.

MR DONAGHUE:   No, your Honour – with respect, your Honour, in my submission, what they are saying is that the purpose in 51(xxxi) is not related to the head of power.  That is the last couple of lines on 518.  It is related to:

the object for which the land is acquired.

So ‑ ‑ ‑

GORDON J:   And here, the object for which it is acquired is to prevent the Russian Federation being on the land and thereby giving – and thereby obtaining exclusive possession of it for the Commonwealth.

MR DONAGHUE:   The point where I respectfully differ from your Honour is from the words “thereby”.  So, in my submission, if the purpose for which the land is acquired is wholly negative – just about getting Mr Clunies‑Ross off his house, just about getting the Russian Federation off the land – without any plan or intention to use the interests that have been acquired – to give them to another embassy, or to create a buffer zone, or to do anything else, if it is wholly negative – then, in our submission, 51(xxxi) does not support it.  That means there will be no power for the Commonwealth to do it unless ‑ ‑ ‑

GORDON J:   That means any passive use is out?

MR DONAGHUE:   No, it means there has to be an active or passive use.  And in my submission, here, your Honours are putting to me that there must be, as a flipside, an intended passive use, and I am submitting that that is not so, that one can seek simply the negative exclusion without any further plan or intent, and in that circumstance, 51(xxxi) will not support it, which means the Commonwealth would lose unless it has another head of power, but if we have another head of power, then we can do it without compensation.  That is my submission on the Clunies‑Ross part of the case.

GAGELER CJ:   Mr Solicitor, that passage from Blakeley needs to be read, I think, with some of the words at the top of page 519 where, having introduced this concept of “use”, the Court goes on to say:  of course “use” has to be given a “wide meaning”.

MR DONAGHUE:   Yes.

GAGELER CJ:   Then, if you look at the next paragraph, where they referred to the word “for”, the connection that they seem to be looking to is between the “acquisition of property” as a composite concept and the purpose of the acquisition of property occurring, rather than looking necessarily, in every case, to a physical entity that is going to be deployed in some way in the future.

MR DONAGHUE:   In my submission, your Honour, we respectfully contend that that next paragraph, which returns to the word “for”, is linking back to the argument that you see summarised in three steps in the middle of 518.  So, Mr Barwick’s argument is described, at about point 4 on the page, as resting upon a particular construction given to 51(xxxi), and there is then multiple steps.  There has to be a:

purpose in respect to which the Parliament has power to make laws –

is a “composite” concept: 

in which the notion of the acquisition of property is one element, the provision, the provision of just terms another element –

and then the submission was:

and the independent existence of an actual intention of using the land for a purpose in respect to which the Parliament has power to make laws –

The idea then was the fact that the Governor‑General said that this is the purpose is not enough, you have to prove it as a fact, and the way that was said to be grounded in a text was by the word “for”.  So, when their Honours deal with the “use” submission – and then, in my submission, go back to the “for” and say, well, this argument is seeking to have that “for” do a lot of work in allowing you to interrogate the specific intent, at the end of that paragraph, the:

specific intent in the Executive Government or other acquiring authority.

So, it was, in my submission, trying to go back behind the Governor‑General that the Court was dealing with there.

GAGELER CJ:   Just looking at the text of section 51(xxxi) and reading it, one, as a constitutional guarantee and, two, as a head of power that is meant to be broadly construed, where does the word “use” get inserted?

MR DONAGHUE:   It seems – Blakeley would seem to suggest that while it does not – that the word “purpose” in that text is – so, their Honours say at the top of 519:

for practical purposes the word “use” would have the same meaning as the word “purpose” in par. (xxxi) of s. 51 –

So, it is:  acquisition of property on just terms from any State or person for any use in respect of which the Parliament has failed to make laws.  That is how Blakeley seems to read it.

GAGELER CJ:   And what is being used, when you read it that way?

MR DONAGHUE:   The proprietary interest that is acquired.

BEECH-JONES J:   That would seem to cut across your argument on ground 1, would it not?  Because we have just changed purpose from head of power to the Commonwealth’s intended use of the property rights or the property, which is not the same thing.

MR DONAGHUE:   Your Honour, my argument on ground 1 ‑ ‑ ‑

BEECH-JONES J:   Was that:

purpose in respect to which Parliament has power to make laws –

equates to territories power.

MR DONAGHUE:   No, your Honour.  My argument on ground 1 is that territories power, by itself, without looking at 51(xxxi) at all – so you do not need to concern yourselves with those purposive words in 51(xxxi) – is a power to make laws for the government of a territory, which is the same as for the peace, order or good government of the territory ‑ ‑ ‑ 

BEECH‑JONES J:   I see.

MR DONAGHUE:   So, it just supports the law without going anywhere near 51(xxxi).  It is only if 51(xxxi) abstracts from 122 that I need to engage on ground 1 – with 51(xxxi) – and if you read it as Blakeley, in my submission, is authority for reading it, as focusing not upon the head of powers but upon the use of the proprietary interest acquired.  If there is not such a use, then the power is not engaged, in exactly the same way as in the Tasmanian Dam Case, where the Commonwealth imposes legislative restrictions on Tasmania’s capacity to use Tasmania’s property.

It lost a whole set of proprietary rights that it could otherwise have exercised in relation to the land, but that did not engage 51(xxxi) because it was just depriving Tasmania of things.  The Commonwealth was not acquiring an interest.  Now, I am not squarely there, for reasons that have already been discussed, but in my submission, when one – fully accepting that 51(xxxi) is a constitutional guarantee as well as a head of power – it is not a guarantee against having your property taken without just terms.

What it is a guarantee against, in our submission, is about the government taking property so that it can deploy it, its new proprietary interest in the public interest.  We have not given your Honours the case, but Chief Justice Gleeson, in our submission, captured it rather well, if I may respectfully say so, in Smith v ANL at paragraph 9, when he said:

A government may be satisfied that it can use the assets of some citizens better than they can; but if it wants to acquire those assets in reliance upon the power given by s 51(xxxi) it must pay for them, or in some other way provide just terms –

What the just terms are about is if the government takes your property to deploy it in the public interest, the person who bears the cost of that should be society as a whole, not the previous property owner.  It is not about guaranteeing you that you will not be deprived of your property without just terms.  Tasmanian Dam and that whole line of authority support that.

EDELMAN J:   How would it work in relation to anything other than land, then?  So, where a law is passed requiring the assignment of a bank account, for example, does the Commonwealth then have to prove that it has an intention to use the money assigned for a particular reason and that, without that proof, there is no acquisition of property?

MR DONAGHUE:   Well, it would have to establish that the – assuming, I think, in your Honour’s example, that 51(xxxi) is the only head of power, then it would have to establish that property was acquired to be used in a wide sense, not as a matter of constitutional fact but as a matter of characterisation.  So, there would have to be evidence as to – your Honours would have to identify the purpose of the law in the usual way, and you would have to conclude that it had that element to it.

I accept that usually – I obviously cannot say that this feature of 51(xxxi) has featured in a lot of the recent 51(xxxi) case law, but that, we submit, is because it is usually quite obvious that there is not just taking a purely negative step.

GORDON J:   In Tooth’s Case, Justice Mason said that:

whether an enactment is a law with respect to the acquisition of property –

in the context of 51(xxxi):

one must look to its direct legal operation and effect.

In other words, one looks to substance over form.  Is that not what the problem is with your argument, is that we are not undertaking that kind of inquiry?

MR DONAGHUE:   Your Honour, I would not accept that I am urging a formalistic analysis on you.  I have not taken your Honours through it, but if you read – the extrinsic materials are very short, the second reading speech and the explanatory memorandum, and replete with references to the fact that security advice tells us we have to cancel this lease.

GORDON J:   Then the direct legal operation and effect of the Act, even if that is accepted, is?

MR DONAGHUE:   That the means adopted to achieve that end is taking someone’s property.  I obviously accept that, but that is an unavoidable – and I hesitate to use the word “incidental”, because I am not sure that it advances the analysis a great deal in this area, but it is an inevitable consequence of the only available means to address the security risk.  In my submission, if you look at a law which is about addressing the security risk and adopts the only means available to do so, that does not bespeak a characterisation of the law as a law with respect to the acquisition of property. 

Now, in putting it that way, I have blurred into, I think, the incongruity argument, which is the last argument that I would seek to address, because, really, in effect – and I should say immediately that it is not our case, as was put against us, that the incongruity depends upon the importance of the objective; that is not our case at all.  Our case is that, if the Russian Federation, by its presence on land 300 metres from Parliament House, poses a threat to the security of Australia, to require the Australian Government to compensate them for defending itself against that threat is incongruous.  That is the compensation case here. 

If your Honours accept that the purpose of this law was as the extrinsic material clearly shows it to be, it is, we submit, absurd to say that compensation must be paid for responding to a threat.  Compensation must be paid to the person who presents the threat as the price of responding to that threat.  That is in a nutshell.

GORDON J:   The other way of asking it, is to ask:  would the termination of the lease be any less effective, which is the other way it is put sometimes, at achieving its purpose if you accept the purpose that you have identified, if just terms compensation were provided? 

MR DONAGHUE:   Well, your Honour, I think ‑ ‑ ‑

GORDON J:   And the answer is?

MR DONAGHUE:   If you ask the question in that way ‑ ‑ ‑

GORDON J:   Well, it is often put that way.

MR DONAGHUE:   It is sometimes put that way but, as Mr Walker accepted, you have to deal with these incongruity cases sort of Act by Act.

GORDON J:   But if you tailor those categories – fines, taxes – it is less effective.  So, the question here is:  why is it that the termination of the lease is less effective, given your identified purpose, by the payment of compensation?

MR DONAGHUE:   Your Honour, I do not accept that that formula is the exclusive way to identify incongruities.  So, if one looks at, for example, at – one of the examples commonly given is forfeiture of property.  If we say “forfeiture of property”, that was by an innocent third party that was imported illegally – that is Burton v Honan, I think.  So, why does one need to take the property from the hands of the innocent purchaser, forfeit it without paying that person compensation in order to achieve the objective?  In my submission, it is not necessary in that situation not to pay compensation ‑ ‑ ‑

EDELMAN J:   If you do not pay compensation, there is no forfeiture of the value – you might have forfeited a particular thing, you have not forfeited the value of the thing.  So, if you forfeit, for example, their rights to a bank account and you had to pay them compensation, the object of forfeiture would be entirely undermined.

MR DONAGHUE:   Your Honour, I accept that there are many cases where that is true, where to pay compensation is just to put money back into the hands of the person from whom it would otherwise have been taken, but if the object of a forfeiture regime is – and the same might be said of property used in the commission of a crime, where the property does not belong to the criminal.

That is another scenario where the person who suffers as a result of the forfeiture, who loses their property, could have been compensated for that, and you might still – now, would that render the object of the law less effective?  In my submission, it is not clear that it would.  It might ‑ ‑ ‑

BEECH-JONES J:   To pick up the Chief Justice’s question to Mr Walker this morning, is not the relevant incongruity between the means adopted – not the purpose – and the provision of just terms?  So, to pick up a tax, some taxes are just straight‑up to raise revenue, some taxes actually have an object or purpose of inducing some economic behaviour – like selling a house, for example – but it is the incongruity between the legal feat, the means adopted – taxation – and the payment on just terms, not what the ultimate economic or other object of the law is.  Is it not?

MR DONAGHUE:   In my submission, it will sometimes be that if the object that there is – the incongruity arises because to require the payment of compensation would defeat the means by which the law seeks to achieve its objective.  So, if its objective is revenue‑raising, then the payment of compensation to the person who pays the tax is obviously self‑defeating.

If the purpose of the tax was not revenue‑raising, then the incongruity analysis might perhaps be different.  What I was seeking to suggest by the forfeiture examples is that it is not always the case that the incongruity will be between the purpose and the means, so that if the purpose of the forfeiture law is a deterrent purpose as to the commission of crime, then you might still achieve that purpose if you compensate an innocent person whose property is used.

BEECH-JONES J:   But is that not – pulling up Justice Edelman’s – the incongruity is between the means.  It is not forfeiture if you are handing them back the same value of what is being forfeited.  By its very nature, it is not a forfeiture anymore.

MR DONAGHUE:   It may depend on who the “they” is in that situation, but I hear what your Honour says.  In our submission ‑ ‑ ‑

GAGELER CJ:   So – I am sorry.

MR DONAGHUE:   Sorry, your Honour.  The underlying idea, in our submission, of the incongruity cases is that when one looks at the compound phrase “acquisition of property on just terms”, the Constitution is contemplating a kind of acquisition that is sometimes, I think, described as bringing up a standard of fair dealing between the Commonwealth and the State or person who owns the property so that if the law in question is of a kind where that notion of fair dealing has no resonance, makes no sense, then the Constitution does not – the incongruity or inconsistency, as it is sometimes called, including in Theophanous, means that there is no requirement to compensate. 

Here, if we are wrong in the argument that I am now putting to your Honours, then the position would seem to be that the Russian Federation, presenting a threat to Australia’s national security by being located as close as it was to Parliament House, can have its lease terminated, but the Commonwealth can respond to a threat that the Russians pose only by paying substantial compensation to them. 

In my submission, if one asks, is there any notion of fair dealing that would prevent that, if you create the problem yourself, if you are yourself the source – the enlivening motivator for the action that has been taken – to compensate you is incongruous.  It is, to use the words of Chief Justice Dixon in Schmidt, you are just in an area to which 51(xxxi) is wholly unrelated.

GORDON J:   But you might have been the source – the Commonwealth might have been the source in making the decision at the outset.

GAGELER CJ:   The Commonwealth granted the lease.

GORDON J:   They granted the lease.

GAGELER CJ:   For consideration.

MR DONAGHUE:   Fifteen years ago, your Honours.  So, that ‑ ‑ ‑

GORDON J:   Well, 15 years ago is ‑ ‑ ‑

BEECH-JONES J:   They could have included a clause saying:  we have a right to terminate if there is a bona fide belief on reasonable grounds that you are a threat to national security – all those things.

MR DONAGHUE:   No doubt that is so, your Honour, but the world changes and the world in 2008 and the world in 2023 are completely different places.

BEECH-JONES J:   We are not here to judge whether there is a threat to national security.  We just take the statement as made.

MR DONAGHUE:   Yes.

BEECH-JONES J:   But we are not being asked, as an objective fact, to find one.

MR DONAGHUE:   No, but I am asking your Honours to find that the purpose of this law was as – is clearly evidenced by the extrinsic material – to, it was said that the security advice is that this lease must be cancelled.  So, if that security advice is right – and Parliament obviously proceeded on that basis, and did so urgently ‑ ‑ ‑

GAGELER CJ:   But you are not asking us to find that it is right.  There is no agreed fact.

MR DONAGHUE:   No, there is not.

GAGELER CJ:   You are just relying on the objective purpose of the law.

MR DONAGHUE:   I am, and I am saying if the objective purpose of the law is to respond to a threat that the Russian Federation posed by cancelling their lease, which is integral to the source of the threat that they pose, just terms has nothing to say about it, because we do not, as a notion of justice or fair dealing, compensate people for problems that they cause themselves.  We have not cancelled anybody else’s lease who is near Parliament House.

BEECH‑JONES J:   I think we just went from a purpose of the law to an objective fact that they caused a problem, which we are not being asked to find.

MR DONAGHUE:   No, but your Honours are being asked to ‑ ‑ ‑

GORDON J:   The objective fact is that you granted them a lease in 2008 and you have changed your mind.

MR DONAGHUE:   That is an incomplete statement of the relevant facts, in my submission.

GORDON J:   And you have now terminated the lease.

MR DONAGHUE: We have now terminated the lease because – so, taking it in stages, if your Honours accept my submission about the objective purpose of this law, you then have to engage in a characterisation inquiry to work out whether it is or is not a law with respect to section 51(xxxi). That is not an inquiry that, in my submission, turns upon the objective fact of whether or not there was a security risk or not.

But if I am right that the purpose of the law is as identified, then your Honours are squarely faced with the proposition, the purpose of the termination of this lease being to respond to a threat that Parliament was satisfied existed:  is it “just”, consistent with community standards of fair dealing, to require the Commonwealth to pay the person who caused the risk – who Parliament is satisfied caused the risk?  That is the question.  My submission is that the answer is:  it is not.

If your Honours accept that, then the consequence will be that, for incongruity‑type reasons, 51(xxxi) does not abstract from 122 and so 122 supports the law, but the historic shipwrecks clause in section 6(1) of the Act, which only applies if 51(xxxi) applies, is not engaged.  So, you have the result that the Act is valid but that there is no obligation to pay compensation.

If your Honours are against me then, as I have said, 51(xxxi) also supports the law and your Honours would answer the questions accordingly.  But there are those two paths – the Clunies‑Ross path or the incongruity path – either one of which independently can produce the answer that 51(xxxi) is not engaged and so there is no compensation obligation.  I have not taken your Honours to ‑ ‑ ‑

GAGELER CJ:   Mr Solicitor, you can pause at this point.

MR DONAGHUE:   Yes.

GAGELER CJ:   We will take the luncheon adjournment, and we will hear the balance of your submissions after lunch and Mr Walker’s reply then.  Thank you.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

MR DONAGHUE:   Your Honours, unless the Court has further questions, those are our submissions.

GAGELER CJ:   Thank you.  Mr Walker.

MR WALKER: May it please the Court. Your Honours, may I start with the way in which the differences and similarities between the parties’ position in relation to section 51(xxxi) was stated at the outset of my friends’ submissions. I trust it is clear enough from our writing and my address that we say, to use and adapt some language of our friend, that section 51(xxxi) applies in the sense that it provides a test for the validity of a law of the kind in question here. To put it another way, satisfaction of the requirements or criteria for the resort to legislation effecting an acquisition pursuant to section 51(xxxi) is obviously a condition of the validity of any such enactment.

We do agree that there cannot be, and is not identified, in the sense that we have explained it, any purpose – picking up the language of 51(xxxi) – for the acquired right of exclusive possession entailed in the leasehold which was terminated by the reversioner.  We do say then, if that is common ground, and I had understood it was in writing, then that is an end of 51(xxxi) applying, and if 51(xxxi) cannot be made out then, because there is an acquisition, that is an end of the validity of the legislation.

I do not want to rehearse the arguments about that, but that is the way in which there is a near approach to agreement between the parties, and then a fairly violent departure from our positions – we reach opposite conclusions.  We certainly do not say – and never have said – that there was no acquisition effected by the statute.  There was.  The only question is whether it was validly done so.

In particular – though I do not want to return to it in any detail – the tangential but evocative reference to Clunies‑Ross by both parties should not disguise the evident fact that Clunies‑Ross does not stand for anything that in this case would mean that there had not been an acquisition.  If anything, as we had hoped to spell out, it would stand for the proposition that it was not an acquisition that would satisfy, had they applied to the question in Clunies‑Ross – though they did not – the terms of section 51(xxxi) themselves.

While on matters of jurisprudential glossing of section 51(xxxi), apropos Blakeley, the passages my friend took you to, there is, in our submission, little but bleak comfort in the Court’s rather disdainful use of Mr Barwick’s suggested equivalence of the word “use” for “purpose”.  It does not make clearer, as their Honours spelled out.  In our submission, Blakeley does not present any impediment at all to the way in which we have argued the need to observe the requirements of section 51(xxxi) for an acquisition pursuant to Commonwealth legislation to have been validly enacted.

Tasmanian Dam was both the subject of writing and address by my learned friend, in particular, in order to provide, it was urged, an example – we would say, obviously, not particularly apposite to this case but nonetheless an example – of why, as a matter of legal principle, not all deprivations of property amount to an “acquisition” within the meaning of 51(xxxi).  So much may, of course, be readily conceded.  On the other hand, when A takes from B, there is nearly always, without any linguistic distortion, a deprivation of B in some sense.  So, deprivation may not be sufficient, but it will nearly always be an aspect of the dealing which constitutes an acquisition.

GAGELER CJ:   Mr Walker, as I understand it, you and the Solicitor are in agreement that there was an acquisition of property here.  There is no dispute that there was a taking and there was a gaining, and you put those two together and you get an acquisition.

MR WALKER:   That is our case, but I thought that we were at odds about that, which is why I have turned to the Tasmanian Dam thing.

GAGELER CJ:   And I thought there was really no real dispute in both of you invoking the reasoning in Clunies‑Ross to say, for your own purposes, that there was no acquisition for a use.

MR WALKER:   And so, it is ‑ ‑ ‑ 

GAGELER CJ:   It is a question of what follows from that.

MR WALKER:   Quite, quite.  So, it is a failure to meet the compound phrase or that part of the compound phrase in the suggestion made in Clunies‑Ross.  Your Honour is right.  I do not know that your Honour is right that my friend joins us in saying there is an acquisition.  I rather perceive that they contest that.  I will only spend half a minute extra, if I may, on it.

It is as simple as this.  Of course, you can construct cases – and maybe Tasmanian Dam provides a concrete example – of deprivation of one person not amounting to an acquisition by another.  But here, there cannot be any doubt about it.  There was a right of exclusive possession which appertained to the proprietor of the estate in fee simple, namely, the Commonwealth, before there was the grant of any leasehold estate.  There was then a grant of a leasehold estate which carried with it a right of exclusive possession that was adverse to the person – the Commonwealth – who continued to enjoy the fee simple.

EDELMAN J:   And why is it the purpose?

MR WALKER:   I am sorry, your Honour?

EDELMAN J:   Why is not the purpose of the acquisition of a right of exclusive possession to exclude others?

MR WALKER:   Well, it is – so, it is an effect or consequence, to use my friend’s words, but more to the point, it is – and this one is doing it accidentally – that is when you seek and obtain a right of exclusive possession in all the various ways and nuances with which the word “purpose” might be attended, in various legal contexts.  Here, it could not be plainer that that is the purpose of the exercise, particularly if there is really nothing else in the statute except incidental bibs and bobs.

EDELMAN J:   So, once you accept that, is that not the end of your 51(xxxi) argument?

MR WALKER:   No, because in our submission ‑ ‑ ‑

EDELMAN J:   Putting aside ground 2?

MR WALKER:   No – I understand, your Honour, putting that aside.  No, no, no, because, in our submission, that requires ascertainment, identification of a legislative head of power for the Commonwealth; I do not know whether I have to meet 52(i), but I would leave that to one side, I know it is prominent on the shelf; but there is 122, which I know I have to meet.

EDELMAN J:   Yes.

MR WALKER:   I really do not want, in reply, to return to what I have already argued about that.  It suffices to say on that that the reference to paragraph [22] in Yunupingu really does not go anywhere near as far as the Commonwealth would need. Now, that does not conclude the issue about section 122, but it does rather detract from that as a recent support of the argument. Let me explain.

In paragraph [22], the phrasing includes to laws providing for administration, for delegated legislation, for self‑government, and they fall within the notion of “laws for the government of” a territory and, in our submission, it cannot be said with any textual cogency that that is indistinguishable, in all its character, from “the peace, order and good government” rubric that opens section 51 and section 52.

There is no doubt – there cannot be any doubt, given the Constitution as a whole, but particularly the relation of sections 51, 52, 122 and 125 – there cannot be any doubt that a law answering the description of section 122, that is, providing for the government of a territory, will be a law falling within the broad ambit, non‑justiciable, of peace, welfare and good government of the Commonwealth. No doubt about that at all.

Our point is simply this.  It still has to be a law which provides for the government of the Territory, as opposed to simply, in this case, carrying out what would be, but for the requirements of section 51, an Executive act.  It is for those reasons, in our submission, that it is not as Justice Edelman put to me, we do not lose the 51(xxxi) point unless there is an adverse answer to us for that part of the compound phrase upon which we most level our attention, namely:

for any purpose in respect of which the Parliament has power to make laws –

In this case, in our submission, that will come down to something I do not want to say anything further on, namely, whether that will include a power to get back exclusive possession.  Leave aside the motives of that, leave aside how you may use it.

In our submission, though a power to get back exclusive possession could be the subject of legislation, it would need to be under something like the Lands Acquisition Act which, in fact, has been enacted for just that purpose.  An actual taking, in our submission, does not constitute, in itself, the implementation of a law for the government of the Territory.

EDELMAN J: In the course of the convention debates, section 122 was moved around in the Constitution.  Was the wording ever changed?

MR WALKER:   I cannot answer that from memory, I am sorry, your Honour.

EDELMAN J:   The “for the government” wording.

MR WALKER:   Yes, I am sorry, I cannot remember.  Could I then come to the question of the way in which the Commonwealth’s argument deploys the notion of national security.  This, in particular, relates to – probably now relates only to – the last issue in the case, which is if there is an acquisition, if it is governed – as it plainly would be if it was an acquisition by 51(xxx) – need there be just terms?  The historic shipwrecks clause being there in case there does need to be.

On that issue, we start by saying, as I think has fallen from a number of your Honours during my friend’s address, well, of course the question of the reality, cogency or uniqueness of any threat from Russia is not before this Court in any shape or form – in particular, whether there is any wrongdoer from whom, for example, something in the nature of a forfeiture might be condoned.  It does not arise in this case.  That is all alien to the discourse.

And so, we have an announced political motivation, but the Court does not rule and cannot rule on whether or not the threat is merely a perception, whether that perception is ill‑founded, et cetera, et cetera.  All of those enquiries are invidious and outside the proper role for the Court generally, but certainly in a case such as the present.

That ought to be enough to put paid to the idea that there is an inherent – or, perhaps, as my friend’s argument put it, an obvious incongruity in the notion of just terms accompanying a legislated response by way of acquisition to the idea of just terms for the person from whom the acquisition is effected.  As it were, outside court, by reference to what might be called a civilised response to such a law, one would say:  but what if the threat is completely mistaken?  What if it is no greater than the risk presented by any foreign country in any embassy in a relevant vicinity?

Those, of course, are questions that I can pose from the Bar table, not by way of suggesting there can or should be any consideration of answer in this Court but so as to put paid to the idea that it is evidently “absurd” – to use language my friend has used – or ridiculous to suppose that Russia should not get just terms because the perception of a threat is the perception of a threat from Russia.

Laws made just in case – or, a more pompous phrase, for more abundant caution – are perfectly well within power, but they are not laws which readily lend themselves to the response that, when they effect an acquisition pursuant to 51(xxxi), it should to without saying there will not be compensation.  If one used the approach of reasoning that identified cases where just terms are inherently unavailable, of asking about how just terms would impact upon the efficacy of the acquisition – that is, the point of carrying out the acquisition at all – then there are, of course, cases where, rather ponderously but nonetheless obviously, that will work:  a forfeiture; a tax, even more obviously, et cetera.

But it does not operate at all straightforwardly – we submit it does not operate, has no purchase at all – in cases of legislation for more abundant caution, or just in case, or to eliminate a risk – which is a possibility not yet realised – to eliminate a risk, however small, because of the dire consequences were it to materialise.

That would be true of a law acquiring all the residences in the street immediately bordering a barracks because the Commonwealth does not want to impose a positive vet security clearance requirement on all residents and visitors, understandably.  So, to meet the risk that a resident or guest would be a threat of violent attack on a defence establishment, the Commonwealth would of course be authorised, by dint of the defence power and incidental power, if not other things within a territory.

For example, of course they would be entitled to acquire all that land so as to have the exclusive possession which would mean that only security‑cleared, say, Commonwealth contractors or officers could live in those houses, eliminating the threat of an unfriendly presence too close to the guard house.  Your Honours, the very notion that the significance of that – that is, the just in case, more abundant caution, this is the better way to do this – the notion that that expels the constitutional guarantee of just terms is, in our submission, really disturbing.

No one would suppose, in the example I have given, that you should proceed on the basis that everyone is to be regarded, until they can prove otherwise, as something in the nature of a terrorist threat.  That is absurd.  But everyone presents a risk – which, by the way, is not eliminated, but merely managed by a positive vet security clearance.  So, a law can address that risk, it can take somebody’s property.  The notion that that should not be accompanied by just terms is alarming.

In our submission, our case is really no different.  There has been no determination.  There is no attempted determination of the nature of this risk, whether it be real or otherwise.  Certainly, no reference to the notion that we have created it, as my learned friend was in effect saying in his argument about the principle by which there would not be just terms.  Your Honours have no inkling from any of the materials before you of how Russia has created any risk.

But we can say this about the presence of the Russian embassy in that location, that that was a possibility created deliberately by the Commonwealth.  We can also say this.  This is not lost in the mists of 2008 – at my age, I am entitled to say that is not all that long ago.  Your Honours, two weeks before this statute was enacted – two weeks – there was the end of litigation about this lease.  The litigation concerned its purported termination for cause.

The cause, by the way, was not getting on with finishing the building of the embassy.  They lost that case – sorry, they were losing that case, if I can editorialise slightly.  Returning to what is before your Honours, they agreed to settle the case by declarations and orders which had the effect, by way of a declared position of our rights under the lease and an injunction against them exercising powers adverse to us with respect to the lease, of a five year period during which, in effect, we would be able to complete the building of the embassy, which we had covenant to do.

So, two weeks before this statute was enacted, they were joining in orders – because they were declaratory, the court was no rubber stamp – they were joining in orders by which the lease had a currency, it was, in effect, varied by extending the time for our commencement and completion of embassy‑building, and they agreed to be restrained from acting adversely to our right of exclusive possession during that relevant period.

Your Honours, it really is a bit rich, in those circumstances, to say that we are to be regarded as a party responsible for the legislated resort to the acquisition of the property which had so recently been vindicated by orders in the court – in the Federal Court – in such a way as to be denied compensation by way of just terms for that legislated acquisition, if that is what has occurred.

May it please the Court.

GAGELER CJ:   Thank you, Mr Walker.  The Court will consider its decision in this matter and will adjourn until 10.00 am tomorrow.

AT 2.37 PM THE MATTER WAS ADJOURNED