ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51 9 December 2009 S24/2009
ORDER
Order that the questions stated in the special case be answered as follows:
Question 1:By reason of s 51(xxxi) of the Constitution:
(a)did the Commonwealth lack executive power to enter into the Funding Agreement?
(b)is the [National Water Commission Act 2004 (Cth)] invalid insofar as it authorised the CEO to enter into the Funding Agreement on behalf of the Commonwealth?
Answer:The replacement of the plaintiffs' bore licences did not constitute an acquisition of property within the meaning of s 51(xxxi) of the Constitution. Accordingly, the questions of invalidity posed in paragraphs (a) and (b) of Question 1 do not arise.
Question 2:If the answer to either part of Question 1 is "yes", are all or any of:
(a)the Amendment Regulation;
(b)the Proclamation;
(c)the Amendment Order;
invalid or inoperative as a consequence?
Answer:Does not arise.
Question 3:Do the plaintiffs remain the holders of all or any of the bore licences issued to them under the [Water Act 1912 (NSW)]?
Answer:No.
Question 4:If the answers to Questions 2 and 3 are "no", do the plaintiffs have an implied right under the Constitution to recover from the Commonwealth such compensation for the loss of their bore licences as would constitute "just terms" within the meaning of s 51(xxxi) of the Constitution?
Answer:Does not arise.
Question 5:Who should pay the costs of this Special Case?
Answer:The plaintiffs.
Representation
R J Ellicott QC with M G McHugh and W A D Edwards for the plaintiffs (instructed by Martine Anderson Legal Counsel for ICM Australia Pty Ltd)
S J Gageler SC, Solicitor-General of the Commonwealth with A Robertson SC and C L Lenehan for the first and second defendants (instructed by Australian Government Solicitor)
M G Sexton SC, Solicitor-General for the State of New South Wales with J K Kirk for the third and fourth defendants (instructed by Crown Solicitor (NSW))
Interveners
R J Meadows QC, Solicitor-General for the State of Western Australia and R M Mitchell SC intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia)
P M Tate SC, Solicitor-General for the State of Victoria with K L Emerton SC and G A Hill intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
W Sofronoff QC, Solicitor-General of the State of Queensland with G J D del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law (Qld))
M G Hinton QC, Solicitor-General for the State of South Australia with S T O'Flaherty intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor (South…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51
Case
[2009] HCA 51
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered a constitutional challenge brought by ICM Agriculture Pty Ltd and others against the Commonwealth. The dispute arose from a funding agreement entered into by the Chief Executive Officer of the National Water Commission with a State, which the plaintiffs alleged authorised the State to acquire property on other than just terms. The core of the plaintiffs' argument was that their bore licences, issued under New South Wales legislation, constituted property within the meaning of section 51(xxxi) of the Constitution, and that the replacement of these licences with aquifer access licences under subsequent legislation amounted to an acquisition of property that was not on just terms.
The legal issues before the Court were whether the Commonwealth lacked the executive power to enter into the funding agreement, and consequently, whether the National Water Commission Act 2004 (Cth) was invalid to the extent it authorised such an agreement. This involved determining whether the legislative power conferred by section 96 of the Constitution, potentially in conjunction with section 51(xxxvi), was subject to the limitations imposed by section 51(xxxi) regarding the acquisition of property on just terms. Additionally, the Court had to consider whether the plaintiffs' bore licences constituted "property" for the purposes of section 51(xxxi) and whether their replacement amounted to an "acquisition" of that property.
The Court reasoned that while the legislative power under section 96 of the Constitution, when combined with section 51(xxxvi), does not permit the Commonwealth to grant financial assistance to a State on terms requiring the State to acquire property on other than just terms, this principle did not apply in the present case. The Court concluded that the replacement of the plaintiffs' bore licences did not constitute an acquisition of property within the meaning of section 51(xxxi) of the Constitution. This conclusion rendered the questions concerning the Commonwealth's executive power and the validity of the National Water Commission Act moot. The Court also determined that the plaintiffs no longer held their bore licences.
Consequently, the High Court ordered that the questions stated in the special case be answered accordingly. The Court held that the replacement of the plaintiffs' bore licences did not constitute an acquisition of property within the meaning of section 51(xxxi) of the Constitution, meaning the questions of invalidity did not arise. The Court also found that the plaintiffs no longer held their bore licences. The plaintiffs were ordered to pay the costs of the Special Case.
Orders
Orders of the court
Order that the questions stated in the special case be answered as follows:
Question 1: By reason of s 51(xxxi) of the Constitution: (a) did the Commonwealth lack executive power to enter into the Funding Agreement? (b) is the [National Water Commission Act 2004 (Cth)] invalid insofar as it authorised the CEO to enter into the Funding Agreement on behalf of the Commonwealth? Answer: The replacement of the plaintiffs' bore licences did not constitute an acquisition of property within the meaning of s 51(xxxi) of the Constitution. Accordingly, the questions of invalidity posed in paragraphs (a) and (b) of Question 1 do not arise.
Question 2: If the answer to either part of Question 1 is "yes", are all or any of: (a) the Amendment Regulation; (b) the Proclamation; (c) the Amendment Order; invalid or inoperative as a consequence? Answer: Does not arise.
Question 3: Do the plaintiffs remain the holders of all or any of the bore licences issued to them under the [Water Act 1912 (NSW)]? Answer: No.
Question 4: If the answers to Questions 2 and 3 are "no", do the plaintiffs have an implied right under the Constitution to recover from the Commonwealth such compensation for the loss of their bore licences as would constitute "just terms" within the meaning of s 51(xxxi) of the Constitution? Answer: Does not arise.
Question 5: Who should pay the costs of this Special Case? Answer: The plaintiffs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
FRENCH CJ, GUMMOW AND CRENNAN JJ
Finally, passages in the reasons of several members of the Court in Attorney‑General (Vict); Ex rel Black v The Commonwealth[35], respecting the relationship between s 96 and the guarantee or prohibition provided by s 116 with respect to matters of religion, suggest that s 96 and s 51(xxxi) also should be read together. Wilson J said that Magennis remained a persuasive analogy respecting s 96 and s 116[36]. Gibbs J said he considered[37]:"that ss 96 and 116 should be read together, the result being that the Commonwealth has power to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit, provided that a law passed for that purpose does not contravene s 116."[35](1981) 146 CLR 559; [1981] HCA 2.[36](1981) 146 CLR 559 at 650.[37](1981) 146 CLR 559 at 593; see also at 618 per Mason J.Conclusions respecting s 96 and s 51(xxxi) The result is that the legislative power of the Commonwealth conferred by s 96 and s 51(xxxvi) does not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms. The plaintiffs' case, to that extent, should be accepted. But that is not the end of the matter. It is necessary now to consider whether the replacement of the plaintiffs' bore licences issued under the 1912 Act involved the acquisition of property other than on just terms within the meaning of s 51(xxxi). The plaintiffs placed heavy reliance upon what they said were the rights, recognised at common law in England and applicable to Australian conditions, of an overlying landowner to take and use groundwater. They relied upon English authorities, particularly Chasemore v Richards[38], which were referred to in Perth Corporation v Halle[39]. These rights were said to amount to an interest in land with an existence apart from statute. The statutory intervention by the 1912 Act was but a particular form of regulation in the perceived public interest, and, in any event, the bore licences held by the plaintiffs themselves created rights which were "property" within the meaning of s 51(xxxi).[38](1859) 7 HLC 349 [11 ER 140].[39](1911) 13 CLR 393 at 398‑399, 403‑407, 410‑411, 413; [1911] HCA 57. It is convenient first to consider the position at common law both in England and Australia and, in doing so, to detail the development of the statute law, particularly in New South Wales.Water use Water is a finite and fluctuating natural resource. Both within Australia[40] and internationally[41], the need for sustainable and efficient management of water resources has attracted a good deal of attention. Questions of the ownership[42] and the need for the conservation of water resources[43] were serious legal issues in Australia even prior to Federation. The first statutes significantly regulating water resources were passed by New South Wales and Victoria during the 1880s and 1890s[44]. Since that time, the regulation of water has developed as understanding of the resource has progressed, and the need for irrigation has intensified. The regulation of groundwater extraction in New South Wales, particularly in recent decades, discloses a growing awareness of the need to carefully manage water for agricultural use. Nevertheless, it appears that there is "no single understanding or definition of sustainable yield across Australia"[45].[40]See, for example, Agriculture and Resource Management Council of Australia and New Zealand, Standing Committee on Agriculture and Resource Management, Allocation and Use of Groundwater, Occasional Paper 2, December 1996; Gray, "Legal Approaches to the Ownership, Management and Regulation of Water from Riparian Rights to Commodification", (2006) 1(2) Transforming Cultures eJournal 64; Gardner, "The Administrative Framework of Land and Water Management in Australia", (1999) 16 Environmental and Planning Law Journal 212. [41]See, for example, Hardin, "The Tragedy of the Commons", (1968) 162 Science 1243; Blomquist et al, "Institutional and Policy Analysis of River Basin Management: The Murray Darling River Basin, Australia", World Bank Policy Research Working Paper 3527, February 2005; Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action, (1990); Barnes, Property Rights and Natural Resources, (2009).[42]Second Reading Speech, New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 2 July 1896 at 1282, 1283, 1288, 1290, 1292, 1293, 1301-1303 and 1307; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 8 July 1896 at 1408; Second Reading Speech, New South Wales, Legislative Council, Parliamentary Debates (Hansard), 2 September 1896 at 2798-2801 and 2806; see also Second Reading Speech of Mr Alfred Deakin, Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 24 June 1886 at 432-433, 436 and 440.[43]Second Reading Speech, New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 2 July 1896 at 1282, 1286-1287, 1291-1292 and 1295; Second Reading Speech, New South Wales, Legislative Council, Parliamentary Debates (Hansard), 2 September 1896 at 2798; New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 10 June 1897 at 1038; Second Reading Speech, New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 11 August 1897 at 2888; see also Second Reading Speech of Mr Alfred Deakin, Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 24 June 1886 at 432‑433, 436 and 440.[44]Water Rights Act 1896 (NSW); Artesian Wells Act 1897 (NSW); Irrigation Act 1886 (Vic). [45]Agriculture and Resource Management Council of Australia and New Zealand, Standing Committee on Agriculture and Resource Management, Allocation and Use of Groundwater, Occasional Paper 2, December 1996, par 4.1.The common law