Minister of State for the Army v Dalziel

The case of *Minister of State for the Army v Dalziel* concerned an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute arose when the Commonwealth, acting under National Security Regulations, took exclusive possession of land for an indefinite period. The occupier, Arthur Dalziel, who operated a parking station on the land, claimed compensation for loss of profits and occupation. The Minister of State for the Army, however, sought to limit compensation based on an order made under the Regulations, which excluded such losses.

The central legal issues before the High Court were whether the taking of exclusive possession of property for an indefinite period under regulation 54 of the National Security (General) Regulations constituted an "acquisition of property" within the meaning of section 51(xxxi) of the Australian Constitution, and if so, whether regulation 60H and the Basis of Compensation Order made thereunder provided "just terms" as required by the Constitution. The court was also required to consider the validity and severability of these regulations and the order.

A majority of the High Court (Rich, Starke, McTiernan, and Williams JJ., with Latham C.J. dissenting) held that the taking of exclusive possession of property for an indefinite period under regulation 54 did constitute an acquisition of property for the purposes of section 51(xxxi) of the Constitution. Furthermore, a majority (Rich, McTiernan, and Williams JJ., with Latham C.J. and Starke J. dissenting) found that regulation 60H, by purporting to allow the Minister to fix a basis of compensation that did not constitute just terms, and the Basis of Compensation Order made thereunder which excluded compensation for loss of profits or occupation, were invalid. However, these judges also held that regulation 60H was severable from the other National Security Regulations, and that compensation could still be awarded under regulation 60G(5) on a basis conforming to the constitutional requirement of just terms.

The High Court affirmed the decision of the Supreme Court of New South Wales, holding that the Basis of Compensation Order was invalid and that compensation should be determined under the ordinary principles of law for the compulsory taking of property, rather than being limited by the exclusionary provisions of the order.