Wurridjal & Ors v Commonwealth of Australia

[2008] HCATrans 349

[2008] HCATrans 349

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M122 of 2007

B e t w e e n -

REGGIE WURRIDJAL

First Plaintiff

JOY GARLBIN

Second Plaintiff

BAWINANGA ABORIGINAL CORPORATION

Third Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

First Defendant

ARNHEM LAND ABORIGINAL LAND TRUST

Second Defendant

FRENCH CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 3 OCTOBER 2008, AT 10.01 AM

(Continued from 2/10/08)

Copyright in the High Court of Australia

__________________

FRENCH CJ:   Yes, Mr Merkel.

MR MERKEL:   Before my learned friend begins, if I could hand up two documents which respond to matters your Honour Justice Kirby raised yesterday for distribution to the Court.  One relates to shipwreck clauses in other legislation and the other to references to Teori Tau since Newcrest, if the Court pleases.

FRENCH CJ:   Thank you.  Yes, Mr Walker.

MR WALKER:   May it please the Court.  May I take up an incomplete answer yesterday to a question from Justice Gummow concerning the arguments founded on section 62(4) of the NER Act.  The question posed, we suppose, is whether a priori the mandatory or universal ignoring of improvements is something which in the demurrer leads to an unambiguous certain outcome.

All I want to add to what we have already said is, well, in our submission, as a matter of constitutional principle, the question whether just terms are or are not provided by a concatenation of statutory provisions of which subsection 62(4) is part in this case depends and depends entirely on their application to particular facts.

To put it another way, the fact that one may imagine circumstances in which a set of statutory provisions may operate in a way which can be hypothesised as producing less than just terms is not necessarily, in our submission, to pose a case that requires or even permits decision.  Certainly, in our submission, the pleaded facts in this case, and the demurrer meeting them, is not such a situation.

It is to be recalled, of course – I think Justice Hayne may have noted this as a plausible possibility in this very case – that registered leases which are not covered by section 31 emergency response leases by reason of subsection 31(3) of the NER Act may well in the ordinary course be the very land which is most valuably or plausibly valuably improved, and so it simply will never come up for consideration under subsection 62(4) in relation to rent.

GUMMOW J:   Would you say that again, Mr Walker?

MR WALKER:   Registered leases, and “registered” means under the Northern Territory system for Torrens tenure, are excised – rather curious wording – it proceeds by saying, land which but for this subsection would be covered by a lease is hereby removed from a national emergency response lease and it is land covered by a registered lease.

CRENNAN J:   Is there anything in the demurrer book which allows us to understand the scope of the registered leases?

MR WALKER:   No, and that is my very point, that that is exactly the kind of thing which first at the broadest level of what is a matter, but second on a pleading – on a demurrer to a pleading – even more acutely raises the need for an understanding of the facts to which the possibilities which ex facie are raised by the terms of 62(4), the possibility of that producing less than just terms.  You need facts, we do not have them.

The only other thing I wish to say about the, as I say, mandatory and universal deleting of improvements from what the Valuer‑General may look to in determining a rent for a section 31 emergency response lease is this, that even where there are improvements that are not covered by registered leases it may well be – and this is a Bar table speculation, but with some plausibility, we submit – that many of them have been funded from precisely the same funds which would be drawn upon for the payment of any monetary compensation, pursuant to just terms.

MR WALKER:   In other words, just terms may well require in particular cases consideration of the history, financial and governmental, with produced improvements in the first place and that is very much a matter which is fact rich and which requires, in our submission, matters to have been pleaded.

KIRBY J:   Does your client support the submission put to us yesterday by Mr Merkel that just terms is a larger circle than reasonable compensation, especially as it affects Aboriginal interests?

MR WALKER:   “Larger” is a word that will introduce a problem, in our submission.

KIRBY J:   I do not see why.  It is either a coincident or it is bigger.

MR WALKER:   No.  It could be smaller in financial terms.

KIRBY J:   It could be smaller insofar as one is dealing with financial issues.

MR WALKER:   Yes.

KIRBY J:   It was put to us yesterday, and at the moment I am convinced that there is some merit in it, that so far as Aboriginal interests are concerned, they will include, as the Court has frequently said, spiritual interests and cultural interests and interests that are not to be dealt with solely on financial terms.  Does your client take a different view for that?

MR WALKER:   No.

KIRBY J:   If you do, I would like to know what it is.  I would like it to be spelt out.

MR WALKER:   No, is the answer, your Honour, but I do not accept that just terms will necessarily be larger if one is measuring size by money, and I think your Honour understands.

KIRBY J:   Yes, but money, it is suggested, and I think Justice Dixon supports the proposition and mere language supports the proposition, money is not all of it.

MR WALKER:   Quite so.

KIRBY J:   And in particular for Aboriginal interests for one of whom you are speaking. 

MR WALKER:   Your Honour, as I think is very clear from the written submissions, we have left, and very deliberately left, to the plaintiffs to put the case about just terms.  Your Honour asked me have I anything to say against that aspect of the plaintiff’s case and the answer unequivocally is no.

KIRBY J:   You opened the question.  I merely asked you a question by reference to what you were saying to the Court this morning.

MR WALKER:   Your Honour, the question about just terms requires facts.  That observation in no way argues against what my learned friend, Mr Merkel, was urging yesterday concerning the content of just terms, particularly in relation to property, which is either recognised by or created under the Act, under which my client is created and constituted.  That Act bespeaks the special recognition and nature of Aboriginal connection, yes, and we do not have a syllable to say against what my learned friend said in that regard.  We stress, however, that just terms is a question requiring concrete application to facts.  That is not against my learned friend’s argument, but it says something about what is presently posed for decision.

The next point I wanted to supplement some submissions from yesterday on is this, namely, the question of the diversion of the income stream about which there is a difference between the plaintiffs and us.  Could we simply draw to attention that we have supplied the statutory framework for that on page 15 of our written submissions in footnote 72.  That is simply to give your Honours that reference.  Can I next move to supplement and finish what I was attempting yesterday in ‑ ‑ ‑

GUMMOW J:   Just on this question of income stream.  The fact that the income stream from an improvement is not diverted may in a particular case impact upon the just terms requirement in 62.

MR WALKER:   Exactly.  Now, if an improvement, for example, may not represent to city eyes perhaps anything very valuable financially but serves a critical community purpose, which will often be the case, and that critical community purpose is utterly unaffected by the punitive acquisition, for example, then for the reasons Justice Gummow has just raised, that will obviously be relevant to just terms.  That will be, in fact, bearing in mind that my client can only deal with its land in accordance with the direction of a land council who itself may proceed only with the consent of the traditional owners, and having consulted other affected Aboriginal persons, then, in our submission, for all the reasons that Justice Kirby has asked me to consider in the last questions, just terms will always include consideration of the facts of how an improvement has been dealt with or affected by an acquisition.

Your Honours, the next thing I wanted to finish off was my attempt to answer the Chief Justice’s question to my friend yesterday concerning the use of the term “lease” in the NER Act. Without adding to what I have already said yesterday, could I give the references? It is Part 8 of the Law of Property Act (NT). We have supplied extracts, tables and extracts, and I would draw attention in particular to sections 117, 118 and 119. They raise questions rather than necessarily supply complete answers concerning the effect of the section 31 national emergency response leases.

Those questions will require to be answered by reference, of course, to section 50 of the National Emergency Response Act itself, to which your Honours’ attention has earlier been drawn, that is, that part of the Act has effect despite other laws.  I also draw to attention the contemplation of the Parliament shown by subsection 58(3) of the NER Act, that laws of the Territory on certain topics, some described and some of it may be prescribed, might apply but maybe disapplied by regulation; a clear indication of their otherwise possible application.

GUMMOW J:   On this question of section 50, what is the relationship between section 50 and picking up section 35(1), exclusive possession of the Commonwealth, and 69 of the Land Rights Act which creates the criminal offence with respect to entering and remaining on sacred sites?  I think the plaintiffs say 69 has been washed away by section 50.  But the question I want to ask you is, would section 69 in any event ever impose criminal liability upon the Commonwealth in accordance with the ordinary principle of construction explained by Sir Owen Dixon in Cain v Doyle in 72 CLR 409 and referred to often enough.

In other words the Commonwealth’s exclusive possession is never going to intersect really with a criminal offence in section 69.  The human actor is still there and subjected to 69.  So the question I want to ask, do you differ or accept the proposition that 50 washes away 69 with respect to sacred site offences?  If you need to think about it, do so.

MR WALKER:   Yes.

GUMMOW J:   But at the moment it seems to me an illusory category that has been put up.

MR WALKER:   Well, the exclusive possession ‑ ‑ ‑

GUMMOW J:   Of the Commonwealth.

MR WALKER:   ‑ ‑ ‑ of the Commonwealth might be interpreted to mean an untrammelled right to occupy particular physical pieces of land.  That is a ready understanding of that expression.  But it might not, and in the context where there is a prohibition on sacred sites applying to individuals who, for example, are employees of the Commonwealth, unless there be something factual which I cannot presently imagine, there is no necessity to interpret the exclusive possession which is granted as overriding for a subset of the geographical area in question the prohibition in section 69.

HAYNE J:   But invert it.

MR WALKER:   Yes.

HAYNE J:   The officer of the Commonwealth who goes in and does something on a sacred site, if charged with an offence under section 69, could that officer answer by saying, but the Commonwealth has exclusive possession?

MR WALKER:   My answer just now is, no, he or she could not because the special provision for sacred sites with criminal sanction in section 69 is not in any commensurately special way in the NER Act singled out for implied or pro tanto repeal and exclusive possession, though we accept capable of importing a positive right to be on land, indeed, that will normally be the expectation of somebody granted exclusive possession, bearing in the mind the special nature of this land which includes sacred sites given statutory recognition and criminally sanctioned protection, in our submission, one would not read section 35 exclusive possession no differently from if it were a private conveyance.

Given that context, where the exclusive possession is being given of Aboriginal land by definition, and that it has a pre‑existing and very special quality illustrated by section 69 of the Aboriginal Land Rights Act, the better reading of exclusive possession is that it does not swamp, wash out, pro tanto derogate from the prohibition in section 69.

Now, of course, going back to the first matter that Justice Gummow raised, in our submission, the Commonwealth itself is not subject to the criminal sanction, apart from the general proposition to which reference has been made.  One sees, for example, that the kind of persons contemplated by allocation of penalty do not include either the Crown, by the use of that word, which is the one adopted in the statutes, nor is a body politic mentioned.  That is subsection (1) of section 69.

Your Honours, the second of the Territory Acts to which I need to make reference concerning the word “lease” as a term of art carrying its attribute subject to section 50 and section 58(3) operation is the Act of the Territory, the Land Title Act, in particular, it is Part 6 of Division 2 in that statute.  There are a number of provisions, I do not need to go to any of them.  Your Honours see, for example, that one can transfer interests.  Well, that obviously in this case will be overridden by the specific provision in section 35 against transfer by the Commonwealth.  On the other hand, in the same provision of section 35, other dealings are permitted by the Commonwealth and those, in our submission, fall to be dealt with, being land in the Territory, by the pre‑existing regime provided by the Land Title Act as well as the Law of Property Act.

One sees, for example, that there can be a standard terms document lodged, for example, by the Commonwealth, under sections 168 and 169 and, bearing in mind that an instrument of some kind is contemplated under section 55 as capable of being registered, those, in our submission, are all machinery provisions entirely apt, in no way incongruent with reading the word “lease” in the NER Act as being a lease.  Your Honours will recall I called that in aid, in any event, in the argument I made about subsection 62(5) imposing an obligation rather than a voluntary possibility of the Commonwealth paying rent.

FRENCH CJ:   It will not be executed by the Trust.

MR WALKER:   No.

FRENCH CJ:   It will not look like a lease from that point of view.

MR WALKER:   No.  Indeed, the very expression in section 55 is “by force of” and there are at least two meanings one can give to that word “force”.

FRENCH CJ:   The Land Title Act contemplates a validly executed instrument, does it not?  Section 66?

MR WALKER:   Yes.  Section 55 permits that to be done, in our submission.  Your Honours, may I then briefly come to the question of section 71 of the Aboriginal Land Rights Act.  I have already said much of what I wanted to add to our written submissions in that regard yesterday.  Could I ask your Honours to note by way of cross‑reference and addition the following proposition.

GUMMOW J:   Where does this fit in in your written submissions?  Paragraph 45?

MR WALKER:   Yes.  That is the particular argument which is most important to us, the one starting at 45.  Your Honours will have seen that one of the propositions upon which we depend and the plaintiffs depend might be called the section 19 requirement which, by reason of what I have described as the role of affected Aboriginal persons, traditional Aboriginal owners, the Land Council and my client’s direction wholly by the Land Council, the importance of the involvement by the traditional owners veto in relation to disposition of interests, but we need to add this qualification;  that is not complete or universal.  There are exceptions.  Some of them have been noted in our written submissions.  We need to add a very obvious further one.  So what I am adding is a cross‑reference, really, to our paragraph 18 with its footnote 25, our paragraph 21 with its footnote 30 and our paragraph 24.  I do not want to go to those paragraphs, but what I am adding should be seen as an addition to them.

There is a most obvious way in which section 19 veto involvement of traditional owners will not be required for a disposition of interests in Aboriginal lands and it comes about because of the definition of “Aboriginal lands” in subsection 3(1) to include what I will call “escrow land”, land within the area of my client but where the deed of grant is held in escrow.  Your Honours are familiar with that from recent decisions, particularly see subsection 10(2) of the Act and the function of my client under paragraph  5(1)(c).  There is a specific function of my client under paragraph 5(1)(c):

to acquire, as and when practicable, the estates and interests of other persons in the land with a view to the surrender to the Crown of those estates and interests and the delivery to the Land Trust of the deed of grant held by the Land Council.

That is a process which, believe it or not, has not yet been completed after all this time.  So there is still escrow land.  That means that any of those outstanding estates or interests will be caught – I should not say “caught” – will have the protection recognised by section 71, but they will not have been through the veto power of the traditional owners as to their original grant.  That is a further qualification we need to add to our written submissions.  However, in our submissions they are, as it were, grandfather provisions and they say nothing about what might be called the inherent susceptibility to variation of the fee simple which is granted.  They recognise that when the fee simple was granted it was intended to be free of all other estates or interests so that there was a transitional period protected by the escrow while they were being all called in.

Your Honours will note that in relation to section 71 there is a special definitions section that explains its terms, namely section 66, which expands or at least changes the definition of “estate or interest” in Aboriginal land inclusively in a number of different ways which, as your Honours can see include, if you go to paragraph (d) in the reference to section 14, you have the reference to Commonwealth or Territory use and occupation.  Again, when one goes, for example, to section 14 this is not a provision which in any way portends open‑ended alteration to the fee simple.  It is a set regime of an entirely familiar kind for all fee simples by way of what might be called a reservation.

It is for those reasons that we submit that, as we have put it in our written submissions, section 71 simply continues in operation.  This is a major difference between us and the plaintiffs.  We submit that the protection of the extremely important traditional rights referred to in section 71(1) continue to operate in precisely the way Parliament intended by reason of what has been called the ambulatory effect of section 71(2).  They have not been swept away or extirpated.

We have given a reference – that is, by the section 31 national emergency response lease – to a decision of Justice Riley in the Territory Supreme Court, Margarula v Rose (1999) 149 FLR 444 – I think we have given your Honours copies of that – simply to illustrate by decision the way in which the word “interfere” in section 71(2) is all important.

It is not, as it were, a conveyancing or simple inconsistency of estate or interest which is in question in subsection (2).  It is doing things which will be largely physical and social – see subsection (1) – in such a way as to interfere with a use or enjoyment of an estate or interest.  That again depends upon the facts.  In the Margarula v Rose Case the facts included physically trespassing on and climbing over apparatus and plant and equipment of the mining company.  It was held that did not answer the description of section 71(1) and it did amount to an interference in terms of section 71(2), whereby section 71 was not available as a defence to the criminal trespass that had been charged. 

In our submission, that is a valuable illustration, first, of the necessity for facts, second, that the interfering with use or enjoyment is not to be understood as simply involving the comparison of two deeds, as it were.  It involves examining conduct which would otherwise be permitted under subsection (1) and evaluating the impact that conduct has on the “use and enjoyment of” the other estate or interest.

Your Honours will have seen that we also differ from the plaintiffs, importantly, by how we resist the susceptibility of section 71 rights, which are very important, to termination under section 37 of the National Emergency Response Act, that is, we entirely accept the gravity of that consequence in relation to the learning on acquisition that is advanced by the plaintiffs.  What we resist is, as it were, the bad news that there has been that entrenchment.  We submit that section 37 in its terms contemplates the kind of right where it is sensible to suppose that one might find the person or persons to whom such notice may be given. 

When one examines the nature of the very special rights and very important rights nuanced for different degrees of connection of Aboriginal peoples with that land and affected by the possibility of permissions from time to time, then, in our submission, section 37 simply cannot operate according to its tenor in relation to the rights protected by subsection (1) of section 71.  That is an important proposition for why they continue.

Your Honours, that leads me to my last point which might be regarded as the most important point from the Land Trust’s point of view.  That which really characterises the Land Trust in its obvious intended, almost unique, mission under the Act is the getting in and proper stewardship, subject utterly to direction of the Land Council with the consent of the traditional owners in consultation with other affected Aboriginal persons, of the fee simple; the fee simple, which was the solution adopted pre‑Mabo to recognise that which was problematic to describe as property in those days.

In our submission, this is a species of property which for all the reasons that the prehistory of the Act, see the Woodward Report, and the consideration of the importance of the fee simple, for example, in Blue Mud Bay shows, ought to be treated as the most formidable piece of property that could be granted by Parliament.

KIRBY J:   Did not the Court say that in Fejo?

MR WALKER:   Yes, yes, quite.  It can be said, in our submission, importantly for investigation of the question whether this is a kind of property which is inherently susceptible of the kind of alteration which has been made by the section 31 national emergency response lease, it can be said that none of us has better or more solid or more fixed property than fee simple.

Because it is at the top of that hierarchy in terms of fixed content and solidity it is important, obviously, to regard what might be described as inbuilt detractions or reservations, and it would also be true that none of us has a fee simple with nothing in the nature of a reservation, particularly in this country.  So that in itself, in our submission, is nothing at all like the workers compensation system, both as a matter of substance and form, susceptible of alteration from time to time such as was considered by this Court in Chaffey 231 CLR 651.

We call in aid the contrast which your Honours referred to in Chaffey at page 664 of the Commonwealth Law Reports in paragraphs 24 and 25.  Part of that contrast your Honours expressed by reference to the Newcrest decision where, of course, the property was not inherently variable compared to WMC where it was.  One sees that in those two paragraphs.  In Newcrest may we add this reference, or emphasise this reference? In the reasons of your Honour Justice Gummow, 190 CLR 513 at 634 to 635, the passage in particular concerning the grant out of the Territory’s radical title upon the Commonwealth taking it.

GUMMOW J:   What page was that?

MR WALKER:   Page 634, the bottom of the page to the top of page 635.  I think reference may have been made already to that yesterday.  For all those reasons, in our submission, in this Court for purposes including that raised in this argument, the approach taken in Blue Mud Bay [2008] HCA 29 at 50 – I do not need to take your Honours to it – is one which unless something special were to be shown about this fee simple, to which I am about to come, would produce the solidity of the property, it is unquestionably property, the only question is whether forcing or taking a leasehold out of it is an acquisition.

If that is all one knew, that would be almost a paradigm governmental taking, to take a leasehold from a freehold.  The only question is whether there is something about this particular fee simple.  The references I have just given culminating in Blue Mud Bay to paragraph 50 are, in our submission, entirely in one direction in support of our proposition, but of course this is an acquisition.

In our submission, there is the all important matter of context and history to use the phrase employed in a slightly different setting, but concerning precisely the same constitutional issues in Telstra [2008] HCA 7 paragraph 51. Now the context and history I do not wish to labour because they have been, I hope, fully set out not only in the written submissions, but also in the references incorporated in those submissions. But we would stress these features of it.

This was intended by the fee simple, as it were, to cut the Gordian knot of the problematic and probably unending difficulties of translating anthropologically observed realities – by that I mean realities that may never be quite clearly understood – into matters of power or control to use the key concepts of ownership that is property.  By employing the fee simple, in our submission, the Parliament made clear the very opposite of an intention to subject that form of property to the infinite variety of possible future effects which would prevent in statutory encroachment by section 31 type provisions from being acquisitions.

Now, in particular, in our submission, that is to be seen from the nature of the special incursions upon this fee simple which I think your Honour the Chief Justice may have been asking about yesterday.  Could I take your Honours to subsection 4(2B) of the Aboriginal Land Rights Act.  I think the Chief Justice was asking about the power of the Minister to effect the extent of the land and it is there found by Gazette notice, “The Minister may . . . vary the boundaries of the land” and then I

draw to attention particularly the language of the next few words “to be held by a Land Trust”. 

The first point I make is that does not look like a power to affect the metes and bounds in a registered grant.  It looks rather like a power to alter the descriptions that one finds in the Schedule to the Act from which, after investigation grants may be recommended.  That is the first point.  The second point is that when one tracks through the possibilities in paragraphs (a) and (b), we submit that they may all be characterised, in effect, as reallocation between land trusts and thus never moving away from the benefit of the Aboriginal persons with the relevant connections rather than detraction ‑ ‑ ‑

FRENCH CJ:   That is the same point that Mr Merkel made yesterday, was it not?

MR WALKER:   Yes, and that very important difference between this fee simple, if you like, and other fee simples, namely, that perhaps not directly, but at an anterior stage and indirectly the capacity to enjoy it in a particular land trust may be affected by what appears to be mere ministerial fiat is not, upon closer examination, anything of the kind.

There is no subjection to executive discretion.  The purposes for that gazettal of variation are tightly circumscribed by reference to matters which are intended to permit adjustments so that the appropriate land trust or land trusts reflecting the relevant Aboriginal peoples hold the land eventually by way of the registered fee simple.  That, in our submission, is a highly significant indication that this is not a case which has any relevant similarity with what, to use an admittedly extreme example from recent decision, might be seen in a workers compensation scheme.  If we are correct in that then there can be no doubt about either the property or the acquisition in relation to the section 31 lease and the fee simple.

Your Honours, it remains only to say we have not said anything about special measures, not because that is not an important topic but because it really does not arise in this case.  That is why so little is found in our written submissions on the point and why I wish simply to say, on the facts pleaded and the nature of the issues raised by the demurrer, the question of whether these are or are not special measures and, if so, what does it matter and, if not, what does it matter simply does not arise.  May it please the Court.

FRENCH CJ:   Thank you, Mr Walker.  Yes, Mr Solicitor.

MR GRANT:   May it please the Court.  We accept that on the authority of the majority decision in Newcrest it would not be strictly necessary to decide the issue on which the Territory intervenes in the event that the Court determined that this legislation is supportable by the race power or the external affairs power.

Having said that, we submit that the Teori Tau issue would still be properly decided in that event for two reasons.  The first is it would lend certainty to the interaction between placitum 51(xxxi) and section 122 and we note in this respect that that is not simply a mere intellectual concern, as the Commonwealth contends in this matter, that the law is supported solely by section 122.  It certainly has not suggested that it will not in the future exercise its legislative authority in respect of matters for which executive authority has been transferred to the Territory pursuant to the self‑government arrangements, so it remains a live issue in that respect.  Of course, your Honours will recall that that was the practical basis on which Justice Toohey was disinclined to overrule Teori Tau in Newcrest.

The second reason we say the Teori Tau issue would be properly decided is that it would avoid the need for potentially extended examinations of whether a particular law is capable of characterisation under some section 51 head of power, as well as under section 122.  That is the sort of examination that is called up in this case.

Your Honours, we largely adopt the submissions that have been put by the plaintiffs and we rely on our written submissions.  We would wish only to address some additional matters arising from the question of abstraction that was raised yesterday and relating to two matters outlined in the Commonwealth’s submissions in reply, namely, eminent domain and the effect of the petroleum legislation 1954 insofar as that goes to any inconvenience that would result from overruling Teori Tau.

Turning first to the question of abstraction, we say, your Honours, that but for section 51(xxxi), it is obvious there are a number of heads of power in section 51 which would have been capable of supporting laws as to the acquisition of property without just terms.  Likewise, section 122 would have been capable of supporting Commonwealth laws as to the acquisition of property in a Territory without just terms but for 51(xxxi).  We say that 51(xxxi) abstracts, and we use that term advisedly, from all of those other powers any power to enact a Commonwealth law for the acquisition of property otherwise than on just terms, that is to say, your Honours, you cannot avoid the just terms qualification by relying on another head of power. 

That is a rule of construction that was propounded by Sir Owen Dixon in Schmidt, as Justice Hayne went to yesterday, and it has been picked up since in Nintendo and Clunies‑Ross, Mutual Pools and finally in Newcrest.  Now, your Honours, for this purpose section 122 is a purpose in respect of which the Parliament has power to make laws as that phrase is used in section 51(xxxi).

FRENCH CJ:   Government of the Territory is the purpose, is that right?

MR GRANT:   Yes, that is so, your Honour.  Just because that purpose is not confined to a specific and narrow subject matter does not deny its characterisation as a purpose.  The purpose is anything to do with the territories which the Commonwealth decides requires the making of laws.  Sir Owen Dixon gives some attention to that particular phrase as it appears in section 51(xxxi) and says that it is indefinite.  We take his Honour there to mean indefinite in the sense that it is very broad.  It is clear now, since Lamshed v Lake, that section 122 is not to be read as disjoined from the rest of the Constitution in this respect. Of course, that has been reinforced in Spratt v Hermes, Berwick v Gray and subsequently in Newcrest.

KIRBY J: If you look at it simply in terms of the governance of the Commonwealth and of Australia – I am not seeking to foreclose the question by referring to the governance of the Commonwealth, whether that just includes the States on some people’s theories – the people who are living in the Northern Territory are citizens and they are electors within the Constitution and to exclude them from the protections that are provided by section 51(xxxi) would itself, in this day and age, appear to most people to be odd. Why should they be excluded from protections that all other citizens of Australia living elsewhere in the Commonwealth are not excluded from?

MR GRANT:   In our submission, they should not, your Honour.  Of course, we put the subsidiary argument that this is a Constitutional right and it should not be denied in the absence of clear words, and there are no clear words.  The observation your Honour makes has particular force when one bears in mind that, for the internal territories at least, those territories were part of the Commonwealth at Federation and when one bears in mind the fact that they are wholly incorporated into the Commonwealth in terms of the application of taxation laws and immigration laws, which is not necessarily the case in respect of other territories, and when one bears in mind the fact that those territories comprise approximately one‑sixth of the land mass of the Commonwealth and their combined population approaches or exceeds that of Tasmania.  So for those three reasons, your Honour, we say that the rights argument does have some force, at least in relation to internal territories.

KIRBY J:   Can one take judicial notice of the fact that the population of the Northern Territory comprises a very much greater cohort of indigenous people than any State or other Territory of the Commonwealth?

MR GRANT:   Your Honour, we do not see how that necessarily keys into the application of the guarantee.

KIRBY J:   If the theory of Teori Tau is right, then a very large proportion of Australian citizens and a very substantial sub‑proportion of them who are indigenous are cut off from a protection of the Constitution that is provided in section 51(xxxi) to everyone else.

MR GRANT:   Yes, your Honour.  Insofar as that keys into the rights argument or the rights construction, yes, that is significant.

KIRBY J:   It is not a construction that seems to be comfortable to a modern notion of governance of this nation equally for all citizens throughout the continental length and breadth of it.

MR GRANT:   Yes.  We accept and adopt that, your Honour. 

KIRBY J: When one thinks that a lot of the early jurisprudence was undoubtedly affected and sometimes said to be affected by the fact that we had territories offshore in Papua and New Guinea of people who at that time and even then had no right to enter Australia because they offended the White Australia policy, then it is not really a theory of the Constitution that one would hasten to embrace today.

MR GRANT:   No, your Honour.  The matter now must be considered in a contemporary context. 

GUMMOW J:   Do you want to say anything more about paragraph 8 of the Commonwealth’s reply?  In particular, I am referring to the Petroleum Ordinance 1954.

MR GRANT:    Yes, we do, your Honour.  The suggestion put there is that there may be significant ramifications flowing from overruling Teori Tau by operation of that ordinance.  Of course, that ordinance declared that all natural gas and helium on or below the surface of land was the property of the Commonwealth.  In 1978, upon self‑government, the property that was affected by that particular ordinance was vested in the Territory by operation of section 69 of the Self‑Government Act.

GUMMOW J:   What does section 69 say?

MR GRANT:   That Commonwealth property vested in the Territory subject to the section 70 provisions, your Honour.

FRENCH CJ:   I think that affected some of the mining leases, did it not, in Newcrest?

MR GRANT:   Yes, yes, your Honour.  In 1984 that 1954 ordinance was repealed by the Petroleum Act 1984, which is a piece of Northern Territory legislation. That Territory legislation, the 1984 Territory legislation, provided that natural gas and helium on or below the surface of the land was deemed to be the property of the Crown and always had been. So that is the full legislative context in which the Commonwealth makes its submission. Now, we make only four responses ‑ ‑ ‑

FRENCH CJ:   Was that if there were an acquisition you got it back?

MR GRANT:   Well, that is another response, but dealing specifically with the question of inconvenience or ramification, the 1954 ordinance would not have operated to acquire any property in the form of helium or natural gas from Crown land or pastoral leases, which made up the vast bulk of the land holding in the Territory at the time, because those matters were reserved from pastoral leases, obviously, or to put it another way, pastoral leases were granted for specific purposes and the grant did not extend to ownership of those sorts of resources.

The second observation we would make in relation to the Commonwealth’s proposition is that the application of the guarantee were this Court to overrule Teori Tau would only operate to upset transactions by which the Commonwealth conferred rights to drill for natural gas and helium on land covered by freehold grant, and the Commonwealth does not contend that there were any such arrangements.

KIRBY J:   Is this an argument of inconvenience, as you understand it?

MR GRANT:   Yes, it is.

KIRBY J:   Well, why would inconvenience be of great significance for a constitutional question?

MR GRANT:   Well, we say not, your Honour, but it is a matter that is thrown up by the Commonwealth and we address it this way.  Even if one accepted that inconvenience or these purported ramifications or possible ramifications were determinative or in any way influential, the contention is an empty one in the sense that it does not identify any real inconvenience or ramification or prejudice.  The Commonwealth does not come here and say, there were in fact transactions by which these sorts of rights were granted which would be upset by the operation of the guarantee to section ‑ ‑ ‑

KIRBY J:   I think if the inconvenience of Wakim was tolerable, the inconvenience that is involved in this case is even more so.

MR GRANT:   Quite so, even were it not illusory.  The third submission we put in relation to this suggestion is that the acquisition which it is said that the 54 ordinance effected, and we do not concede that it did effect an acquisition necessarily, it occurred in 1954, and the Commonwealth does not now contend that there is any person in whom a claim now subsists.  Then finally, in any event, that legislation pre-dated Teori Tau and it is not said that the Commonwealth has since acted in any material way in reliance on that decision, and certainly, it has not and could not have done so since 1978 when the property passed to the Territory upon self‑government.

Your Honour, we say the contention does not withstand any serious scrutiny.  Similarly, there is a suggestion that amendments to the Aboriginal Land Rights Act might be somehow affected by repealing Teori Tau.  Apart from the legislation at Bar at the moment, we are not aware of any amendment since the inception of that legislation that might be affected by overruling Teori Tau. 

Your Honours, whilst we are on the issue of the Commonwealth’s contentions in relation to overruling Teori Tau, there is also a suggestion in the Commonwealth’s submissions, the original submissions, that the eminent domain which the Government of South Australia or the Crowning right that South Australia enjoyed over the territory at the date of Federation was simply transferred to the Commonwealth upon acceptance of the Northern Territory. 

KIRBY J:   What did the Crown have to do with it once the State was created by the Constitution?

MR GRANT:  Yes, well, I apologise, your Honour, I accept the ‑ ‑ ‑

KIRBY J: Do not apologise, that is the present orthodoxy. I just will never cease to question it. Once the Constitution established the States, the Commonwealth and the Territories, they are constitutional entities of Australia.

MR GRANT: Yes, and, your Honour, the right of eminent domain to which the States, including the State of South Australia, were and are entitled derives from the Constitution and their status as States. Now that is a right that is characteristic of a fully sovereign power and it is not something that was transferred from South Australia as the surrendering State to the Commonwealth at the time of surrender. It is not something that the Commonwealth can transfer to the Territory in the event that it is admitted or established as a new State. Of course, that is the purport of the Commonwealth’s submission, that the Commonwealth needs a right of eminent domain which it procured from the State of South Australia and the Territory needs to recognise that the Commonwealth has a right of eminent domain, if it is to have such a right should it become a State.

Now, your Honours, the Commonwealth took the Territory in the Commonwealth’s capacity under the Constitution and subject to the constitutional limitations, one of which we say is 51(xxxi). The capacity in which the Commonwealth holds the Territory is very different to the capacity in which the State of South Australia held the Territory between 1900 and 1911. In particular, South Australia had a right of eminent domain and there is some discussion of the nature of that right, your Honours, in Minister of State for the Army v Dalziel (1944) 68 CLR 261, particularly Justice Rich at 284. Your Honours, that is referred to at item 20 of the plaintiff’s list of authorities.

KIRBY J:   What does this go to exactly?

MR GRANT: It goes to the nature of eminent domain and the limitation that is imposed on the Commonwealth by the Constitution in that respect. Simply to illustrate, your Honour, the difference in capacities between the manner in which the Commonwealth holds the Territory and South Australia’s eminent domain over that area that was the Territory prior to acceptance.

KIRBY J: But once the Constitution came into force and created a Territory of the Commonwealth as a separate political entity of Australia under its Constitution and once the Northern Territory became a Territory of the Commonwealth, successively in different parts, why would one do anything other than analyse its character and legal status and incidence than by reference to the Constitution of the Commonwealth of Australia? Why would one impose upon it, especially in different parts of it, different theories that antedate its creation as a constitutional entity of this nation?

MR GRANT:   One would not, your Honour.  We simply say that the power of the Commonwealth, and particularly under section 122, is subject to various constitutional limitations, one of them being 51(xxxi) which operates, if one uses the language of eminent domain, to, if you like, deprive the Commonwealth of eminent domain over the Territory.

FRENCH CJ:   Mr Grant, in relation to 51(xxxi), it is directed to the acquisition of property from any State or person.  Of course, if you are talking about a Territory, there is no scope for the application of an acquisition of property from a State.  So what is the scope of the term “person” if this limitation is applied to a Territory?  Do we pick up the political polity or individuals within in?

MR GRANT:   Your Honour, if one looks to the Acts Interpretation Act ‑ ‑ ‑

FRENCH CJ:   This is bearing in mind that, assuming this to apply to territories, it applies to territories which have no governments, little or no population at one end, through to the Northern Territory and the ACT.

MR GRANT:   Yes.  We understand there are difficulties there, your Honour, and we do not seek to, as a matter of principle, draw any distinction between different types of territory beyond saying, as we have in response to Justice Kirby, that internal territories occupy a different position for those three reasons we have outlined; their position at the date of Federation, the application of all the laws of the Commonwealth to them, including immigration and taxation laws, and their geographical location, if you like.

But if your Honours go to section 22 of the Acts Interpretation Act, which of course governs the Self‑Government Act, you will see expressions used to denote to persons generally, such as “person” includes a body politic.  Obviously that has got limited ‑ ‑ ‑

FRENCH CJ: We are talking about the Constitution, of course.

MR GRANT: Yes, limited application to the Constitution.

FRENCH CJ:   I think we have to go back to an English Interpretation Act.

MR GRANT:   Even if it does not extend to bodies politic, your Honour, there is nothing unusual in the notion that the Commonwealth is able to acquire Crown land in the Territory without paying just terms – section 70(9) of the Self‑Government Act, in fact, has a provision in those terms – but it is subject to a requirement to pay just terms where the land is acquired from a private citizen or a corporation.  So, your Honour, the Territory as a body politic is a creation of the Commonwealth Parliament, but the citizens of the Territory, if you like, enjoy the benefit of the guarantee from the date of Federation and there is no reason why one should read 51(xxxi) as depriving them of that benefit on the basis of the express reference to State and person.

GUMMOW J:   The question arises, I suppose, if the Commonwealth sets about compulsorily acquiring Territory property, property of the Territory.

MR GRANT:   Yes, it does, and it does not arise in this particular case.  That was a matter adverted to, of course, by Justice McHugh in Newcrest, but we say it does not lead to the conclusion or give rise to any anomaly.  One simply reads it as requiring just terms to be paid where the acquisition is effected from a corporation or an individual citizen.  Your Honours, we say that bearing in mind that both section 51 and section 122 are legislative powers of the national Parliament.  They are not mutually exclusive provisions.  So the section 51 heads of power can apply and they have been held to apply in the Territories, and the proper approach is that expressed by Justice Windeyer in Spratt v Hermes, and since adopted, that when the Commonwealth legislates it legislates using all powers thereto enabling.

Now, your Honours, the rule of abstraction applying to 51(xxxi) is a rule of construction, a rule of interpretation, as detailed by Sir Owen Dixon in Schmidt and it is only subject to a manifest intention to the contrary displayed in any other head of legislative power and, your Honours, we say there is no such manifest intention disclosed in section 122.  It is a general power to make laws for a Territory and there is no manifest intention to exclude acquisition of property on just terms.

On the contrary, your Honours, we say that 51(xxxi) and section 122 should be read together to require that no acquisition of property can be made by or under a Commonwealth law otherwise than on just terms, subject to the particular position of the body politic.  Your Honours, even Justice Toohey in Newcrest would agree with that insofar as the Commonwealth law was also supportable under another head of power in section 51 as well as section 122.  But his decision, as we indicated at the outset, is quite clearly based purely on precedent.  He was not inclined to overrule Teori Tau.

The only way we say Teori Tau can properly be regarded is a simple application of the disparate strictly dualist federal approach to Commonwealth legislative power whereby section 51 is federal and applies in States only, section 122 is a non‑federal matter and is capable of having application in Territories only and in which section 51(xxxi) abstracts the power to acquire property on just terms from the other section 51 heads of power but does not do so in respect of section 122.  Of course, the courts moved beyond that simple disparate approach and there is no justification for treating section 51(xxxi) in that way in respect of its application to section 122.

When properly passed, your Honours, the Commonwealth’s argument is simply an attempt to avoid that conclusion in relation to the basis of Teori Tau.  It clearly is a decision that is based on that disparate notion which Sir Garfield Barwick had disavowed in Spratt v Hermes and then some years later, seven years later, in Berwick v Gray again disavowed in finding that laws applying in Norfolk Island were capable of support under 51(ii) and that section 51 had had application to Territories.  If it please the Court, they are the Territory’s submissions.

FRENCH CJ:   Thank you, Mr Solicitor.  Mr Burmester.

MR BURMESTER:   If it please the Court.  The first issue I will deal with is the question of section 122 and the application to the Territory’s power of section 51(xxxi).  The issue essentially is, is section 122 never subject to section 51(xxxi); is it always subject to section 51(xxxi); or is there some middle position.  The Commonwealth contends that there is a possible middle position.

Our primary position, however, is that any law that is supported by section 122, regardless of whether other powers may also be available, is not subject to section 51(xxxi), and we say Teori Tau was correct and ought to continue to be applied.  We reject the submission that your Honours have just heard that Teori Tau depends on giving the Territory’s power a disparate operation.

As my friend has just pointed out, Sir Garfield Barwick had disavowed that in earlier cases, particularly Spratt v Hermes, and we say in the light of that it is hard to say that in Teori Tau they reverted to the old view of the world.

KIRBY J:   Let me just get this right.  The submission which you make on behalf of the Government of the Commonwealth is that citizens of Australia in the States are protected by section 51(xxxi), but citizens of Australia in the Territories, specifically the self‑governing territories of the Northern Territory of Australia and the Australian Capital Territory are not?

MR BURMESTER:   Your Honour, that is not ‑ ‑ ‑

KIRBY J:   That lends itself to a yes or no answer.

MR BURMESTER:   Your Honour, we say that in exercising our powers as a government in the Territory, we are entitled to act as if we were equivalent to a State government.  The State governments have no constitutional ‑ ‑ ‑

KIRBY J:   Even though self‑government has been afforded to the people of Australia in the Northern Territory?

MR BURMESTER: Your Honour, we say that the Commonwealth in the Territory stands in the same capacity as a State government. The State governments, as we know, are not bound by any provision in the Constitution requiring them to pay just terms. Our alternative position, in a sense, says, even if we do some things in the Territory as a national government and therefore it is appropriate for section 51(xxxi) to apply, if we are essentially acting as a local government dealing with a local issue confined to that territory area, then we ought to be equated with a State and not subject to the just terms guarantee in 51(xxxi) which, properly construed, was always intended by the founders and can be read on its terms to deal, if you like, with national issues, national powers and not locally confined territory powers.

KIRBY J:   So essentially, the self‑government is really a bit of a charade?

MR BURMESTER:   Your Honour, the Commonwealth could always take back self‑government from a territory; that is the Constitutional position.  It is not a question ‑ ‑ ‑

KIRBY J:   But it has not.  So far it has granted it, and we have self‑government and have had it since 1978 in the Northern Territory, and you are coming along here contending that the citizens of Australia in the Northern Territory, who are self‑governing, are not protected in the same way as citizens of Australia elsewhere.  That is your primary submission, is it not?  I just want to get it very clear and I want to get it out of your mouth, for the Commonwealth of Australia.

MR BURMESTER:   Your Honour, to the extent the citizens of the Northern Territory are citizens of Australia ‑ ‑ ‑

KIRBY J:   No, they are citizens of Australia.

MR BURMESTER:    ‑ ‑ ‑ and a Commonwealth law operates Australia‑wide, our alternative position accommodates that and recognises, as in Newcrest where they said it was an Australia‑wide law, that the citizens get the guarantee of 51(xxxi).

KIRBY J:   You keep wanting to scurry back to your alternative position, but I want to pin you down on your primary submission, which is the Teori Tau.

MR BURMESTER:   Yes, your Honour, the primary submission says that 122 operates unconstrained by 51(xxxi).  That is the primary position.

FRENCH CJ:   Is that across all territories, external and internal?

MR BURMESTER:   Across all territories, your Honour.

FRENCH CJ:   Regardless of whether they have self‑government or not?

MR BURMESTER:    Yes.  We do not seek to make a distinction between internal or external or ‑ ‑ ‑

FRENCH CJ:   Because self‑government is a statutory, not constitutional artefact.

MR BURMESTER:   Self‑government is a statutory thing.  Well, we have chosen in section 50 of the Self‑Government Act to make certain provision, we have repealed it for the purposes of the Emergency Response Act.  But yes, within the Territory we say, under section 122 it is unconstrained by 51(xxxi), and the reason we say that is as a matter of construction.  We accept that that is the issue, how do you construe the two provisions?  Do they collide?  Can they be read side by side in a way that makes sense?  That is the issue I need to explore initially in terms of the first proposition.

KIRBY J:   But as I hope Justice Gaudron and Justice Gummow, I and on the theory of it, Justice Toohey, indicated there are two constructions that are available, and if we have a choice it is much more appealing in the notion of the equality of citizens of Australia throughout the land mass of the continent of Australia that they are not disadvantaged in this respect under federal legislation.

MR BURMESTER:   Yes, your Honour, can I just deal briefly with what Newcrest might in fact be authority for?  In our submission, it is an authority, if it stands for anything in terms of just its outcome, that a law made under a 51 head of power is subject to 51(xxxi) because certainly Justices Gummow, yourself Justice Kirby and Justice Gaudron said she agreed with that in terms of saying 122 was subject to 51(xxxi).

But if you look at the reasons – the basis on which Justice Gaudron actually made her decision in that case, it was that this was not a Territory law, the law in Newcrest was not a law under 122.  So while she said she agreed with your Honours Justice Gummow and Kirby, she did base her decision in her actual reasoning on the proposition that the Newcrest law was not a 122 law.  As we know, Justice Toohey deliberately did not overrule Teori Tau, so we say the issue is still open.

KIRBY J:   I think Justice Toohey did indicate that if he had felt free to overrule Teori Tau he agreed with the view that had been expressed by Justice Gummow and myself.

MR BURMESTER:   Yes, your Honour, but he did not overrule Teori Tau.  So, your Honours, if I can explore why we say 122 and 51(xxxi) can operate alongside each other without 51(xxxi) qualifying 122.  Can I start with the words “subject to this Constitution”?  Justice Gummow in Newcrest at page 606 suggested “No particular conclusion follows” from the fact that 122 does not contain those words while 51 does, but, in our submission, that cannot be correct.

The presence of those words in one section, section 51, are not – in section 122 is of significance when you construe the two provisions together.  Those words, in our submission, carry at least an implication that section 122 alongside 51 is predominant, or at least that section 51(xxxi) in particular cannot be given any preferred status alongside section 122.  Justice McHugh in Newcrest at pages 577 and 580 deals with this issue.

So, in our submission, the first construction point is that the absence of “subject to this Constitution” in 122 does not have no significance when you are comparing it with another section, such as section 51, where those terms appear.

The other key issue that falls for consideration is whether the words in section 51 that talk about “acquisition of property . . . for any purpose in respect of which the Parliament has power to make laws” embraces a law for the government of the Territory under section 122.  Of course, in Newcrest and particularly Justice Gummow’s reasoning, he saw that as a distinction that did not have any relevant significance for this purpose.  They both defined a purpose in respect of which Parliament has power to legislate, and that as I understand it is the proposition put to this Court by the other parties in the matter.

In our submission, that treats section 122 as if it was just another placitum in section 51.  It, as it were, reads section 122 as simply being a “power to make laws for the peace, order, and good government of the Commonwealth with respect to” a territory.  We say that is to ignore the unqualified nature of the language used in section 122, which was – as the cases have regularly said, without getting hung up on words, but it talks about it being a plenary power as full as one can imagine.  It is not seen as a subject matter power ‑ ‑ ‑

GUMMOW J:   This word “plenary”, really, we should not have ‑ ‑ ‑

MR BURMESTER:   I agree it is not – but there are other ‑ ‑ ‑

HAYNE J:   It is a lovely conclusion, Mr Burmester, it is not an argument.

MR BURMESTER:   It is not the word, it is what lies behind it and what lies behind it ‑ ‑ ‑

GUMMOW J:   It is common law argument on a bad day, it seems to me.

MR BURMESTER:   What lies behind it is that section 122 is the power to legislate on any subject matter on any question ‑ ‑ ‑

HAYNE J:   It is a statement of conclusion, it is not an argument.  Can we have the argument, Mr Burmester, not the conclusion.  We know that?

MR BURMESTER: Well, your Honour, I am trying to distinguish the scope of section 122. Those words “the government of any territory” as I indicated earlier to Justice Gummow, puts the Commonwealth in the same position as a State government untrammelled except by the Commonwealth Constitution. We say that is significantly different from the sort of thing that section 51 is trying to do where it says the Commonwealth “has power to make laws of the peace, order and good government of the Commonwealth with respect to” certain identified subject matters or persons. We say one should not, as a matter of construction, equate the words in section 122 with simply being another subject matter, another placitum within section 51. We say if one automatically says any section 122 law is caught by section 51(xxxi), that is essentially what is being done.

Can we finally say that in respect of the issues raised on the demurrer we accept that the action would be dismissed if the Commonwealth were to succeed on what we described as the first issue which is whether the acquisition is subject to 51(xxxi).  If it is not, then the question of just terms does not arise.  Our primary case has always been on the property issue that if there is an acquisition of property of the fee simple estate held for the benefit of the traditional owners, then they are entitled to just terms and we say that we are entitled to succeed on that matter.

On the section 71 rights, as I indicated, if those rights are not an acquisition of property because that is not affected by the section 31 lease at all, and the legislative provisions concerning it, then we would be delighted for the demurrer to succeed on that basis, but otherwise we say we are entitled to succeed on the arguments we put on that aspect of the demurrer.  If the Court does not accede to our arguments that the statutory provisions are necessarily unjust or there is a failure to provide for just terms, then we say the appropriate course on the third issue is to conclude that we have raised a reasonably arguable case on the matters raised in the pleadings and insofar as those matters are concerned, we accept what was raised by your Honour Justice Hayne that we cannot ask for implications of facts, but we do refer the Court to the passage of Justice Gibbs’ judgment in – it is not on our list of authorities but if I can just cite it – Kathleen Investments (Aust) Limited v Australian Atomic Energy Commission ‑ ‑ ‑

HAYNE J:   His Honour picks up South Australia v The Commonwealth and Chief Justice Dixon’s ‑ ‑ ‑

MR MERKEL:   Yes, your Honour, but the one qualification that his Honour says – not a qualification, sorry, the introductory statement is ‑ ‑ ‑

KIRBY J:   Put the citation on the record.

MR MERKEL: I am sorry, 139 CLR 117, your Honour. The passage is at 135. What his Honour says:

The only facts which can be taken to be admitted for this purpose are those which are, expressly or impliedly, averred in the statement of claim itself –

Now, what we say is that the facts which we had pleaded in the statement of claim, expressly or impliedly, raised the issues upon which we have based our submissions and, apart from the section 34 point, that is the income stream aspect, we say all of the other matters are raised on any fair reading of the statement of claim and we say that the correct course is for the demurrer to be refused on the basis that it is not established that the facts pleaded could not raise a reasonably arguable case, that the statute does not provide for just terms.

FRENCH CJ:   Just going back for a moment – I am sorry – to the permits, the point of the question I was putting to you earlier was really, simply, that you described the permit system as an incident of the fee simple.  The permit system was created under a Northern Territory statute, was it not?

MR MERKEL:   Yes, your Honour.  No; I am sorry.  The permit system arises as a result of the Land Rights Act.

FRENCH CJ:   Yes, but it is created under the Aboriginal Land Act (NT). That is where the permits are issued by the Land Council.

MR MERKEL:   Yes, your Honour, but ‑ ‑ ‑

FRENCH CJ:   That is what we were looking at in the context of Blue Mud Bay, as I recall it.

MR MERKEL:   We say that, properly understood, the right to exclude arises under the Land Rights Act.

FRENCH CJ:   I understand that.  It is just that, when you talk about the permit system that is not, in a sense, an incident of a fee simple, it is a separate mechanism created under a statute of a different polity which empowers land councils to grant permits to enter Aboriginal land, which picks up its definition from the Commonwealth statute, the Aboriginal Land Rights Act.

MR MERKEL:   Yes.  I am sorry, your Honour.

FRENCH CJ:   It is a minor point.

MR MERKEL:   No.  I accept what your Honour says.  Our reliance has to be on the rights, in effect, to exclude, or the right that excludes public entry on Aboriginal land in the Land Rights Act.  It is that right that has been removed effectively under the emergency response legislation.

Can I finally just correct a matter relating to how we have put this problem of compensation in a contingent sense and that was the abrogation of section 50(2) which necessitated, we said, the High Court…..practical matter to resolve the Teori Tau issue, or the Newcrest issue, before a claim for compensation could proceed for judgment?

What we really were saying is given the nature of the abrogation and the requirement for this case to be brought, what we were seeking to say is that it meant the exposure of the Land Council or the traditional owners not only just to having to proceed without any aid to do so, but to proceed with the deterrence or the disincentive of a burden of a costs order to have to make good their right to claim compensation, and we would say it is similar to what this Court often does in special leave cases where an issue of public importance is raised to require as a condition of the grant of special leave that there be no costs burden for the person who is in effect seeking to defend their personal rights but the case raises a point of public importance.

It is in that context that we raise both the contingent aspect for saying it would be some years before a financial outcome would arise, and also it is that basis that we had put, that it was not a just term for the Commonwealth to in effect impose this burden on the traditional owners.  This is the case in the present case, or on the Land Council, whose costs would eventually be borne by the traditional owners on the basis of it being the usual kind of adversarial litigation.

We say that is not a complaint, that that is a requirement for a shipwrecks clause case, because as we put earlier, this is not such a case.  So it is for those reasons we would put that the demurrer should be dismissed.

FRENCH CJ:   Thank you, Mr Merkel.

MR MERKEL:   If the Court pleases.

FRENCH CJ:   The Court will reserve its decision and thank counsel.  We will adjourn until 10.15 am on Tuesday, 14 October.

AT 3.47 PM THE MATTER WAS ADJOURNED