Durham Holdings Pty Ltd v The State of New South Wales [2001] HCA 7 | Case summary

Durham Holdings Pty Ltd v The State of New South Wales [2001] HCA 7 | Case summary | Zoe

By instrument dated 27 June 1990, the Arrangements were amended with the object of limiting to $60 million the total amounts which might be paid as compensation to certain coal mining companies, of which the applicant was one. The rate of compensation was increased from 50 cents per tonne to 90 cents per tonne but the effect of the new cl 22AA(3) of the Arrangements was to "cap" the total amount of compensation payable to the applicant at $23,250,000.
The applicant instituted proceedings in the Supreme Court of New South Wales claiming compensation in the sum of $93,397,327, less the interim payments already received, plus interest. It also sought declaratory relief respecting the invalidity of the legislative scheme. The New South Wales Court of Appeal (Spigelman CJ, Handley and Giles JJA) ordered that the proceedings be dismissed.
In its application to this Court, the applicant contends that cl 22AA(3) of the Arrangements is invalid because it is beyond the power conferred by s 6 as amended by the 1990 Act. The applicant submits, as it did to the Court of Appeal, that s 6 must be read in accordance with the presumption that the legislature does not intend to acquire property without compensation. The terms of s 6(3) of the Act rebut any operation of the presumption. The reasons of the Court of Appeal on this contention are plainly correct[2]. Observations of Beaumont J in Commissioner of Taxation v Northumberland Development Co Pty Ltd[3], upon which the applicant relied, were made respecting s 6 in its form before the addition of sub‑s (3).
The applicant also contends in this Court that the legislation in question is invalid because the Parliament of New South Wales lacks power to enact laws for the acquisition of property without compensation. There are numerous statements in this Court which deny that proposition[4]. Moreover, the existence of the presumption referred to above suggests that the power, against the exercise of which the presumption operates, indeed exists.
However, as the facts narrated above indicate, the acquisition occurred in 1982 by force of s 5 of the Act, with the then attendant compensation scheme. The substance of the applicant's complaint concerns not acquisition without compensation, but the quantum or measure of the additional compensation provided pursuant to the "cap" imposed by the 1990 Act. The applicant pleaded invalidity of cl 22AA(3) and of s 6(3), in so far as it authorised the introduction of that sub‑clause, on the ground that the legislation purported to deprive it of its property "without just, or any properly adequate, compensation". In this Court, the applicant also asserted that it had been subjected to a legislative judgment which confiscated its property as a punishment and was in the nature of a Bill of Pains and Penalties[5]. However, there is nothing to show any punishment of the applicant, and this submission therefore need not further be considered.
In Union Steamship Co of Australia Pty Ltd v King[6], the Court stated that, within the limits of the grant, a power such as that conferred on the New South Wales Parliament by s 5 of the Constitution Act 1902 (NSW) to make laws "for the peace, welfare, and good government of New South Wales" is "as ample and plenary as the power possessed by the Imperial Parliament itself"[7]. Moreover, at the time of the 1990 Act, the Australia Act 1986 (Cth) ("the Australia Act")[8] was in force. Section 2(2) thereof declared and enacted that the legislative powers of each State Parliament included all legislative powers that Westminster might have exercised before the commencement of that Act for the peace, order and good government of the State.
However, the universality of the power thus conferred is subject to the Commonwealth of Australia Constitution Act and to the Constitution of the Commonwealth[9]. It is to that Constitution that the States owe their existence[10], and s 106 continues, subject to the Constitution, "[t]he Constitution of each State of the Commonwealth".
In Union Steamship, the Court added[11]:

The applicant sought to rely upon statements respecting the common law in decisions respecting the powers of several of the States of the United States before the inclusion in those written State Constitutions of guarantees respecting the taking of property[15]. However, what would be involved if the applicant's submission were accepted would not be the development of the common law of Australia. Rather, it would involve modification of the arrangements which comprise the Constitutions of the States within the meaning of s 106 of the Constitution[16], and by which the State legislatures are erected and maintained, and exercise their powers.
The applicant must seek to introduce into the constitutional text, in particular s 2(2) of the Australia Act, a limitation not found there. Undoubtedly, having regard to the federal system and the text and structure of "[t]he Constitution of each State of the Commonwealth" (the phrase used in s 106 of the Constitution), there are limits to the exercise of the legislative powers conferred upon the Parliament which are not spelled out in the constitutional text[17]. However, the limitation for which the applicant contends is not, as a matter of logical or practical necessity[18], implicit in the federal structure within which State Parliaments legislate. Further, whatever may be the scope of the inhibitions on legislative power involved in the question identified but not explored in Union Steamship, the requirement of compensation which answers the description "just" or "properly adequate" falls outside that field of discourse. The Court of Appeal correctly refused to disturb what, since the Wheat Case[19], has been taken to be the settled position respecting State legislative power.
KIRBY J. This application for special leave to appeal[20] concerns the validity, and if valid the interpretation, of the Coal Acquisition Act 1981 (NSW) ("the Act") and the Coal Acquisition (Compensation) Arrangements 1985 (NSW) ("the Arrangements"). The Arrangements were made by the Governor of the State of New South Wales, acting pursuant to s 6 of the Act[21].
The ultimate complaint is that, in effect, under the Act and the Arrangements the applicant has suffered expropriation of substantial property in coal in specified parcels of land in the State without compensation, or without just compensation. It contends that the provisions made by the Act and the Arrangements for payment in respect of the acquisition of such property afford only about "a quarter of the value assessed" by the Coal Compensation Board of the State[22]. And that having regard to accrued interest, the amount paid would be "a significantly smaller fraction of the admitted value"[23].
Normally, in Australia, where property is compulsorily acquired in accordance with law, the property owner is compensated justly for the property so acquired[24]. Australian society ordinarily attaches importance to protecting ownership rights in property. The present application was brought to test the constitutional right of a Parliament and Executive Government of a State of the Commonwealth to depart from the foregoing norms. The applicant asked this Court to consider whether, under the Act and the Arrangements, properly construed, the State had acquired its property and, if so, whether such laws were beyond the State's lawmaking powers.

It is usually appropriate (and often necessary) to consider any arguments of construction of legislation before embarking on challenges to constitutional validity. This rule is frequently observed in relation to attacks on the constitutionality of federal laws[34]. It is convenient to take this course in the present application because, if the applicant were to succeed on its construction argument, the challenge to the validity of the Act might fall away, or at least be postponed.
The foundation for the applicant's first argument is a principle which I did not take the respondent, the State, to contest. It is that, within the Australian legal system, courts will presume that legislation (federal, State or Territory), or subordinate laws made under such legislation, do not amend the common law to derogate from important rights enjoyed under that law, except by provisions expressed in clear language. This principle is sometimes described as a "presumption"[35] or as a "[rule] of construction"[36] or as an "intention" which is attributed to the lawmaker. It rests on the imputed aspiration of the law to attain, and not to deny, basic precepts of justice. The presumption, rule of construction or imputed intention certainly applies to the taking of property without compensation. This has been acknowledged by this Court in respect both of legislation[37] and delegated lawmaking[38]. Indeed, it has been suggested that "the general rule has added force in its application to common law principles respecting property rights"[39].
In addition to these principles of the common law, the applicant invoked a connected, but different, "presumption". This was that Australian legislation would be construed so as to accord with the basic principles of customary international law[40]. It submitted that this was particularly so where such law expressed established norms of fundamental human rights[41]. The applicant argued that the right of an individual, corporation or State in Australia to own property (and thus, by inference, not to be deprived of property by arbitrary process or without just terms) was implicit in contemporary customary international law[42]. According to the applicant "compensation", in this context, meant "the full money equivalent of the thing of which [the owner] has been deprived"[43].
There is little point in searching for additional expositions of, or foundations for, the principle that courts will presume that legislation does not overrule the common law in the absence of clear and express terms, given that it is so clear and that it was not really contested by the State. In English legal history the principle can be traced back for at least 300 years and probably further[44]. It has been applied countless times in Australia, including in the construction of legislation governing privately owned minerals and the public acquisition thereof[45].
However, any presumption, rule of construction, or imputed intention is subject to valid legislative provisions to the contrary. Judges may decline to read such legislation as having such an effect. The more peremptory, arbitrary and unjust the provisions, the less willing a judge may be to impute such a purpose to an Australian lawmaker. But a point will be reached where the law in question is "clear and unambiguous"[46]. Various other verbal formulae are used in the reasoning of this Court to describe that point. They are collected by the Court of Appeal in its reasons[47]. Once that point is reached, subject to any constitutional invalidity, the judge has no authority to ignore or frustrate the commands of the lawmaker. To do so would be to abuse judicial power, not to exercise it.
The applicant endeavoured to beguile this Court into a line of legal argument concerned with a subordinate presumption. This is that, in default of an express provision, a court would ordinarily afford compensation when contemplated by law but not expressly provided as the law apparently intended[48]. In this connection, the applicant relied on a minority opinion of Beaumont J in the Federal Court of Australia holding, in the context of income tax liability, that s 6(1) of the Act did not rebut the normal presumption that compensation would be paid for property taken under a statute[49]. The applicant suggested that this meant "just compensation".
There are a number of answers to this argument. The Act, as originally enacted, purported to reserve, as a legislative possibility, the circumstance that no compensation at all would be payable for the subject acquisition. It did so by referring to the determination of the case "if any" in which compensation was payable and to the determination of the amount and methods of payment but only "if there are any" cases determined to call forth such compensation[50].
Arrangements such as were contemplated by the Act were duly made. This is not, therefore, a case where the Court was being asked to fill a gap left by the Executive Government, in a scheme as contemplated and enacted by Parliament. Here, the Executive Government had acted. It had provided for compensation. The provisions included one applicable to the applicant's case. Indeed, it was one which the applicant had, in fact, invoked in its claim for compensation. In such circumstances, the complaint of the applicant is not really about the failure to provide compensation, or to fulfil an assumption expressed in the Act. It is rather about the formula for the quantification of the compensation so provided. Given that s 6(1) of the Act purported to enact that no compensation at all might be provided in the arrangements made as delegated legislation, if such a law is valid the argument for the applicant would have faced difficulties even if no arrangements whatever had been made. But given that arrangements were made, this aspect of the applicant's argument is unsustainable.
Nor is the applicant otherwise assisted by the reasoning of Beaumont J referred to[51]. His Honour was not there concerned with the issue before the Court of Appeal or this Court[52]. His opinion differed from that of his colleagues[53]. Most importantly, his treatment of s 6 of the Act omitted reference to sub-s (3), inserted in 1990. It is by that sub-section, which founded the opinion of the Court of Appeal, that the Parliament of the State had purported expressly to authorise a provision for compensation precisely such as was made by cl 22AA of the Arrangements. The provision might be regarded as unjust, discriminatory, exceptional and a departure from ordinary Australian norms. But it undoubtedly constituted "compensation". And in the words of the cases, it was "clear and unambiguous" in its terms[54].
A glance at the legislative history of the Act, contained in the Parliamentary debates, indicates that a deliberate policy decision was made by the Government, and explained to the Parliament of the State prior to the enactment of s 6(3) of the Act. This was to impose the limit of $60 million on compensation for the three largest claimants, including the applicant[55]. This was said to be because of "the need for budgetary constraint"[56]. In the debates, the Minister was even more blunt: "The Government promised … fair and equitable compensation; and that is what people are getting - except the big fellows."[57] The terms of s 6(3) of the Act, therefore, contemplate precisely the Arrangements which ensued. The limits that were imposed, the discrimination that was effected and the "compensation" paid on terms less than just, were all deliberate acts of the Government and Parliament of the State.
The applicant persisted with a submission, in effect, that the only way in which such a law could be unmistakably clear was by naming the applicant and specifying the limit on recovery in the law itself, assuming that such a law would be valid[58]. It argued that it was possible to construe s 6(3) of the Act as authorising differential treatment only where normal principles of compensation might result in an injustice and necessitate observance of a different principle. This submission cannot stand with the clear terms of s 6(3). Moreover, were there any ambiguity, it is contradicted when those terms are read in the light of the Minister's statements to the Parliament.
The Court of Appeal was therefore correct to dismiss the construction argument. No occasion arises for this Court to disturb that Court's judgment on that basis.

This conclusion obliges this Court to examine the applicant's second argument. This was that the Act, specifically s 6, construed as above, is outside the legislative powers of the State and, by inference, that the Arrangements are likewise unconstitutional.
It is not unusual to have challenges in this Court to the constitutional validity of State legislation. Such challenges have arisen ever since the Court was established[59]. Provisions in State statutes, including some of great importance to the State, are, from time to time, found constitutionally invalid[60]. But this result ordinarily follows a conclusion that the State law in question is invalid because it is inconsistent with federal law[61], or with an express prohibition in the Constitution[62] or with an implication drawn from the language and structure of the Constitution[63]. What was unusual about the present application was that, for the most part, the applicant's argument did not rest on an invocation of the federal Constitution. It depended upon contentions about fundamental limitations said to exist in the legislative powers of a Parliament of a State to enact a law such as the Act.
In essence, the applicant submitted that the lawmaking powers of the Parliament of the State were "largely determined by the common law" and were therefore subject to such restrictions as the common law imposed. The applicant argued that the assumption that a legislature, such as the Parliament of the State, was "uncontrolled" and subject to no applicable constitutional limits (within the subjects of lawmaking otherwise open to it) was fundamentally misconceived. It was an assumption that could be traced to the Oxford lectures of the legal scholar A V Dicey[64]. According to the applicant, Dicey's assertion that there was no constitutional limit to the legislative power of the United Kingdom Parliament (and by derivation the legislature of New South Wales) was historically inaccurate, wrong in principle, "tragic" in its legacy and doubted by persuasive dicta in Australian courts[65]. It was made no more convincing by judicial repetition that rested on unexamined assumptions.
The applicant's submission was that, when examined against the background of preceding English constitutional law and history, it would be concluded that Dicey's assumption that Parliament (whether in the United Kingdom or of a State of Australia) was "sovereign" and "omnipotent"[66] was revealed to be a slogan, unsupported by proper analysis. As the applicant would have it, a distinguished academic had misled generations of British, Australian and colonial judges[67]. My own reasoning, both in the New South Wales Court of Appeal[68] and in this Court[69], was taken to task. The basic mistake made by so many judges was (it was submitted) in simply assuming that Dicey's parliamentary sovereignty or omnipotence theory was correct in law. In fact, according to the applicant, it was no more than an assertion, comparatively recent, which was denied by historical materials and logical scrutiny.
There is no doubt that there exist in England very old cases which suggest that a view was once held that the English Parliament was less than omnipotent, being subject to the laws of God[70]. Yet "[a]lthough many lawyers maintained that Parliament was bound by natural or divine law", there is, according to Professor Goldsworthy, "no evidence of substantial support in any period for the notion that the judiciary rather than Parliament possessed ultimate authority to interpret and enforce that law"[71].
Celebrated instances have arisen, from time to time, when English judges have held that an Act of the English Parliament could be treated as invalid where it conflicted with a basic principle of the common law, for example, that a person should not be a judge in his or her own cause[72]. The uncontrolled omnipotence of Parliament was rejected on a number of occasions by Lord Chief Justice Coke[73]. It was questioned by Lord Chief Justice Hale[74] and also, apparently, by Lord Chief Justice Holt[75], Lord Chief Justice Kenyon[76], Lord Mansfield[77] and Lord Chief Justice Camden[78]. Doubts about it appear in other writings[79]. In turn, this view came to influence the early development of the common law in the United States of America[80]. The assertion of the right of the courts in that country to strike down laws which were found to be invalid (a right not expressed in the Constitution itself)[81] may have been influenced as much by the foregoing assertions of common law judicial authority in England, as by the pre-existing exercise by the Privy Council of its power to strike down laws of the American colonies found to be incompatible with laws made by the British Parliament.
From the foregoing historical material, the applicant sought to build its argument, in effect, that in the nineteenth century the law had taken a wrong turning under the influence of Dicey's ideas. This had infected British thinking and spread to Britain's colonies, including in Australia[82]. But there had always been academic sceptics[83]. In more recent years, their numbers had increased[84]. At last, English judges were beginning to join in the criticism of Dicey's "crude absolute of statutory omnipotence"[85]. In numerous decisions of the courts the role of judicial review had been enlarged to apply to situations that once would have been unthinkable[86] - including even consideration of challenges to the validity of an Act of the United Kingdom Parliament by virtue of its suggested conflict with the European Communities Act 1972 (UK)[87].
The applicant urged this Court to adopt an approach in harmony with this enlarged understanding of the function of the courts, in relation to the Parliament of the United Kingdom, by reference both to judicial opinions in early history and in more recent times. Putting it shortly, it submitted that the time had come for this Court to release Australian law from the intellectual prison into which Dicey had cast so many judges and lawyers for more than a century. His theory of the sovereignty and omnipotence of "uncontrolled" British legislatures was a left-over from the thinking of absolute monarchy whose mantle had been temporarily seized by absolute parliaments. It was an approach unsuitable to the law and society of today which recognised, and enforced, checks on power, not obedience to notions of absolute power[88].
In further support of its submission, the applicant invoked three additional considerations. The first comprised a series of decisions of the New Zealand Court of Appeal[89]. Justice Cooke, as he then was, expressed the opinion that "[s]ome common law rights presumably lie so deep that even Parliament could not override them"[90]. Such judicial statements were made with reference to the suggested limitations that would exist, even in the case of the Parliament of New Zealand, on the power to enact "literal compulsion, by torture for instance"[91]. Once such a principle was established as a matter of law, its operation would be elucidated by the traditional means of case-by-case determination.
Secondly, the applicant invoked Sir Owen Dixon's reminder that the principle of parliamentary supremacy is itself a doctrine of the common law[92]. What the judges had recognised for a time to be an omnipotent and unqualified supremacy, they could now recognise to be subject to specified limitations[93]. Such limitations would include controls at least on such gross and discriminatory departures from basic civil rights as were reflected in the Act and the Arrangements.
Thirdly, the applicant invoked what it detected as a new willingness on the part of this Court to "define the powers" of the Parliament of a State, as instanced in its recent decision in Egan v Willis[94]. I was reminded of my own remarks in that decision[95]:

In Union Steamship Co of Australia Pty Ltd v King[96], this Court left open the question whether, with respect to a Parliament of a State, there were any common law rights which were so fundamental as to be beyond legislative power. In its amended statement of claim[97] the applicant contended that the legislative powers of the Parliament of the State excluded the power to "deprive named persons of their property without just, or any properly adequate, compensation". However, the applicant could not point to any case in England, the colonies of Australasia or modern Australia, to support its argument that this was the kind of "fundamental" common law right that "lay so deep" contemplated by the New Zealand cases. It could point to no judicial opinion to support its attempt to revive the question reserved in Union Steamship and to require its answer in this case.
Before modern times, English legal history contained many examples of statutes, enforced by the courts, by which the Parliament at Westminster authorised the acquisition of property without compensation[98]. The statutes by which the Crown appropriated the lands of the monasteries in England provide an early illustration[99]. Of direct relevance to Australia are the Imperial Acts which necessarily deprived the indigenous peoples of Australia of any rights that they might have enjoyed in land acquired for the purposes of British settlement[100]. If the validity of such legislation has not hitherto been questioned, some point of distinction, connected with a different status belonging to the New South Wales Parliament, would have to be found to justify a legal approach different from the acceptance accorded to analogous laws of the Westminster Parliament.
It was suggested that a distinction was evident from colonial times. This was that, by statute[101] or by the common law, no law could be made by a colonial legislature "repugnant to the Law of England", that is, the common law of England. However, for many reasons, this argument is unavailable to the applicant. Most importantly, the status of the Parliament of New South Wales is no longer that of a colonial legislature, governed by imperial legislation. It is that of a State of the Australian Commonwealth as provided for in the Australian Constitution[102]. Yet even before that Constitution was enacted, and partly to resolve difficulties which had arisen from the views of Boothby J in the Supreme Court of South Australia[103], the Colonial Laws Validity Act 1865 (Imp)[104] had been enacted. It was there provided that "[n]o Colonial Law shall be or be deemed to have been void or inoperative on the Ground of Repugnancy to the Law of England, unless the same shall be repugnant to the Provisions of some such Act of Parliament, Order, or Regulation as aforesaid"[105]. Clearly enough, this enactment was designed to restrict the operation of previous doctrines of repugnancy which had been thought by some to limit the legislative powers of a Parliament such as that of New South Wales to conform with fundamental principles of the common law of England. By the time that legislature had become the Parliament of a State, such limitations had been swept away. There is therefore no applicable repugnancy on which the applicant could rely.
At one stage, a second basis for invalidity was suggested by reference to the words by which legislative authority was conferred on colonial Parliaments. Typically, and in the case of New South Wales, the grant of legislative power was, in terms, "to make laws for the peace, welfare, and good government" of the colony (later the State)[106]. The opinion has been expressed that those words are, or may sometimes have the effect of being, words of limitation[107]. In the context of a Parliament of a State I do not accept that this is so[108]. This Court in Union Steamship[109] established conclusively that the words are words of grant. They are therefore to be given the widest possible operation, consistent with the vast variety of matters upon which such a legislature may be expected to exercise its powers. They are not words of limitation to afford the applicant the means to question the validity of the exercise of such powers, relevantly in the Act and the Arrangements.
Thirdly, so far as the powers of a Parliament of a State of Australia to permit the acquisition of property without the payment of compensation are concerned, a long line of opinions in this Court upholds the existence of that power[110]. Clearly these opinions stand in the way of the second proposition advanced by the applicant. These decisions equate the power of a Parliament of a State to the uncontrolled legislative authority enjoyed by the Parliament of the United Kingdom in its own sphere[111]. Whereas in the federal Constitution, specific provision had been made requiring the provision of "just terms" as a precondition to the acquisition of property from any State or person by federal law[112], no equivalent provision was there included in respect of State acquisition laws.
The assumptions, and assertions, that the enactments of a Parliament of a State providing for acquisition may be valid, although "the terms are unjust"[113], and that such injustice "is of no consequence legally"[114], have continued into recent times. If Teori Tau v The Commonwealth[115] is put to one side (on the footing that it was concerned with the application of the federal constitutional requirement to the Territories and that its authority has recently been questioned[116]) there are other decisions expressly concerned with legislative powers of a Parliament of a State that contain remarks supportive of the traditional view. One such decision is Mabo v Queensland ("Mabo")[117]. The plaintiffs in that matter submitted that the Queensland Parliament lacked legislative power to deprive indigenous peoples of property rights without providing compensation[118]. All members of this Court rejected that argument[119]. To that extent, the decision in the case, and the legal rule for which the decision stands, bars the way of the applicant's argument in this application.
The only basis for distinguishing the Court's ruling in Mabo from the issue presented by the applicant in these proceedings was that a relevant difference exists between the "native title" in issue in that case[120] and other species of property, such as the interest in the coal acquired from the applicant. This would be an unconvincing point of distinction given that it was assumed, or stated, in Mabo that "native title" was a species of legal property[121]. Its subsequent recognition by the common law and enforcement in Australian courts depended upon its having such a quality[122]. In Mabo, Deane J foreshadowed the issues argued in this application. He specifically warned about the danger of attributing to the "prima facie rule of construction" (involved in the applicant's first argument) "a status equivalent to a constitutional constraint upon legislative power"[123] (involved in the second). It is implicit in the very susceptibility to rebuttal of the rule or presumption against statutory deprivation of property without compensation, that it is possible, by clear law, to exclude the rule, rebut the presumption and acquire property without compensation.
Since Mabo, individual judges of this Court have repeated the traditional view in the course of their reasoning[124]. I myself have done so[125]. An application by this Court of its settled rule is fatal to the applicant's case. To succeed, the applicant would have to persuade the Court to overrule at least so much of its decision in Mabo as held that there was no constitutional or legal restriction on a Parliament of a State to acquire property without the provision of compensation, meaning just compensation. Having regard to the terms of the Act, the present application would not afford a suitable vehicle to permit the re-argument of such a large proposition.

Apart from the expositions of judicial authority in the above decisions, considerations of legal policy and political theory reinforce, and to some extent explain, the judicial authority collected in the cases.
Members of a legislature, such as the Parliament of New South Wales, are regularly answerable to the electors, whereas judges in Australia are not[126]. Judges recognise that, whatever the deficiencies of electoral democracy, the necessity of answering to the electorate at regular intervals has a tendency to curb legislative excesses. Many judges reject "the role of a Platonic guardian" and are "pleased to live in a society that does not thrust [that role] upon [them]"[127]. Most judges in Australia would probably share this relatively modest conception of their role. In this conception, the duty of obedience to a law made by a Parliament of a State derives from the observance of parliamentary procedures and the conformity of the resulting law with the State and federal Constitutions. It does not rest upon judicial pronouncements to accord, or withhold, recognition of the law in question by reference to the judge's own notions of fundamental rights, apart from those constitutionally established.
Ultimately, this conception of the judicial function rests on political facts. These include the existence and powers of the Parliaments of the States and the inappropriateness of judicial questioning of such basic political realities[128]. These are reasons why, in Australia, the notion that there are some basic common law rights that "lie so deep" that even a Parliament, otherwise acting within its powers, cannot contradict them, has so far gathered few adherents. To the contrary, the commonly expressed view about the common law in Australia envisages a "more modest"[129] role, at least where a legislature has made law within the ambit of its constitutional powers[130]. This is because, in Australia, the common law operates within an orbit of written constitutional laws and political realities.
One further consideration, to which the Court of Appeal referred[131], should also be mentioned in answering the applicant's submission that this Court should now turn its back on past authority, if necessary overrule its previous holdings, and uphold as a doctrine of the common law an entitlement of judges to invalidate State legislation found to breach fundamental or "deep lying" rights. It is a consideration of particular relevance to the present case. In 1988 a referendum of electors in Australia rejected a proposal to add to the federal Constitution a new provision requiring that, to be valid, a "law of a State" providing for the "acquisition of property from any person" had to afford "just terms"[132].
Where the Constitution is amended pursuant to referendum, it is permissible, in my view, to take into account the history and purpose of the change that is thereby effected[133]. If this aid to construction is available where an amendment is adopted, I see no reason to reject it where an amendment is proposed but fails. It is true that defeat of a proposal may be explained by many reasons. These may include the fact that the proposal was combined with other amendments, arguably more controversial[134]. The proposed amendment in 1988 concerned the federal Constitution. The issues argued by the applicant here concern the powers of the Parliament of New South Wales under the Constitution Act of that State and of the courts of the State. Moreover, the applicant's submission raises a fundamental question, not one limited to the particular instance of uncompensated, or insufficiently compensated, expropriations.
Nevertheless, the rejection by the electors of the Commonwealth (including those in New South Wales) of a proposed amendment to the federal Constitution, which would have prevented or invalidated legislation such as the amending legislation adopted by the New South Wales Parliament in 1990, suggests a reason for special caution when this Court is invited, but 12 years later, effectively to impose on the Constitution of the State a requirement which the electors, given the chance, declined to adopt.
The referendum proposal of 1988, although it was lost, reinforces to some extent the orthodox theory of Australia's legal and political arrangements. Under the Australian Constitution, it is not necessary to depend on judges to prevent, or cure, all injustices, including those of the kind of which the applicant complains. At least in theory, it is open to the electors to do so. They may do so by dismissing the government and the Parliament responsible for creating such laws. Alternatively, it is open to the electors to influence the insertion in the federal and State constitutions of entrenched provisions that forbid repetition of such laws[135]. The practicalities are not always so straight-forward. However, the legal principle postulated by the applicant was one reserved for an extreme case. For such a case it may ordinarily (although not inevitably) be assumed that, ultimately, the political process will produce just laws on significant topics.

The applicant fell back on its last submission: that, properly understood, the Act and the Arrangements amounted to a Bill of Pains and Penalties, that is, a law exacting a form of punishment. The Act and the Arrangements were described as amounting to a legislative judgment that purported to confiscate the applicant's property as a form of punishment, in effect for being one of the three "big fellows", to use the Minister's description. It was said that Bills of Attainder, which once imposed a legislative penalty on an individual's life or person, had "disappeared from the English scene more than 250 years ago"[136]. By analogy, the applicant argued that legislative competence to enact a law of pains and penalties, burdening particular individuals, was beyond the power of the Parliament of the State.
When the colony of New South Wales was established, legislation imposing a punishment on an individual, even in England, was "looked upon as barbarous"[137]. The Parliament of the State had, therefore, so it was submitted, not received a power to enact such legislation, so alien to the "civilised world". It was argued that no such legislature could impose it[138]. The power of punishment belonged, of its nature, exclusively to the judiciary. The applicant made it clear that it rested this argument not on any notion of constitutional separation of powers in New South Wales[139] but upon contemporary conceptions of what was involved in legislative power as such.
There are many answers to these submissions, which the State described as "somewhat far fetched"[140]. Neither the provisions of the Act, nor the Arrangements, comprise anything analogous to a Bill of Pains and Penalties. Neither the Act nor the Arrangements constitute, or impose, punishment for guilt of any offence[141]. Neither imposes a judgment on the applicant. Neither involves a legislative exercise of judicial power, even assuming that to be forbidden to the New South Wales Parliament[142]. Accordingly, this argument fails at the threshold. In the result, every argument advanced for the applicant is rejected. The applicant therefore fails.

Before parting with this application, I would mention briefly a number of points which were not argued. Some of them are relevant to meeting the suggestion that constitutional law in Australia, as expounded by this Court, particularly in respect of State laws, is devoid of any means of preventing, and providing redress against, extreme departures from fundamental rights in the form of State legislation. Such a conclusion would be mistaken.
Just as the available protections against extreme cases of discrimination and injustice do not arise in Australia from a comprehensive constitutional charter of civil rights[143] or from a binding treaty on fundamental rights given local legislative effect[144], nor do they arise from a belated attempt to assert for the common law (and the judges who expound and apply it) a role superior to legislation which judicial authority, legal history and political realities deny.
In Australia, the foundation for judicial protection against "extreme" derogation from fundamental rights lies, in part, in the presumptive principle of construction which judges, federal and State, regularly invoke[145]. But it also lies in the provisions of, and implications derived from, the federal Constitution itself. Whereas the role of the common law, in the face of legislation, is "modest", the role of the Constitution is substantial.
An illustration of the way in which implications derived from the language and structure of the Constitution can sometimes afford protections from State legislation deemed incompatible with the Constitution is Kable v Director of Public Prosecutions (NSW)[146]. Further implications may be drawn from the language, structure and presuppositions of Ch III[147]. Any attempt to impose on State courts functions incompatible with the exercise of judicial power and due process of law might, in a given case, contravene the presuppositions of Ch III of the Constitution[148]. If this is so, an extreme case may well be constrained by other implications, derived from the Constitution, which limit and control the lawmaking of other branches of the government of a State, including a Parliament of a State.
In Australia, a State is not free-standing. Nor is it merely an historical colony given a different name. It is a State of the Commonwealth. It derives its constitutional status, as such, from the federal Constitution. It may be inferred, from that Constitution, that a State is a polity of a particular character. Thus s 107 of the Constitution provides, and requires, that each State should have a Parliament. Such Parliaments must be of a kind appropriate to a State of the Commonwealth and to a legislature that can fulfil functions envisaged for it by the Constitution[149]. Ultimately, a "law of a State"[150], made by such a Parliament, could only be a "law" of a kind envisaged by the Constitution. Certain "extreme" laws might fall outside that constitutional presupposition.
The significance of the contemporary realisation that the foundation of Australia's Constitution lies in the will of the Australian people[151] has not yet been fully explored. It is not impossible that this conception would, in an extreme case, also reinforce the foregoing and affect judicial recognition of a purported "State law" that was not, in truth, a "law" at all. In Australia, considerations such as these, derived directly or indirectly from the Constitution, afford the likely future judicial response to any extreme affront masquerading as a State law. The answer lies in the implications derived from the Constitution, not in assertions by judges that the common law authorises them to ignore an otherwise valid law of a State[152]. Such an over-mighty assertion in relation to constitutional powers of lawmaking is as alien to our law as to our political realities. On the other hand, judicial derivation of implications from the federal Constitution is not alien but familiar[153].
The present case, although apparently involving discrimination and arguably injustice to the applicant, falls far short of the extreme instance that would enliven any of the foregoing constitutional implications, assuming they had been invoked. By the Act, and the Arrangements, compensation is provided to the applicant. It can be recovered by due process of law. The applicant has taken steps to do so. The law of the State is formally valid. It is not inconsistent with the express terms of the federal Constitution nor any applicable federal law. But neither is it invalid as incompatible with the Constitution Act of the State.
In these circumstances, decisions about the appropriateness or otherwise of the law, of the compensation provided and the procedures for its recovery, were matters for the elected Parliament and government of New South Wales. The complaints of discrimination and injustice in these proceedings are therefore complaints of a political and not of a legal character. They must be addressed to the government and members of the Parliament of the State and ultimately to the electors. The courts cannot respond to them.

Durham Holdings Pty Ltd v The State of New South Wales

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