Houston v State of New South Wales

Federal Court of Australia|2021-06-11|Before: Griffiths J

Introduction 1 By an interlocutory application filed on 29 January 2021, the respondent (State) seeks summary judgment under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) on the basis that the applicant (Mr Houston) has no reasonable prospect of successfully prosecuting the proceeding. Alternatively, the State seeks that judgment be entered for it in relation to the relief claimed in [37] of the Further Amended Statement of Claim filed on 11 January 2021 (FASOC) on the ground that, under s 31A(2) of the FCA Act, Mr Houston has no reasonable prospects of successfully prosecuting the proceeding with respect to his claim for declaratory relief that certain legislative instruments are inoperative or wholly invalid. 2 In the further alternative, the State seeks that certain paragraphs of the FASOC be struck out under r 16.21(1) of the Federal Court Rules 2011 (Cth) (2011 FCRs) on the grounds that they contain frivolous or vexatious material, are evasive or ambiguous, and/or fail to disclose a reasonable cause of action.

Background matters outlined 3 The background to Mr Houston's proceeding is summarised in Houston v State of New South Wales [2020] FCA 502 at [3]-[15]. Those reasons for judgment relate to Mr Houston's unsuccessful interlocutory application for a maximum costs order under r 40.51 of the 2011 FCRs. 4 It is convenient to set out [11]-[15] of those earlier reasons for judgment, which provide a broad outline of Mr Houston's substantive proceeding: 11. The applicant brings these proceedings in circumstances where he is being prosecuted in the Land and Environment Court for alleged offences against s 12 of the Native Vegetation Act 2003 (NSW) (NV Act). Those proceedings were commenced on 18 December 2018. It is alleged that the applicant cleared or authorised the clearing of native vegetation otherwise than in accordance with a development consent or a property vegetation plan, as required by the NV Act. The applicant is liable to penalties up to 10,000 penalty points. He is also liable under s 38 of the NV Act to conduct remedial work requiring him inter alia to plant and maintain new native vegetation or, alternatively, pay the State for performing such work. 12. It is against that background that the applicant seeks declarations in this Court that the NV Act and other legislation which is relevant to the criminal proceedings are inoperative or wholly invalid. That other legislation is cl 58 of the Biodiversity Conservation (Saving and Transitional) Regulation 2017 (NSW) and Pt 5A of the Local Land Services Act 2013 (NSW). It is unnecessary for the purposes of the present interlocutory application to explain how that other legislation is relevant. 13. In broad outline, the applicant contends that the relevant legislation is inoperative or wholly invalid because it has a disproportionate and/or discriminatory effect on his farming operations. He contends that in order to give effect to the Kyoto Protocol, the Commonwealth has by a series of both formal and informal arrangements and a mutual understanding with the States and Territories sought to implement the Commonwealth's obligations under the Kyoto Protocol by a "net zero broadscale land clearing" policy, with the effect that the States and Territories are responsible for introducing legislation to limit broadscale land clearing. He further contends that in these circumstances the Commonwealth and/or the State of NSW was required to provide just terms compensation for any identifiable and measurable advantage derived by either of them by the operation of the impugned legislation. The applicant contends that there is implied in the text and structure of the Constitution that the Commonwealth will not employ any power other than the legislative power of the Commonwealth to give effect to an acquisition of property in the Commonwealth other than on just terms (the implied just terms guarantee). The implied just terms guarantee is said to condition the exercise of power under ss 61 and 96 of the Constitution. It is further contended that the guarantee requires that a law of a State which acquires property for constitutional purposes is not valid if it does not provide for just terms and by its terms, operation or effect the law imposes a disproportionate or discriminatory burden connected to the use of properties. 14. In his reply submissions, Mr Houston stated that his case "will answer the questions raised by ICM Agriculture v Commonwealth and expounded by Hayne, Crennan Kiefel and Bell JJ in Spencer v Commonwealth" (footnotes omitted). He contends that the existence of a "scheme or device" between the States and the Commonwealth was not fully resolved in the extensive Spencer litigation (Spencer v Commonwealth [2018] FCAFC 17; 262 FCR 344). In particular, he contends that there has been no factual exploration of the agreements, arrangement or understandings between the Commonwealth and State which led to the 1 January 1990 baseline date in the impugned legislation. Mr Houston added that these matters have not been resolved in the particular context in which he now advances his claims, which he described as follows (without alteration): … a rights based approach to s 51(xxxi), in accordance with modern Australian approach to certain foundational freedoms or constitutional limitations (i.e. consistent with the modern approach to s 92, the implied freedom of political communication and the implied right to vote). Such an approach will enable s 51(xxxi) to be considered in what the Applicant contends, is the appropriate constitution or context, as revealed, by the Convention debates. 15. Mr Houston candidly acknowledged that his "rights based" approach to s 51(xxxi) is "novel" and "has not been prosecuted in a previous case".

Principles concerning summary judgment and strike out

(a) Summary judgment principles 5 There was no significant dispute between the parties concerning the relevant legal principles applying to s 31A(2) of the FCA Act. They may be summarised as follows: (a) As the terms of s 31A make clear, a claim need not be hopeless or bound to fail for it to have no reasonable prospects of success. (b) The State has the onus of persuading the Court that the proceeding has no reasonable prospects of success. The assessment of whether the proceeding has no reasonable prospects of success requires the making of a value judgment in the absence of full and complete factual matrix and argument, with the result that the Court is vested with a discretion (Kimber v The Owners Strata Plan No. 48216 [2017] FCAFC 226; 258 FCR 575 at [62] per Logan, Kerr and Farrell JJ). (c) The Court is required to make a practical judgment as to whether the applicant has more than a "fanciful" prospect of success (Spencer v Commonwealth of Australia [2010] HCA 28; 241 CLR 118 (Spencer High Court) at [25] per French CJ and Gummow J). (d) Where there are factual issues capable of being disputed which are in dispute, summary dismissal should not occur "simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue" (Spencer High Court at [25] per French CJ and Gummow J). Particular caution must be exercised in determining whether summary judgment should be granted where there are factual disputes and the evidence is not in its final form (see Boston Commercial Services Pty Ltd v G E Capital Finance Australasia Pty Ltd [2006] FCA 1352; 236 ALR 720 at [43]-[45] per Rares J). (e) Generally speaking, where an applicant's success in the proceeding relies upon a question of law, the moving party on a s 31A application will likely succeed if it is able to demonstrate that the question is well settled on authority (Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; 220 FCR 256 at [48] per Reeves J). Appropriate account needs to be taken, however, of the possibility that existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify development of the law. Where success of the proceeding "is critically dependent upon a proposition of law which would contradict a binding decision of the High Court, it is reasonable to conclude that a proceeding has no reasonable prospects of success" (Spencer High Court at [25] per French CJ and Gummow J). (f) If a prima facie case in support of summary judgment is established, the onus shifts to the opposing party to point to some factual or evidentiary issues which make a trial necessary (Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; 167 FCR 372 at [127] per Gordon J). (g) Although it is pre-Spencer High Court, I respectfully agree with the observation of the Full Court in Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; 178 FCR 401 at [31] that a Judge hearing a summary dismissal application should exercise some caution in determining whether questions of law that have been raised "are so difficult that they ought not to be decided summarily". Having said that, however, there is no reason to doubt the ongoing force of Barwick CJ's observations in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125 at 130, where he said that summary dismissal should not be confined to "cases where argument is unnecessary to evoke the futility of the plaintiff's claim". He added that: Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. (h) The following passage from Reeves J's judgment in Cassimatis at [46] is also apposite: It is apparent from these authorities that s 31A has lowered the bar, or softened the test, for summary judgment, or summary dismissal, as compared to that set by earlier summary judgment or summary dismissal regimes. At the same time, it sets a different inquiry from that required under those regimes. The critical question under s 31A in a summary dismissal application such as the present one is whether ASIC, the applicant, has "reasonable" prospects of successfully prosecuting these proceedings. As the moving party in this summary dismissal application, the Cassimatises bear the onus of persuading the Court of this criterion. These authorities reveal that the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. The relevant circumstances will partly depend upon the stage which the proceedings have reached. Among other things, this will affect the materials available to the Court considering the application, for example, whether pleadings have been exchanged, or discovery of documents has occurred. (i) The Court retains a discretion whether or not to determine proceedings summarily or to refer them to trial, albeit that this discretion must be exercised judicially (Cassimatis at [50] per Reeves J). (j) Notwithstanding that s 31A of the FCA Act sets a lower bar than previously for the summary determination of a proceeding, the power to dismiss an action summarily is not to be exercised lightly (Spencer High Court at [60] per Hayne, Crennan, Kiefel and Bell JJ and Trkulja v Google LLC [2018] HCA 25; 263 CLR 149 at [22] per Kiefel CJ, Bell, Keane, Nettle and Gordon JJ). I will discuss the Spencer litigation in a little more detail shortly.

(b) Strike out principles 6 The parties were also in substantial agreement relating to the relevant principles guiding the exercise of the Court's discretion under r 16.21 of the 2011 FCRs to strike out pleadings on any of the grounds set out therein. It is well settled that the discretion is to be exercise sparingly and only in a clear case. Leave to replead may be granted in an appropriate case. An application to strike out a statement of claim because it does not disclose a reasonable cause of action normally involves establishing that the applicant's case is so untenable that it cannot possibly succeed (see General Steel at 129 per Barwick CJ).

(c) The Spencer litigation 7 In Spencer High Court, it was held that Mr Spencer's proceeding should not have been summarily dismissed essentially because, after the Full Court dismissed an appeal in that case, the High Court delivered judgment in ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; 240 CLR 140 in which the plurality raised the question whether an informal arrangement between the Commonwealth and NSW conditioning Commonwealth funding under s 96 of the Constitution upon acquisition by the State of Mr Spencer's property rights contravened s 51(xxxi) of the Constitution. The Court considered that Mr Spencer's pleading left open the possibility that he might seek leave to amend so as to raise the issue whether there was an informal agreement in contravention of that provision. 8 Upon remitter to the Federal Court, Mr Spencer alleged that his property had been acquired as a result of the operation of NSW's vegetation clearance laws, particularly the Native Vegetation Act 2003 (NSW) and the Native Vegetation Regulation 2005 (NSW). In Spencer v Commonwealth [2015] FCA 754; 240 FCR 282 at [22] (Spencer First Instance), the primary judge summarised Mr Spencer's claims in relation to s 51(xxxi) as follows: 22 Although these written submissions range widely over a number of issues and sources, not all of which can be said to be relevant to the legal and factual issues in this proceeding, my understanding of the steps in Mr Spencer's claim in relation to s 51(xxxi) which can be discerned from these written submissions is as follows: (1) First, Mr Spencer claims he has three kinds of property rights: fee simple in his property Saarahnlee; a "subset of fee simple", profit à prendre in relation to carbon stored in trees on his property; and finally perpetual Crown leasehold in the parts of his property which were not held in fee simple, that kind of leasehold being, he submits, "most like fee simple of all other property known to law". (2) Second, he submits the respondents "entered into arrangements and contrivances to get around s.51(xxxi)" of the Constitution. He submits the Commonwealth cannot pay the State to make an unjust acquisition of property, without paying compensation, and with the parties "sharing the benefits of the property thus unjustly acquired". (3) His property (in the three senses he has used the term) has been acquired for the purposes of s 51(xxxi) because the rights he could exercise over that property and which are bound up with ownership were "effectively sterilised" by the NSW vegetation clearance laws. The Commonwealth obtained a benefit from this sterilisation: namely a costs saving from the avoidance of the need to take other measures to reduce emissions in order to meet the Kyoto Protocol targets. (4) The "effective sterilisation" occurred through the legislative scheme in the NSW Native Vegetation Act 2003 and the Native Vegetation Regulation 2005 (NSW) made under that Act: an absolute prohibition on clearing without approval, the Minister being the consent authority, and consent depending on the application of a complex environmental assessment methodology - "the myriad onerous, minute and detailed standards" there set out. The Act also reverses the onus of proof in relation to an allegation of clearing without approval, "permits intrusive search without warrant" and "abolishes the privilege against self-incrimination", all of which combines, Mr Spencer submits, to force farmers such as himself to bear the costs, by holding our most significant capital goods - our production goods - in a kind of compulsory supposed pre-1788 botanical museum. The Native Vegetation Act stands for the unequal, capricious, discriminatory, disproportionate, unjustified oppression of a minority; and as since ancient times, we come to the Court for justice. 9 On appeal to the Full Court (see Spencer v Commonwealth [2018] FCAFC 17; 262 FCR 344 (Spencer Full Court), Griffiths and Rangiah JJ summarised the primary judge's findings in Spencer First Instance in the following terms at [3] (emphasis in original and denotes a defined expression): 3 In brief terms, in Spencer below her Honour held that: (a) The two federal laws challenged by Mr Spencer (the Natural Resources Management (Financial Assistance) Act 1992 (Cth) (the NRM Act) and the Natural Heritage Trust of Australia Act 1997 (Cth) (the NHT Act)) were not invalid. They were not laws with respect to the acquisition of property within the meaning of s 51(xxxi) of the Constitution. Furthermore, when considered at a broader level, their practical operation and effect as part of a scheme involving the four intergovernmental agreements, coupled with the NSW vegetation clearance laws, did not give rise to an acquisition of property in contravention of s 51(xxxi) of the Constitution. (b) The decision dated July 2007 of the NSW Rural Assistance Authority (the RAA) that Mr Spencer's farm was not commercially viable because of the effect of the State's native vegetation clearance laws could be characterised as a "sterilisation" or a "taking" of his property, but that taking was by the State and there was no acquisition by the State nor by any other person of an interest or benefit of a proprietary nature in the bundle of rights Mr Spencer held in his farm (which was called 'Saarahnlee'). (c) Even if there had been an "acquisition" of property within the meaning of s 51(xxxi) of the Constitution, Mr Spencer was offered just terms in November 2007 when the State offered to pay the then properly assessed market value for Saarahnlee. (d) Mr Spencer had not proven the existence of any "informal arrangement" between the Commonwealth and NSW. (e) Mr Spencer did not have any private right of action in respect of the conduct of the Commonwealth and the State even if that conduct was unlawful or the relevant legislative or executive acts were invalid, nor had he proven any economic or non-economic losses flowing from the alleged unlawful conduct. 10 In dismissing the appeal, the Court in Spencer Full Court made the following relevant findings: (a) Where it is alleged that a State has effected an acquisition of property, s 51(xxxi) will not apply unless the State is required by the Commonwealth, under an intergovernmental agreement, to acquire the property on other than just terms (at [172], [210] (Griffiths and Rangiah JJ), [354] (Perry J)). (b) The primary judge had found that the four impugned intergovernmental agreements did not require the State to acquire property, so s 51(xxxi) was not engaged, findings which were not challenged on appeal (at [150]-[152], [187] (Griffiths and Rangiah JJ)) and which Perry J held were correct (at [395]). (c) Even if an "informal agreement" between the Commonwealth and State is sufficient, there could be no lesser requirement than described at (a) above in relation to the contents of such an agreement. Thus, if there is an informal agreement, for s 51(xxxi) to apply, it would need to be demonstrated that the State is required under the informal agreement to acquire property on other than just terms. There is no constitutional principle that "joint action" with the effect of acquiring property enlivens s 51(xxxi) (at [210] (Griffiths and Rangiah JJ); [352]-[354] (Perry J)). (d) The Native Vegetation Act was valid and operative and was an independent exercise of the legislative powers of the NSW Parliament (at [233] (Griffiths and Rangiah JJ), see also at [433] (Perry J)).

The FASOC summarised 11 The State consented to the filing of the FASOC, while expressly reserving its rights to challenge it as untenable. Despite that express reservation, Mr Houston says that the State has waived its right to seek summary judgment, a proposition which I reject for reasons which are given later in these reasons for judgment. 12 It might also be noted that the FASOC constituted the third iteration of Mr Houston's pleading. 13 The FASOC pleaded various matters relating to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (opened for signature 16 March 1998, 2303 UNTS 162, entered into force 16 February 2005) (Kyoto Protocol) and Australia's response thereto, in particular Australia's implementation of what Mr Houston called the 'Kyoto net zero land clearing purpose'. The FASOC then referred to the Native Vegetation Act and the Local Land Services Act 2013 (NSW) (LLS Act) (which repealed the Native Vegetation Act with effect from 25 August 2017 and introduced Pt 5A). It is pleaded at [21] that the Native Vegetation Act and Pt 5A of the LLS Act enabled the Commonwealth to meet what Mr Houston described as the 'Kyoto change in land use measurement and reporting obligations' and implemented the 'Kyoto net zero broadscale land clearing purpose', and that these matters were supported by Commonwealth financial grants under s 96 of the Constitution. 14 At [26] of the FASOC, Mr Houston pleaded that the terms, operation and effect of various matters, including the now repealed Native Vegetation Act, permitted the State to burden him and other large holders of native vegetation by exposing them to prosecution for breach "in a disproportionate or discriminatory way". 15 At [28], Mr Houston pleaded that the terms, operation and effect of the Native Vegetation Act and Pt 5A of the LLS Act placed a disproportionate burden on him and other large landholders of native vegetation by imposing a disproportionate economic opportunity loss and a disproportionate burden of managing native vegetation in the interests of the State. 16 At [29], Mr Houston claimed that the State had acquired three of his properties "for constitutional purposes". He claimed that his properties had been acquired because the terms, operation and effect of the impugned laws had "an oppressive and corporeal burden" on him to manage the identified land "in the interests of the State". Alternatively, he pleaded that the State had acquired his personal property, in the form of his labour, and the labour of other persons engaged by him, to manage the burden of invasive native species or non-native weeds. 17 At [30], he further pleaded that the Native Vegetation Act and Pt 5A of the LLS Act effected an acquisition of his property for Constitutional purposes, by acquiring his personal property and his own labour by requiring him actively to manage native vegetation in the social, economic and environmental interests of the State. In particulars to this paragraph, Mr Houston claimed that the impugned provisions denuded native vegetation on his land of its value and utility. He also claimed that an acquisition had occurred because the Commonwealth and State had obtained a benefit relating to Mr Houston's use or non-use of his land. It is desirable to set out the particulars of this claimed benefit as set out in sub-paragraph (d) of [30] of the FASOC (underlining in original and showing tracked amendments): d) by providing an identifiable gain, benefit or advantage, of a proprietary nature or otherwise, to the Commonwealth and the Respondent relating to the Applicant's use or non-use of the land on North Bunarba, Semakh and Talana. Particulars (a) identifiable and measurable environment gains or benefits to the Respondent and the Commonwealth, viz. Under Articles 3.3 and 3.7(2) of the Kyoto Protocol, the Commonwealth is required to account for emissions from deforestation; the direct human-induced conversion of land that was Kyoto complying forest on 31 December 1989 to non-forest land (i.e. forest to a non-forest use). Once a land unit is deforested it is also required to account for all subsequent carbon stock changes and non-CO2 greenhouse gas emissions on the land unit, irrespective of whether they are attributable to an anthropogenic or non-anthropogenic cause. Due to these rules, the Commonwealth had a number of options for reducing its net deforestation emissions, including reducing forest conversion and promoting the regeneration of forests on deforested land units. The 2003 Act's introduction of vegetation management laws with the objective of ending broadscale clearing of pre-1990 remnant native vegetation produced a sharp decline in native vegetation clearing. The main benefit of this native vegetation management regime to the Commonwealth and the Respondent was/is the reduction of emissions from forest conversion and the provision of deforestation offset in the Commonwealth's greenhouse accounts under the Kyoto Protocol; and (b) In addition, the personal labour provided by the Applicant (or his agents) as a result of the operation and effect of the impugned laws and is a benefit to the Respondent and the Commonwealth because in order to achieve the objectives of the impugned laws neither the Commonwealth nor the Respondent is/ was required to purchase properties for conservation purposes and employ public officials to manage native vegetation in the interests of the State. 18 In the alternative to [30], Mr Houston pleaded at [30A] that parts of the Land Management (Native Vegetation) Code 2018 (NSW) made under Div 5 of Pt 5A of the LLS Act are invalid because they impose an unreasonable and/or disproportionate corporeal burden on Mr Houston to manage native vegetation in the interests of the State by depriving him of the ability to eradicate invasive native species in the treatment area. This involved an administrative law challenge. He pleaded that the operation and effect of parts of the Code resulted in an outcome which was inconsistent with the object of LLS Act, "namely to ensure the proper management of natural resources in the social, economic and environmental interests of the State, consistently with the principles of ecologically sustainable development". Sch 4 to cl 82(2) of the Code was also said to be invalid and beyond the Minister's power under ss 60T and 60W of the LLS Act because it directly discriminated against large holders of native vegetation and/or bore no relationship to the objects of LLS Act. 19 It is desirable to set out [30A] of the FASOC in its entirety: 30A. In the alternative to paragraph 30, regulations made under Division 5 of Part 5A of the LLSA are invalid. Particulars Part 5A of the LLSA I. Part 2 (Invasive Native Species) of the Equity Code is invalid and beyond the power of the Minister under ss 60T and 60W of the Act because: a. it imposes an unreasonable and/or disproportionate corporeal burden on the Plaintiff to manage native vegetation in the interests of the State by depriving the Plaintiff the ability to eradicate invasive native species in the treatment area; and/ or b. in its operation and effect the regulation results in an outcome inconsistent with an object of the Act namely to ensure the proper management of natural resources in the social, economic and environmental interests of the State consistently with the principles of ecologically sustainable development (s 3(e)) because its oppressive and prescriptive terms result in the risk of no management or suboptimal management of invasive native species. II Schedule 4 of cl. 82(2) of the Equity Code is invalid and beyond the power of the Minister under s 60T and 60W of the Act because: a. it directly discriminates against a small number of the regulated class, namely large holders of native vegetation; and/ or b. it bears no relationship the objects of the Local Land Services Act 2013 (NSW). 20 In addition to the matters pleaded at [30] and [30A], it was pleaded at [31] that the Native Vegetation Act and Pt 5A of the LLS Act are not appropriate and adapted to achieving either the stated objectives of the laws or a net reduction in deforestation under the Kyoto Protocol. Particulars were provided in support of those claims. 21 Because of their central importance to Mr Houston's claims concerning the so-called "implied just terms guarantee" and "just terms guarantee", it is also desirable to set out, without alteration, [32]-[36] of the FASOC: Implied just terms guarantee 32. There is, an implication in the text and structure of the Constitution that the Commonwealth will not employ any, power other than the legislative power of the Commonwealth to give effect an acquisition of property in the Commonwealth other than on just terms (the implied just terms guarantee). 33. The implied just terms guarantee attaches to and conditions the exercise of power under ss 61 and 96 of the Constitution. 34. The implied just terms guarantee requires that a law of a State acquires property for constitutional purposes if the law acquires property and: a) in its terms, operation or effect supports a Commonwealth purpose; and/or b) is supported by a grant of financial assistance from the Commonwealth under s 96. 35. The implied just terms guarantee requires that a law of a State which acquires property for constitutional purposes is not valid if it does not provide for just terms and: a) by its terms, operation or effect the law imposes a disproportionate or discriminatory burden connected to the use of the property; and b) is not appropriate or adapted to a Commonwealth purpose that the law supports. 35A. In the alternative to the implied just terms guarantee, there is an implication in the text and structure of the Constitution that the just terms guarantee in s 51(xxxi) extends to a law of the State, which acquires property (the just terms guarantee). Particulars The guarantee arises by operation of the existence of an express constitutional guarantee in respect of the acquisition of property by the Commonwealth (s 51(xxxi) which is legislatively (ss 51, 106) and financially (s 51(i) and (ii), s 96) supreme in the text and structure of the Constitution, such that the absence of the just terms in any law of a State, which acquires property without just terms, undermines the existence, structure and democratic function of the federation and the Commonwealth's place in that structure. 36. In these premises, and the whole of the premises set forth herein, the Native Vegetation Act 2003 and/or cl. 58 of the Biodiversity Conservation (Savings and Transitional) Regulation 2017, and Part 5A of the LLSA do not satisfy the implied just terms guarantee, or the just terms guarantee, and are invalid. 22 These paragraphs of the FASOC present the "rights-based" approach to s 51(xxxi) upon which Mr Houston relies in seeking to distinguish his proceeding from that in Spencer Full Court. As previously noted, Mr Houston candidly accepted that his "rights-based" approach is "novel". The alternative limbs of this "rights-based" approach were further developed in Mr Houston's written and oral submissions, which are summarised below.

Section 78B notices 23 Mr Houston issued notices as required by s 78B of the Judiciary Act 1903 (Cth). It is desirable to set out the relevant terms of the notice dated 10 March 2021 because they further illuminate the Constitutional issues which Mr Houston seeks to raise (without alteration): … 2. The matter involves questions about s 51(xxxi), 61 and 96 of the Constitution namely: I. Can a positive obligation to manage land in the interests of the State which attaches to a restriction on the use of land amount to an acquisition of property within the meaning of s 51(xxxi)? II. Can personal property in the form of forced labour or work amount to 'property' within the meaning of s 51(xxxi)? III. Should the assessment of the validity of a law which is said to infringe the just terms limitation in s 51(xxxi) be approached using proportionality reasoning and analysis; a. at all; b. in circumstances where the law imposes a disproportionate or discriminatory burden on a small number of the regulated class; and/or c. where an acquisition of property within the meaning of s 51(xxxi) is established. IV. Does the text and structure of the Constitution contain an implied just terms guarantee and limitation which extends to a law of a State: a. where the law of the State acquires property within the meaning of s 51(xxxi), does not provide just terms and; i. is the beneficiary of financial assistance under s 96 of the Constitution; ii. implements a joint scheme between the Commonwealth and the State which relies on the exercise of executive power under s 61 of the Constitution; iii. implements a Commonwealth purpose; and/or iv. implements an exclusive Commonwealth purpose. b. that acquires property within the meaning of s 51(xxxi). …

The parties' evidence summarised 24 The State relied upon two affidavits affirmed by Christopher Frommer on 29 January 2021 and 23 February 2021 respectively. In brief, the first affidavit deposed to matters concerning the remittal of this proceeding from the High Court, the filing of pleadings (including the three iterations of the statement of claim) and Mr Houston's unsuccessful application for a maximum costs order. Mr Frommer then attached various documents referred to in Mr Houston's FASOC, including: The United Nations Framework Convention on Climate Change adopted in 1992; The Kyoto Protocol; The 1992 COAG National Greenhouse Response Strategy; The 1997 COAG Heads of Agreement on Commonwealth/State roles and Responsibilities for the Environment; The 2003 National Heritage Trust Agreement entered into by the Commonwealth and NSW; and A 2019 NSW Department of Planning, Industry and Environment document titled "Policy for resolving investigations under the now repealed Native Vegetation Act 2003". 25 Mr Frommer's second affidavit annexed correspondence between the parties and highlighted the fact that Mr Houston had agreed to remove the Commonwealth as a party to the proceeding because no relief was sought against it. 26 Mr Houston relied upon an affidavit by his instructing solicitor, Mr Brendon Moylan, affirmed on 16 February 2021. Mr Moylan's affidavit annexed various correspondence between Mr Houston and the State concerning the FASOC, with the evident purpose of highlighting that the State consented to its filing. However, as the annexed email from Mr Frommer dated 23 December 2020 made clear, the State reserved its rights to bring an application for summary judgment or strike out. The following passage is an extract from that email: … For the avoidance of doubt, I note that the State's consent to the filing of the FASOC should not be understood as a concession that the matters alleged in the document are reasonably arguable. I also note that consent is given without prejudice to the State's right to bring an application for summary judgment and/or for the pleading to be struck out, in accordance with the timetable that has already been set. … Mr Moylan's affidavit also annexed a copy of the 'Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its first session, held at Montreal from 28 November to 10 December 2005' (2005 Montreal Agreement).

Outline of the State's grounds for seeking summary judgment 27 Briefly, and without elaboration at this stage, the State's application for summary judgment is based upon the following propositions: (a) An approach to s 51(xxxi) based on proportionality/discrimination, on which Mr Houston's case seems to depend (to distinguish Spencer), is unsustainable. (b) Section 51(xxxi) is not a constraint on State power, thus the State may independently exercise its legislative powers (and this legislation is not in the category raised in P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382). (c) No Commonwealth requirement of the State of the requisite kind (i.e. to acquire property other than on just terms), nor any federal invalidity, has been pleaded, and nor could it be given that the Commonwealth is not a party. (d) The impugned State laws do not operate to acquire property within the meaning of s 51(xxxi), as there is no taking or acquisition. 28 The State also claimed that Mr Houston's administrative law challenge to the validity of the Code could not succeed on the grounds of disproportionality and/or discrimination because there is no scope to apply a reasonable proportionality test in circumstances where s 60T of the LLS Act contains a generalised, non-purposive, power to make land management codes and s 60W merely addresses the content of such codes. Moreover, the State contended that the Code is consistent with the objects of the LLS Act.

Mr Houston's submissions summarised 29 Mr Houston contended that the State's summary judgment application raised the following two key issues: (a) whether the proceeding presented an arguable case as to the acquisition of property (the acquisition point); and (b) whether there is an arguable case for a limitation, deriving from the Constitution, which applies to the impugned State laws (the State extension point). 30 There is also a third issue, namely the administrative law challenge to the validity of both Pt 2 and Sch 4 of the Code. This claim is raised in [30A] of the FASOC (see [19] above). Part 2 and Sch 4 of the Code are said to be ultra vires and invalid because they impose an unreasonable and/or disproportionate corporeal burden on Mr Houston to manage native vegetation in the interests of the State and the operation and effect of the Code is also said to result in an outcome which is inconsistent with the objects of the LLS Act and do not ultimately achieve the environmental/biodiversity goals when applied to Mr Houston's circumstances. Schedule 4 of the Code is said to be ultra vires and invalid because it directly discriminates against a small number of large holders of native vegetation and/or bears no relationship to the objects of the LLS Act. Mr Houston contends that the true purpose of the impugned regulations is not to fulfil the objects of the LLS Act, but rather is directed to fulfilling the Commonwealth's Kyoto Protocol commitments. 31 It is convenient to summarise Mr Houston's submissions in respect of these three matters in turn, bearing in mind that the State carries the onus of persuading the Court that it is entitled to summary dismissal or striking out.

(a) Acquisition point 32 Mr Houston's written and oral submissions advanced two alternative limbs with respect to the acquisition of property. The first limb is that the impugned regulations operate to "take" his property, with consequential benefit to the State and/or the Commonwealth. The way in which the impugned laws are said to amount to a "taking" of Mr Houston's property was advanced in a number of alternative propositions, which are summarised at [8] of Mr Houston's "brief written outline of submissions" (written submissions) (footnotes omitted): a) a restriction on use which prevents utilisation of the land in an optimal way and results in forgone cropping opportunity; b) as expressly stated in the Objects of the impugned laws, an obligation to positively manage native vegetation in the State's exclusive interests; c) an adverse effect on the utility of the regulated land over time (denuding the value or viability of the land due to additional costs of management resulting in more frequent weed infestation); and/or d) an infringement on the personal property of the Applicant by effectively requiring him to utilise his own labour in the exclusive interests of the State. 33 Mr Houston contended that each of the impugned laws also provided a consequential benefit to the State and/or the Commonwealth in the same terms as the FASOC as set out at [17] above. 34 The second limb turns on the proposition that the impugned regulations cast a disproportionate and discriminatory burden on him and other large landholders, so as to amount to an acquisition through the application of a "structured proportionality" test. While acknowledging that the High Court has not endorsed the application of structured proportionality to s 51(xxxi), Mr Houston relies upon what Gageler J said in Attorney-General (NT) v Emmerson [2014] HCA 13; 253 CLR 393 at [121]. There, in dissent, Gageler J said that in the case of a provision such as s 51(xxxi), which involves a Constitutional guarantee, the inquiry is not whether the law is capable of being reasonably considered to be appropriate and adapted to the end sought to be achieved, but rather as to "whether the burden or restriction [that is to say, the acquisition of property] is reasonably appropriate and adapted, in the court's judgment, to the legitimate end in view", citing inter alia Cunliffe v Commonwealth [1994] HCA 44; 182 CLR 272 at 300 per Mason CJ and Attorney-General (SA) v Corporation of the City of Adelaide [2013] HCA 3; 249 CLR 1 at [62] per French CJ. Justice Gageler's remarks were directed to laws of the Northern Territory which required property to be forfeited where a person was found guilty of drug-related offences (and in circumstances where s 50(1) of the Northern Territory (Self-Government) Act 1978 (Cth) was a provision expressed in similar terms to s 51(xxxi) of the Constitution). Mr Houston also relied on Palmer v Western Australia [2021] HCA 5; 388 ALR 180 at [53]-[61] where Kiefel CJ and Keane J discussed the utility of applying "structured proportionality" to laws impinging on rights and freedoms. 35 In his written submissions, Mr Houston said that his acquisition point is not novel (at [3]): it is based on the restriction on use, combined with a positive obligation imposed upon him to manage the affected land at his cost, as required by both the Native Vegetation Act and Pt 5A of the LLS Act. He contended that the acquisition point relies on conventional notions of what constitutes an acquisition for the purposes of s 51(xxxi). He contended that his case is a more suitable vehicle than Mr Spencer's case to test the acquisition point because Mr Houston is a large broadscale farmer to whom the impugned laws are squarely aimed (at [3] of his written submissions). 36 The reasons why Mr Houston said his case is distinguishable from Mr Spencer's case are reflected in [6] and [7] of his written submissions (footnotes omitted): 6. By asking the Court to explicitly acknowledge and explore the nature of the express and implied just terms guarantee by applying proportionality reasoning and analysis, the Court will be asked, for the first time, to explore the Convention Debates concerning s 51(xxxi) to give appropriate historical context to s 51(xxxi). Additionally, by taking such a lens to s 51(xxxi), the proceeding will resolve current outstanding ambiguity around the two key issues identified above. 7. Therefore, at the outset, the proceeding is fundamentally different in its facts and presentation to Spencer's case, such that it cannot and should not be the subject of comparison. Different laws are said to be invalid, for different reasons, based on entirely different facts and unrecognisably different legal arguments. Accordingly, the reasoning and result by the Full Court Spencer v Commonwealth is not a bar to success in this proceeding. 37 In further support of the acquisition point, Mr Houston submitted that there is no decided case which addresses an acquisition of property involving the imposition on freehold land of a restriction on use, combined with a positive obligation to manage land in the State's interests and at the landholder's costs. He described the "heart" of his proceeding as not just being the cost of a foregone cropping opportunity as a result of the restriction on use, but also the burden imposed on him by the impugned laws in relation to the management of native vegetation in the interests of the State. 38 Notwithstanding his contention that the impugned laws were not "a mere restriction on use", Mr Houston stated at [19] of his written submissions that his case would resolve ambiguity about the meaning of the term "acquisition" for Constitutional purposes in what he loosely described as a "restriction on use" case. He then added that the Court would be required to consider not only the restriction on use effect of the impugned laws, but also the "additional impact of a serious and sometimes expensive positive burden as a result of the 'carefully worded restrictions' which apply to vast areas of native vegetation on freehold land owned by [him]". 39 Mr Houston contended that none of these facts and matters was raised in Mr Spencer's case. Mr Houston repeatedly referred to his intention to adduce evidence at trial which he said would demonstrate the disproportionate and discriminatory effect of the relevant positive land management obligations on landholders such as himself. It was put that the effect of the regulations was to make farmers such as him "park rangers" without any compensation from the State. 40 In apparent contradiction to his written submissions, where it was contended that the pleaded acquisition was not novel (see [35] above), in oral address it was put on behalf of Mr Houston that his acquisition case was "different to any case that has gone before it" and was "completely novel". It was contended that three "novel" components of the acquisition argument (those listed at 32-(d) above) all raised questions of fact and that there would be a need at trial not only for the Court to view Mr Houston's land, but also for the Court to consider proposed expert and lay evidence, which will demonstrate that the impugned laws as they apply to him "were/are not justified" (at [5] of his written submissions). 41 In response to the emphasis given by the State to the fact that the Commonwealth was no longer a party to the litigation, Mr Houston described this as an attempt by the State to "evade" his case entirely. He submitted that s 51(xxxi) is not limited in its terms to laws providing for the acquisition of property by the Commonwealth itself. He expressly confirmed that he was not alleging "joint action" as in Mr Spencer's case. He added that he did not rely on any finding of the need for there to be a "requirement" for there to be an acquisition, as held in Spencer Full Court.

(b) State extension point 42 As to the State extension point, Mr Houston candidly acknowledged in his written submissions that some aspects of it "may be considered novel only because they have never been argued before" (at [24]). He added that his proceeding would bring Magennis "into the twenty-first century by employing the modern approaches of implication and proportionality assessment of constitutional guarantees to constitutional interpretation". 43 As noted above, there are three alternative limbs to Mr Houston's "rights-based" approach, through which he contended s 51(xxxi) extended to the impugned laws in the current proceedings. 44 The first two limbs were described in the FASOC as the "implied just terms guarantee". The First limb is that the impugned laws were supported by (but not necessarily conditioned upon) a grant of financial assistance by the Commonwealth under s 96 of the Constitution. The Second limb is that the impugned laws were embedded with a Commonwealth purpose. In the FASOC and in oral submissions, Mr Houston contended that both the First limb and Second limb would not apply to all State laws, but only those which impose "a disproportionate or discriminatory burden connected to the use the property and is not appropriate or adapted to a Commonwealth purpose that the law supports", evidently adopting a structured proportionality analysis. 45 The Third limb, which was expressed in the FASOC to be the "just terms guarantee", was that the express Constitutional guarantee in s 51(xxxi) applies to all State laws as a matter of statutory construction. This extension of s 51(xxxi) was said to rise from the text and structure of the Constitution, particularly the legislative and financial supremacy of the Commonwealth within Australia's federal democracy, and the supremacy given to property rights within the Constitution. In oral submissions, it became unclear the extent to which this limb differed from the Second limb in requiring that the impugned laws "in some way shape or form" pursued a Commonwealth purpose or were linked to some exercise of Commonwealth power. It was also unclear whether this limb of the State extension point relied upon the concept of proportionality. 46 Mr Houston summarised the key elements to the State extension point as follows (at [26] of his written submissions): (a) There is a "clear implication in the text and structure of the Constitution that the just terms obligation in s 51(xxxi) cannot be avoided by the Commonwealth by deploying power (other than legislative power under s 51) to a State law which acquires property for a Commonwealth purpose", citing Magennis in support of the proposition that there was such an implication and adding that the implication he now advances was never raised in the Spencer litigation. (b) Each of the impugned laws embeds a Commonwealth purpose by enabling the Commonwealth to meet its Kyoto Protocol obligations. Notwithstanding his earlier disavowal of alleging any "joint action" as raised in Mr Spencer's case, Mr Houston contended that "the laws are clearly doing the Commonwealth's work by being directly 'coupled' with a clear, exclusive 'Commonwealth purpose' … [as] evidently part of a 'joint scheme' made possible by the deployment of ss 61 and 96 Commonwealth power". (c) Mr Houston added that his case raised a new Constitutional question as to whether regulations made under State laws, which are limited by the implication for which Mr Houston contends, can embed a "Commonwealth purpose" for the purposes of s 51(xxxi) while avoiding just terms limitations. Mr Houston rhetorically asked whether the State can "exploit the implied limitation by hiding the Commonwealth purpose in the regulations?". He said that this new Constitutional question arises from the alignment of the weed management obligations under Pt 2 of the Code and the definition of 'forest' in the Annex to the 2005 Montreal Agreement. (d) Even without this "textual coupling", Mr Houston contended that the proposed implication extends to laws that effect a Commonwealth purpose, as reflected in the 2003 National Heritage Trust Agreement, a bilateral agreement between the State and Commonwealth, which resulted from the Commonwealth's agreement with the State to provide financial support under s 96 of the Constitution. 47 Mr Houston placed particular emphasis on his claim that in both ICM Agriculture and Spencer High Court the High Court left open the prospect of further juridical development in this area. He contended that while aspects of the State extension point may be considered "novel, they are nevertheless eminently arguable". In oral address, Mr Houston's counsel candidly acknowledged that there was no binding authority on the Court which supported Mr Houston's State extension point. Reliance was placed, however, on Gageler J's dissenting judgment in Emmerson at [121]-[122], as well as the joint judgment of Kiefel CJ and Keane J in Palmer at [53]-[61]. It was further submitted that significance should attach to the fact that the High Court declined in ICM Agriculture to overrule Magennis. 48 Mr Houston then submitted that although his proceeding invoked "a proportionality assessment" to assess the validity of the impugned laws, "it is not necessary that this approach be accepted by the Court as appropriate in order for the case to proceed to trial". This was because he also claimed that there is an acquisition of property and a Constitutional limitation extending to impugned State laws regardless of whether the laws are assessed through a proportionality lens. Given the FASOC and Mr Houston's oral submissions, it may be that this statement was intended to indicate that the acquisition point did not rest upon the application of proportionality. Having said that, however, at [32] of his written submissions, Mr Houston submitted that the case "will ultimately require resolution of whether structured, strict or another kind of proportionality should apply to s 51(xxxi) (if at all) and the corresponding implication for which [he] contends". This provides another illustration of the sometimes contradictory ways in which Mr Houston's case was put. 49 The ambiguity in Mr Houston's position regarding proportionality is further highlighted by the contention in [33] of his written submissions where, in response to the State's claim that his case was simply an attack on the merits of the impugned laws, Mr Houston said that this "is an inapposite, awkward and misplaced refrain in a proceeding where proportionality is being advanced as the "rational approach to the question of whether a law which burdens a right or freedom can be justified, which requires the courts to make something of a value judgment."" (emphasis in original), referring to Palmer at [53]-[61] per Kiefel CJ and Keane J. 50 In oral address, Mr Houston urged the Court not summarily to dismiss his claim because of the effect that such an outcome would have not only on his individual rights, but on the rights of other farmers who were in a similar position.

(c) Validity of Pt 2 and Sch 4 of the Code 51 In support of his administrative law challenge, Mr Houston contended that both Pt 2 and Sch 4 of the Code were ultra vires because they are not directed to the objects of the LLS Act (and in their operation and effect undermine the objects of that legislation) because they do not ultimately achieve environmental/biodiversity goals when applied to Mr Houston's circumstances. He also contended that Sch 4 of the Code on its face "directly discriminates and/or has a disproportionate impact on" him. He said that he proposed to adduce expert evidence by an ecologist and agricultural economist in support of these claims. 52 As the State pointed out, no oral submissions in chief were made by Mr Houston in respect of his administrative law challenge, and only one paragraph of his written submissions was devoted to this challenge. In response, Ms Nolan (who appeared for Mr Houston) submitted that this was not required in circumstances where the State carried the onus of persuading the Court that the case is one which is suitable to be disposed of summarily. Ms Nolan did, however, address the administrative law challenge in her oral address in reply. 53 In conclusion, Mr Houston made the following contentions in opposing summary dismissal (without footnotes): 35. Despite the threshold for summary dismissal having been lowered, it must still be exercised with caution, particularly where, as here, complex and novel questions of law and fact are involved. Summary dismissal cannot apply to the real, albeit novel, questions of law, raised by this proceeding that are serious, important and difficult, involve conflicting authority, and are apparently arguable. The proceeding should not be terminated summarily as the State has not been able to demonstrate that there is a "high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way".

State's submissions summarised 54 To avoid adding unduly to the length of these reasons for judgment, I will not summarise the State's comprehensive submissions, which are substantially reflected in my reasons below for upholding its interlocutory application.

Consideration and determination 55 I will address each of the major topics in turn.

(a) Some threshold matters 56 I reject Mr Houston's submission that the State is precluded from bringing its summary judgment application because it gave its consent to the filing of the FASOC. As noted above, that consent was given subject to an express reservation of the State's right to challenge the tenability of the FASOC. The course adopted by the State was "an eminently sensible and practical approach" to the proposed amendment application (see Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 at [21] per Wigney J). The State's approach enabled it to have brought before the Court at a relatively early stage in the proceeding its claim that Mr Houston's proceeding did not have reasonable prospects. 57 In her oral address, Ms Nolan raised two other threshold issues. The first was that the Court should bear in mind that the determination of the summary judgment application would constitute an interlocutory judgment and that arguably the legal questions raised "could be removed to the High Court and the High Court could determine it", referring to s 40 of the Judiciary Act. 58 This contention cannot be sustained. Absent any action to date to have the matter removed to the High Court under s 40, it is difficult to see why this Court should not proceed to hear and determine the interlocutory application. In circumstances where s 78B notices have been issued in the proceeding and no action has been taken by any Attorney-General to have the matter removed to the High Court, nor has the appellant himself applied to have the matter removed to the High Court, the matter ought to proceed in this Court in the normal way. 59 For completeness, it might also be noted that the proceeding was originally commenced in the original jurisdiction of the High Court but it was then remitted by consent to this Court. This further highlights the inappropriateness of this Court not proceeding in the normal way because of a purely theoretical and speculative assertion that it could be removed to the High Court. 60 The second matter raised by Ms Nolan relied upon the criminal prosecution against Mr Houston pending in the NSW Land and Environment Court. Ms Nolan submitted that Mr Houston would seek to run in that proceeding the same arguments as raised by him in this Court. Ms Nolan submitted that "nothing that your Honour would say would bind the Land and Environment Court" and this "is a powerful matter" favouring refusal of the State's summary judgment application. That contention should also be rejected. First, were Mr Houston to seek to raise the Constitutional issues in that other proceeding, the Court would necessarily be exercising federal jurisdiction and one would expect that the usual doctrines of judicial comity would apply. Secondly, if Mr Houston sought to raise in that other Court the issues raised by him here, it may confidently be expected that he would be met with one or more defences of res judicata, issue estoppel, Anshun estoppel and/or abuse of process (as to which, see generally UBS AG v Tyne [2018] HCA 45; 265 CLR 77; Fortescue Metals Group v Warrie on behalf of the Yindjibarndi People [2019] FCAFC 177; 273 FCR 350 and Kitoko v University of Technology Sydney [2021] FCA 360 at [71] ff per Griffiths J). In any event, irrespective of what might happen in the Land and Environment Court, this Court has its own responsibility to hear and determine matters which fall within its jurisdiction, absent some compelling reason to the contrary, of which there is none in this case. 61 I will now address the primary issues, commencing with the acquisition point, then deal with the State extension point and finally address the administrative law challenge and explain why I consider that none has reasonable prospects so as to warrant the matter going to trial.

(b) Acquisition point 62 As noted at [32] ff above, Mr Houston's claim that there has been an "acquisition" for the purpose of s 51(xxxi) has two alternative limbs. The first limb is that the impugned regulations operate to "take" his property, with consequential benefit to the State and/or the Commonwealth. The second limb relies upon establishing an acquisition through the application of a structured proportionality test, drawing on what Gageler J said in Emmerson at [121]. 63 For the following reasons, Mr Houston does not have reasonable prospects of establishing any "acquisition" for the purposes of s 51(xxxi). This finding alone is sufficient to warrant summary dismissal of Mr Houston's Constitutional law claims.

No "benefit" accrued to the State or Commonwealth 64 First, it is well established that an "acquisition" of property for the purposes of s 51(xxxi) entails both a loss, or taking of an interest in property from the owner, and a reciprocal gain or benefit to another relating to the ownership or use of property. In Commonwealth v Tasmania [1983] HCA 21; 158 CLR 1 (Tasmanian Dam Case), in an important passage, Mason J explained the difference between a mere "taking" (as required under the Fifth Amendment to the US Constitution) and an acquisition so as to attract s 51(xxxi) (at 145): The emphasis in s 51(xxxi) is not on a 'taking' of private property but on the acquisition of property for purposes of the Commonwealth. To bring the constitutional provision into play it is not enough that the legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be. 65 This passage has been repeatedly approved by the High Court, including in JT International SA v Commonwealth [2012] HCA 43; 250 CLR 1 (Plain Packaging) at [42] per French CJ, at [118] per Gummow J, at [169] and [188] per Hayne and Bell JJ, at [278] per Crennan J and at [357] and [369]-[370] per Kiefel J. 66 As Mason CJ, Deane and Gaudron JJ remarked in Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; 179 CLR 297 at 304, as distinct from "taking", ""acquisition" directs attention to whether something is or will be received". And as French CJ critically stated in Plain Packaging at [42], for s 51(xxxi) to be attracted "… the interest or benefit accruing to the Commonwealth or another person must be proprietary in character" (emphasis added) (to similar effect, see Plain Packaging at [147]-[150] per Gummow J, at [278] per Crennan J and at [369]-[370] per Kiefel J). 67 I have set out above at [17] the benefit or advantage which Mr Houston claims accrued to the Commonwealth or the State concerning his use or non-use of his land. Although the relevant particular refers to "an identifiable gain, benefit or advantage, of a proprietary nature or otherwise …", the particularised benefits do not constitute any interest or benefit of a proprietary character. The reduction of emissions from forest conversion and the provision of deforestation offsets relating to the Commonwealth's commitments under the Kyoto Protocol cannot be described as being of a proprietary character. Nor can the supposed "acquisition" of Mr Houston's labour in managing native vegetation, which he contends means the State does not need to purchase properties for conservation purposes and employ public officials to manage native vegetation in the interests of the State. As in Plain Packaging, compliance with the impugned legislation by Mr Houston, even assuming the accrual of the alleged benefits to the State and/or Commonwealth, "does not create a relationship … which is proprietary in nature" (at [150] per Gummow J). 68 The reference to the High Court's decision in Newcrest Mining (WA) Ltd v Commonwealth [1997] HCA 38; 190 CLR 513 does not assist Mr Houston's case. In Newcrest, the passage of the National Parks and Wildlife Conservation Amendment Act 1987 (Cth) prohibited mining in Kakadu National Park, which the Commonwealth owned in fee simple. Newcrest argued that two proclamations extending Kakadu National Park over land which it held mining leases amounted to an acquisition of property under s 51(xxxi). While acknowledging the proclamations and Amendment Act did not directly acquire Newcrest's leasehold interests or proprietary interests in the minerals, the High Court held the legislation amounted to an acquisition of property as the Director of National Parks and Wildlife acquired "identifiable and measurable advantages" of the "land freed from the rights of Newcrest to occupy and conduct mining operations thereon" and in the case of the Commonwealth, "the minerals freed from the rights of Newcrest to mine them" (at 634 per Gummow J). 69 Unlike Newcrest, the impugned legislation here has not resulted in an identifiable or measurable advantage for the State or Commonwealth in the form of a proprietary interest referable to Mr Houston's land. Indeed, the restrictions imposed by the impugned legislation have not produced any interest of a proprietary nature in favour of either the State or Commonwealth. Nor have the restrictions freed existing proprietary rights held by the State or Commonwealth from the burden of a proprietary interest held by Mr Houston. As the High Court emphasised in Plain Packaging, references to receipt of "identifiable and measurable advantages" as capable of amounting to an acquisition must be read as advantages of a proprietary nature (see at [172] per Hayne and Bell JJ and at [302]-[305] per Crennan J). The identifiable or measurable advantages advanced in this case are not of that kind.

No "taking" or "loss" in the relevant sense 70 There is another reason why Mr Houston has no reasonable prospects of establishing an "acquisition" by operation of the impugned legislation. That is because the four alternative propositions advanced (see [32] above) with respect to a "taking" or "loss" of Mr Houston's proprietary rights do not amount to an "acquisition" for the purposes of s 51(xxxi). No proprietary interests have been taken from Mr Houston as a result of the operation of the impugned legislation. As the State contended, Mr Houston has never possessed an unrestricted right to clear native vegetation on his land. Even prior to the Native Vegetation Act, his rights and interests in his land were subject to numerous conditions and limitations (see further at [76] ff below for the analogy with the requirement to obtain consent for land development). 71 First, restrictions on the use of land do not generally amount to the acquisition of property. The Tasmanian Dam Case illustrates how the mere imposition of restrictions on the use of property will not generally constitute an acquisition for the purposes of s 51(xxxi). The High Court held there that s 51(xxxi) did not apply where restrictions were imposed upon Tasmania's use of property under the World Heritage Properties Conservations Act 1983 (Cth). That is because it was held that neither the Commonwealth nor anyone else had acquired a proprietary interest in any property because of the operation of that legislation (see at 145-146 per Mason J, at 181-182 per Murphy J and 247-248 per Brennan J. This fundamental point is neatly captured in what Deane J said in the Tasmanian Dam Case at 283 (emphasis in original): … [L]aws which merely prohibit or control a particular use of, or particular acts upon, property plainly do not constitute an "acquisition" of property for the purposes of the Commonwealth. Commonly, such laws are of general application and apply to property by reason of its being property of a particular description or by reference to the nature of the use or act prohibited or controlled … The mere extinguishment or deprivation of rights in relation to property does not involve acquisition. 72 The circumstances here have some similarities with Alcock v Commonwealth [2013] FCAFC 36; 210 FCR 454. That involved an appeal from a determination of a primary judge that there was no arguable case s 51(xxxi) applied to various Victorian legislation which had the effect of prohibiting the taking of abalone from a marine park or marine sanctuary. The applicant, who held a licence under State legislation which entitled him to take abalone, contended that the Victorian legislation contravened s 51(xxxi). He relied upon cases such as ICM Agriculture and Spencer High Court in support of his contention that there was a formal or informal agreement between the Commonwealth and the State. The primary judge found that even if it were assumed that there was a formal or informal intergovernmental agreement as alleged, the applicant's case would fail because, on the pleaded facts, no acquisition of property had occurred within the meaning of s 51(xxxi) whether under legislation, a formal or informal agreement or otherwise. 73 An appeal against those findings was unsuccessful for the following reasons. First, the applicant's rights as a licensee arose from Victoria's fisheries legislation and were subject to statutory variations (at [81]). Secondly, the pleaded formal or informal intergovernmental agreement did not supply any fact which might engage the operation of s 51(xxxi) which did not affect the State's power to legislate with respect to fisheries (at [82]). Thirdly, and significantly, the Full Court found at [83] that, in any event, "there was no acquisition of property on any view as no other entity gained a benefit thereby". The Full Court concluded that there was no arguable case for the infringement of the Constitutional guarantee in s 51(xxxi) and the primary judge was correct to so find. 74 Secondly, Mr Houston does not have reasonable prospects of establishing a relevant "acquisition" in respect of personal property in his own labour or the labour of others engaged by him to fulfil his legal obligations in terms of land management. None of the impugned legislation required him positively to manage native vegetation, nor perform any labour at all. To the extent that a complaint was directed to s 38 of the Native Vegetation Act, which empowered the Director-General to issue directions for remedial work where native vegetation had been cleared in contravention of that Act, any such direction need not require the landholder to carry out such work. As the State pointed out, any such direction did not oblige the landholder personally to carry out the work: it would be open to the landholder to engage a contractor to carry out the necessary work. Of course this may involve a financial cost to the landholder, but that is not the same as acquiring Mr Houston's labour or the labour of any other person. For completeness, I consider that there is also considerable force in the State's contention that s 38 is properly viewed as a standard feature of regulatory schemes in that it provides for remediation in the event of a contravention. Accordingly, it is no more an acquisition than is a forfeiture penalty. 75 Thirdly, even if it could be established that the impugned legislation operated to take Mr Houston's proprietary rights and interests in his land and/or his personal property in his own and other labour used by him to manage native vegetation, those rights are inherently susceptible to variation by regulation, even to the point of sterilisation (Tasmanian Dam Case at 145-146 per Mason J, at 181 per Murphy J and at 247-248 per Brennan J; see also Telstra Corporation Ltd v Commonwealth [2008] HCA 7; 234 CLR 210 at [48]-[49]; Cunningham v Commonwealth [2016] HCA 39; 259 CLR 536 at [43]-[48] per French CJ and Bell J, at [66]-[70] per Gageler J, at [169]-[172] per Keane J, at [222] and [235] per Nettle J and at [252]-[253] per Gordon J; and see also Plain Packaging at [363] per Kiefel J and the summary of Esposito v Commonwealth [2015] FCAFC 160; 235 FCR 1 at [77] ff below). 76 Fourthly, as foreshadowed above, the impugned regulatory regime is analogous to regimes which regulate land development generally and which regimes have been held not to attract s 51(xxxi). The following elements of the LLS Act highlight how the impugned regulatory regime operates similarly to legislative regimes regulating the development of land. (a) Div 4 of Pt 5A and Sch 5A identify allowable activity provisions which permit clearing in certain areas without the need for any approval or other authorisation under the LLS Act. (b) Div 5 of Pt 5A provides for authorisation of clearing under a code of practice, relevantly the Code. The content of such codes is dealt with in s 60W which provides that, in connection with authorising clearing, a code may set out circumstances in which a set aside area for native vegetation is required in connection with clearing, and provide for re-vegetation, weed control and other land management actions so as "to establish or maintain" that area or otherwise to protect areas that may be affected by such clearing. (c) Div 6 of Pt 5A and Sch 5B provide for a formal clearing approval involving the Native Vegetation Panel as set out in s 60ZE (this reflects the development consent process under NSW planning law). An approval may only be granted if a biodiversity assessment report in relation to the proposed clearing has been obtained and provided to the Panel (s 60ZG). Any approval must include a condition which requires the applicant to retire biodiversity credits under the Biodiversity Conservation Act 2016 (NSW) (s 60ZG(3)). Accordingly, neither the Native Vegetation Act nor Pt 5A of the LLS Act positively require Mr Houston to perform or engage labour. To the extent that he wishes to clear native vegetation, it is open to him to seek and obtain one of the various forms of approval or authorisation, some of which may involve the imposition of conditions that require certain off-setting actions. 77 These matters serve to underline the analogy between the scheme under the Code and conditions imposed on development consents. This analogy was referred to in Esposito at [55]-[57]. There, the Full Court (Allsop CJ, Flick and Perram JJ) emphasised that the ownership of land in fee simple is governed not only by the common law, but is also susceptible to variation by statute. With particular reference to the passage of the Environmental Planning and Assessment Act 1979 (NSW), the Full Court said that the common law rights attaching to fee simple in NSW have been varied extensively and have removed what would have been the appellants' otherwise unfettered right to build on their land as they please. 78 The Court added at [57] that when the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) came into force and a decision was subsequently made by the Minister under that Act, the appellants' rights were not diminished. That was because the appellants were not legally permitted to build residential dwellings on their land at any time and this state of affairs did not change with the enactment of the EPBC Act or the relevant Ministerial decision. 79 Finally, it is also relevant to note that in Esposito the Full Court rejected an argument that s 51(xxxi) was attracted because the EPBC Act diminished the value of the appellants' land because the appellants were denied the further possibility of zoning changes. The Full Court cited caselaw at [60] which stood for the proposition that it "is well established that s 51(xxxi) does not protect the value of an item of property from diminution but only the property itself from acquisition" (see Commonwealth v WMC Resources Ltd [1998] HCA 8; 194 CLR 1 at [193]-[194] per Gummow J and ICM Agriculture at [84] per French CJ, Gummow and Crennan JJ and [147] per Hayne, Kiefel and Bell JJ). 80 It is worth setting out what the Full Court said in Esposito at [61] because it is a direct answer to Mr Houston's claim that the impugned laws here amounted to an acquisition because they diminished the value of his property: In those circumstances, it is clear to us that the appellants continue to own all of the property they have always owned. What they have lost - the fulfilment of a value adding hope and with it the destruction of much of the value of their property - are not themselves proprietary in nature. It follows that the first claim under s 51(xxxi) must fail because of the absence of any acquisition of the appellants' property. 81 That reasoning applies here. As such, Mr Houston's claim that the impugned legislation denuded the value or viability of his land due to the additional costs of weed management, and therefore amounted to an acquisition for the purposes of s 51(xxxi), has no reasonable prospects of success.

Proportionality does not apply to question of "acquisition" under s 51(xxxi) 82 As noted above, Mr Houston's acquisition case relied not only on a claim that the State had taken his property and derived a consequential benefit, but also claimed that there was an acquisition resulting from the disproportionate and discriminatory burden cast upon him and other large landholders, relying upon Gageler J's observations in Emmerson at [121]-[122]. One difficulty which confronts Mr Houston is that Gageler J's observations were in dissent. Another difficulty is that they were expressly directed to a case which dealt with the application of a provision such as s 51(xxxi) in the particular context of forfeiture laws, which might appropriately be described as sui generis, as Gageler J himself acknowledged at [110]-[112]. There is no indication that Gageler J intended his observations to have a wider application beyond forfeiture cases. 83 Mr Houston's case is not assisted by what Kiefel CJ and Keane J said in Palmer at [53]-[61]. No issue of s 51(xxxi) was raised in that proceeding. Rather, the proceeding related to the operation of s 92 of the Constitution and the passages relied upon by Mr Houston need to be read in that particular context. The passages provide no support for Mr Houston's contention that the concept of proportionality or structured proportionality is relevant to s 51(xxxi), as opposed to s 92. Indeed, Kiefel J (as her Honour then was) explicitly rejected that very proposition in Plain Packaging at [340]. 84 In addition, the application of proportionality in the way advanced by Mr Houston is contrary to High Court authority, as it would extend to the operation of s 51(xxxi) well beyond circumstances in which the Commonwealth and/or the State under Mr Houston's State extension point "acquired" property in the relevant sense (see [64] ff above). While acknowledging that summary dismissal should not be used to stultify development of the law, the application of a proportionality test which considers the "discriminatory" or "disproportionate" effect of impugned laws on the property rights of landholders would be a radical departure from the "bedrock principle" underpinning s 51(xxxi): namely there can be no acquisition of property by the Commonwealth or another without an acquisition of an interest in property (see Plain Packaging at [169] per Hayne and Bell JJ). 85 As such, I find that Mr Houston has no reasonable prospects of establishing an acquisition through this alternative limb.

(c) State extension point 86 It is strictly unnecessary to address and determine this matter because Mr Houston's Constitutional claims lack reasonable prospects because of what is said above concerning the untenable nature of the "acquisition" which he claims attracts the operation of s 51(xxxi). For completeness, however, I will explain why I consider that Mr Houston's State extension point is also untenable. 87 The starting point in assessing Mr Houston's prospects of establishing this part of his case is the fact that s 51(xxxi) applies to the Commonwealth and not directly to any State. In the absence of any comparable provision under State law, Mr Houston is driven to argue that s 51(xxxi) somehow extends to the State in this instance (noting the hurdle created for Mr Houston by Durham Holdings Pty Ltd v New South Wales [2001] HCA 7; 205 CLR 399). In Alcock, the Full Court (Rares, Buchanan and Forster JJ) said at [82]: The postulation of an arrangement of some sort between the Commonwealth and Victoria did not supply any factor which might engage the operation of s 51(xxxi) in a way which would affect the authority of the Victorian Parliament or the validity of the Marine Parks Act. Even if there was some arrangement (formal or informal) between the Commonwealth and Victoria which was reflected in the Marine Parks Act, that would not signify that Victorian legislation, dealing with areas where Victoria had title, property and full legislative capacity, was invalid, as s 51(xxxi) of the Constitution is not addressed directly to the power of a State Parliament. 88 Secondly, and providing a qualification to the first proposition, it has been recognised that s 51(xxxi) has some limited capacity to extend to a State. In Magennis, a majority of the High Court (Latham CJ, Rich, Williams and Webb JJ) held that State legislation in the form of legislation providing for the settlement on land of war veterans was inoperative when it was used for the purposes of giving effect to an agreement which had been reached between the Commonwealth and the State. See also Tunnock v Victoria [1951] HCA 55; 84 CLR 42 and Pye v Renshaw [1951] HCA 8; 84 CLR 58. 89 In ICM Agriculture, it was held that the Commonwealth's power under ss 96 and 51(xxxvi) of the Constitution does not extend to the grant of financial assistance to a State on terms and conditions which require the State to acquire property on other than just terms (at [46] per French CJ, Gummow and Crennan JJ). Justice Heydon said at [252] that while States are at liberty to make uncompensated expropriations (subject to their own legislation and s 109 of the Constitution), "they are not at liberty to embark on schemes with the Commonwealth involving steps which include a failure by the Commonwealth to comply with s 51(xxxi)". 90 There is a lengthy analysis of Magennis in ICM Agriculture. In refusing to overrule Magennis, the plurality (French CJ, Gummow and Crennan JJ) referred to caselaw post-Magennis which stands for the proposition that the terms and conditions attached to a grant of financial assistance under s 96 "may sufficiently be disclosed in an informal fashion, falling short of an inter-governmental agreement …" (at [38]). At [40], the plurality refused leave to re-open Magennis on the basis that its reasoning was "sound", with reference to subsequent developments in the interpretation of the Constitution since it was decided. Those developments were said to be: (a) powers such as ss 81 and 83 of the Constitution do not confer a substantive spending power and the power to expend appropriated moneys must be found elsewhere in the Constitution or in Commonwealth laws; (b) s 51(xxxi) is not confined to the acquisition of property by the Commonwealth or its instrumentalities, but include acquisition by persons standing in no such position as the Commonwealth, its agencies and instrumentalities; (c) references to s 51(xxxi) as being "a very great constitutional safeguard" and that it "has assumed the status of a constitutional guarantee of just terms … and is to be given the liberal construction appropriate to such a constitutional provision" (referring to Clunies-Ross v Commonwealth [1984] HCA 65; 155 CLR 193 at 201-202 per Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ); (d) it was important to look beyond matters of legal form and have regard to the practical effect of an impugned law, including considering whether or not an impugned law or arrangement is a "circuitous device" (citing Bank of NSW v Commonwealth [1948] HCA 7; 76 CLR 1 at 359 per Dixon J); and (e) other caselaw which indicated that s 96 and the guarantee or prohibition provided by s 116 with respect to matters of religion indicated that ss 96 and 51(xxxi) "also should be read together" (at [45]). 91 As observed above, the presentation of Mr Houston's case left unclear the extent to which he relied upon Magennis. To the extent that he did so and he asserted that there was a relevant agreement or arrangement (formal, informal or otherwise) between the Commonwealth and the State relating to the operation of native vegetation clearance legislation in NSW so as to enable the Commonwealth to meet its commitments under the Kyoto Protocol, I do not consider that he has reasonable prospects of establishing any such claim having regard to Spencer Full Court. 92 To the extent that Mr Houston relies upon a "rights-based" approach to s 51(xxxi) so as to distinguish the outcome in the Spencer litigation, which I understood to be his primary contention, I accept the State's contention that this approach is unsupported by any High Court authority and is inconsistent with existing authority. It is fair to say that the principles relating to s 51(xxxi) are relatively well developed, as is reflected in cases such as Telstra Corporation; Smith v ANL Ltd [2000] HCA 58; 204 CLR 493; Esposito; ICM Agriculture; Plain Packaging; Spencer High Court and Spencer Full Court (and the cases referred to therein). Those authorities highlight the different themes which have arisen in determining whether or not s 51(xxxi) applies. Some of the authorities have turned on the issue whether property has been taken or acquired, which involves an examination of the nature and character of the relevant property rights as well as the extent to which there has been some statutory variation of those rights. Another theme is whether the relevant property is inherently susceptible to statutory variation. Another theme is whether the acquisition of property is no more than ancillary to the adjustment of competing rights, claims or obligations. A further theme, of which Emmerson is an example, is whether an acquisition is by its very nature antithetical to the notion of just terms. 93 None of those cases provide any support for Mr Houston's "rights-based" approach. This is made even clearer when attention is given to the specific limbs of his "rights-based" approach as identified at [44]-[45] above. 94 It is evident that the First and Second limbs of the "right-based" approach involve arguing that Magennis and ICM Agriculture left open the extension of s 51(xxxi)'s application to State legislation beyond circumstances in which a bilateral agreement or other informal arrangement required or conditioned a s 96 grant of Commonwealth financial assistance on the enactment of State legislation which acquired property other than on just terms. This in turn hinges on the statement by French CJ, Gummow and Crennan JJ in ICM Agriculture that the reasoning in Magennis was "sound, all the more so in the light of developments in the interpretation of the Constitution since Magennis was decided" (at [40]). Mr Houston contends that these developments include new interpretative approaches to implied Constitutional rights and freedoms. 95 However, this statement in ICM Agriculture must be read in context. The very next sentence states that those Constitutional developments "support the view taken by the majority [in Magennis] of the relationship between s 51(xxxi) and 96" (emphasis added). After considering the constitutional developments (which are summarised at [90] above), French CJ, Gummow and Crennan JJ concluded at [46] that the "result is that the legislative power of the Commonwealth conferred by ss 96 and s 51(xxxvi) does not extend to the grant of financial assistance to a state on terms and conditions requiring the state to acquire property on other than just terms" (emphasis added). Similarly, Hayne, Kiefel and Bell JJ recognised that the question arising in ICM Agriculture by reference to Magennis is "whether s 51(xxxi) intersects in some relevant manner with s 96", or more specifically "may the parliament fix a term or condition that requires compulsory acquisition of property by the state otherwise on just terms" (emphasis added) (at [136]). 96 As is evident, the extension of s 51(xxxi) to State legislation left open by Magennis and ICM Agriculture relied upon an examination of the terms and conditions upon which financial assistance was granted under s 96. It is in this context that the High Court made clear that the Commonwealth cannot use a "circuitous device" to circumvent the Constitutional guarantee in s 51(xxxi). The High Court in ICM Agriculture did not suggest that the reasoning in Magennis could be divorced from an examination of the terms and conditions of the s 96 grant or other exercise of Commonwealth legislative or executive power, and instead merely pursue an examination of the influence or otherwise of a Commonwealth purpose over the impugned State legislation, as contended for under Mr Houston's Second limb. 97 This is confirmed by French CJ, Gummow and Crennan JJ's discussion of Pye in ICM Agriculture at [36] (emphasis added): The argument rejected in Pye was that the exercise of the power to grant financial assistance under s 96 would be vitiated if shown to be for the purpose of inducing the state to exercise its powers of acquisition on less than just terms. The concept of improper purpose as a vitiating characteristic was rightly rejected. Section 96 says nothing about purpose. It authorises the making of grants on "such terms and conditions as the Parliament thinks fit". The constraints imposed by constitutional prohibitions or guarantees will be directed to the range of permissible terms and conditions rather than their underlying purpose. As this passage makes clear, Magennis and ICM Agriculture do not stand for the proposition that s 51(xxxi) constrains the purpose for which s 96 grants can be administered, only the permissible terms and conditions of such grants. Neither case lends any support to Mr Houston's case. 98 This aligns with the view taken by the Full Court in Alcock (see [87] above) and Spencer Full Court per Griffiths and Rangiah JJ at [172] and [210] and per Perry J at [353]-[354]. It is also consistent with Spencer High Court, where the appeal against summary dismissal was allowed because of the possibility of an informal agreement "conditioning the relevant Commonwealth funding" (emphasis added) on the State acquiring Mr Spencer's property, not some broader notion that the impugned State laws pursued a Commonwealth purpose (at [31]-[34] per French CJ and Gummow J and [46]-[49] per Hayne, Crennan, Kiefel and Bell JJ). 99 The Third limb of Mr Houston's "rights-based" approach as pleaded in [35A] of the FASOC (see [21] above) is contrary to over a century of High Court caselaw. As stated by Gaudron, McHugh, Gummow and Hayne JJ in Durham Holdings at [7] (footnotes omitted): 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. Moreover, the existence of the presumption [that the legislature does not intend to acquire property without compensation] referred to above suggests that the power, against the exercise of which the presumption operates, indeed exists. See also: Commonwealth v NSW [1915] HCA 17; 20 CLR 54 at 66 per Griffith CJ, at 77 per Barton J, at 98 per Isaacs J, and at 105 per Gavan Duffy J; Magennis at 403 and 405 per Latham CJ, at 416 per Dixon J and at 419 per Williams J; Pye at 78-80 per Dixon, Williams, Webb, Fullagar and Kitto JJ; Mabo v Queensland [1988] HCA 69; 166 CLR 186 at 202 per Mason J and WMC Resources at [149] per McHugh J. 100 Finally, to the extent that Mr Houston's rights-based approach relied upon the invocation of the concept of proportionality with respect to the State extension point, as already indicated there is authority which indicates that such an analysis has no application to s 51(xxxi) (see Plain Packaging at [340] per Kiefel J). Furthermore, its application to the State extension point would be contrary to numerous statements by the High Court that other heads of legislative power in s 51 cannot be used to circumvent s 51(xxxi). As stated by Gibbs J in Trade Practices Commission v Tooth [1979] HCA 47; 142 CLR 397 at 407 (footnotes omitted) I fully accept that the powers given by the other paragraphs of s. 51 do not authorize legislation for the acquisition of property (W. H. Blakeley & Co. Pty. Ltd. V. The Commonwealth (1953) 87 CLR 501 at 521 ; Attorney-General (Cth) v. Schmidt (1961) 105 CLR 361 at 371 and cases there cited) and that the court will not permit the adoption of "a circuitous device to acquire indirectly the substance of a proprietary interest without at once providing the just terms guaranteed by s. 51(xxxi) of the Constitution when that is done" (Bank of NSW v. The Commonwealth (1948) 76 CLR 1 at 349; and see Minister of State for the Army v. Dalziel (1944) 68 CLR 261). 101 Simply stated, if an acquisition of property is captured by s 51(xxxi), the authorities are clear that just terms must be provided, regardless of the proportionality of the means through which the law's purpose is sought to be achieved. Indeed, this was in part why Kiefel J rejected the application of proportionality to s 51(xxxi), namely that s 51(xxxi) "contains its own limits and conditions", the provision of just terms, the requirement for which "is not answered by a test of proportionality" (Plain Packaging at [340]). 102 I accept that some allowance must be made for the incremental nature of the development of Constitutional law principles but that does not warrant Mr Houston's proceeding going to trial in order to establish whether or not his novel "rights-based" State extension point should succeed. As I have emphasised, this part of Mr Houston's case is unsupported by existing authority, draws on cases which do not relate to s 51(xxxi), or relies upon propositions which have been rejected in other cases.

(d) Administrative law challenge 103 It is desirable to summarise or set out the relevant provisions of the LLS Act and the Code which are relevant to Mr Houston's claim that parts of the Code are ultra vires. 104 Relevantly the objects of the LLS Act include an object "to ensure the proper management of natural resources in the social, economic and environmental interests of the State, consistently with the principles of ecologically sustainable development (described in section 6(2) of the Protection of the Environment Administration Act 1991)" (s 3(e)). Part 5A of the LLS Act deals with land management of native vegetation. It applies to most rural areas of the State. Section 60N makes it an offence for a person to clear native vegetation in a regulated rural area unless inter alia the clearing is authorised by a land management (native vegetation) code under Div 5. Division 5 deals with the clearing of native vegetation under a code. Section 60S states that the clearing of native vegetation in a regulated rural area is authorised without any approval or other authority under Pt 5A if it is clearing carried out by or on behalf of the landholder in accordance with a code made under Div 5. 105 Section 60T empowers the Minister to prepare and make a code, but this may only be done with the concurrence of the Minister administering the Biodiversity Conservation Act 2016 (NSW) (ss 60T(1) and (2)). A code must be published on the NSW legislation website, which indicates that such a code is a legislative and not merely an administrative instrument (s 60T(4)). There is provision in s 60U for public consultation on the making of a proposed code and the Minister is obliged to consider any submissions duly made on the proposed code (s 60U(3)). 106 Section 60W deals with the content of codes. As is evident from its terms, it is quite prescriptive in specifying the various matters which may be addressed in a code. It provides: 60W Content of codes (1) A land management (native vegetation) code may make provision for or with respect to authorising the clearing of native vegetation on category 2-regulated land. (2) A code may, in connection with any clearing authorised by the code - (a) set out the circumstances in which a set aside area for native vegetation is required in connection with any such clearing, and (b) provide for the re-vegetation, weed control and other land management actions on category 1-exempt land or other land to establish or maintain a set aside area or to protect areas that may be impacted by any such clearing, and (c) authorise the re-categorisation of land in connection with any such clearing. (3) A code may (without limitation) make provision for or with respect to the following - (a) the clearing of native vegetation in particular regions or other areas, (b) the clearing of native vegetation in connection with particular activities, (c) the clearing of particular kinds of native vegetation, (d) when clearing of native vegetation may or may not be carried out, (e) the clearing of native vegetation that may continue to be carried out for the purposes of rotational farming practices that were in place as at 1 January 1990, (f) the manner in which clearing of native vegetation is to be carried out, (g) the giving of notice to Local Land Services and others before or after the clearing of native vegetation is carried out, (h) voluntary or mandatory certificates from Local Land Services confirming that the clearing may lawfully be carried out and certificates from Local Land Services authorising minor variations of the code (including the duration of any such certificates), (i) the keeping of records relating to the clearing of native vegetation, (j) the conservation of biodiversity, (k) the transition to this Part of clearing and other requirements under property vegetation plans under the Native Vegetation Act 2003, (l) any other matter prescribed by the regulations. 107 "[C]ategory 2-regulated land" is defined in s 60D of the LLS Act to mean areas of the State to which Pt 5A applies which is designated as category 2-regulated land on the native vegetation regulatory map (as prepared and published under Div 2 of Pt 5A). 108 Sections 60T and 60W provided the source for the making of the Code in 2018. Part 2 of the Code deals with invasive native species. Division 4 of Pt 5 of the Code deals with removing native vegetation from regulated rural areas. It is desirable to set out cl 82 of the Code: 82 Permitted clearing on native vegetation (1) This Division authorises clearing of native vegetation from Category 2-regulated land in accordance with the conditions in this Division. (2) In the three year period immediately following publication of this Code, the maximum area on any landholding from which native vegetation may be cleared under this Division is the area determined in accordance with Schedule 4 to this Code. (3) For the purposes of determining the area from which native vegetation has been cleared under this Division, native vegetation is taken to have been cleared on the date on which a mandatory code compliant certificate is issued. 109 The reference in cl 82(3) to "a mandatory code compliant certificate" is a reference to the instrument in cl 83. Under that provision, clearing of native vegetation can only be carried out under Div 4 after Local Land Services has issued a mandatory code compliant certificate for the intended clearing. Clause 83(2) imposes limitations on the issue of such a certificate. 110 Clause 84 of the Code imposed landholding restrictions on the clearing of native vegetation. Under cl 84(3) clearing of native vegetation is prohibited on a landholding that is a "small holding". Further, in cl 88 it is provided that for every area of category 2-regulated land identified in a mandatory code compliance certificate that is an area from which native vegetation could be cleared, the certificate must require the establishment of a set aside area on category 2-regulated land on the same landholding. 111 These are but a broad summary of some of the provisions in the Code. They serve to indicate, however, the prescriptive nature of the Code and the checks and balances it provides for the clearing of native vegetation. I am not persuaded that any of its provisions are ultra vires the LLS Act. Mr Houston does not contend that the various procedural requirements set out in ss 60T and 60U, including public consultation, have not been complied with. Nor did I understand him to complain that the content of the Code did not correlate with the power conferred by s 60W(3) for a code to make provision for or with respect to the numerous matters set out therein. Rather, as I have emphasised, Mr Houston's complaint seems to be directed to the merits or equity of the terms and operation of the Code. That is not a proper basis upon which the Code could be held to be invalid. Mr Houston effectively invites the Court to descend into an impermissible review of the merits of the Code (see [114] ff below). 112 Schedule 4 to the Code, which Mr Houston says is also ultra vires, provides for what is described as "maximum equity clearing in the first three years" (referring to cl 82(2) of the Code). Schedule 4 comprises a table which specifies the percentage of the area of landholdings to which Pt 5A of the LLS Act applies that is category 2-regulated land and which can be cleared under Div 4. The table identifies the percentage of land which can be cleared, ranging from 50 hectares to 50,000 hectares. The maximum area of any landholding from which native vegetation may be cleared in the three year period immediately following publication of the Code is the area determined in accordance with whichever is the greater of: (a) 25 percent of the estimated total area from which native vegetation may be cleared up to a cumulative maximum of 625 hectares; or (b) the total area from which native vegetation may be cleared up to 100 acres. 113 Mr Houston contends that this table supports his contentions of disproportionality and discrimination because of what he claims to be the unduly harsh and disproportionate effect on large landholders. In particular, he emphasises that the cap of 625 hectares applies to any parcel of land in the range of 7,500 hectares up to 50,000 hectares. He submitted that this cap operated to render the farming of large landholdings unviable. 114 It is convenient to deal first with Mr Houston's claim that the Code is inconsistent with the statutory objects set out in s 3 of the LLS Act. As noted above, one of those objects is described in s 3(e) as ensuring "the proper management of natural resources in the social, economic and environmental interests of the State, consistently with the principles of ecologically sustainable development" as described in s 6(2) of the Protection of the Environment Administration Act 1991 (NSW). Mr Houston did not contend that the Code was in some way inconsistent with those principles of ecologically sustainable development (ESD). Rather, as the pleading in [30A(1)(b)] of the FASOC makes clear, his complaint is that the operation and effect of the Code results in an "outcome" which is inconsistent with that object because "its oppressive and prescriptive terms result in the risk of no management or suboptimal management of invasive native species". This pleading is not clearly expressed. Its wording strongly suggests, however, that Mr Houston is inviting the Court to assess the merits of the impugned parts of the Code. If so, that is not a legitimate basis for impugning the Code and I regard the claim to be untenable. 115 It is, of course, well established that inconsistency between delegated legislation and a parent statute can result in invalidity. As French CJ stated in Plaintiff M47/2012 v Director-General of Security [2012] HCA 46; 251 CLR 1 at [54], "delegated legislation cannot be repugnant to the Act which confers the power to make it". A leading example is Morton v Union Steamship Company of New Zealand Ltd [1951] HCA 42; 83 CLR 402, where regulations made under the Excise Act 1901 (Cth) were held to be invalid where they imposed "a distinct and independent addition of liability to the liabilities" already dealt with at length in the Act (at 412). It is equally well established, however, that inconsistency needs to be clearly shown, which merely reflects the general principle that the Court should act reasonably in order to save legislation from invalidity (see, for example, Davies v Western Australia [1904] HCA 46; 2 CLR 29). A difficulty may arise where the nature of the alleged inconsistency is that between delegated legislation and an explicit object in the parent Act, particularly where the relevant object is expressed in broad terms and considerable discretion is left to the executive in creating delegated legislation to give effect to that objection. That difficulty arises here. 116 Self-evidently the concepts described in s 3(e) of the LLS Act are very broad, referring as they do to notions of "the proper management of natural resources", "in the social, economic and environmental interests of the State", and consistently with ESD principles. That the claimed inconsistency with the statutory object amounts to an impermissible challenge to the merits of the Code and not to the question of the power to make the Code is made particularly stark by the latter part of the relevant pleading and the reference to the "oppressive and prescriptive terms" of the Code resulting in the risk of "no management or suboptimal management of invasive native species" (emphasis added). 117 For the following reasons I do not consider that the other limb of Mr Houston's administrative law challenge has reasonable prospects. That limb relates to the pleading at [30A(1)(a)] of the FASOC and the claim that the impugned regulations imposed an unreasonable and/or disproportionate burden on Mr Houston. It is well settled that, while delegated legislation may be rendered invalid for unreasonableness/disproportionality, these grounds relate to the fundamental question whether the impugned regulation is a real or valid exercise of power. Thus, for example, in South Australia v Tanner [1989] HCA 3; 166 CLR 161 at 167-168, the majority (Wilson, Dawson, Toohey and Gaudron JJ) said (emphasis added): … the test of validity is whether the regulation is capable of being considered to be reasonably proportionate to the end to be achieved … It is not enough that the court itself thinks the regulation inexpedient or misguided. It must so lacking in reasonable proportionality as not to be a real exercise of the power. 118 This approach to reasonable proportionality as a ground of review of delegated legislation is also reflected in what French CJ said in Corporation of the City of Adelaide at [61] (footnotes omitted): The use of the term "proportionality" in Tanner did not draw upon any novel or distinct theory of judicial review of delegated legislation. It was used to designate an evolved criterion defining the limits of a particular class of statutory power. As discussed earlier in these reasons, "proportionality" is a term used to designate criteria, going to validity, of rational law-making and decision-making in the exercise of public power. Kiefel J, writing extra-curially, has referred to its application in such disparate fields as criminal responsibility, sentencing, the permissible scope of qualifications upon human rights and freedoms under constitutional and statutory charters, intrusions upon constitutional guarantees, immunities and freedoms, express and implied, as well as purposive law-making power. Other fields in which it has been said proportionality operates include apportionment of liability in negligence cases and in the application of equitable estoppel against the "disproportionate making good of the relevant assumption". Each of its applications has its own history. 119 It is also well settled that there is a high threshold in making good an unreasonable disproportionality challenge to legislation (see French CJ in Corporation of the City of Adelaide at [49]). The fundamental point has repeatedly been emphasised that the critical question is the existence and ambit of a power to make delegated legislation, not the expediency or merits of the exercise of the power (see, for example, French CJ in Corporation of the City of Adelaide at [48]-[50] and the cases cited therein). 120 In Murphy v Electoral Commissioner [2016] HCA 36; 261 CLR 28, Kiefel J said at [65] (footnotes omitted and emphasis added): The aim of any testing for proportionality is to ascertain the rationality and reasonableness of a legislative restriction in a circumstance where it is recognised that there are limits to legislative power. Proportionality analysis does not involve determining policy or fiscal choices, which are the province of the Parliament … Those observations are equally apposite to a challenge to the validity of delegated legislation based upon disproportionality. The central focus must be the contemplated ambit of power and the rational connection between the impugned regulation and the enabling power under which it was made. 121 In my view, the fundamental flaw in this limb of Mr Houston's ultra vires case is that his claims of disproportionality and discrimination disguise what is in substance a challenge to the merits or equity of the impugned regulations. As stated by Black CJ and Weinberg J in Vanstone v Clark [2005] FCAFC 189; 147 FCR 299 at [149]: A court will not easily be persuaded to strike down delegated legislation on the ground of lack of reasonable proportionality. The reason is plain. Courts are naturally wary of the dangers of becoming embroiled in merits review under the guise of judicial review. Unless "proportionality", as a basis for challenge, is kept strictly in check, there is a risk that courts will transgress their legitimate function. As the analysis above of the Code reveals, the Code reflects a series of countervailing checks and balances. Those checks and balances reflect policy choices by the Executive. The role of Court is not to second-guess those policy choices which, as I have already indicated, are not inconsistent with the object in s 3(e) of the LLS Act. Those checks and balances are evident on the face of the Code, including in the table to Sch 4. 122 It is appropriate to conclude at this stage of the proceeding that Mr Houston's challenge to the regulations under this limb has no reasonable prospects. The expert and lay evidence which Mr Houston says he intends to call if the matter goes to trial cannot overcome the essential problem that his challenge is directed to the merits of the impugned laws and not to the critical question of the existence of the power to make such regulations and the rational connection between those regulations and the statutory powers under which they were made. 123 There are some cases involving a challenge to the validity of subordinate legislation where it may be necessary to have detailed evidence concerning the practical effect of that legislation. An example is Australian Energy Regulator v Snowy Hydro Limited [2014] FCA 1013. That case involved a claim that the respondent had contravened cl 4.9.8(a) of the National Electricity Rules. Those rules required a body such as Snowy Hydro to comply with a dispatched instruction from the Australian Energy Market Operator (who operated the National Electricity Market (NEM)) unless to do so would, in the recipient's opinion, "be a hazard to public safety or materially risk damaging equipment". In a cross-claim Snowy Hydro challenged the validity of cl 4.9.8(a) on grounds of unreasonableness and/or lack of reasonable proportionality to the subject matter of the grant of the rule-making power. It was common ground that detailed evidence would be required to explain how the NEM worked in practice and that there were contentious factual issues, mainly of a technical nature, which would also require evidence. Justice Beach declined to have the validity challenge heard and determined as a separate question under r 30.01 of the 2011 FCRs. One of the reasons for declining to use the separate question process was the need for expert and lay evidence on factual issues and the undesirability to split the evidence of such witnesses in the event that the matter proceeded to trial. 124 Snowy Hydro is far removed from the circumstances here, which involves an application for summary judgment and/or strike out, and not the appropriateness of a separate question. It is sufficient to determine the State's interlocutory application on the usual basis that the factual allegations in the FASOC could be established at trial. As I have emphasised, however, even on that assumption, Mr Houston has no reasonable prospects of establishing that the impugned regulations are beyond the ambit of the power under which they were made.

Conclusion 125 For these reasons, I am satisfied that the State has discharged its onus of establishing that Mr Houston has no reasonable prospect of successfully prosecuting the proceeding. Accordingly, judgment will be entered for the State and Mr Houston will be ordered to pay the State's costs. I certify that the preceding one hundred and twenty-five (125) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Griffiths.

Native Vegetation Act 2003(NSW)ss 12, 38

Environment Administration Act 1991(NSW)s 6(2)

Biodiversity Conservation (Saving and Transitional) Regulation 2017(NSW)

Native Vegetation Regulation 2005(NSW)

Mr Spencer (the Natural Resources Management (Financial Assistance) Act 1992(Cth)

National Parks and Wildlife Conservation Amendment Act 1987(Cth)

World Heritage Properties Conservations Act 1983(Cth)

Environmental Protection and Biodiversity Conservation Act 1999(Cth)

Local Land Services Act 2013(NSW)ss 3(e), 60T-U, 60W, 60ZE, 60ZG

Judiciary Act 1903(Cth)ss 40, 78B

Federal Court Rules 2011(Cth)rr 16.21(1), 30.01, 40.51

drasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 Clunies-Ross v Commonwealth [1984] HCA 65; 155 CLR 193 Commonwealth v NSW [1915] HCA 17; 20 CLR 54 Commonwealth v Tasmania [1983] HCA 21; 158 CLR 1 Commonwealth v WMC Resources Ltd [1998] HCA 8; 194 CLR 1 Cunliffe v Commonwealth [1994] HCA 44; 182 CLR 272 Cunningham v Commonwealth [2016] HCA 39; 259 CLR 536 Davies v Western Australia [1904] HCA 46; 2 CLR 29 Durham Holdings Pty Ltd v New South Wales [2001] HCA 7; 205 CLR 399 Esposito v Commonwealth [2015] FCAFC 160; 235 FCR 1 Fortescue Metals Group v Warrie on behalf of the Yindjibarndi People [2019] FCAFC 177; 273 FCR 350 General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125 Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; 179 CLR 297 Houston v State of New South Wales [2020] FCA 502 ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; 240 CLR 140 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; 167 FCR 372 JT International SA v Commonwealth [2012] HCA 43; 250 CLR 1 Kimber v The Owners Strata Plan No. 48216 [2017] FCAFC 226; 258 FCR 575 Kitoko v University of Technology Sydney [2021] FCA 360 Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; 178 FCR 401 Mabo v Queensland [1988] HCA 69; 166 CLR 186 Morton v Union Steamship Company of New Zealand Ltd [1951] HCA 42; 83 CLR 402 Murphy v Electoral Commissioner [2016] HCA 36; 261 CLR 28 Newcrest Mining (WA) Ltd v Commonwealth [1997] HCA 38; 190 CLR 513 P J Magennis Pty Ltd v Commonwealth [1949] HCA 66; 80 CLR 382 Palmer v Western Australia [2021] HCA 5; 388 ALR 180 Plaintiff M47/2012 v Director-General of Security [2012] HCA 46; 251 CLR 1 Pye v Renshaw [1951] HCA 8; 84 CLR 58 Smith v ANL Ltd [2000] HCA 58; 204 CLR 493 South Australia v Tanner [1989] HCA 3; 166 CLR 161 Spencer v Commonwealth of Australia [2010] HCA 28; 241 CLR 118 Spencer v Commonwealth [2015] FCA 754; 240 FCR 282 Spencer v Commonwealth [2018] FCAFC 17; 262 FCR 344 Telstra Corporation Ltd v Commonwealth [2008] HCA 7; 234 CLR 210 Trade Practices Commission v Tooth [1979] HCA 47; 142 CLR 397 Trkulja v Google LLC [2018] HCA 25; 263 CLR 149 Tunnock v Victoria [1951] HCA 55; 84 CLR 42 UBS AG v Tyne [2018] HCA 45; 265 CLR 77 Vanstone v Clark [2005] FCAFC 189; 147 FCR 299

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Cases Cited (50)

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