PJ Magennis Pty Ltd v Commonwealth

After the proclamation under s. 4 (3) had appeared, the Closer Settlement (Amendment) Act 1907 was further amended. It was done by Act No. 14 of 1946 and Act No. 48 of 1948. One amendment made was to add a new sub-section (sub-s. (4)) to s. 4 of the principal Act. Paragraph (b) of the new sub-section provides that "the compensation to be paid in respect of any such resumption shall be the value of the land as assessed by an advisory board, or where an appeal has been made as determined by the Land and Valuation Court." To this paragraph there is a proviso. The purpose of the suit is to overcome the operation of the proviso. It provides that where any such resumption is made for the purposes of the scheme contained in the agreement approved and ratified by the War Service Land Settlement Agreement Act 1945 N.S.W. certain provisions shall apply which are then set out. The effect of these provisions is to limit the value at which the Advisory Board may assess the land. The limitation is by reference to the value obtaining on 10th February 1942.

If the owner has agreed not to claim compensation in excess of the value assessed by the Board, the value the Board may fix is restricted to not more than fifteen per cent over the value as at that date. If the owner has not so agreed, the value the Board may fix or the Court determine is restricted to the value as at that date, that is, without the addition of fifteen per cent.

The date 10th February 1942 is that mentioned in the National Security (Economic Organization) Regulations as a reference point for various purposes, including the control of the price of land.

The plaintiff says that it is intended to resume its land for the purposes of the scheme contained in the agreement to which the proviso refers, and not unnaturally it objects to its land being resumed at a value which doubtless is as remote from the present in amount as it is in time.

The agreement ratified by the War Service Land Settlement Agreement Act 1945 N.S.W. (No. 6 of 1946) is an agreement made on 28th November 1945 between the Commonwealth and the State of New South Wales.

According to recitals contained in the agreement, it was made in order to carry into effect proposals agreed to at a conference of Commonwealth and State Ministers with a view to the settlement on land in the State of discharged members of the Forces and other eligible persons.

The plaintiff contends that the agreement is not binding upon the Commonwealth as a valid and enforceable obligation. From this it goes to the proposition that the State statute is not effective to resume its land at the value prescribed by the proviso.

I am quite unable to perceive how this second proposition follows from the first. The State law cannot be invalid, that is, unless some inconsistent Federal law is produced.

If, because of the unenforceability of the agreement, s. 4 (3) ceases to authorize the resumption of the plaintiff's land or s. 4 (4) (b) for that reason does not operate to restrict the value which may be assessed or determined, it must be because the State enactment so intends. But how possibly could such an intention be extracted from the provisions?

When s. 4 (4) (b) speaks of a resumption made for the purposes of the scheme contained in the agreement approved and ratified by the State statute, it is doing no more than describing a plan set out in an instrument the subject of a public transaction. It implies nothing as to its legal status or enforceability. Still less does it imply that the provisions which it proceeds to set out shall have no application if it is found that the agreement is not a binding obligation of the Commonwealth legally enforceable in the courts of justice.

To import such an unexpressed term into a statute and make it a resolutive condition has, I believe, no warrant either in principle or in precedent.

Whether the resumption is made for the purposes described is a matter left to the Advisory Board and the Governor in Council. If these authorities have not sufficient faith in the fulfilment of the expectations that are raised by the execution of the agreement on behalf of the Commonwealth, doubtless they will not resume land for the purposes of the scheme. But if they are satisfied, why should the statute be read as meaning that they cannot act under it unless the agreement can be enforced by legal sanctions?

Let it be assumed that s. 4 (3) must now be treated as authorizing two different forms of acquisition, that is, acquisitions for two different purposes, for closer settlement generally and for the purposes of the scheme. Even so, it is no less an acquisition for the purposes of the scheme because the obligation of the agreement is found to be political and not legal.

What considerations, whether of logic or of practical affairs, justify the introduction of a condition that the agreement must bind the Commonwealth as a legal obligation before the purpose which the State provision describes can animate the Advisory Board and the Governor in Council?

If the agreement is examined it will be found that there are not a few clauses which depend on, or provide for, agreed action by State and Commonwealth, and the general tenor of the document suggests rather an arrangement between two governments settling the broad outlines of an administrative and financial scheme than a definitive contract enforceable at law.

It is not my purpose to discuss the agreement in detail and in order to illustrate how much future concurrence of the governments is needed it is enough to refer to the following clauses: - 4 (2): 6 (4): 9: 10 (b) (c) and (d): 13 (3): 15 (1) and par. (b) of the definition of "eligible person" in clause 2 (1).

It is, I think, a question whether the agreement could be treated as a contract enforceable by suit. Certainly many clauses are not susceptible of legal enforcement. Surely the operation of the State statute does not depend on the question.

But it was not on this ground that the plaintiff denied obligatory force to the agreement. The execution of the agreement on behalf of the Commonwealth was authorized by a Federal statute: No. 52 of 1945. The argument assumed that, if the Federal statute authorizing the execution of the document on behalf of the Commonwealth was valid, the agreement formed a binding legal obligation of the Commonwealth. But it attacked the validity of the Federal Act as outside legislative power. It was conceded that the general subject of soldier settlement might fall within the defence power. But two reasons were assigned for the conclusion that the power would not support Act No. 52 of 1945. One reason is that the agreement is not confined to discharged servicemen but is capable of extension to other classes of people. The other is that, according to the argument, part of the subject of the agreement is the acquisition of property. A law upon that subject can be supported not under the general powers but only under s. 51 (xxxi.). It is said that the law authorizing the execution of the agreement is a law for the acquisition of property; but s. 51 (xxxi.) will not support it because the terms contemplated are not just.

For the reasons I have given, whether all this is right or wrong, it does not appear to me to help the plaintiff to escape s. 4 (3) and s. 4 (4) (b) of the State statute. But as I think it is quite wrong, it is better that I should say so.

The first reason given for impeaching the validity of No. 52 of 1945 depends on the definition of "eligible person" in clause 2 of the agreement. The scheme is for the purpose of settling "eligible persons" on the land. The definition of the expression is in two paragraphs.

Paragraph (a) deals with discharged members of the Forces: paragraph (b) adds a class of persons (if any) which the Commonwealth with the concurrence of the State determines shall be eligible to participate in land settlement under the scheme. Even if this paragraph would cover persons completely outside the principle of rehabilitating servicemen and their dependants, a thing which other clauses make very doubtful, it would not matter. The whole agreement would not fall outside the subject of the Commonwealth power, simply because the parties reserved to themselves the right of extending it by future agreement and failed to restrict the reservation to the subjects of Federal authority.

The second reason assigned for saying that the Federal Act is void gives to the doctrine that a law with respect to the acquisition of property must rest on s. 51 (xxxi.) to the exclusion of other powers an application which appears to me to be completely outside its scope. All Act No. 52 of 1945 (War Service Land Settlement Agreements Act 1945) did is to provide that the execution by or on behalf of the Commonwealth of agreements between the Commonwealth and the States, naming them, substantially in the forms in the schedules was thereby (that is by the Act) authorized. There were two agreements scheduled. The agreement with New South Wales executed in pursuance of the authority is substantially in the schedule form appropriate to that State.

A legislative authority of this kind removes possible objections based on such authorities as Commercial Cable Co. v. Government of Newfoundland [1] and The Commonwealth v. Colonial Ammunition Co. Ltd. [2] ; it puts beyond doubt the authority of the signatory to execute the instrument on behalf of the Commonwealth; and it secures for the executive government Parliamentary approval of the transaction. But it goes no further. It does not otherwise change the legal character of the instrument or of the transaction it embodies. It certainly does not convert the terms of the agreement into the provisions of a law. The statute does not authorize the acquisition of property. It contains no provision whatever about property. It is entirely concerned with the execution of an agreement. I should say that it was a law with respect to a matter incidental to the execution of a power vested by the Constitution in the Government of the Commonwealth and was an exercise of the legislative power conferred on the Parliament by par. (xxxix.) of s. 51.

1. (1916) 2 A.C. 610. 2. (1924) 34 C.L.R. 198.

Whatever the agreement might say about the acquisition of property I fail to see how the statute could be a law with respect to the acquisition of property that must be justified by par. (xxxi.) or be ultra vires.

What the agreement does say about the acquisition of property in fact concerns acquisition by the States. It is needless to discuss its provisions at length. The scheme it contains is one for the land settlement of servicemen in which the Commonwealth and State bear in equal proportions the deficiency arising from the difference between the cost of acquiring the land, of its development and improvement and the purchase price obtained from the settler. Certain functions in carrying out the arrangement fall to one government, certain functions to the other. So with the burden of costs of particular services performed. Some things are to be done in conjunction or in consultation.

But for the purpose in hand the provision that matters is clause 11 which is as follows: - "11. (1) The State shall - (a) set apart or resume, as the case may be, for settlement such land comprised in an approved plan of settlement as is Crown land; and (b) acquire compulsorily or by agreement and at a value not exceeding that ruling on the tenth day of February, One thousand nine hundred and forty-two, private land or lands held under lease from the Crown comprised in an approved plan of settlement. (2) The State shall subdivide develop and improve the land to a stage where it can be brought into production by a settler within a reasonable time having regard to the type of production proposed."

Because it is provided that the State shall exercise its powers, legislative or executive, in this manner, it is said that the enactment authorizing the execution of the agreement on behalf of the Commonwealth is a law with respect to the acquisition of property. Thus, because the State undertakes to exercise its powers of acquisition, it is argued, apparently, that there is therefore an acquisition "with respect to" which the Commonwealth legislates when it passes a law authorizing the execution of the agreement containing the State's undertaking.

It could hardly be more remote from the real purpose of s. 51 (xxxi.) which is to furnish the Commonwealth with a legislative power of acquiring property and providing for the acquisition of property by its agencies and instrumentalities and perhaps by persons standing in no such relation to the Commonwealth for purposes within its legislative competence, at the same time imposing the condition that it must be on just terms.

The State is bound by no such condition and, however hard or unjust it may be considered, there is nothing in s. 51 (xxxi.) to restrain the power of the State and nothing to prevent the Commonwealth including such a provision as clause 11 in an agreement with the State.

In my opinion there is no foundation for the view that Act No. 52 of 1945 is without validity.

It is perhaps worth remarking that the present plaintiff would have no locus standi to impeach the validity of the Act and the agreement unless, contrary to the opinion I have expressed, they could show that its invalidity affected the operation upon them of the State legislation (Anderson v. The Commonwealth [1] ).

On the hypothesis that the invalidity of Act No. 52 of 1945 could be established, an argument was advanced that s. 103 of the Re-establishment and Employment Act 1945 would then be the Federal legislation governing the relation of the States to the subject of the settlement of servicemen on the land and that the existence of the State legislation now in question involved an inconsistency with s. 109 of the Constitution. The argument was not developed and I think that an inspection of s. 103 is enough to show that it had no basis.

Another argument founded on s. 109 was suggested. It adopted the assumption that Act No. 52 of 1945 is valid and moreover that it gave the agreement the force of law. On that hypothesis it was suggested that the State legislation departed in some particulars from the agreement, e.g. slight differences in the persons it covered exist and the allowance of fifteen per cent in addition to the value of 10th February 1942 where the owner agreed to the Board's assessment is new. Accordingly it was urged that the State legislation was invalid.

There are two clear answers to this suggestion. First, Act No. 52 of 1945 does not give the agreement the force of law. Second, even if it were a law or the equivalent of one, the State legislation would be invalid only to the extent of the inconsistency and this would not avail the plaintiff.

In my opinion the demurrers should be allowed and judgment entered for the defendants with costs.

The question is whether the State of New South Wales can validly resume the plaintiff's land described in the statement of claim "for the purposes of the agreement" which the Parliament of the State ratified and approved by the War Service Land Settlement Agreement Act 1945 of New South Wales. The terms of the agreement are set out in the Schedule to that Act and also in the First Schedule to the War Service Land Settlement Agreements Act 1945 of the Commonwealth. By this Act the Parliament of the Commonwealth authorized the execution, by the Commonwealth or on its behalf, of an agreement substantially in accordance with the form in the First Schedule. The plaintiff alleges by its statement of claim that the State of New South Wales threatens and intends to resume the land for the purposes of this agreement: and in this demurrer this allegation is assumed to be correct.

The first recital in the agreement states that at a conference held at Canberra on 22nd August 1945 between Commonwealth and State Ministers they agreed to proposals for "the settlement on land in the State of discharged members of the Forces and other eligible persons." The second recital states that it is expedient to make an agreement "in order to carry into effect the said proposals." The first clause of the agreement says that it is not to have any force or effect or bind either party until it is approved by the Parliament of the State. This was done by the War Service Land Settlement Agreement Act 1945 of New South Wales to which reference has been made.

The agreement is a scheme for co-operation between the Commonwealth and the State in the settlement of persons of the class to whom the agreement applies upon the land in New South Wales. Both parties assume financial burdens in connection with the scheme. The State accepts the important part of providing land for the purposes of settlement and putting the settlers on the land. This part is completely within its constitutional powers. The Constitution indeed leaves the power to settle the lands within a State to the State. The State of New South Wales has elaborate legislative and executive machinery for the promotion of settlement on the land of the State. By the agreement the State accepts the duty of operating this machinery in order to carry out its part in the scheme. The agreement is in the nature of a political arrangement between the Commonwealth and the State to promote the settlement on the land of New South Wales of persons of the class for whose good the scheme is designed.

The Closer Settlement (Amendment) Act 1907 N.S.W. as it stood when the agreement was ratified by the State Parliament, gives power to the Governor of the State to resume land for closer settlement - s. 4: before this power can be exercised to resume any land, it is necessary for the Governor to notify that he proposes to consider the advisableness of acquiring the land for the purposes of closer settlement. A notification was made on 23rd August 1945 under s. 4 with respect to the plaintiff's land. That indeed was the date of the conference of Ministers at which the proposals embodied in the agreement were approved. Assent was given to the Commonwealth Act authorizing the execution of the agreement on 11th October 1945 and to the State Act ratifying it on 7th January 1946. In consequence of the approval and ratification of the agreement by the State Parliament, that legislature amended the State's War Service Land Settlement Act 1941 and the Closer Settlement (Amendment) Act 1907. These amendments were made by the War Service Land Settlement and Closer Settlement (Amendment) Act 1945, to which assent was given on 17th January 1946. The most important for present purposes of these amendments was made in consequence of clause 11 of the agreement. The material parts of this clause provide that the State shall (a) set apart or resume, as the case may be, for settlement such land comprised in an approved plan of settlement as is Crown land; and (b) acquire compulsorily or by agreement and at a value not exceeding that ruling on 10th February, 1942, private land or lands held under lease from the Crown comprised in an approved plan of settlement. The State had legislative and administrative machinery to purchase or compulsorily acquire land and it could by setting that machinery in motion carry out the part assigned to it by these parts of clause 11. There was no provision in any State law limiting value by reference to the rule laid down in clause 11. Section 3 of the War Service Land Settlement and Closer Settlement (Amendment) Act 1945, to which assent was given on 17th January 1946, made an amendment in s. 4 of the Closer Settlement (Amendment) Act 1907 which imposes a limitation upon value in accordance with the rule laid down in clause 11 in any case where land is resumed "for the purpose of the scheme contained in the Agreement approved and ratified by the War Service Land Settlement Agreement Act, 1945." This is the State Act to which reference has been made.

The State Parliament did not create any new power to resume land for the purposes of the agreement. It would have been within its constitutional power to do so. Section 4 of the Closer Settlement (Amendment) Act 1907, as subsequently amended, arms the State with power to carry out the terms of clause 11 of the agreement. The purposes of closer settlement for the attainment of which the Governor may exercise this power include the settlement upon the land of persons of any class to which the agreement applies. A resumption made under s. 4 is purely a State resumption, whether made for the purposes of the agreement or for the purpose of settling any class of persons who are outside the agreement.

Section 7 of the Closer Settlement (Amendment) Act 1907, as subsequently amended, provides that the power given by s. 4 may be exercised by publishing a notification of resumption in the Government Gazette of New South Wales; that upon resumption the land vests in His Majesty for the purposes of the Closer Settlement Acts; and that the land must be "dealt with thereunder." His Majesty is the Crown in right of the State of New South Wales: the laws under which the land must be "dealt with" are laws of New South Wales. The resumption, vesting and dealing if resumed by the State "for the purposes of the agreement" would depend entirely on State law. Every legislative provision necessary to support the resumption is a State law and it is clearly within the constitutional powers of the State. Section 109 does not come into play because there is no Commonwealth law which is inconsistent with any State law necessary to support the resumption.

The War Service Land Settlement Agreements Act 1945 of the Commonwealth is not part of the constitutional basis of the legislative provisions upon which the State of New South Wales can rely to proceed with the resumption of the plaintiff's land, if the State intends to resume the land for the purposes of the agreement, as is alleged by the statement of claim. These provisions have their full force and vigour as laws by virtue of the constitutional powers of the State. Nothing that has been said against the validity of the above-mentioned Act of the Commonwealth can impugn the validity of any State law authorizing the State to resume the subject land with the object of using it to fulfil its part of the agreement ratified by the State Parliament, or the validity of the resumption, if made, for that object. Every such State law remains in force irrespective of the question whether the Commonwealth Act is valid or not. The doctrine of frustration does not apply to a legislative Act: it is not repealed by reason of a change in the circumstances in which the Act was expected to operate. If the Commonwealth Parliament has no power to enter into the agreement, nevertheless the amendments made by the State Parliament to the Acts of New South Wales in consequence of its ratification remain in those Acts and lose nothing of their legal force on that account.

The War Service Land Settlement Agreements Act 1945 is not, however invalid. The Act is not, in my opinion, a law with respect to the acquisition of property. It does not acquire property or authorize the acquisition of any property by the Commonwealth, a State, or any corporation or person. The condition in s. 51 (xxxi.) of the Constitution provides no reason against the validity of this Act. This Act is not a law with respect to the acquisition of property by any test yet applied to determine whether a law is with respect to any subject matter of Commonwealth power, and the references in the agreement to the purchase and acquisition of property do not make it such a law.

It is plain upon the terms of the agreement that the Commonwealth and State were co-operating in a scheme to settle on the land persons whom each Government has constitutional power to assist. The words of Starke J. in Deputy Federal Commissioner of Taxation (N.S.W.) v. W. R. Moran Pty. Ltd. [1] can be applied - "The legislative bodies of the Commonwealth and the States were each entitled to use to the full the powers vested in them for the purpose of carrying out the scheme. Co-operation on the part of the Commonwealth and the States may well achieve objects that neither alone could achieve; that is often the end and the advantage of co-operation. The court can and ought to do no more than inquire whether anything has been done that is beyond power or is forbidden by the Constitution." The State of New South Wales used its constitutional power to play its part in the scheme by amending its Acts for the promotion of closer settlement. It would be surprising if by making this agreement with the Commonwealth the State restricted its legislative power, including its power to resume land within the State by importing into its own Constitution a condition in the Commonwealth Constitution restricting Commonwealth power only: it would be a novel result that a State power becomes less when a State agrees upon co-operation with the Commonwealth than it is when the State acts separately. In my opinion the State has lawful authority to proceed with the resumption of the subject land if it should think fit to do so.

These are demurrers by the defendants to an action in which the plaintiff claims declarations that the War Service Land Settlement Agreements Act 1945 Cth., the War Service Land Settlement Agreement Act 1945 N.S.W., the Closer Settlement (Amendment) Act 1907 N.S.W. as subsequently amended and in particular ss. 4 (1) (b) and 5, and the War Service Land Settlement Agreement are all invalid, and consequent injunctions. Paragraph 14 of the statement of claim alleges, and these allegations must be taken to be true for the purposes of the demurrers, that the State of New South Wales has threatened and intends to resume the plaintiff's land for the purposes of the War Service Land Settlement Agreement. This is an agreement made between the Commonwealth and the State of New South Wales. Section 3 (1) of the War Service Land Settlement Agreements Act 1945 Cth., which came into operation on 11th October 1945, provides that the execution by or on behalf of the Commonwealth of agreements between the Commonwealth and the State of New South Wales, the Commonwealth and the State of Victoria, and the Commonwealth and the State of Queensland, substantially in accordance with the form contained in the First Schedule to this Act, is hereby authorized. This Act also provides, s. 3 (2), that the execution by or on behalf of the Commonwealth, of agreements between the Commonwealth and the State of South Australia, the Commonwealth and the State of Western Australia, and the Commonwealth and the State of Tasmania, substantially in accordance with the form contained in the Second Schedule to this Act, is hereby authorized. The most important variation between the two forms of agreement for the purposes of the present case is that the first agreement provides (clause 11), that the State shall set apart or resume, as the case may be, for settlement such land comprised in an approved plan of settlement as is Crown land; and acquire compulsorily or by agreement and at a value not exceeding that ruling on the 10th February 1942, private land or lands held under lease from the Crown comprised in an approved plan of settlement; whereas the second agreement provides (clause 11), that the State shall set apart Crown land or with funds provided by the Commonwealth resume for settlement Crown land and acquire compulsorily or by agreement private land comprised in an approved plan of settlement at a value to be approved by the Commonwealth and will hold the same for use for the purposes of the scheme. There is therefore in the second agreement no limitation of the value at which the land is to be acquired to that ruling on 10th February 1942.

On these demurrers we are concerned with the agreement authorized by s. 3 (1) of the War Service Land Settlement Agreements Act 1945 entered into between the Commonwealth and the State of New South Wales. Clause 1 of this agreement provides that it shall have no force or effect and shall not be binding on either party unless and until it is approved by the Parliament of the State. The agreement, which was made on 28th November 1945, and therefore after the date of the Commonwealth Act, was approved by the Parliament of New South Wales by the War Service Land Settlement Agreement Act 1945, which came into force on 7th January 1946. Section 2 of this Act provides that the agreement, a copy of which is set forth in the schedule to the Act, is hereby approved and ratified.

The agreement provides for the settlement of discharged members of the Forces and other eligible persons on land in the State. By clause 2 eligible person is defined to mean (a) a discharged member of the Forces as therein defined; or (b) a person included in a class of persons (if any) which the Commonwealth with the concurrence of the State determines shall be deemed eligible to participate in land settlement under the scheme. Paragraph (b) is only an agreement to enter into an agreement, and pending such further agreement the agreement appears to me to be confined to discharged members of the Forces because clause 12 (b) provides that an eligible person may apply to participate under the scheme not more than five years after (i) 15th August 1945; or (ii) the date when he ceased to be engaged on war service, and it is only possible in the case of discharged members of the Forces to ascertain which would be the later of these two dates. An argument was submitted for the plaintiff that the class of eligible persons defined in par. (b) could include persons who could have no claims to rehabilitation on account of war service, and therefore persons whom the Commonwealth could not assist to settle on the land under the defence or any other constitutional power, and that this paragraph is inseverable from par. (a). But as I am of opinion that par. (b) is at most an agreement to enter into an agreement, and that the only persons at present eligible to participate in the scheme are discharged members of the Forces as defined in par. (a), I do not propose to discuss this contention.

The agreement is a joint scheme entered into by the Commonwealth and the State to settle discharged members of the Forces on land in New South Wales. The agreement is not for a fixed term. It is dated 28th November 1945 and will continue until 15th August 1950 at least, and may continue for an indefinite period afterwards. Yet, whenever the State acquires private land by agreement or compulsion for the purposes of the scheme, it must do so at a value not exceeding that ruling on 10th February 1942. It is therefore immaterial what changes in the value of the land may occur between 10th February 1942 and the date of acquisition, even assuming that no improvements are made in the meantime, and if they are made, there is no provision for the owner receiving compensation for any increase in the value of the land on this account. The compensation is therefore obviously inequitable and the agreement provides for the compulsory acquisition of land from private owners on a semi-confiscatory basis. Section 51 (xxxi.) of the Constitution provides that Parliament shall have power to make laws with respect to the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws. Whenever, therefore, the Commonwealth Parliament legislates with respect to the acquisition of property for a purpose in respect of which the Parliament has power to make laws, the legislation must provide just terms, that is the legislation must provide that the owner shall receive the full equivalent in money for the value of the property of which he is deprived. The agreement attempts to escape this constitutional requirement by providing that the State and not the Commonwealth shall make the acquisition and become the owner of the land. The State legislation relied upon is contained in the Closer Settlement (Amendment) Act 1907, s. 4 as amended by s. 3 of the War Service Land Settlement and Closer Settlement (Amendment) Act 1945 N.S.W. and s. 7 of the War Service Land Settlement and Closer Settlement (Amendment) Act 1948 N.S.W. The method of acquisition provided for by s. 4 is that where an advisory board reports that any land is suitable to be acquired for closer settlement the Governor may, subject to the Act, purchase it by agreement from the owner; or, failing such agreement, resume it under the Act. Before resuming any land, the Governor shall, by proclamation in the Gazette , notify that he proposes to consider the advisableness of acquiring such land for the purposes of closer settlement. Section 3 (b) of the amending Act of 1946 inserted at the end of s. 4 of the Act of 1907 a new sub-s. 4 (1) and (b), of which (b) provides in a proviso that where any resumption is made for the purposes of the scheme contained in the agreement approved and ratified by the War Service Land Settlement Agreement Act 1945, the value of the land as so assessed or determined (that is assessed by an advisory board or determined by the Land and Valuation Court) shall not exceed the value that would have been so assessed or determined in respect of an identical resumption as at 10th February 1942, excepting the value of any improvements effected on such land since that date. This proviso was amended by s. 3 of the amending Act of 1948. The effect of the amendment is that an advisory board can now add fifteen per cent to the value ruling on 10th February 1942, and in the case of compulsory acquisition, if the dispossessed owner agrees not to claim compensation in excess of the value of the land as assessed by an advisory board, the value of the land as so assessed shall not exceed by more than fifteen per cent the value ruling on 10th February 1942 excepting the value of any improvements effected on such land since that date. But in the case of any resumption other than a resumption where the owner agrees not to claim compensation in excess of the value of the land as assessed by an advisory board, the value of the land is still, as under the previous proviso, to be the value ruling on 10th February 1942, excepting the value of any improvements effected on such land since that date. The proviso in its latest form therefore provides an inducement to owners who are prepared to forego their statutory right to appeal to the Land and Valuation Court from an assessment of an advisory board by providing that such owners are to have their compensation assessed at a higher rate than those owners who are not prepared to forego this right. Such an inducement is not provided for in the agreement so that presumably the State is prepared to finance the whole of it. But it is immaterial on these demurrers, for the plaintiff is not prepared to accept the rate ruling on 10th February 1942, even plus fifteen per cent, and has not been induced not to challenge the whole scheme.

The only step which the State has so far taken to resume the plaintiff's land is the initial step of publishing in the New South Wales Government Gazette on 24th August 1945 a proclamation under s. 4 (3) of the Closer Settlement (Amendment) Act 1907, as subsequently amended, that it proposes to consider the advisableness of acquiring the plaintiff's land. It was contended by Mr. Hardie that in the light of this proclamation par. 14 of the statement of claim must be read as an allegation that the State was intending to resume the plaintiff's land for closer settlement under the provisions of s. 4 (1) (b) of the Closer Settlement (Amendment) Act. This would be a resumption of land at its full value. But this is plainly not the true meaning of the allegation. Its true meaning is that the State is intending to resume the land for the purposes of the agreement and therefore to pay compensation on the semi-confiscatory basis provided for in the amending Closer Settlement (Amendment) Acts of 1946 and 1948.

A number of arguments were addressed to the Court on behalf of the plaintiff. The substantial question is whether the War Service Land Settlement Agreements Act 1945 Cth. is invalidated by s. 51 (xxxi.) of the Constitution, and if it is invalidated, what effect the invalidation has upon the proviso to s. 4 (b) of the Closer Settlement (Amendment) Act 1907 as amended by the Acts of 1946 and 1948. It is submitted for the plaintiff that s. 3 of the Commonwealth Act is a law with respect to the acquisition of property for a purpose of the Commonwealth, that is the rehabilitation of discharged members of the Forces, within the meaning of s. 51 (xxxi.) of the Constitution. Legislation for the rehabilitation of discharged members of the Forces is, of course, authorized by the defence power of the Commonwealth, s. 51 (vi.) of the Constitution, and legislation for this purpose is therefore legislation for a purpose in respect of which the Commonwealth Parliament has power to make laws within the meaning of par. (xxxi.). Section 3 (1) of the War Service Land Settlement Agreements Act 1945 Cth. merely authorizes the execution of the agreement so that, in order to determine its real effect, it is necessary to turn to the agreement itself. The party which resumes the land under the agreement is the State. The State agrees to resume the land at a sum not exceeding its value on 10th February 1942, but the agreement does not intend the settler to repay the State even on this basis for he is placed on the land at a valuation which will enable him to earn a reasonable living after meeting such financial commitments (excluding principal repayments under any agreement between the State and the settler for the purchase of land) as would be incurred by a settler possessing no capital. If this value is less than the value for which the land was acquired, plus the cost of developing and improving the land for settlement under the terms of the agreement, the State shall contribute one-half of the excess of this total cost and the other half of the excess shall be contributed by the Commonwealth.

Further, applicants may require training, or settlers, that is the persons who have been allotted holdings under the scheme, may require further experience to fit them to work their holdings, and so the agreement makes provision for such training and for an assistance period of one year (subject to extension in special circumstances) during which the settler is to receive a living allowance from the Commonwealth and during which he shall not be required to pay any rent or interest in respect of the holding or make any payment on account of principal or interest in respect of advances (other than certain advances for working capital). It is the Commonwealth which provides the training and pays to applicants selected for training, living allowances and transport incidental to their training, and which provides living allowances for settlers during the assistance period. The Commonwealth also meets one-half of the cost involved in the remission of rent and interest during the assistance period. The selection of the settlers is important. Clause 12 (c) provides that an applicant for settlement shall apply to the appropriate State authority which shall on behalf of the Commonwealth determine whether an applicant is an eligible person, and classify eligible persons as suitable (either immediately or after training or further experience) or as unsuitable for settlement. Clause 15 provides for the State making arrangements approved by the Commonwealth for making advances to settlers for the purposes of providing working capital and paying for and effecting improvements and acquiring stock, plant and equipment. The agreement provides that any losses incurred in respect of these advances shall be equally borne by the Commonwealth and the State. Finally the agreement provides that the State shall subdivide, develop and improve the land to a stage where it can be brought into production by a settler within a reasonable time having regard to the type of production proposed, and that the form and conditions of tenure on which a holding is to be held by a settler shall be determined by the State.

It is apparent that the agreement is a joint scheme by the Commonwealth and the State to settle on the land discharged members of the Forces selected by a State authority on behalf of the Commonwealth. The scheme requires valid Commonwealth and State legislation to make it effective. The Commonwealth legislation is s. 3 (1) of the War Service Land Settlement Agreements Act 1945. It is legislation for a purpose in respect of which the Commonwealth Parliament has power to make laws because its purpose is to enable the executive government of the Commonwealth to carry out the terms of the agreement. It is also legislation with respect to the acquisition of property from, inter alia, private persons for this purpose. It is true that the property is acquired from these persons by the machinery of State legislation, and it is only Commonwealth legislation with respect to the acquisition of property which must comply with s. 51, par. (xxxi.) of the Constitution. But the immediate question concerns the validity of s. 3 (1) of the War Service Land Settlement Agreements Act and this is Commonwealth legislation. In McClintock v. The Commonwealth [1] , Starke J. said: "That the constitutional power to make laws for the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws is not confined to laws for the acquisition of property by the Commonwealth alone as it contended. The only limitations upon the constitutional power are "just terms" and a "purpose in respect of which the Parliament has power to make laws." And there is no reason for further limiting the power. Authorities, independent of the Commonwealth, may be set up for various purposes under the constitutional powers of the Commonwealth and endowed with authority to acquire property. There is no constitutional provision denying this power to the Commonwealth." I said, in a judgment with which Rich J. was in substantial agreement, that "section 51, placitum (xxxi.) of the Constitution is not limited to the acquisition of property by the Commonwealth but extends to the acquisition of property for any purpose in respect of which the Commonwealth Parliament has power to make laws. The placitum requires that whenever the Parliament exercises such a legislative power, and the legislation provides for the acquisition of property from any State or person, the legislation must provide just terms for the acquisition, otherwise the acquisition is unlawful" [1] . In Bank of New South Wales v. The Commonwealth [2] it is said in the joint judgment of Rich J. and myself that "s. 51 (xxxi.) of the Constitution requires that laws for the acquisition of property shall provide for the acquisition on just terms. The requirement applies whether the law authorizes the Commonwealth or some person or corporation to acquire the property: McClintock v. The Commonwealth [3] ; Jenkins v. The Commonwealth [4] ." It was contended by Mr. Hardie that the only Commonwealth legislation which falls within par. (xxxi.) is legislation which effects or authorizes an acquisition of property or provides machinery for effecting the acquisition of property authorized by Commonwealth legislation, and that the agreement does not effect or authorize such an acquisition or provide such machinery. But there are no express words in the paragraph which limit its width in this way, and there is nothing in its subject matter or context from which such a limitation can be applied. In my opinion the paragraph applies to all Commonwealth legislation the object of which is to acquire property for a purpose in respect of which the Commonwealth Parliament has power to make laws. It is immaterial whether the acquisition is to be made by the Commonwealth or some body authorized to acquire property by the Commonwealth or by a State by agreement with the Commonwealth. The Commonwealth legislation is invalid unless it provides for the acquisition of the property on just terms by whatever machinery the acquisition is to be brought about. In order to be legislation with respect to the acquisition of property within the meaning of s. 51 (xxxi.) of the Constitution, the Commonwealth or some body authorized by the Commonwealth must no doubt have an interest in the acquisition of the property. Otherwise the acquisition could not be for a purpose in respect of which the Commonwealth Parliament has power to make laws. But the interest need not be a proprietary interest. Any legal interest including a contractual interest would be sufficient if it made the acquisition one for such a purpose. The present agreement confers on the Commonwealth a number of legal rights which are at least contractual rights with respect to the use and disposal of the land acquired by the State. When the land is so acquired it must be disposed of in accordance with the agreement and not otherwise. The land is acquired by the State on behalf of the Commonwealth and itself. Half the excess cost of acquiring, improving and developing the land, and more than half the other expenses incidental to carrying out the scheme are to be borne by the Commonwealth. The scheme would be in substance the same if the land was acquired jointly by the Commonwealth and the State. Under the scheme the State acquires the land solely but it is then dealt with on account of the Commonwealth and State jointly. The whole transaction is a joint venture entered into between the Commonwealth and the State to settle discharged members of the Forces on the land. The acquisition of the necessary land is of the essence of the scheme. The purpose of the Commonwealth is to settle discharged members of the Forces on this land. Commonwealth legislation authorizing the executive government of the Commonwealth to enter into such an agreement is, in my opinion, legislation with respect to the acquisition of land for a purpose in respect of which the Commonwealth Parliament has power to make laws. Section 3 (1) of the War Service Land Settlement Agreements Act is, therefore invalid.

1. (1947) 75 C.L.R., at p. 23. 2. (1947) 75 C.L.R., at p. 36. 3. (1948) 76 C.L.R., at p. 250. 4. (1947) 75 C.L.R. 1. 5. (1947) 74 C.L.R. 400.

Section 51 (xxxi.) of the Constitution applies only to legislation of the Commonwealth Parliament and does not invalidate State legislation which does not provide just terms. The State of New South Wales could, no doubt, resume the plaintiff's land for closer settlement under the provisions of s. 4 (1) (b) of the Closer Settlement (Amendment) Act 1907. The War Service Land Settlement Agreement Act 1945 is a valid Act of the Parliament of New South Wales. But it operates only to approve and ratify the War Service Land Settlement Agreement. If this is an agreement which it is beyond the power of the Commonwealth Parliament to authorize, then it is not an agreement between the Commonwealth and the State, and there is no agreement which the State Act can approve and ratify. The State Act is therefore an Act which has in law no operation. It is the same with the proviso to s. 4 (b) of the Closer Settlement (Amendment) Act 1907 introduced by the War Service Land Settlement and Closer Settlement (Amendment) Act 1945 as amended by the War Service Land Settlement and Closer Settlement (Amendment) Act 1948. The proviso only operates where there is a resumption of land for the purposes of the scheme contained in the agreement approved and ratified by the War Service Land Settlement Agreement Act 1945. As there is no agreement, this Act approved and ratified nothing, and there could not be any resumption under the Closer Settlement (Amendment) Act to which the proviso could apply.

Accordingly, in my opinion, if the allegations in par. 14 of the statement of claim are true, the plaintiff is at least entitled to declarations that the War Service Land Settlement Agreements Act 1945 Cth. is invalid, and that the War Service Land Settlement Agreement Act 1945 N.S.W. and the proviso to s. 4 (b) of the Closer Settlement (Amendment) Act 1907 introduced by the War Service Land Settlement and Closer Settlement (Amendment) Act 1945 and amended by the War Service Land Settlement and Closer Settlement (Amendment) Act 1948 are inoperative, and to consequential relief, and the plaintiff has a sufficient interest to maintain the action against all the defendants. This Court has power to make the declarations not only with respect to the Commonwealth Act but also with respect to the State Acts because the action involves the interpretation of the Constitution, and in such a case the Court has jurisdiction to adjudicate upon the whole matter other than separate and distinct causes of action which have no relation to the constitutional question, and not merely upon the interpretation of the Constitution (R. v. Bevan; Ex parte Elias and Gordon [1] ; Carter v. Egg & Egg Pulp Marketing Board [2] ).

1. (1942) 66 C.L.R. 452, at pp. 465, 480. 2. (1942) 66 C.L.R. 557.

In June 1945 the Commonwealth Parliament enacted the Re-establishment and Employment Act 1945, of which s. 103 provided that the Commonwealth might, in accordance with any agreement, make advances or payments to a State to enable it to acquire land for settlement by discharged members of the Forces, to develop and improve land for that purpose, and to settle discharged members of the Forces thereon; and for such other purposes relating to the settlement of such members of the Forces as might be prescribed. In August 1945 a conference of Commonwealth and State Ministers was held at Canberra. This conference agreed on certain proposals, which, from the recital of the agreement hereinafter referred to, appear to have been in the terms of that agreement. Before an agreement was entered into between the Commonwealth and any State, the Commonwealth Parliament in October 1945 enacted the War Service Settlement Agreements Act 1945 (No. 52 of 1945).This Act authorized the execution of agreements between the Commonwealth and the States of New South Wales, Victoria and Queensland substantially in accordance with the form contained in the first schedule to the Act. Authority was also given for the execution by the Commonwealth of agreements with the three remaining States substantially in accordance with the form in the second schedule, but we are concerned only with that in the first schedule. On 28th November 1945, in pursuance of this authority, the Prime Minister of the Commonwealth executed an agreement with the Premier of New South Wales in the form contained in the first schedule. The recital to this agreement refers to the conference of August 1945 at Canberra and states that certain proposals were agreed to with a view to the settlement on land in the State of New South Wales of discharged members of the Forces and other eligible persons. Clause 1 provided that the agreement should not be binding until approved by the State Parliament. By clause 2 "eligible person" was defined to include a discharged member of the Forces and also a person included in a class which the Commonwealth, with the State's concurrence, determined to be eligible to participate in the land settlement. By clause 4 the Commonwealth was to provide financial and other assistance, and the State was to initiate proposals for settlement, but the Commonwealth might do so in matters in respect of which it had power to make laws. By clause 5 the State was to provide capital moneys for acquiring, developing and improving the land. By clause 6 the State was to bear the cost of all State administration and to make a capital contribution in respect of each holding equal to one-half of the excess of the total cost over the valuation made by Commonwealth and State officers who in making the valuation were to allow for a reasonable living for the settler after meeting financial commitments other than land purchase. By clause 7 the Commonwealth was to bear its costs of administration, provide training and pay to trainees, living allowances and other training expenses. Both Commonwealth and State were to bear half the cost of rent and interest remissions and of certain losses and make a capital contribution of half the amount of the excess referred to in clause 6. By clause 10, after the State had selected land suitable for settlement, it was to prevent that land being otherwise dealt with. By clause 11 the State was to set apart or resume approved lands and by sub-clause (1) (b) acquire compulsorily or by agreement and at a value not exceeding that ruling on 10th February 1942 private land or land held under Crown lease. By clause 13 a living allowance might be granted to a settler during an assistance period on terms fixed by the Commonwealth. There were other provisions in the agreement not necessary to refer to, except perhaps clause 15 which with clause 7 made the Commonwealth and State each liable for half the loss on certain advances to settlers.

There was no further Commonwealth legislation, but on 7th January 1946 the New South Wales Parliament approved and ratified the agreement by the War Service Land Settlement Agreement Act 1945 (No. 6 of 1946). That Parliament also made amendments of the New South Wales Crown Lands and Closer Settlements Acts to conform to the agreement. Among other amendments were those made by the War Service Land Settlement and Closer Settlement (Amendment) Act 1945, by s. 3 of which it was provided that where a purchase or resumption was made for the purposes of the scheme in the agreement the price or value should not exceed that which would have been assessed or determined on purchases or resumption as at 10th February 1942, excepting improvements after that date. The agreement made no exception of such improvements.

By proclamation of 23rd August 1945 - the day following the Canberra conference - gazetted on 24th idem it was notified that the Governor in Council proposed to consider the advisableness of acquiring the plaintiff's land for the purposes of closer settlement. This notification was published in pursuance of s. 4 of the Closer Settlement (Amendment) Act 1907 as amended which provides that where an advisory board reports that land is suitable to be acquired for closer settlement the Governor may purchase it, or, failing agreement, resume it under the Act; but before resuming land the Governor, by proclamation in the Gazette , must notify that he proposes to consider the advisableness of acquiring it for closer settlement.

Because of this proclamation the plaintiff has brought an action in this Court against the Commonwealth and the State of New South Wales alleging that the State of New South Wales threatened and intends to resume the plaintiff's land for the purposes of the agreement, and that the Commonwealth threatens and intends to pay moneys for such resumption; and the plaintiff claims a declaration that the agreement is void and inoperative; that the Commonwealth Act authorizing it is ultra vires; that the New South Wales Act approving and ratifying it is invalid; and that the amendment of the Closer Settlement (Amendment) Act, and in particular s. 4, is invalid; and claiming an injunction restraining the State from resuming the land and the Commonwealth from paying moneys for such resumption.

The proposals of the Canberra conference appear to have been beyond the power conferred by s. 103 of the Re-establishment and Employment Act 1945 and that may have been the reason why the proposals were made the subject of further legislation authorizing the agreement in the form in the schedule to Act No. 52 of 1945. The proposals appear to have gone beyond the authority of the first-mentioned Act in that they made provision for persons other than discharged soldiers, and also for the resumption of lands at February 1942 prices. Under reg. 6 of the National Security (Economic Organization) Regulations (see Manual of National Security Legislation, 6th ed., pp. 283-285) the compensation payable on resumptions was not subject to such regulations. There may have been other provisions in the proposal which required authority not possessed by the Ministers. It may have appeared reasonable to the Ministers that lands resumed for discharged soldiers should not be paid for at a higher price than lands purchased by agreement in the ordinary way; and it may have been their intention and that of the Prime Minister and Premier of New South Wales, as well as of both Parliaments, that the provision for resumption at February, 1942 prices should operate only so long as the National Security Regulations in respect of the price of land. The date 10th February 1942 indicates that all the Ministers and both Parliaments had these regulations in view. They were repealed as regards land as from 20th September 1948 (see the Declaration of the Commonwealth Treasurer of 17th idem made under Statutory Rule 1948 No. 121). Moreover it would be impossible to assume that the Ministers and the Parliament contemplated that the National Security Regulations would be followed by State legislation along the same lines. But counsel for the defendants submitted that the February 1942 prices still operated under the agreement and under the New South Wales legislation. They made an alternative submission that if these prices did not obtain the agreement and the New South Wales legislation was in any event valid as to the balance, although Mr. Barwick for the plaintiff asserted, and this was not denied, that there would be no resumption unless it could be made at the February 1942 prices. However, whatever may have been in fact the intention of the Ministers or Parliament there is no justification in law for imputing to them an intention that these prices should cease to operate with the regulations.

Then taking these prices as intended to continue in operation after 20th September 1948, I think that the Commonwealth legislation authorizing the agreement was contrary to par. (xxxi.) of s. 51 of the Commonwealth Constitution. Subject to this, I think that the agreement could be sustained under par. (vi.) of s. 51 and under s. 96 of the Commonwealth Constitution. As regards discharged soldiers it could be sustained under both sections, and as regards "eligible persons" not being discharged soldiers, it could be sustained under s. 96. I do not see why a provision for payments by the Commonwealth direct to settlers would render s. 96 inapplicable if the State desired or agreed to such payments direct. Both State and Commonwealth might benefit by direct payments, but that would be consistent with financial benefit to the States. However, clause 11 (1) (b), if it is still in operation as the defendants submit, does not provide for just terms. The courts will not readily deny that terms provided by the Commonwealth Parliament are just, and in this matter regard will be had to the interest of the public as well as to the interest of the owner. The question is whether the terms provided can reasonably be regarded as just. I can see no ground upon which clause 11 (1) (b) can be justified, seeing that it discriminates against a particular class of owners. I can suggest no reason or justification for such discrimination. It may be that there are lands which are not worth more than their value in February 1942, but it is safe to say that most lands would be worth considerably more. Any justification for the February 1942 values being maintained ceased with the repeal of the price-fixing regulations, so called not because of their precise terms but because of their effect in practice. It was not submitted that the terms were just. But it was submitted by Mr. Hardie for the New South Wales defendants that the Commonwealth statute No. 52 of 1945 merely authorizes the agreement. There is no substantive independent power in the Commonwealth Parliament to authorize agreements with the States. The power if it exists must be found in some section of the Constitution authorizing legislation to the effect of the agreement. I think the power is found in par. (vi.) of s. 51 and in s. 96. The agreement deals with matters with respect of which the Commonwealth Parliament has power to make laws: i.e. the settlement of discharged soldiers and financial assistance to the States. Further it is an agreement for the acquisition of property for such purposes. The question is whether the agreement and the Commonwealth statute authorizing it constitute a law with respect to the acquisition of property for such purposes. It is submitted for the defendants that it is not such a law because the acquisition is not made by the Commonwealth Parliament or by any body or person deriving the power of acquisition from that Parliament. In my opinion par. (xxxi.) of s. 51 is not so limited. It speaks of a law with respect to the acquisition of property. As the Commonwealth Parliament is a plenary legislature these words should be given their fullest meaning consistent with other provisions of the Constitution. They are broad enough to include an acquisition by the State exercising its powers of acquisition by agreement with the Commonwealth, and should, I think, be held to extend to such acquisition (see McClintock v. The Commonwealth [1] ).

It was also submitted by the defendants that the New South Wales legislation in support of this agreement authorizes the resumption although the February 1942 prices no longer obtain. Mr. Kitto for the Commonwealth defendants submitted that the purpose of the notification was for New South Wales closer settlement and that the scheme under the agreement was only part of that major purpose which survived although the agreement might fail. The titles to the New South Wales legislation, making amendments to conform to the agreement, suggest that the purpose of the agreement was collateral, as Mr. Barwick submitted, but I am not satisfied that the elimination of the agreement necessarily frustrates the State purpose of closer settlement. Mr. Barwick also relied on clause 10 of the agreement dedicating selected lands for the purposes of the agreement, but of course that argument fails with the agreement. Mr. Barwick's submission that s. 103 of the Re-establishment and Employment Act 1945 and the decision in Wenn v. Attorney-General (Vict.) [2] reveal that the State is excluded from the field of legislation for soldier settlement, except to the extent of implementing valid agreements with the Commonwealth under that section, must also fail, seeing that there is no agreement authorized by that section. If and when such an agreement is made Wenn v. Attorney-General (Vict.) [2] indicates that State legislation not in terms in conflict with any particular provision of the agreement may still be inoperative under s. 109 of the Constitution. I have come to the conclusion that the State legislation and the proclamation are valid as regards closer settlement for State purposes; but that the State legislation is inoperative so far as it was enacted to give effect to the agreement: properly construed it contemplates, I think, a valid agreement.

1. (1948) 77 C.L.R. 84. 2. (1948) 77 C.L.R. 84.

The fact that the plaintiff's lands are specified in the proclamation is sufficient to establish its interest in the subject matter of this action, as we must assume that the State threatens and intends to resume them under the agreement.

To sum up: If the agreement expressly stated that its purpose was to secure land for discharged soldiers at less than fair prices it would be impossible to hold that the agreement and the Commonwealth statute antecedently authorizing it did not amount to a purported exercise of the defence power under par. (vi.) invalidated by par. (xxxi.) of the Commonwealth Constitution. But invalidity is not avoided because that purpose is implied and not expressed. It is important to keep in mind that the terms of the agreement are set out in the first schedule to the statute.