Pye v Renshaw

The original citation in the suit was issued on 10th July 1950. On 18th August 1950 there came before Roper C.J. in Eq. a motion by the plaintiff for an interlocutory injunction and a motion by the defendant Renshaw that certain paragraphs of the statement of claim as originally drawn be struck out. Leave was given to amend the statement of claim, and certain amendments were made. The defendants Renshaw and Kelly then demurred ore tenus to the statement of claim. On 24th August 1950 Roper C.J. in Eq. made the order which is now under appeal. By that order the Court (a) upheld the demurrer, (b) ordered that the two motions be dismissed, (c) gave leave to the plaintiff to amend his statement of claim within 21 days, and (d) ordered that, if the statement of claim were not amended within that period, the suit should be dismissed. Notice of appeal to this Court was given on 14th September 1950, which was the last day for giving such notice. The statement of claim had not in the meantime been amended, but on 1st September 1950 a proclamation purporting to effect the resumption of the plaintiff's lands had been published in the Gazette .

When the appeal was called on, a preliminary objection was taken on behalf of the defendants Renshaw and Kelly that the order in question was an interlocutory order and that therefore no appeal lay without leave. The Court intimated that it would hear argument on the appeal, reserving its decision on the preliminary objection. The question whether the order was a final order or an interlocutory order for the purposes of s. 35 of the Judiciary Act 1903-1950 may be open to argument, but, in our opinion, it was an interlocutory order: see Re Page; Hill v. Fladgate [1] , where Cozens-Hardy M.R. refers with approval to Stewart v. Royds [2] . The latter case does not appear to be distinguishable from the present and appears to dispose of Mr. Wallace's argument that the order here was a final order subject to a condition subsequent.

1. (1910) 1 Ch. 489, at p. 492. 2. (1904) 118 L.T. Jo. 176.

The question whether, if the order was interlocutory, leave should now be granted was not fully argued before us. There is obviously much to be said against granting leave. Two of the three injunctions sought by the statement of claim cannot now be granted, and we are disposed to think that none of the three could ever have been granted in any case, even if some cause of action were disclosed by the amended statement of claim. The whole position seems indeed to have been misconceived by the plaintiff. The position when the suit was commenced was that either there was power to resume his lands or there was not. The position now is that either the plaintiff's lands have been effectively resumed by the proclamation of 1st September 1950, or they have not. Assuming the Crown not to be actually in possession, his remedy (if any) was and is by way of declaration of right and an injunction to restrain the servants and agents of the Crown from interfering with his possession of the lands. However, the case has been fully argued and the whole position discussed, and we understand that other suits of a similar character are pending in the Supreme Court. If the plaintiff's argument against the validity of the resumption is sound, an order which is appropriate and effective to protect his rights can be framed, and on the whole we think that the most satisfactory course is to give leave to appeal and consider on its merits the argument presented for the plaintiff. It is necessary to begin by examining the relevant legislation as it has existed before and after the decision of a majority of this Court in P. J. Magennis Pty. Ltd. v. The Commonwealth [3] .

The central feature in the Magennis Case [3] was Commonwealth Act No. 52 of 1945, the War Service Land Settlement Agreements Act 1945. By this Act the Commonwealth Parliament authorized the execution on behalf of the Commonwealth of certain agreements with the States, including the State of New South Wales. The agreement with New South Wales, under which both parties purported to assume financial and other obligations, contained a term that, for the purposes of the agreement, land should be acquired by the State compulsorily or by agreement at a value not exceeding that ruling on 10th February 1942. The relevant New South Wales legislation actually authorizing the acquisition of land was and is contained in s. 4 of the Closer Settlement (Amendment) Act 1907-1950, which provides that, where an advisory board reports that any land is suitable to be acquired for closer settlement, the Governor may (a) subject to the Act purchase it by agreement with the owner or (b) resume it under the Act. By Act No. 6 of 1946 (the War Service Land Settlement Agreement Act 1945) the Parliament of New South Wales approved and ratified the agreement with the Commonwealth which had been authorized by Commonwealth Act No. 52 of 1945, and, by s. 3 of Act No. 14 of 1946, it amended s. 4 of the Closer Settlement (Amendment) Act 1907 by adding a new sub-section. This sub-section, so far as material, provided that the price to be paid in respect of any resumption should be the value of the land as assessed by an advisory board or (on appeal) by the Land and Valuation Court, provided 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 " the value assessed should not exceed the value as at 10th February 1942, together with the value of improvements effected since that date. Other amendments were made, which introduced into pre-existing legislation a number of references to the agreement with the Commonwealth and special provisions in relation to the carrying out of that agreement.

It was held by the majority in the Magennis Case [1] (Dixon and McTiernan JJ. dissenting) that the Commonwealth Act No. 52 of 1945 was a law with respect to the acquisition of property, that it did not provide for just terms, and that it was therefore in excess of the power conferred by s. 51 (xxxi.) of the Constitution and void. It was said to follow that the agreement executed in pursuance of the Act was not binding on the Commonwealth, and, because the agreement was not binding on the Commonwealth, it was held that there was nothing upon which the State Act No. 6 of 1946, which purported to approve and ratify the agreement, could operate. That Act was treated as simply inoperative. The position thus reached could not, of course, affect the validity of any State legislation authorizing the acquisition of land, because State powers are in no way affected by s. 51 (xxxi.). As Latham C.J. [1] said: "There is no doubt as to the power of the State Parliament to provide for compensation for land resumed upon any basis which it thinks proper". It was said, however, that, under the State legislation as it then stood, the provisions limiting the amount of compensation to the value as at 10th February 1942 applied only to resumptions "for the purpose of the scheme contained in the agreement", and there was in law no agreement. The State could, therefore, proceed with the resumption of the plaintiff's land, but only under the general provisions of s. 4 of the Closer Settlement (Amendment) Act 1907, that is, at a value assessed by a board and subject to appeal to the Land and Valuation Court [2] , per Latham C.J.; [3] , per Williams J.; [4] , per Webb J. Webb J. [4] put it thus: - "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. (1949) 80 C.L.R. 382. 2. (1949) 80 C.L.R., at p. 405. 3. (1949) 80 C.L.R., at pp. 405, 406. 4. (1949) 80 C.L.R., at pp. 424, 425. 5. (1949) 80 C.L.R., at p. 430. 6. (1949) 80 C.L.R., at p. 430.

The decision in the Magennis Case [5] was pronounced on 21st December 1949. On 6th May 1950 Act No. 14 of 1950 of the Parliament of New South Wales became law. That Act repealed Act No. 6 of 1946 as from 7th January 1946, which was the date of its commencement. It amended the new sub-section, which had been added in 1946 to s. 4 of the Closer Settlement (Amendment) Act 1907, by deleting all reference to any agreement with the Commonwealth and by inserting in lieu thereof a reference to land resumed for the purposes of s. 3 of the War Service Land Settlement Act 1941 (No. 43 of 1941). The result of this was to make the limitation of compensation for resumed land by reference to value as at 10th February 1942 applicable to all land resumed for the purposes of s. 3 of the Act of 1941. That section authorized the Minister by notification in the Gazette to set apart any area of Crown land, or land acquired by the Crown, to be disposed of exclusively to discharged members of the forces and certain other classes of persons. Act No. 14 of 1950 also deleted from all relevant legislation all reference to any agreement with the Commonwealth and all reference to any direct or indirect participation of the Commonwealth in any scheme of soldier settlement.

As has already been pointed out, the legislative power of the State is not affected by s. 51 (xxxi.) of the Constitution. If a State Act provides for the resumption of land on terms which are thought not to be just, that is of no consequence legally: it cannot affect in any way the validity of the Act or of what is done under the Act. And the effect of Act No. 14 of 1950 is to make it perfectly clear that all relevant legislation of the Parliament of New South Wales is intended to take effect unconditioned by any Commonwealth legislation and irrespective of the existence of any agreement between the Commonwealth and the State of New South Wales. To adopt the language of Webb J., already quoted, it cannot now be correct to say that, properly construed, the State Acts contemplate the existence of a valid agreement or of any agreement or scheme. There is no possible ground of attack on the validity of this legislation, there is no ground whatever for saying that it is inoperative, and all courts are bound to give effect to it according to its tenor.

Counsel for the plaintiff did not indeed profess to attack the validity or efficacy of any State legislation. The argument was that the Executive was using the power of resumption for a purpose which was not a purpose for which the power was given by Parliament. The decision of Roper C.J. in Eq. was primarily a decision on a demurrer, and they said that, for the purposes of the demurrer and for the purposes of this appeal, the allegations in the statement of claim must be assumed to be true. And they said that, if those allegations were true, they disclosed that the particular resumption in question was not authorized by the State legislation.

Now, the power of resumption which is in question is, as has already been said, conferred by s. 4 of the Closer Settlement (Amendment) Act 1907 as it has stood since the commencement of Act No. 14 of 1950. That section imposes three conditions which must be fulfilled before a resumption can take effect. There must be publication in the Gazette of a notification by the Governor that he proposes to consider the advisableness of acquiring particular land, there must be a report of an advisory board that the land is suitable to be acquired for closer settlement, and there must be approval of the resumption of the land by resolution of both Houses of Parliament. Section 7 provides that the resumption of land under the Act shall be effected by notification in the Gazette , and that, on such notification being made, the land shall vest in His Majesty for the purposes of the Closer Settlement Acts and be dealt with thereunder. There is no suggestion that any of the three conditions prescribed by s. 4 has not been complied with, no attack is made on the report of the advisory board, and there is not even any suggestion that the land is not in fact suitable to be acquired for closer settlement or is not in fact being acquired for closer settlement.

It is important to observe that the War Service Land Settlement Act 1941 does not relate to the acquisition or resumption of lands. It merely authorizes the Minister to reserve or set apart for certain purposes lands which have been acquired or resumed. The powers given by that Act may or may not be exercised, and may or may not be exceeded. If they are exceeded, or there is a threat to exceed them, a subject may or may not have a remedy, but nothing in that Act can have any possible bearing on the validity of any acquisition or resumption. It is also important to observe that sub-s. (4) (b) of s. 4 of the Closer Settlement (Amendment) Act 1907 also does not relate to the acquisition or resumption of lands as such. It deals with a matter which arises after acquisition or resumption has been effected, namely, the assessment of compensation. The case may or may not fall within the provision which limits the amount of compensation by reference to value as at 10th February 1942, but whether it does or not is a question which can have no possible bearing on the validity of any acquisition or resumption.

As soon as the position is thus understood, it becomes plain, in our opinion, that the demurrer ore tenus was rightly upheld by Roper C.J. in Eq. It is perhaps not strictly necessary to go through the allegations in the statement of claim which are said to support the argument that the resumption is invalid. Since, however, great stress was laid on the proposition that, for the purposes of a demurrer, the allegations made must be taken to be true, it seems desirable to refer as briefly as possible to those allegations.

Paragraph 6 of the statement of claim alleges that, in accordance with the agreement and before the repeal of the New South Wales Act of 1945, the Commonwealth had approved of the proposed acquisition of the plaintiff's lands. Obviously, if the statutory conditions have been fulfilled, it does not matter who has approved or disapproved, or approves or disapproves, of the acquisition.

Paragraph 7 alleges that the acquisition is made by "arrangement" with the Commonwealth "in order that" the Commonwealth may settle discharged soldiers on the plaintiff's lands and that the plaintiff may be paid less than the true value of his lands. As was pointed out in the Magennis Case [1] , the State may authorize the resumption of lands on any terms which it thinks fit. If the reference to the Commonwealth "settling" discharged soldiers on the lands means anything, it presumably means that the Commonwealth will decide who is to be "settled" and perhaps that it will finance the "settling". It is impossible to maintain that the validity of the resumption by the State can be affected if it chooses to co-operate with the Commonwealth in the matter of closer settlement or to accept financial assistance from the Commonwealth.

Paragraph 8 refers to the "agreement", which was considered in the Magennis Case [1] . Whatever may have been the position before Act No. 14 of 1950, it is now very clear that the power of acquisition on the prescribed conditions is given by Parliament to the Executive irrespective of the agreement and of anything contained in it.

Paragraph 9 alleges that valuations of the plaintiff's lands were made by officers of the State and Commonwealth in consultation, and that the State and Commonwealth have "arranged" that each will make a capital contribution towards acquiring, developing and improving the lands. Paragraph 10 alleges that the Commonwealth intends to provide financial and other assistance to the State in and about the settlement of the lands in accordance with the agreement. What valuations the State chooses to have made and what arrangements it chooses to make before or after resumption with the Commonwealth or anybody else with regard to the closer settlement of soldiers on land in New South Wales are matters equally irrelevant to the validity of any resumption. The same observation applies to the allegations in pars. 11, 12 and 15.

Paragraph 14 alleges that the resumption is proposed to be made by the State "as the agent of the defendant the Commonwealth". This alleges not a proposed illegal action but a legal impossibility. The effect of a proclamation under s. 7 is to vest the subject land in the State of New South Wales, which becomes and can alone become by virtue thereof the legal and beneficial owner of the land. It holds the lands thenceforth for the purposes of the Closer Settlement Acts. The allegation of agency is indeed meaningless. Mr. Barwick argued that the purposes were not purposes of the Closer Settlement Acts. But the settlement of discharged soldiers on subdivided land, with or without the financial assistance and co-operation of the Commonwealth or of another State or country or of a banking institution or anybody else, is closer settlement within the meaning of the Acts, and for the purposes of this case that is all that matters.

The only remaining paragraph is par. 15c. This paragraph is apparently directed to founding a claim for relief against the Commonwealth and the Treasurer of the Commonwealth. It contains a long and involved series of allegations, which may be fairly summarized as follows. It alleges that the Commonwealth and the Treasurer are paying and intend to continue to pay moneys of the Commonwealth to the State of New South Wales upon the terms that the State shall use them (a) for the purpose of acquiring lands, including the lands of the plaintiff, at a price below their real value, (b) for settling thereon such discharged soldiers as the Commonwealth shall approve, and (c) for developing the lands. It is further alleged that the State would not acquire the lands at the proposed price unless the moneys in question were being provided by the Commonwealth. There is no allegation that the moneys have not been duly appropriated by Act of the Commonwealth Parliament, and indeed no allegation that the payment of the moneys is or would be for any reason unlawful. No doubt, however, it is intended to be based on the proposition of law that an appropriation by the Commonwealth Parliament for the purposes mentioned is unconstitutional. But, even if it be assumed (an assumption of doubtful validity) that the plaintiff has such an interest as would enable him to maintain an action founded on this proposition, the proposition itself cannot be supported. The argument really comes to this. The Commonwealth cannot itself acquire land except upon just terms. A State can resume land on any terms, just or unjust, authorized by its Parliament. But the Commonwealth is not authorized by s. 96 or any other provision of the Constitution to provide money for a State in order that the State may resume land otherwise than on just terms. This is the very argument which was rejected in Victoria v. The Commonwealth [1] : see also South Australia v. The Commonwealth [2] , where Latham C.J. said: - "The Commonwealth may properly induce a State to exercise its powers by offering a money grant".

1. (1926) 38 C.L.R. 399. 2. (1942) 65 C.L.R. 373, at p. 417.

In our opinion the decision of Roper C.J. in Eq. was correct. The appeal should be dismissed.