wealth v Western

wealth v Western - [1944] HCA 4 - HCA 1944 case summary — Zoe

[51]

respondent's estate whatever rights it has under reg. 54, that is, every right which the owner in fee has in the land together with every right which any other person might have by way of an ease- ment. Within the ambit of the defence power the Commonwealth is a freeholder. The test of what estate a person has in land is to consider what he can do with it. Acquisition of land or of an estate in land is only a matter of terms, and the Court looks to the actual powers the Commonwealth has under reg. 54. The Commonwealth has acquired all the rights which the respondent had in the land, namely, the right of possession, the right of user, the right of sub- leasing, and the right of granting a licence. The matter before the Court in John Robinson & Co. Ltd. v. The King (2) did not involve a distinction between acquiring property and taking possession of property in any sense which concerned the beneficial interest in it. In Attorney-General v. De Keyser's Royal Hotel Ltd. (3) the members of the Judicial Committee dealt indifferently with the terms " taking possession " and " acquisition " as though they were interchangeable terms. The distinction they made, if at all, was to refer to " tem- porary possession" as against "' permanent acquisition." " For the duration of the war " is an indefinite period ; therefore it is not a temporary period. The right to just terms is given by the Con- stitution ; therefore by no artifices or devices can the Commonwealth Parliament provide for any terms that cannot be proved just (Aws- tralian Apple and Pear Marketing Board v. Tonking (4) ). For " just terms" the respondent, being entitled to an estate or interest in possession, should get the full equivalent, according to ordinary standards, of the property taken (Clissold v. Perry (5)). The Regulations, excluding therefrom reg. 60H and any order made under that regulation, do seem to satisfy that test. A fair construc- tion of reg. 60H (2) is that it is in juxtaposition to the distinction made in s. 5 (1) (6) (i) and (ii) of the National Security Act 1939-1943. It was intended to cover within the terms of those sub-sections any property, whether it be real property or personal estate, or whatever the interest was that was taken. There is not any reason to suppose that Parliament was not following out a definite scheme. Reg. 60H is ultra vires because of par. 3 thereof. The obligation is upon the Commonwealth of placing the rights of subjects on a clear basis. A claimant must have the right of recourse to an independent tribunal (1) (1922) 2 A.C. 180. (4) (1942) 66 C.LLR., at p. 106.

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H.C. ow A. free from the coercion or direction of Parliament (Johnston Fear & pauua Kingham & The Offset Printing Co. Pty. Ltd. v. The Commonwealth Munisrer ov (1) ). Under the Constitution the Commonwealth can never become Srare ror the judge in its own cause, whether it be by a tribunal or by legis- a play lation. If the Regulations were valid in every other respect they Daizer. fail by reason of their ambiguity; having regard to s. 5 (1) (b) re (i) and (ii) of the National Security Act and also to sub-regs. 1, 2 and 3 of reg. 60H, they do not show what is meant by the word " property." The Court is not able with any certainty to define its meaning as used. The Basis of Compensation Order itself is ambiguous. In a case where the Central Hirings Committee proposes to " otherwise determine " within the meaning of clause 1 of that order, that Committee is not bound to hear evidence or to hear anybody in the matter. If proviso iv to clause 1 is subject to any other proviso it does not carry the question of just terms any further; if, however, it purports to empower the Committee to award an amount which in exceptional circumstances seems proper then it nullifies prior provisions. The order is silent as to what constitutes "exceptional circumstances." The reasonable interpretation of the order is that Parliament has sought to go outside the Constitution. The order has not, nor have amendments thereto, retrospective operation. The amendments have effect, if at all, only as from the date thereof. This Court is not bound by the decisions in Buckman v. Button (2) and Director of Public Prosecutions v. Lamb (3): see the Law Quarterly Review, vol. 59, p. 199, and Craies on Statute Law, 4th ed. (1936), p. 335. Unless a statute clearly indicates an intention to interfere with vested rights it should be construed as not so interfering, or, alternatively, as interfering as little as possible therewith (Australian Coal and Shale Employees Federation v. Aberfield Coal Mining Co. Ltd. (4) ). Tn so far as the order as amended purports to fix an amount of compensation as at a date subsequent to the date on which the respondent's claim crystallized it must be bad, because "just terms" must be terms considered as at the date when the claim crystallized, that is, the date of the entering into possession. For that reason also the amend- ments, at least, are ultra vires.

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lessor and lessee. The lease granted to the lessee "the free and exclusive licence and right to the use of " certain refreshment rooms, &c., in a theatre. It was held that even if the lessee could exclude the lessor from those rooms the real substance of the agreement was not the granting of any interest in land, that no interest in land was granted, and that the "' lessee " had only an exclusive licence to use the premises for the purpose of providing refreshments (1). The document was "really a grant of a privilege and licence merely masquerading as a lease" (2). See also Frank Warr & Co. Ltd. v. London County Council (3), where it was held that under a similar agreement (which used the words "grant" and "let" but not the words "lease," "lessor" or " lessee") no interest in land was created which could be the subject of compensation under the Lands Clauses Consolidation Act 1845 (Imp.).' In Olore v. Theatrical Properties Ltd. and Westley & Co. Ltd. (4) a similar agreement used the words "doth hereby demise and grant to the lessee the free and exclusive use" of parts of a theatre. It was held that no interest in land was created. In Commissioner of Stamp Duties (N.S.W.) v. Yeend (5) it was held that an agreement under which a person had the sole right to use premises for the purpose of providing refreshments did not vest any "property" in that person within the meaning of a definition of property which included any estate or interest in any property real or personal. These are cases of contracts creating personal rights to use land for particular purposes, in one case with and in others without a right to exclude the "grantor." In the present case the rights of the Common- wealth to use land for purposes of defence are created, not by con- tract, but by action taken by the Commonwealth under the Regula- tions. But the rights so created are, in my opinion, of the same character as those which were created in the cases cited - they are inalienable personal rights and the Commonwealth is not a grantee of property but alicensee. Such personal rights are not proprietary rights.

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particular Regulations, and, on the other hand, the acquisition of land, may be supported by reference to similar statutes and decisions of the courts thereon. English statutes relating to this matter are conveniently mentioned in Attorney-General v. De Keyser's Royal Hotel Lid. (1). Lord Dunedin refers to the right under the preroga- tive "to take for use of the moment in a time of emergency " (2), and discusses whether certain statutes, beginning with 7 Anne c. 26, related to permanent acquisition in times of peace, as well as of war, or to another subject matter, namely, the temporary use of land during war (3). His Lordship refers to provision made in statutes for "a temporary taking, and for payment; or, in other words, for getting by statute, with the concomitant obligation of payment, that very possession which, according to the view expressed above, it was the function of the prerogative to provide free of charge, leaving it to statute to provide for a permanent acquisition." So also in 38 Geo. II. c. 27 there is provision for treating with the owner of land " for the possession or use thereof, during such time as the exigence of the service shall require." Reference is made to the Act 44 Geo. II. c. 95, which provided for "temporary taking for such time as the exigence of the public service shall require" (4). The latter phrase appears also in the Defence Act 1842, 5 & 6 Vict. ¢. 94,8. 16. Lord Moulton clearly distinguishes between acquisition of property and taking of possession of property when he says that he is satisfied that the Defence Act 1842 enables the Crown to acquire "either the property or the possession or use of it as it may need" (5). Lord Swmner says that the Defence Act "enables the Crown to take lands under the Act in peace or in war, in absolute ownership and in perpetuity or for temporary occu- pation only" (6). Lord Parmoor recognizes the same distinction, referring " to an entry upon, or to taking temporary possession of, or to the temporary occupation and use of the land" (7). Lord Parmoor sets out and analyses the various statutes which enable the Crown to take possession of land during such time as the exigencies of public service may require (8). The statutes examined in this decision of the House of Lords thus recognize the distinction between acquisition of land and the temporary taking of possession of land, and the speeches of their Lordships show that this distinction is fully recognized as a real distinction.

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creating rights inter partes, but a Constitution containing a provision of a fundamental character designed to protect citizens from being deprived of their property by the Sovereign State except upon just terms. The meaning of property in such a connection must be determined upon general principles of jurisprudence, not by the artificial refinements of any particular legal system or by reference to Sheppard's Touchstone. The language used is perfectly general. It says the acquisition of property. It is not restricted to acquisition by particular methods or of particular types of interests, or to particular types of property. It extends to any acquisition of any interest in any property. It authorizes such acquisition, but it expressly imposes two conditions on every such acquisition. It must be upon just terms, and it must be for a purpose in respect of which the Parliament has power to make laws. In the case now before us, the Minister has, in adversum, assumed possession of land of which Dalziel was weekly tenant. With all respect to the argument which has been addressed to us to the contrary, I am quite unable to understand how this can be said not to be an acquisi- tion of property from Dalziel within the meaning of the placitum. Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle. But there is nothing in the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it was expropriating. Possession vaut titre in more senses than one. Not only is a right to possession a right of property, but where the object of proprietary rights is a tangible thing it is the most characteristic and essential of those tights. "So feeble and precarious was property without possession, or rather without possessory remedies, in the eyes of medieval lawyers, that Possession largely usurped not only the substance but the name of Property; and when distinction became necessary in modern times, the clumsy term ' special property ' was employed to denote the rights of a possessor not being owner " (Pollock & Wright, Possession in the Common Law, (1888), p. 5). '' Possession confers more than a personal right to be protected against wrongdoers: it confers a qualified right to possess, a right in the nature of property which is valid against everyone who cannot show a prior and better right." "' Possession is a root of title" (ibid., p. 22). 'The rule that Possession is a root of Title is not only an actual but a necessary part of our system " (ibid., p. 93). " The standing proof that English law regards, and has always regarded, Possession as a substantive root of

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property by the Commonwealth. This approach to the decision of the case is necessitated by the statements on the limitations of the legislative power with respect to the acquisition of property which appear in the cases of Andrews v. Howell (1) and Australian Apple & Pear Marketing Board v. Tonking (2), and by the reasons upon which the majority relied in Johnston Fear & Kingham & The Offset Printing Co. Pty. Lid. v. The Commonwealth (3). This body of authority establishes that the Commonwealth Parliament has no power, either in peace or in war-time, to legislate on the subject of "the acquisition of property" (situate within any State) except the power conferred by s. 51 (xxxi.). The specific and explicit limitation on the power with which this placitum vests the Parlia- ment would be frustrated by an interpretation of the Constitution which attributed to it any concurrent implied power to legislate which was not subject to the same limitations. To avoid this result it is necessary to adopt the interpretation that the only power with which the Constitution vests the Parliament to legislate on the subject of the acquisition of property is the express and limited power in s. 51 (xxxi.). Hence there is no legislative power either inherent or implied in s. 51 (vi.) or added to it by s. 51 (xxxix.) to provide for the acquisition of property even as a means for carry- ing on the war. The Australian Constitution differs in this respect from the United States Constitution: this does not explicitly confer power on the legislature to make laws appropriating property for public use: but it exists as an inherent or implied power (Kohl v. United States (4); The Mississippi and Rum River Boom Co. v. Patterson (5); United States v. Gettysburg Electric Railway Co. (6) ; Chicago, Burlington & Quincy Railroad Oo. v. City of Chicago (7) ). The Fifth Amendment provides safeguards on the exercise of this power. The final part of this Amendment says that property shall not be taken without just compensation. This expresses a rule of

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But Matthey v. Curling (2) is not a decision that under a statute similar to reg. 54 an estate or interest in property is not compulsorily acquired at the expense of the lessee because the lease is not discharged by the compulsory entry. In this decision, and in the earlier decision in Attorney-General v. De Keyser's Royal Hotel Ltd. (3) the House of Lords was dealing with the right to compensation under the English statutes providing for the compulsory taking of land in England for the purposes of defence, and in particular with s. 19 of the Defence Act 1842 (Imp.). Section 16 of that Act authorized the Crown to enter into lands, buildings or other hereditaments or easements required for the defence of the realm and to treat and agree with the owners of such land, &c., or with any person or persons interested therein for the absolute purchase thereof or for the possession or use thereof during such time as the exigence of the public service should require. Section 19 empowered the bodies or persons authorized to acquire the lands, &c., either absolutely or for a tem- porary purpose to offer a sum of money as a consideration for the absolute purchase of the lands, &c., or such annual rent or sum for the hire thereof either for a time certain or for such period as the exigence of the public service might require ; and, if an agreement could not be made, to cause a jury to be summoned to find the compensation to be paid either for the absolute purchase of such lands or for the possession or use thereof. The permanent and temporary acquisition of property were therefore dealt with in the statute in the same way. Both transactions were treated as con- cerning property which was being acquired from the owners or any other person or persons interested therein and in both cases the statute provided for a purchase or a hiring (which is plainly an acquisition of property) by agreement ; or, in default of agreement, for what was equivalent to a purchase or a hiring, namely, a compul- sory acquisition of the fee simple or of the temporary possession of the land at a compensation which was intended to be the equivalent of the purchase money or rent. So, in the Case of De Keyser's Royal Hotel (4), Lord Atkinson, in referring to that Act, said : - " Whether the land or its use were presumed to be acquired by voluntary purchase under its sixteenth section, or compulsorily under its

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Lord Moulton said : - '' The duty of paying compensation cannot be regarded as a restriction. It is a consequence of the taking, but in no way restricts it, and, therefore, as the acquisition is made under the Defence Act 1842 the suppliants are entitled to the com- pensation provided by that Act" (1). (The italics are again mine.) The close analogy between the compulsory acquisition of a lease of land and the compulsory taking of possession of land for some statutory purpose is made clear by the speech of Lord Buckmaster in Matthey v. Curling (2). His Lordship referred to the following words of Lord Hatherley in Harding v. Metropolitan Railway Co. (3) : - " As to the abstract principle, I have no doubt that a company purchasing a leasehold interest as this company has done, is bound to take an assignment and bound to enter into an engagement to indemnify the vendor against the covenants of his lease. It would be a grievous injustice to take property by force from a man who is unwilling to dispose of it, and to leave him subject to a substantial rent of £600 a year, and to the other covenants and conditions of his lease." His Lordship went on to say : "' That statement has never been questioned, has formed the foundation of procedure from that date, and to my mind is an accurate statement of the true position in such circumstances ; but if it be accepted, the appellant's defence is taken away, for it establishes the proposition that the lessee remains liable on his covenants in the lease, notwithstanding that he has been deprived of the term by the exercise of legal powers." The following important passage then occurs in his Lordship's speech : - "In the present instance it is true that there was no assignment, nor do I think that the War Office intended to acquire the leasehold interest. They entered into possession by virtue of the authority conferred by the Defence Act of 1842, which empowered them to take, and compelled them to pay compensation as therein provided : Attorney-General v. De Keyser's Royal Hotel Ltd. (4). The preliminary conditions and restrictions imposed by this Act were removed by the statute of 1914, and the regulations made there- under, but though this prevented the necessity for formal vesting by assignment or otherwise in the Crown, it left untouched the Viability to make the compensation. It is, therefore, closely analogous to - though it is not identical with - the compulsory acquisition by a railway company, and there is no principle upon which it is possible to hold

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