Wurridjal & Ors v Commonwealth of Australia & Anor [2008] HCATrans 349 (3 October 2008)

Last Updated: 7 October 2008

[2008] HCATrans 349

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M122 of 2007

B e t w e e n -

REGGIE WURRIDJAL

First Plaintiff

JOY GARLBIN

Second Plaintiff

BAWINANGA ABORIGINAL CORPORATION

Third Plaintiff

and

THE COMMONWEALTH OF AUSTRALIA

First Defendant

ARNHEM LAND ABORIGINAL LAND TRUST

Second Defendant

FRENCH CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 3 OCTOBER 2008, AT 10.01 AM

(Continued from 2/10/08)

Copyright in the High Court of Australia

__________________

FRENCH CJ: Yes, Mr Merkel.

MR MERKEL: Before my learned friend begins, if I could hand up two documents which respond to matters your Honour Justice Kirby raised yesterday for distribution to the Court. One relates to shipwreck clauses in other legislation and the other to references to Teori Tau since Newcrest, if the Court pleases.

FRENCH CJ: Thank you. Yes, Mr Walker.

MR WALKER: May it please the Court. May I take up an incomplete answer yesterday to a question from Justice Gummow concerning the arguments founded on section 62(4) of the NER Act. The question posed, we suppose, is whether a priori the mandatory or universal ignoring of improvements is something which in the demurrer leads to an unambiguous certain outcome.

All I want to add to what we have already said is, well, in our submission, as a matter of constitutional principle, the question whether just terms are or are not provided by a concatenation of statutory provisions of which subsection 62(4) is part in this case depends and depends entirely on their application to particular facts.

To put it another way, the fact that one may imagine circumstances in which a set of statutory provisions may operate in a way which can be hypothesised as producing less than just terms is not necessarily, in our submission, to pose a case that requires or even permits decision. Certainly, in our submission, the pleaded facts in this case, and the demurrer meeting them, is not such a situation.

It is to be recalled, of course – I think Justice Hayne may have noted this as a plausible possibility in this very case – that registered leases which are not covered by section 31 emergency response leases by reason of subsection 31(3) of the NER Act may well in the ordinary course be the very land which is most valuably or plausibly valuably improved, and so it simply will never come up for consideration under subsection 62(4) in relation to rent.

GUMMOW J: Would you say that again, Mr Walker?

MR WALKER: Registered leases, and “registered” means under the Northern Territory system for Torrens tenure, are excised – rather curious wording – it proceeds by saying, land which but for this subsection would be covered by a lease is hereby removed from a national emergency response lease and it is land covered by a registered lease.

CRENNAN J: Is there anything in the demurrer book which allows us to understand the scope of the registered leases?

MR WALKER: No, and that is my very point, that that is exactly the kind of thing which first at the broadest level of what is a matter, but second on a pleading – on a demurrer to a pleading – even more acutely raises the need for an understanding of the facts to which the possibilities which ex facie are raised by the terms of 62(4), the possibility of that producing less than just terms. You need facts, we do not have them.

The only other thing I wish to say about the, as I say, mandatory and universal deleting of improvements from what the Valuer-General may look to in determining a rent for a section 31 emergency response lease is this, that even where there are improvements that are not covered by registered leases it may well be – and this is a Bar table speculation, but with some plausibility, we submit – that many of them have been funded from precisely the same funds which would be drawn upon for the payment of any monetary compensation, pursuant to just terms.

MR WALKER: In other words, just terms may well require in particular cases consideration of the history, financial and governmental, with produced improvements in the first place and that is very much a matter which is fact rich and which requires, in our submission, matters to have been pleaded.

KIRBY J: Does your client support the submission put to us yesterday by Mr Merkel that just terms is a larger circle than reasonable compensation, especially as it affects Aboriginal interests?

MR WALKER: “Larger” is a word that will introduce a problem, in our submission.

KIRBY J: I do not see why. It is either a coincident or it is bigger.

MR WALKER: No. It could be smaller in financial terms.

KIRBY J: It could be smaller insofar as one is dealing with financial issues.

MR WALKER: Yes.

KIRBY J: It was put to us yesterday, and at the moment I am convinced that there is some merit in it, that so far as Aboriginal interests are concerned, they will include, as the Court has frequently said, spiritual interests and cultural interests and interests that are not to be dealt with solely on financial terms. Does your client take a different view for that?

MR WALKER: No.

KIRBY J: If you do, I would like to know what it is. I would like it to be spelt out.

MR WALKER: No, is the answer, your Honour, but I do not accept that just terms will necessarily be larger if one is measuring size by money, and I think your Honour understands.

KIRBY J: Yes, but money, it is suggested, and I think Justice Dixon supports the proposition and mere language supports the proposition, money is not all of it.

MR WALKER: Quite so.

KIRBY J: And in particular for Aboriginal interests for one of whom you are speaking.

MR WALKER: Your Honour, as I think is very clear from the written submissions, we have left, and very deliberately left, to the plaintiffs to put the case about just terms. Your Honour asked me have I anything to say against that aspect of the plaintiff’s case and the answer unequivocally is no.

KIRBY J: You opened the question. I merely asked you a question by reference to what you were saying to the Court this morning.

MR WALKER: Your Honour, the question about just terms requires facts. That observation in no way argues against what my learned friend, Mr Merkel, was urging yesterday concerning the content of just terms, particularly in relation to property, which is either recognised by or created under the Act, under which my client is created and constituted. That Act bespeaks the special recognition and nature of Aboriginal connection, yes, and we do not have a syllable to say against what my learned friend said in that regard. We stress, however, that just terms is a question requiring concrete application to facts. That is not against my learned friend’s argument, but it says something about what is presently posed for decision.

The next point I wanted to supplement some submissions from yesterday on is this, namely, the question of the diversion of the income stream about which there is a difference between the plaintiffs and us. Could we simply draw to attention that we have supplied the statutory framework for that on page 15 of our written submissions in footnote 72. That is simply to give your Honours that reference. Can I next move to supplement and finish what I was attempting yesterday in - - -

GUMMOW J: Just on this question of income stream. The fact that the income stream from an improvement is not diverted may in a particular case impact upon the just terms requirement in 62.

MR WALKER: Exactly. Now, if an improvement, for example, may not represent to city eyes perhaps anything very valuable financially but serves a critical community purpose, which will often be the case, and that critical community purpose is utterly unaffected by the punitive acquisition, for example, then for the reasons Justice Gummow has just raised, that will obviously be relevant to just terms. That will be, in fact, bearing in mind that my client can only deal with its land in accordance with the direction of a land council who itself may proceed only with the consent of the traditional owners, and having consulted other affected Aboriginal persons, then, in our submission, for all the reasons that Justice Kirby has asked me to consider in the last questions, just terms will always include consideration of the facts of how an improvement has been dealt with or affected by an acquisition.

Your Honours, the next thing I wanted to finish off was my attempt to answer the Chief Justice’s question to my friend yesterday concerning the use of the term “lease” in the NER Act. Without adding to what I have already said yesterday, could I give the references? It is Part 8 of the Law of Property Act (NT). We have supplied extracts, tables and extracts, and I would draw attention in particular to sections 117, 118 and 119. They raise questions rather than necessarily supply complete answers concerning the effect of the section 31 national emergency response leases.

Those questions will require to be answered by reference, of course, to section 50 of the National Emergency Response Act itself, to which your Honours’ attention has earlier been drawn, that is, that part of the Act has effect despite other laws. I also draw to attention the contemplation of the Parliament shown by subsection 58(3) of the NER Act, that laws of the Territory on certain topics, some described and some of it may be prescribed, might apply but maybe disapplied by regulation; a clear indication of their otherwise possible application.

GUMMOW J: On this question of section 50, what is the relationship between section 50 and picking up section 35(1), exclusive possession of the Commonwealth, and 69 of the Land Rights Act which creates the criminal offence with respect to entering and remaining on sacred sites? I think the plaintiffs say 69 has been washed away by section 50. But the question I want to ask you is, would section 69 in any event ever impose criminal liability upon the Commonwealth in accordance with the ordinary principle of construction explained by Sir Owen Dixon in Cain v Doyle in [1946] HCA 38; 72 CLR 409 and referred to often enough.

In other words the Commonwealth’s exclusive possession is never going to intersect really with a criminal offence in section 69. The human actor is still there and subjected to 69. So the question I want to ask, do you differ or accept the proposition that 50 washes away 69 with respect to sacred site offences? If you need to think about it, do so.

MR WALKER: Yes.

GUMMOW J: But at the moment it seems to me an illusory category that has been put up.

MR WALKER: Well, the exclusive possession - - -

GUMMOW J: Of the Commonwealth.

MR WALKER: - - - of the Commonwealth might be interpreted to mean an untrammelled right to occupy particular physical pieces of land. That is a ready understanding of that expression. But it might not, and in the context where there is a prohibition on sacred sites applying to individuals who, for example, are employees of the Commonwealth, unless there be something factual which I cannot presently imagine, there is no necessity to interpret the exclusive possession which is granted as overriding for a subset of the geographical area in question the prohibition in section 69.

HAYNE J: But invert it.

MR WALKER: Yes.

HAYNE J: The officer of the Commonwealth who goes in and does something on a sacred site, if charged with an offence under section 69, could that officer answer by saying, but the Commonwealth has exclusive possession?

MR WALKER: My answer just now is, no, he or she could not because the special provision for sacred sites with criminal sanction in section 69 is not in any commensurately special way in the NER Act singled out for implied or pro tanto repeal and exclusive possession, though we accept capable of importing a positive right to be on land, indeed, that will normally be the expectation of somebody granted exclusive possession, bearing in the mind the special nature of this land which includes sacred sites given statutory recognition and criminally sanctioned protection, in our submission, one would not read section 35 exclusive possession no differently from if it were a private conveyance.

Given that context, where the exclusive possession is being given of Aboriginal land by definition, and that it has a pre-existing and very special quality illustrated by section 69 of the Aboriginal Land Rights Act, the better reading of exclusive possession is that it does not swamp, wash out, pro tanto derogate from the prohibition in section 69.

Now, of course, going back to the first matter that Justice Gummow raised, in our submission, the Commonwealth itself is not subject to the criminal sanction, apart from the general proposition to which reference has been made. One sees, for example, that the kind of persons contemplated by allocation of penalty do not include either the Crown, by the use of that word, which is the one adopted in the statutes, nor is a body politic mentioned. That is subsection (1) of section 69.

Your Honours, the second of the Territory Acts to which I need to make reference concerning the word “lease” as a term of art carrying its attribute subject to section 50 and section 58(3) operation is the Act of the Territory, the Land Title Act, in particular, it is Part 6 of Division 2 in that statute. There are a number of provisions, I do not need to go to any of them. Your Honours see, for example, that one can transfer interests. Well, that obviously in this case will be overridden by the specific provision in section 35 against transfer by the Commonwealth. On the other hand, in the same provision of section 35, other dealings are permitted by the Commonwealth and those, in our submission, fall to be dealt with, being land in the Territory, by the pre-existing regime provided by the Land Title Act as well as the Law of Property Act.

One sees, for example, that there can be a standard terms document lodged, for example, by the Commonwealth, under sections 168 and 169 and, bearing in mind that an instrument of some kind is contemplated under section 55 as capable of being registered, those, in our submission, are all machinery provisions entirely apt, in no way incongruent with reading the word “lease” in the NER Act as being a lease. Your Honours will recall I called that in aid, in any event, in the argument I made about subsection 62(5) imposing an obligation rather than a voluntary possibility of the Commonwealth paying rent.

FRENCH CJ: It will not be executed by the Trust.

MR WALKER: No.

FRENCH CJ: It will not look like a lease from that point of view.

MR WALKER: No. Indeed, the very expression in section 55 is “by force of” and there are at least two meanings one can give to that word “force”.

FRENCH CJ: The Land Title Act contemplates a validly executed instrument, does it not? Section 66?

MR WALKER: Yes. Section 55 permits that to be done, in our submission. Your Honours, may I then briefly come to the question of section 71 of the Aboriginal Land Rights Act. I have already said much of what I wanted to add to our written submissions in that regard yesterday. Could I ask your Honours to note by way of cross-reference and addition the following proposition.

GUMMOW J: Where does this fit in in your written submissions? Paragraph 45?

MR WALKER: Yes. That is the particular argument which is most important to us, the one starting at 45. Your Honours will have seen that one of the propositions upon which we depend and the plaintiffs depend might be called the section 19 requirement which, by reason of what I have described as the role of affected Aboriginal persons, traditional Aboriginal owners, the Land Council and my client’s direction wholly by the Land Council, the importance of the involvement by the traditional owners veto in relation to disposition of interests, but we need to add this qualification; that is not complete or universal. There are exceptions. Some of them have been noted in our written submissions. We need to add a very obvious further one. So what I am adding is a cross-reference, really, to our paragraph 18 with its footnote 25, our paragraph 21 with its footnote 30 and our paragraph 24. I do not want to go to those paragraphs, but what I am adding should be seen as an addition to them.

There is a most obvious way in which section 19 veto involvement of traditional owners will not be required for a disposition of interests in Aboriginal lands and it comes about because of the definition of “Aboriginal lands” in subsection 3(1) to include what I will call “escrow land”, land within the area of my client but where the deed of grant is held in escrow. Your Honours are familiar with that from recent decisions, particularly see subsection 10(2) of the Act and the function of my client under paragraph 5(1)(c). There is a specific function of my client under paragraph 5(1)(c):

to acquire, as and when practicable, the estates and interests of other persons in the land with a view to the surrender to the Crown of those estates and interests and the delivery to the Land Trust of the deed of grant held by the Land Council.

That is a process which, believe it or not, has not yet been completed after all this time. So there is still escrow land. That means that any of those outstanding estates or interests will be caught – I should not say “caught” – will have the protection recognised by section 71, but they will not have been through the veto power of the traditional owners as to their original grant. That is a further qualification we need to add to our written submissions. However, in our submissions they are, as it were, grandfather provisions and they say nothing about what might be called the inherent susceptibility to variation of the fee simple which is granted. They recognise that when the fee simple was granted it was intended to be free of all other estates or interests so that there was a transitional period protected by the escrow while they were being all called in.

Your Honours will note that in relation to section 71 there is a special definitions section that explains its terms, namely section 66, which expands or at least changes the definition of “estate or interest” in Aboriginal land inclusively in a number of different ways which, as your Honours can see include, if you go to paragraph (d) in the reference to section 14, you have the reference to Commonwealth or Territory use and occupation. Again, when one goes, for example, to section 14 this is not a provision which in any way portends open-ended alteration to the fee simple. It is a set regime of an entirely familiar kind for all fee simples by way of what might be called a reservation.

It is for those reasons that we submit that, as we have put it in our written submissions, section 71 simply continues in operation. This is a major difference between us and the plaintiffs. We submit that the protection of the extremely important traditional rights referred to in section 71(1) continue to operate in precisely the way Parliament intended by reason of what has been called the ambulatory effect of section 71(2). They have not been swept away or extirpated.

We have given a reference – that is, by the section 31 national emergency response lease – to a decision of Justice Riley in the Territory Supreme Court, Margarula v Rose [1999] NTSC 22; (1999) 149 FLR 444 – I think we have given your Honours copies of that – simply to illustrate by decision the way in which the word “interfere” in section 71(2) is all important.

It is not, as it were, a conveyancing or simple inconsistency of estate or interest which is in question in subsection (2). It is doing things which will be largely physical and social – see subsection (1) – in such a way as to interfere with a use or enjoyment of an estate or interest. That again depends upon the facts. In the Margarula v Rose Case the facts included physically trespassing on and climbing over apparatus and plant and equipment of the mining company. It was held that did not answer the description of section 71(1) and it did amount to an interference in terms of section 71(2), whereby section 71 was not available as a defence to the criminal trespass that had been charged.

In our submission, that is a valuable illustration, first, of the necessity for facts, second, that the interfering with use or enjoyment is not to be understood as simply involving the comparison of two deeds, as it were. It involves examining conduct which would otherwise be permitted under subsection (1) and evaluating the impact that conduct has on the “use and enjoyment of” the other estate or interest.

Your Honours will have seen that we also differ from the plaintiffs, importantly, by how we resist the susceptibility of section 71 rights, which are very important, to termination under section 37 of the National Emergency Response Act, that is, we entirely accept the gravity of that consequence in relation to the learning on acquisition that is advanced by the plaintiffs. What we resist is, as it were, the bad news that there has been that entrenchment. We submit that section 37 in its terms contemplates the kind of right where it is sensible to suppose that one might find the person or persons to whom such notice may be given.

When one examines the nature of the very special rights and very important rights nuanced for different degrees of connection of Aboriginal peoples with that land and affected by the possibility of permissions from time to time, then, in our submission, section 37 simply cannot operate according to its tenor in relation to the rights protected by subsection (1) of section 71. That is an important proposition for why they continue.

Your Honours, that leads me to my last point which might be regarded as the most important point from the Land Trust’s point of view. That which really characterises the Land Trust in its obvious intended, almost unique, mission under the Act is the getting in and proper stewardship, subject utterly to direction of the Land Council with the consent of the traditional owners in consultation with other affected Aboriginal persons, of the fee simple; the fee simple, which was the solution adopted pre-Mabo to recognise that which was problematic to describe as property in those days.

In our submission, this is a species of property which for all the reasons that the prehistory of the Act, see the Woodward Report, and the consideration of the importance of the fee simple, for example, in Blue Mud Bay shows, ought to be treated as the most formidable piece of property that could be granted by Parliament.

KIRBY J: Did not the Court say that in Fejo?

MR WALKER: Yes, yes, quite. It can be said, in our submission, importantly for investigation of the question whether this is a kind of property which is inherently susceptible of the kind of alteration which has been made by the section 31 national emergency response lease, it can be said that none of us has better or more solid or more fixed property than fee simple.

Because it is at the top of that hierarchy in terms of fixed content and solidity it is important, obviously, to regard what might be described as inbuilt detractions or reservations, and it would also be true that none of us has a fee simple with nothing in the nature of a reservation, particularly in this country. So that in itself, in our submission, is nothing at all like the workers compensation system, both as a matter of substance and form, susceptible of alteration from time to time such as was considered by this Court in Chaffey [2007] HCA 34; 231 CLR 651.

We call in aid the contrast which your Honours referred to in Chaffey at page 664 of the Commonwealth Law Reports in paragraphs 24 and 25. Part of that contrast your Honours expressed by reference to the Newcrest decision where, of course, the property was not inherently variable compared to WMC where it was. One sees that in those two paragraphs. In Newcrest may we add this reference, or emphasise this reference? In the reasons of your Honour Justice Gummow[1997] HCA 38; , 190 CLR 513 at 634 to 635, the passage in particular concerning the grant out of the Territory’s radical title upon the Commonwealth taking it.

GUMMOW J: What page was that?

MR WALKER: Page 634, the bottom of the page to the top of page 635. I think reference may have been made already to that yesterday. For all those reasons, in our submission, in this Court for purposes including that raised in this argument, the approach taken in Blue Mud Bay [2008] HCA 29 at 50 – I do not need to take your Honours to it – is one which unless something special were to be shown about this fee simple, to which I am about to come, would produce the solidity of the property, it is unquestionably property, the only question is whether forcing or taking a leasehold out of it is an acquisition.

If that is all one knew, that would be almost a paradigm governmental taking, to take a leasehold from a freehold. The only question is whether there is something about this particular fee simple. The references I have just given culminating in Blue Mud Bay to paragraph 50 are, in our submission, entirely in one direction in support of our proposition, but of course this is an acquisition.

In our submission, there is the all important matter of context and history to use the phrase employed in a slightly different setting, but concerning precisely the same constitutional issues in Telstra [2008] HCA 7 paragraph 51. Now the context and history I do not wish to labour because they have been, I hope, fully set out not only in the written submissions, but also in the references incorporated in those submissions. But we would stress these features of it.

This was intended by the fee simple, as it were, to cut the Gordian knot of the problematic and probably unending difficulties of translating anthropologically observed realities – by that I mean realities that may never be quite clearly understood – into matters of power or control to use the key concepts of ownership that is property. By employing the fee simple, in our submission, the Parliament made clear the very opposite of an intention to subject that form of property to the infinite variety of possible future effects which would prevent in statutory encroachment by section 31 type provisions from being acquisitions.

Now, in particular, in our submission, that is to be seen from the nature of the special incursions upon this fee simple which I think your Honour the Chief Justice may have been asking about yesterday. Could I take your Honours to subsection 4(2B) of the Aboriginal Land Rights Act. I think the Chief Justice was asking about the power of the Minister to effect the extent of the land and it is there found by Gazette notice, “The Minister may . . . vary the boundaries of the land” and then I
draw to attention particularly the language of the next few words “to be held by a Land Trust”.

The first point I make is that does not look like a power to affect the metes and bounds in a registered grant. It looks rather like a power to alter the descriptions that one finds in the Schedule to the Act from which, after investigation grants may be recommended. That is the first point. The second point is that when one tracks through the possibilities in paragraphs (a) and (b), we submit that they may all be characterised, in effect, as reallocation between land trusts and thus never moving away from the benefit of the Aboriginal persons with the relevant connections rather than detraction - - -

FRENCH CJ: That is the same point that Mr Merkel made yesterday, was it not?

MR WALKER: Yes, and that very important difference between this fee simple, if you like, and other fee simples, namely, that perhaps not directly, but at an anterior stage and indirectly the capacity to enjoy it in a particular land trust may be affected by what appears to be mere ministerial fiat is not, upon closer examination, anything of the kind.

There is no subjection to executive discretion. The purposes for that gazettal of variation are tightly circumscribed by reference to matters which are intended to permit adjustments so that the appropriate land trust or land trusts reflecting the relevant Aboriginal peoples hold the land eventually by way of the registered fee simple. That, in our submission, is a highly significant indication that this is not a case which has any relevant similarity with what, to use an admittedly extreme example from recent decision, might be seen in a workers compensation scheme. If we are correct in that then there can be no doubt about either the property or the acquisition in relation to the section 31 lease and the fee simple.

Your Honours, it remains only to say we have not said anything about special measures, not because that is not an important topic but because it really does not arise in this case. That is why so little is found in our written submissions on the point and why I wish simply to say, on the facts pleaded and the nature of the issues raised by the demurrer, the question of whether these are or are not special measures and, if so, what does it matter and, if not, what does it matter simply does not arise. May it please the Court.

FRENCH CJ: Thank you, Mr Walker. Yes, Mr Solicitor.

MR GRANT: May it please the Court. We accept that on the authority of the majority decision in Newcrest it would not be strictly necessary to decide the issue on which the Territory intervenes in the event that the Court determined that this legislation is supportable by the race power or the external affairs power.

Having said that, we submit that the Teori Tau issue would still be properly decided in that event for two reasons. The first is it would lend certainty to the interaction between placitum 51(xxxi) and section 122 and we note in this respect that that is not simply a mere intellectual concern, as the Commonwealth contends in this matter, that the law is supported solely by section 122. It certainly has not suggested that it will not in the future exercise its legislative authority in respect of matters for which executive authority has been transferred to the Territory pursuant to the self-government arrangements, so it remains a live issue in that respect. Of course, your Honours will recall that that was the practical basis on which Justice Toohey was disinclined to overrule Teori Tau in Newcrest.

The second reason we say the Teori Tau issue would be properly decided is that it would avoid the need for potentially extended examinations of whether a particular law is capable of characterisation under some section 51 head of power, as well as under section 122. That is the sort of examination that is called up in this case.

Your Honours, we largely adopt the submissions that have been put by the plaintiffs and we rely on our written submissions. We would wish only to address some additional matters arising from the question of abstraction that was raised yesterday and relating to two matters outlined in the Commonwealth’s submissions in reply, namely, eminent domain and the effect of the petroleum legislation 1954 insofar as that goes to any inconvenience that would result from overruling Teori Tau.

Turning first to the question of abstraction, we say, your Honours, that but for section 51(xxxi), it is obvious there are a number of heads of power in section 51 which would have been capable of supporting laws as to the acquisition of property without just terms. Likewise, section 122 would have been capable of supporting Commonwealth laws as to the acquisition of property in a Territory without just terms but for 51(xxxi). We say that 51(xxxi) abstracts, and we use that term advisedly, from all of those other powers any power to enact a Commonwealth law for the acquisition of property otherwise than on just terms, that is to say, your Honours, you cannot avoid the just terms qualification by relying on another head of power.

That is a rule of construction that was propounded by Sir Owen Dixon in Schmidt, as Justice Hayne went to yesterday, and it has been picked up since in Nintendo and Clunies-Ross, Mutual Pools and finally in Newcrest. Now, your Honours, for this purpose section 122 is a purpose in respect of which the Parliament has power to make laws as that phrase is used in section 51(xxxi).

FRENCH CJ: Government of the Territory is the purpose, is that right?

MR GRANT: Yes, that is so, your Honour. Just because that purpose is not confined to a specific and narrow subject matter does not deny its characterisation as a purpose. The purpose is anything to do with the territories which the Commonwealth decides requires the making of laws. Sir Owen Dixon gives some attention to that particular phrase as it appears in section 51(xxxi) and says that it is indefinite. We take his Honour there to mean indefinite in the sense that it is very broad. It is clear now, since Lamshed v Lake, that section 122 is not to be read as disjoined from the rest of the Constitution in this respect. Of course, that has been reinforced in Spratt v Hermes, Berwick v Gray and subsequently in Newcrest.

KIRBY J: If you look at it simply in terms of the governance of the Commonwealth and of Australia – I am not seeking to foreclose the question by referring to the governance of the Commonwealth, whether that just includes the States on some people’s theories – the people who are living in the Northern Territory are citizens and they are electors within the Constitution and to exclude them from the protections that are provided by section 51(xxxi) would itself, in this day and age, appear to most people to be odd. Why should they be excluded from protections that all other citizens of Australia living elsewhere in the Commonwealth are not excluded from?

MR GRANT: In our submission, they should not, your Honour. Of course, we put the subsidiary argument that this is a Constitutional right and it should not be denied in the absence of clear words, and there are no clear words. The observation your Honour makes has particular force when one bears in mind that, for the internal territories at least, those territories were part of the Commonwealth at Federation and when one bears in mind the fact that they are wholly incorporated into the Commonwealth in terms of the application of taxation laws and immigration laws, which is not necessarily the case in respect of other territories, and when one bears in mind the fact that those territories comprise approximately one-sixth of the land mass of the Commonwealth and their combined population approaches or exceeds that of Tasmania. So for those three reasons, your Honour, we say that the rights argument does have some force, at least in relation to internal territories.

KIRBY J: Can one take judicial notice of the fact that the population of the Northern Territory comprises a very much greater cohort of indigenous people than any State or other Territory of the Commonwealth?

MR GRANT: Your Honour, we do not see how that necessarily keys into the application of the guarantee.

KIRBY J: If the theory of Teori Tau is right, then a very large proportion of Australian citizens and a very substantial sub-proportion of them who are indigenous are cut off from a protection of the Constitution that is provided in section 51(xxxi) to everyone else.

MR GRANT: Yes, your Honour. Insofar as that keys into the rights argument or the rights construction, yes, that is significant.

KIRBY J: It is not a construction that seems to be comfortable to a modern notion of governance of this nation equally for all citizens throughout the continental length and breadth of it.

MR GRANT: Yes. We accept and adopt that, your Honour.

KIRBY J: When one thinks that a lot of the early jurisprudence was undoubtedly affected and sometimes said to be affected by the fact that we had territories offshore in Papua and New Guinea of people who at that time and even then had no right to enter Australia because they offended the White Australia policy, then it is not really a theory of the Constitution that one would hasten to embrace today.

MR GRANT: No, your Honour. The matter now must be considered in a contemporary context.

GUMMOW J: Do you want to say anything more about paragraph 8 of the Commonwealth’s reply? In particular, I am referring to the Petroleum Ordinance 1954.

MR GRANT: Yes, we do, your Honour. The suggestion put there is that there may be significant ramifications flowing from overruling Teori Tau by operation of that ordinance. Of course, that ordinance declared that all natural gas and helium on or below the surface of land was the property of the Commonwealth. In 1978, upon self-government, the property that was affected by that particular ordinance was vested in the Territory by operation of section 69 of the Self-Government Act.

GUMMOW J: What does section 69 say?

MR GRANT: That Commonwealth property vested in the Territory subject to the section 70 provisions, your Honour.

FRENCH CJ: I think that affected some of the mining leases, did it not, in Newcrest?

MR GRANT: Yes, yes, your Honour. In 1984 that 1954 ordinance was repealed by the Petroleum Act 1984, which is a piece of Northern Territory legislation. That Territory legislation, the 1984 Territory legislation, provided that natural gas and helium on or below the surface of the land was deemed to be the property of the Crown and always had been. So that is the full legislative context in which the Commonwealth makes its submission. Now, we make only four responses - - -

FRENCH CJ: Was that if there were an acquisition you got it back?

MR GRANT: Well, that is another response, but dealing specifically with the question of inconvenience or ramification, the 1954 ordinance would not have operated to acquire any property in the form of helium or natural gas from Crown land or pastoral leases, which made up the vast bulk of the land holding in the Territory at the time, because those matters were reserved from pastoral leases, obviously, or to put it another way, pastoral leases were granted for specific purposes and the grant did not extend to ownership of those sorts of resources.

The second observation we would make in relation to the Commonwealth’s proposition is that the application of the guarantee were this Court to overrule Teori Tau would only operate to upset transactions by which the Commonwealth conferred rights to drill for natural gas and helium on land covered by freehold grant, and the Commonwealth does not contend that there were any such arrangements.

KIRBY J: Is this an argument of inconvenience, as you understand it?

MR GRANT: Yes, it is.

KIRBY J: Well, why would inconvenience be of great significance for a constitutional question?

MR GRANT: Well, we say not, your Honour, but it is a matter that is thrown up by the Commonwealth and we address it this way. Even if one accepted that inconvenience or these purported ramifications or possible ramifications were determinative or in any way influential, the contention is an empty one in the sense that it does not identify any real inconvenience or ramification or prejudice. The Commonwealth does not come here and say, there were in fact transactions by which these sorts of rights were granted which would be upset by the operation of the guarantee to section - - -

KIRBY J: I think if the inconvenience of Wakim was tolerable, the inconvenience that is involved in this case is even more so.

MR GRANT: Quite so, even were it not illusory. The third submission we put in relation to this suggestion is that the acquisition which it is said that the 54 ordinance effected, and we do not concede that it did effect an acquisition necessarily, it occurred in 1954, and the Commonwealth does not now contend that there is any person in whom a claim now subsists. Then finally, in any event, that legislation pre-dated Teori Tau and it is not said that the Commonwealth has since acted in any material way in reliance on that decision, and certainly, it has not and could not have done so since 1978 when the property passed to the Territory upon self-government.

Your Honour, we say the contention does not withstand any serious scrutiny. Similarly, there is a suggestion that amendments to the Aboriginal Land Rights Act might be somehow affected by repealing Teori Tau. Apart from the legislation at Bar at the moment, we are not aware of any amendment since the inception of that legislation that might be affected by overruling Teori Tau.

Your Honours, whilst we are on the issue of the Commonwealth’s contentions in relation to overruling Teori Tau, there is also a suggestion in the Commonwealth’s submissions, the original submissions, that the eminent domain which the Government of South Australia or the Crowning right that South Australia enjoyed over the territory at the date of Federation was simply transferred to the Commonwealth upon acceptance of the Northern Territory.

KIRBY J: What did the Crown have to do with it once the State was created by the Constitution?

MR GRANT: Yes, well, I apologise, your Honour, I accept the - - -

KIRBY J: Do not apologise, that is the present orthodoxy. I just will never cease to question it. Once the Constitution established the States, the Commonwealth and the Territories, they are constitutional entities of Australia.

MR GRANT: Yes, and, your Honour, the right of eminent domain to which the States, including the State of South Australia, were and are entitled derives from the Constitution and their status as States. Now that is a right that is characteristic of a fully sovereign power and it is not something that was transferred from South Australia as the surrendering State to the Commonwealth at the time of surrender. It is not something that the Commonwealth can transfer to the Territory in the event that it is admitted or established as a new State. Of course, that is the purport of the Commonwealth’s submission, that the Commonwealth needs a right of eminent domain which it procured from the State of South Australia and the Territory needs to recognise that the Commonwealth has a right of eminent domain, if it is to have such a right should it become a State.

Now, your Honours, the Commonwealth took the Territory in the Commonwealth’s capacity under the Constitution and subject to the constitutional limitations, one of which we say is 51(xxxi). The capacity in which the Commonwealth holds the Territory is very different to the capacity in which the State of South Australia held the Territory between 1900 and 1911. In particular, South Australia had a right of eminent domain and there is some discussion of the nature of that right, your Honours, in Minister of State for the Army v Dalziel [1944] HCA 4; (1944) 68 CLR 261, particularly Justice Rich at 284. Your Honours, that is referred to at item 20 of the plaintiff’s list of authorities.

KIRBY J: What does this go to exactly?

MR GRANT: It goes to the nature of eminent domain and the limitation that is imposed on the Commonwealth by the Constitution in that respect. Simply to illustrate, your Honour, the difference in capacities between the manner in which the Commonwealth holds the Territory and South Australia’s eminent domain over that area that was the Territory prior to acceptance.

KIRBY J: But once the Constitution came into force and created a Territory of the Commonwealth as a separate political entity of Australia under its Constitution and once the Northern Territory became a Territory of the Commonwealth, successively in different parts, why would one do anything other than analyse its character and legal status and incidence than by reference to the Constitution of the Commonwealth of Australia? Why would one impose upon it, especially in different parts of it, different theories that antedate its creation as a constitutional entity of this nation?

MR GRANT: One would not, your Honour. We simply say that the power of the Commonwealth, and particularly under section 122, is subject to various constitutional limitations, one of them being 51(xxxi) which operates, if one uses the language of eminent domain, to, if you like, deprive the Commonwealth of eminent domain over the Territory.

FRENCH CJ: Mr Grant, in relation to 51(xxxi), it is directed to the acquisition of property from any State or person. Of course, if you are talking about a Territory, there is no scope for the application of an acquisition of property from a State. So what is the scope of the term “person” if this limitation is applied to a Territory? Do we pick up the political polity or individuals within in?

MR GRANT: Your Honour, if one looks to the Acts Interpretation Act - - -

FRENCH CJ: This is bearing in mind that, assuming this to apply to territories, it applies to territories which have no governments, little or no population at one end, through to the Northern Territory and the ACT.

MR GRANT: Yes. We understand there are difficulties there, your Honour, and we do not seek to, as a matter of principle, draw any distinction between different types of territory beyond saying, as we have in response to Justice Kirby, that internal territories occupy a different position for those three reasons we have outlined; their position at the date of Federation, the application of all the laws of the Commonwealth to them, including immigration and taxation laws, and their geographical location, if you like.

But if your Honours go to section 22 of the Acts Interpretation Act, which of course governs the Self-Government Act, you will see expressions used to denote to persons generally, such as “person” includes a body politic. Obviously that has got limited - - -

FRENCH CJ: We are talking about the Constitution, of course.

MR GRANT: Yes, limited application to the Constitution.

FRENCH CJ: I think we have to go back to an English Interpretation Act.

MR GRANT: Even if it does not extend to bodies politic, your Honour, there is nothing unusual in the notion that the Commonwealth is able to acquire Crown land in the Territory without paying just terms – section 70(9) of the Self-Government Act, in fact, has a provision in those terms – but it is subject to a requirement to pay just terms where the land is acquired from a private citizen or a corporation. So, your Honour, the Territory as a body politic is a creation of the Commonwealth Parliament, but the citizens of the Territory, if you like, enjoy the benefit of the guarantee from the date of Federation and there is no reason why one should read 51(xxxi) as depriving them of that benefit on the basis of the express reference to State and person.

GUMMOW J: The question arises, I suppose, if the Commonwealth sets about compulsorily acquiring Territory property, property of the Territory.

MR GRANT: Yes, it does, and it does not arise in this particular case. That was a matter adverted to, of course, by Justice McHugh in Newcrest, but we say it does not lead to the conclusion or give rise to any anomaly. One simply reads it as requiring just terms to be paid where the acquisition is effected from a corporation or an individual citizen. Your Honours, we say that bearing in mind that both section 51 and section 122 are legislative powers of the national Parliament. They are not mutually exclusive provisions. So the section 51 heads of power can apply and they have been held to apply in the Territories, and the proper approach is that expressed by Justice Windeyer in Spratt v Hermes, and since adopted, that when the Commonwealth legislates it legislates using all powers thereto enabling.

Now, your Honours, the rule of abstraction applying to 51(xxxi) is a rule of construction, a rule of interpretation, as detailed by Sir Owen Dixon in Schmidt and it is only subject to a manifest intention to the contrary displayed in any other head of legislative power and, your Honours, we say there is no such manifest intention disclosed in section 122. It is a general power to make laws for a Territory and there is no manifest intention to exclude acquisition of property on just terms.

On the contrary, your Honours, we say that 51(xxxi) and section 122 should be read together to require that no acquisition of property can be made by or under a Commonwealth law otherwise than on just terms, subject to the particular position of the body politic. Your Honours, even Justice Toohey in Newcrest would agree with that insofar as the Commonwealth law was also supportable under another head of power in section 51 as well as section 122. But his decision, as we indicated at the outset, is quite clearly based purely on precedent. He was not inclined to overrule Teori Tau.

The only way we say Teori Tau can properly be regarded is a simple application of the disparate strictly dualist federal approach to Commonwealth legislative power whereby section 51 is federal and applies in States only, section 122 is a non-federal matter and is capable of having application in Territories only and in which section 51(xxxi) abstracts the power to acquire property on just terms from the other section 51 heads of power but does not do so in respect of section 122. Of course, the courts moved beyond that simple disparate approach and there is no justification for treating section 51(xxxi) in that way in respect of its application to section 122.

When properly passed, your Honours, the Commonwealth’s argument is simply an attempt to avoid that conclusion in relation to the basis of Teori Tau. It clearly is a decision that is based on that disparate notion which Sir Garfield Barwick had disavowed in Spratt v Hermes and then some years later, seven years later, in Berwick v Gray again disavowed in finding that laws applying in Norfolk Island were capable of support under 51(ii) and that section 51 had had application to Territories. If it please the Court, they are the Territory’s submissions.

FRENCH CJ: Thank you, Mr Solicitor. Mr Burmester.

MR BURMESTER: If it please the Court. The first issue I will deal with is the question of section 122 and the application to the Territory’s power of section 51(xxxi). The issue essentially is, is section 122 never subject to section 51(xxxi); is it always subject to section 51(xxxi); or is there some middle position. The Commonwealth contends that there is a possible middle position.

Our primary position, however, is that any law that is supported by section 122, regardless of whether other powers may also be available, is not subject to section 51(xxxi), and we say Teori Tau was correct and ought to continue to be applied. We reject the submission that your Honours have just heard that Teori Tau depends on giving the Territory’s power a disparate operation.

As my friend has just pointed out, Sir Garfield Barwick had disavowed that in earlier cases, particularly Spratt v Hermes, and we say in the light of that it is hard to say that in Teori Tau they reverted to the old view of the world.

KIRBY J: Let me just get this right. The submission which you make on behalf of the Government of the Commonwealth is that citizens of Australia in the States are protected by section 51(xxxi), but citizens of Australia in the Territories, specifically the self-governing territories of the Northern Territory of Australia and the Australian Capital Territory are not?

MR BURMESTER: Your Honour, that is not - - -

KIRBY J: That lends itself to a yes or no answer.

MR BURMESTER: Your Honour, we say that in exercising our powers as a government in the Territory, we are entitled to act as if we were equivalent to a State government. The State governments have no constitutional - - -

KIRBY J: Even though self-government has been afforded to the people of Australia in the Northern Territory?

MR BURMESTER: Your Honour, we say that the Commonwealth in the Territory stands in the same capacity as a State government. The State governments, as we know, are not bound by any provision in the Constitution requiring them to pay just terms. Our alternative position, in a sense, says, even if we do some things in the Territory as a national government and therefore it is appropriate for section 51(xxxi) to apply, if we are essentially acting as a local government dealing with a local issue confined to that territory area, then we ought to be equated with a State and not subject to the just terms guarantee in 51(xxxi) which, properly construed, was always intended by the founders and can be read on its terms to deal, if you like, with national issues, national powers and not locally confined territory powers.

KIRBY J: So essentially, the self-government is really a bit of a charade?

MR BURMESTER: Your Honour, the Commonwealth could always take back self-government from a territory; that is the Constitutional position. It is not a question - - -

KIRBY J: But it has not. So far it has granted it, and we have self-government and have had it since 1978 in the Northern Territory, and you are coming along here contending that the citizens of Australia in the Northern Territory, who are self-governing, are not protected in the same way as citizens of Australia elsewhere. That is your primary submission, is it not? I just want to get it very clear and I want to get it out of your mouth, for the Commonwealth of Australia.

MR BURMESTER: Your Honour, to the extent the citizens of the Northern Territory are citizens of Australia - - -

KIRBY J: No, they are citizens of Australia.

MR BURMESTER: - - - and a Commonwealth law operates Australia-wide, our alternative position accommodates that and recognises, as in Newcrest where they said it was an Australia-wide law, that the citizens get the guarantee of 51(xxxi).

KIRBY J: You keep wanting to scurry back to your alternative position, but I want to pin you down on your primary submission, which is the Teori Tau.

MR BURMESTER: Yes, your Honour, the primary submission says that 122 operates unconstrained by 51(xxxi). That is the primary position.

FRENCH CJ: Is that across all territories, external and internal?

MR BURMESTER: Across all territories, your Honour.

FRENCH CJ: Regardless of whether they have self-government or not?

MR BURMESTER: Yes. We do not seek to make a distinction between internal or external or - - -

FRENCH CJ: Because self-government is a statutory, not constitutional artefact.

MR BURMESTER: Self-government is a statutory thing. Well, we have chosen in section 50 of the Self-Government Act to make certain provision, we have repealed it for the purposes of the Emergency Response Act. But yes, within the Territory we say, under section 122 it is unconstrained by 51(xxxi), and the reason we say that is as a matter of construction. We accept that that is the issue, how do you construe the two provisions? Do they collide? Can they be read side by side in a way that makes sense? That is the issue I need to explore initially in terms of the first proposition.

KIRBY J: But as I hope Justice Gaudron and Justice Gummow, I and on the theory of it, Justice Toohey, indicated there are two constructions that are available, and if we have a choice it is much more appealing in the notion of the equality of citizens of Australia throughout the land mass of the continent of Australia that they are not disadvantaged in this respect under federal legislation.

MR BURMESTER: Yes, your Honour, can I just deal briefly with what Newcrest might in fact be authority for? In our submission, it is an authority, if it stands for anything in terms of just its outcome, that a law made under a 51 head of power is subject to 51(xxxi) because certainly Justices Gummow, yourself Justice Kirby and Justice Gaudron said she agreed with that in terms of saying 122 was subject to 51(xxxi).

But if you look at the reasons – the basis on which Justice Gaudron actually made her decision in that case, it was that this was not a Territory law, the law in Newcrest was not a law under 122. So while she said she agreed with your Honours Justice Gummow and Kirby, she did base her decision in her actual reasoning on the proposition that the Newcrest law was not a 122 law. As we know, Justice Toohey deliberately did not overrule Teori Tau, so we say the issue is still open.

KIRBY J: I think Justice Toohey did indicate that if he had felt free to overrule Teori Tau he agreed with the view that had been expressed by Justice Gummow and myself.

MR BURMESTER: Yes, your Honour, but he did not overrule Teori Tau. So, your Honours, if I can explore why we say 122 and 51(xxxi) can operate alongside each other without 51(xxxi) qualifying 122. Can I start with the words “subject to this Constitution”? Justice Gummow in Newcrest at page 606 suggested “No particular conclusion follows” from the fact that 122 does not contain those words while 51 does, but, in our submission, that cannot be correct.

The presence of those words in one section, section 51, are not – in section 122 is of significance when you construe the two provisions together. Those words, in our submission, carry at least an implication that section 122 alongside 51 is predominant, or at least that section 51(xxxi) in particular cannot be given any preferred status alongside section 122. Justice McHugh in Newcrest at pages 577 and 580 deals with this issue.

So, in our submission, the first construction point is that the absence of “subject to this Constitution” in 122 does not have no significance when you are comparing it with another section, such as section 51, where those terms appear.

The other key issue that falls for consideration is whether the words in section 51 that talk about “acquisition of property . . . for any purpose in respect of which the Parliament has power to make laws” embraces a law for the government of the Territory under section 122. Of course, in Newcrest and particularly Justice Gummow’s reasoning, he saw that as a distinction that did not have any relevant significance for this purpose. They both defined a purpose in respect of which Parliament has power to legislate, and that as I understand it is the proposition put to this Court by the other parties in the matter.

In our submission, that treats section 122 as if it was just another placitum in section 51. It, as it were, reads section 122 as simply being a “power to make laws for the peace, order, and good government of the Commonwealth with respect to” a territory. We say that is to ignore the unqualified nature of the language used in section 122, which was – as the cases have regularly said, without getting hung up on words, but it talks about it being a plenary power as full as one can imagine. It is not seen as a subject matter power - - -

GUMMOW J: This word “plenary”, really, we should not have - - -

MR BURMESTER: I agree it is not – but there are other - - -

HAYNE J: It is a lovely conclusion, Mr Burmester, it is not an argument.

MR BURMESTER: It is not the word, it is what lies behind it and what lies behind it - - -

GUMMOW J: It is common law argument on a bad day, it seems to me.

MR BURMESTER: What lies behind it is that section 122 is the power to legislate on any subject matter on any question - - -

HAYNE J: It is a statement of conclusion, it is not an argument. Can we have the argument, Mr Burmester, not the conclusion. We know that?

MR BURMESTER: Well, your Honour, I am trying to distinguish the scope of section 122. Those words “the government of any territory” as I indicated earlier to Justice Gummow, puts the Commonwealth in the same position as a State government untrammelled except by the Commonwealth Constitution. We say that is significantly different from the sort of thing that section 51 is trying to do where it says the Commonwealth “has power to make laws of the peace, order and good government of the Commonwealth with respect to” certain identified subject matters or persons. We say one should not, as a matter of construction, equate the words in section 122 with simply being another subject matter, another placitum within section 51. We say if one automatically says any section 122 law is caught by section 51(xxxi), that is essentially what is being done.

KIRBY J: This theory that it is equivalent to a State founders on the rock that the Commonwealth acts through the Federal Parliament, which is subject to 51(xxxi) and a State does not act through the Federal Parliament unless it does so by its consent and request and then if it does by its consent and request, it is in turn subject to any requirements of section 51(xxxi). So that the problem of your theory, it is not a very comfortable theory for a modern democratic polity. We have to have a theory of the Constitution.

MR BURMESTER: Our theory, your Honour, asks in what capacity does the Commonwealth Parliament act? If it is acting as sovereign of a territory and making provision for that territory it is acting in a different capacity from when it is acting for the government of the nation as a whole.

GUMMOW J: How does one determine which capacity? It cannot be what it says, can it, simply?

MR BURMESTER: I am sorry, your Honour?

GUMMOW J: It cannot be simply answered by looking at what the Commonwealth says it is relying on?

MR BURMESTER: No, your Honour, it is a question of - - -

GUMMOW J: Because often enough you come here and say - - -

MR BURMESTER: - - - looking at the substance of the law and when I come to our alternative position perhaps I can clarify that, but, yes, it does require looking at the substance of the law. It is not simply for Parliament to decide in which capacity it is acting.

HAYNE J: Is this not the process of distillation to single characterisation that the Court has rejected?

MR BURMESTER: No, your Honour, we strongly reject that. We are not seeking to deny that some laws that operate in the Territory have a dual character and we are not trying to say you have to choose one or the other for the purpose of saying it is valid under one power, not under another. We are trying to reconcile two provisions and so when I come to the alternative formulation, I will be trying to make clear that we are not trying to engage in a single characterisation approach, which we accept is not the appropriate way to characterise laws for the purpose of working out whether they are within a head of power.

Your Honour, just in passing, Justice Kirby keeps asking me about the equivalence of persons in each State. We do say there is significance in the fact that when the Commonwealth acquired a territory it acquired it from a State in which for State purposes the State was under no obligation to provide just terms.

KIRBY J: I do not see why that is significant. Once the Commonwealth did that, it picked it up and took it into its bosom as the national government and with more modern, up-to-date provisions including that requiring that if you take people’s property you have to give them just terms – not a terribly extraordinary provision by the standards of modern governance. Why should we read it down, especially for Australian citizens in part of the Commonwealth?

MR BURMESTER: Your Honour, I have tried to answer that. Can I just make the point that the passage in Dalziel [1944] HCA 4; 68 CLR 261 at 284 that the Solicitor sought to rely on, we say does not detract from our argument. That was a discussion in a different context. It was not in the context of section 122. He was talking about section 51(xxxi) and not, in our view, dealing with the relationship between the two provisions. We say that there is some significance, that the Northern Territory residents, in relation to State matters while they were residents of South Australia were not subject to just terms, and by becoming a Territory the Commonwealth, we say, acquired in a sense the main powers – all the powers that a State Government previously had.

What is surrendered, under section 111 of the Constitution, is the Territory and we say that embraces, in the light of 122, all the powers that go with the equivalent of State Government power, including eminent domain, without the need to pay just terms. Your Honours, another argument that is sometimes used against exempting section 122 from the just terms of Parliament is its capacity for extraterritorial operation.

GUMMOW J: Wait a minute. I am not sure I understand the argument about section 111. If you take the citizen who lived in New South Wales and owned property in what is now the Australian Capital Territory, if in 1905 the Commonwealth wanted to acquire their property to build Duntroon or whatever, the Commonwealth had to pay compensation. Is the consequence of your argument that because the Territory was surrendered to the Commonwealth and the land was resumed in 1920, the Commonwealth now does not pay compensation to the owners of Duntroon?

MR BURMESTER: Your Honour, that raises this question of whether some laws under section 122 may predominantly be for a national purpose, such as in your example Defence and, therefore, in our alternative position not subject to section 122.

GUMMOW J: I know you have the safe harbour of your alternative, but on your primary submission the answer is yes, I think.

MR BURMESTER: Yes. Your Honours, I was moving on to the question of extraterritorial operation. We have dealt with that in paragraph 22 of our submissions. The reference is there as to why, properly read, section 122 does not authorise the acquisition of land within a State for a Territory purpose and, so read, it is equivalent to one State cannot compulsorily acquire land in another State under its own laws. Again, it puts the Commonwealth on a par with a State and we say, as the Judges in – Justices Brennan, Dawson and McHugh – in Newcrest did, they gave that interpretation, that limitation, to 122. We say that is the appropriate limitation and it again avoids a clash between 122 and 51(xxxi).

Your Honours, without taking you to them, can I commend the judgments of Chief Justice Brennan in Newcrest [1997] HCA 38; 190 CLR 513 at 533 to 543, Justice Dawson 550 to 559 and Justice McHugh 574 to 584. In our view, they are strong endorsements of the approach that Teori Tau continues to be correct. We say that it gives a proper interpretation to two quite disparate provisions of the Constitution and reads them in a way in which they can coexist.

Your Honours, if I can then move to the situation that arises if one is against me on that proposition and assumes that there is a potential conflict between 51(xxxi) and section 122. One needs to start by asking, how does section 51(xxxi) itself operate? What 51(xxxi) does, as we know, is to restrict the operation of certain other legislative powers and becomes itself the source of legislative power to acquire property subject to just terms.

In the absence of section 51(xxxi) it is accepted that many other powers would have incidentally included the power to acquire property for the purpose of the power, but what section 51(xxxi) does by being there is an express provision is to limit the operation, destroy that part of the other powers that would have allowed acquisition and require acquisition to occur under 51 in accordance with the just terms requirement of 51(xxxi).

FRENCH CJ: When you say “destroy”, it is just a matter of the other powers are construed so as not to include that which is covered by section 51(xxxi) in order to avoid an absurdity?

MR BURMESTER: Yes, your Honour, they are construed so as not to be the source of power for the acquisition. Now, the case is made clear, however, that that construal of the other powers, to read them down, is subject to contrary intention whether by express terms or the very nature of the other power and this, for instance, is dealt with in Mutual Pools [1994] HCA 9; (1994) 179 CLR 155 at 168 to 170 and in Nintendo [1994] HCA 27; (1994) 181 CLR 134 at 160 to 161. I need not take your Honours to them, but what those cases indicate is you have to ask, does the other power manifest a contrary intention which precludes the abstraction from it of the power to make an acquisition law or is it of the essence of the other grant of power that it is encompasses the making of laws that detract from proprietary rights and therefore, again, one does not abstract out of it the power to acquire.

We say it would destroy the essence of section 122 if the Commonwealth or a self-governing Territory could not exercise the full extent of the power in section 122, at least in relation to the alternative subclass we have identified in our submissions. But given what I have said about the different nature of the power in 122 as opposed to a power that was simply another placita in section 51, we say it would destroy the essence of the power in section 122 if one were to abstract from 122 in every instance the power to acquire property. Section 122 was intended, as I have said already, to give the Commonwealth the combined capacity of the power as a national government and of a State government.

There is, we say, no essential objective that requires section 51(xxxi) to abstract out of section 122 the power to acquire property. Capital Duplicators dealt with section 90 and said there was an essential objective that meant section 90 had to qualify section 122 to preclude Territory excises. That interpretation effectively put Territory legislative power on a par with State legislative power. We say that is not the result if Teori Tau is overruled. Similarly, with the Territory decisions on Chapter III in section 122, they essentially place Territory and State courts on a par, they do not equate a federal court with a Territory court, and our - - -

KIRBY J: That is not a unanimous view.

MR BURMESTER: - - - argument seeks to do the same. It does not seek to tear section 122 from the constitutional fabric, but rather it seeks to integrate 122 with other provisions of the Constitution. In terms of alternatives, your Honours, one of the difficult issues, as our written submissions acknowledge, is this question of characterisation. In relation to section 122 law, a law operating in a Territory rather, characterisation has not always proved easy. Some judges have always treated it as a section 122 law no matter what the subject matter. Others, like Justice Gaudron in Newcrest, treated general law as never a section 122 law, even in its application in the Territory, and others, and perhaps the more predominant view, is to treat it as having more than one character.

So, your Honour, it is not our argument that a law operating in a Territory has only one character. We accept that in many situations it may well have more than one character. It may have a section 51 character as well as a section 122 character. Our alternative argument and our reference to looking for a predominant character assumes that a law has a dual character, but we say that does not finally answer the question as to whether section 51(xxxi) governs the issue or whether there is still some ability for section 122, which is a broader and much greater power, to operate unconstrained by section 51(xxxi).

FRENCH CJ: So you would say there is no mechanism by which the “just terms” limitation affecting the one head of power, a 51 head of power, sort of infects the reliance upon 122?

MR BURMESTER: That is our primary position.

FRENCH CJ: Contrary to Newcrest?

MR BURMESTER: It cannot, infect. Our alternative position says let us look at the problem that arose in Newcrest where you had a law which while it was dealing with land in the Territory was essentially part of a broader scheme to implement world heritage convention obligations, was seen as essentially fulfilling a national purpose. Newcrest, one can understand, says, well, where there is that national purpose then the fact that the national park was being acquired in a Territory as opposed to a State should not make any difference, and so - - -

FRENCH CJ: You cannot cut it back down to the 122 bit.

MR BURMESTER: You cannot confine it to the 122. So our alternative position seeks to accommodate the outcome in the Newcrest case, not for precisely the same reasons, but we certainly would say on the alternative, well, yes, that either was a law that was not a 122 law in true character, but if it had both characters its predominant character was clearly a law for a national purpose.

GUMMOW J: How does one determine the predominance?

MR BURMESTER: Your Honour, the way you determine whether a law is a 51(xxxi) acquisition law or a law that is, in essence, a tax law – you have to make a choice. Is it a tax law which the tax law authorises or is it a law that has the character that has been abstracted out of the tax power, or the copyright power or some other power, and put in section 51(xxxi)? In doing that, the courts speak in very general terms, but we say it is the same approach that one would take here. In the Mutual Pools decision in 179 CLR – and perhaps I could take your Honours to that, at page 185 to 190 and, in particular, if I could go to 189, you will see at the middle of the page:

the limitations overlap. A law which is clearly authorized under some other grant of legislative power or which necessarily involves an acquisition . . . may well not be susceptible of independent characterization as a law with respect to the acquisition of property. While there is no set test or formula for determining whether a particular law can or cannot properly be characterized for the purposes of s. 51(xxxi) as a law with respect to the acquisition of property . . . it is possible to identify in general terms some categories of laws –

Then they go on and discuss the categories of laws. But you will see there in that language, your Honours, some very broad language, but they are saying what is clearly authorised under one head rather than another, they recognise there is no set test or formula, but they are clearly looking for what we say is the predominant nature or purpose of the law for the purpose of that particular exercise.

We say one can use that to apply a similar approach here under our alternative formula and ask is the law in question clearly authorised under a non-section 122 power. That is not alone enough, but there is no set formula, so one is really asking is it best to characterise this as a law to which section 51(xxxi) applies because it has been abstracted out of the other relevant head of power that might be relevant; or is it properly characterised for this purpose: as a Territory law under 122 because it deals with something in a territory of local import and not pursuant to some national power?

So that is the basis of our alternative argument. We say it is similar to what happens where you are comparing or working out whether a law should be characterised as a law under the race power or a law which has to be made under section 51(xxxi), for instance. You are asking is it clearly authorised under the race power, so it will be incongruous and it would be contrary to the essence of the power to take it out of that power and put it in 51(xxxi). We are saying, is it incongruous or contrary to the essence of 122 to say that this particular law, despite its dual character, ought to be taken completely out of 122, constrained by the constraints that 51(xxxi) that would apply to its character as some other 51 law?

HAYNE J: Does your reliance on this passage in Mutual Pools proceed from the premise that the inquiry is an either/or inquiry, that it is either within 51(xxxi) or it is within another head of power?

MR BURMESTER: I mean, ultimately, your Honour, the question is, is 51(xxxi) governing, but the question is not initially, what character does this law have? We will come to it in a moment. But, no, there may be a debate about whether the Emergency Response Act is only a 122 law or is it both a 122 law and a 51(xxvi) law? We are not saying at that stage that one is only trying to find a single characterisation. It is rather having found a single characterisation, one of which is 122 and another one of which would mean that 51(xxxi) is the relevant source of power to do what is an acquisition, that is when one then asks, well, is it really an acquisition law given the nature of the 122 law and for some purposes it will. So for the defence acquisition in the Territory we would say, well, that is really a defence law which has had abstracted out of it the acquisition power. It has been put in 51(xxxi) and so it would be governed by 51(xxxi).

If one is dealing with control of gambling or the sale of alcohol in the Territory in a way which may involve an acquisition but which could easily be done in the same way by a State because the State and the Territory think that is the appropriate way to control the activity, does involve what is potentially an acquisition, we say, well, the character of that law for this question as to whether 51(xxxi) qualifies it, is a Territory law and it would be inconsistent with the proper content of 122 alongside 51 to take out of 122 for that purpose and put it into 51(xxxi), the acquisition power. I accept, your Honour, it is not precise, there will be judgment.

HAYNE J: But a possible construction of what Chief Justice Dixon says in Schmidt is that no question of either/or is presented. What is presented is, can the law in issue be characterised as a law with respect to 51(xxxi)? That entails recognising, as his Honour said at 372 of [1961] HCA 21; 105 CLR 361, that 51(xxxi) does not have the result:

that property can never pass to or become vested in the Commonwealth or its officers except under a law made in pursuance of s 51(xxxi).

So, recognising that acquisition of property on just terms does not embrace every case in which it can be observed that property has passed to the Commonwealth, the root question is, can this law be characterised as a law with respect to acquisition of property? A possible construction of what his Honour says is that if it can, then regardless of whether it can be characterised as a law with respect to any of the other heads of power, the confinement of power worked by 51(xxxi) must be observed. That is not a question of put into this box or that box, it is not a single characterisation approach to anything, but can the law be characterised as a 51(xxxi) law? If it is, there is a limit and the limit is just terms.

MR BURMESTER: Yes, your Honour, I understand that, and in a sense what we are saying is that - - -

HAYNE J: But do you dispute - - -

MR BURMESTER: No, I do not dispute it. In a sense what we are saying is that, in working out whether it is a 51(xxxi) law, you have to consider what else it is doing under section 122 and if it is a purely Territory-focused law, despite it having an acquisition element in it, we say you can properly say it is predominantly a 122 law or at least – not to use that word – at least it is not a 51(xxxi) law and therefore it can operate untrammelled by 51(xxxi) for this purpose. That is, in a sense, the essence of our alternative argument, that there will be some 122 laws, properly analysed, which you ought not to say are 51(xxxi) laws and you do not say they are 51(xxxi) laws automatically just because they contain an acquisition, just as there are some powers in section 51 where the acquisition stays in them – like the tax power – we say there are some elements of section 122 which retain the power to acquire property regardless of 51(xxxi). They are not properly treated as 51(xxxi) laws.

That, your Honour, is the essence of our argument. One way one gets there is not by necessarily adopting the Mutual Pools approach but simply as a matter of reading down, trying to reconcile two sections, one of which has the capacity to cover an inordinate range of things. You can read down 51(xxxi) so it only governs where 122 is not, as it were, exercising its local – the bit that deals with local matters; confined to local matters for a local purpose. Your Honour, that then requires us, for the purpose of our alternative approach, to look at the Emergency Response Act.

KIRBY J: Of course, one difference between a Territory and a State is that at least in the theory of the Constitution citizens of Australia in the State, if they are not content with the lack of protection for just terms, can move to either have that enshrined in legislation or even in the State Constitution, whereas on your theory of this somewhat imperial control of the Territories that would have to be done on a national basis. It would not be done purely for the Territory concerned. Of course, the answer that is given to that is well, it is already there; why do we have to do it again?

MR BURMESTER: If I could take your Honours to the National Emergency Response Act and try and apply this alternative argument. The plaintiffs assert that it clearly has a dual character, it is a 122 law and a 51(xxvi) law. We say one has to look at it a bit more closely before one reaches that conclusion. They may well be right. It may well have a dual character. We say that for the purpose of our present question, which is whether section 51(xxxi) governs it, it is important to see what it actually does as a whole and not just to take Part 4 by itself but to look at the Act as a whole.

I think, your Honours, we have given you copies of the whole Act this morning because the whole Act was not in the bundle, but one can see from just looking at the table of contents of the Act as a whole that it deals with a great variety of local issues, the sorts of things that you would expect a State government to be making laws about, such as the sale of alcohol in Part 2. These provisions apply to prescribed areas, which is not defined by reference to whether they are areas of ALR land or land over which the Commonwealth has taken leases. Prescribed areas in section 4 is defined in broad terms and the Minister can extend the definition by a declaration.

Part 3 deals with public funded computers and also deals, as I understand it, with prescribed areas. One has Part 5, business management areas, and business management areas are defined in section 3 and again are not confined to ALR land or land leased to the Commonwealth under the Emergency Response Act. One has Part 6 dealing with bail and sentencing and one has Part 7, community stalls.

Now, we say, your Honour, when one reads and looks at the Act as a whole it is predominantly a section 122 law. Some of it may be able to draw on other powers in section 51, such as section 51(xxvi), but we would say it is unlikely the whole of the Act could draw on section 51. So, construed that way, having looked at the content, we say applying the approach, the alternative approach we are putting, the proper conclusion is that it is predominantly a 122 law of a nature where it would be incongruous and inappropriate to constrain it by the operation of section 51(xxxi).

It is confined to the Territory, it deals with things in the Territory, of local concern and the fact that Part 4 deals with particular land in the Territory that happens to be held under the ALR Act does not mean that it automatically means the whole Act becomes predominantly a section 51(xxvi) law and therefore one where it would be appropriate to say that section 51(xxxi) applies. We say it is far removed from the type of law that was under consideration in Newcrest which necessarily involved reliance on other heads of power and which was characterised as predominantly, or could properly be characterised predominantly, for purposes of asking whether it is a 51(xxxi) law or not as such a law and not a Territory law. We say here this is the opposite. Here it is properly characterised as a 122 law and not a law to which 51(xxxi) applies.

Your Honours, in relation to the Territory’s power, the only other thing I would briefly mention is the discussion this morning by the Northern Territory solicitor about the mining ordinance. We say as a matter of fact there was this taking without just terms in the mining ordinance which has flowed through. We accept it may only have applied where there were freehold or there may only be a real issue where there were freeholds. We are in no position to know or to say whether there were such freeholds, but it is not beyond the realms of possibility that there were some areas of freehold where gas and helium may be discovered and even today where it may still pose an issue, but in our written submissions we have not sought to place any particular emphasis on that, rather to simply state the facts and to suggest that that is another reason not to overturn established practice. Your Honours, if I could then move to the question of acquisition of property and the nature of the property at issue?

KIRBY J: May I ask you, Mr Burmester, are there any recent articles? We have Professor Zines’ comment on Newcrest and Teori Tau, but has there been any recent discussion in the academic literature of the debates that divided the Court in Newcrest that you are aware of?

MR BURMESTER: Your Honour, there may be a recent article in the Federal Law Review since I think Newcrest by Mr Horan but we could have a look and perhaps let your Honour know if there was. There was certainly nothing that we thought advanced the argument one way or the other. Most of what has been out there has been a discussion of the case rather than going back to the first principles.

KIRBY J: Except that when you go back to first principles a child of the 19th century would look on it perhaps a little differently and somebody of the mid-20th century differently and then somebody who is living in the 21st century might also look at the constitutional provisions a little differently. We are all the victims of our cultural environment.

MR BURMESTER: I accept that, your Honour.

KIRBY J: Which include advances in the element of democracy.

MR BURMESTER: Your Honours, if we can go to the question of property, we accept that the appropriate starting point is the passage in Telstra which says where one is dealing with statutory rights one needs to look at the practical and legal operation of the legislative provisions and the history. Unlike my friend, Mr Walker, it is not a question of seeking to equate these particular rights to workers compensation rights as in Chaffey. We say the position is more complex than that. Nevertheless, it does lead to the same conclusion, namely that what has happened here in terms of the grant of the lease and the impact on the section 71 rights we say is not an acquisition of property to which 51(xxxi) applies.

As to the property in issue, we say that is as pleaded in paragraphs 8, 17 and 18 in terms of the fee simple and paragraphs 9 and 19 in relation to section 71, and that should confine the area in which the Court needs to consider the issue.

In relation to the fee simple, and I will take that first, we say one can only understand its content by reference to the regulation and control applicable to it and that the statutory limits and statutory regime around the fee simple means that it differs in some important ways from an ordinary fee simple. While the statements in the Blue Mud Bay Case relied on by others emphasise that it is a fee simple, those same passages also recognise that it differs in some important ways from a fee simple. One cannot therefore say this is a fee simple, end of the story.

We have set out in 5.1 to 5.8 in the appendix to our submissions some analysis of the statutory provisions. We say the questions you need to consider are who owns the fee simple and the Land Trust, who owns the fee simple, is a unique statutory creature. One has to ask what can the owner do with the land – and we say there are significant limitations. One has to ask what is the role of the Commonwealth in controlling what the owner can do with the fee simple. We say the Commonwealth continues to have a significant controlling role.

All those three things together mean that the nature of a fee simple here is far removed from an ordinary fee simple when one is talking about imposition on it of a lease to one of the parties in that overall statutory control scheme, namely the Commonwealth. We are not talking about a lease given to some private citizen over a fee simple, we are talking about a lease given to the Commonwealth.

Your Honours, it is important to recognise that the Land Rights Act does not, in our submission, confer proprietary rights upon particular Aboriginals beneficially, it is the Land Trusts that hold the beneficial interests and the statement in the Meneling Case - - -

FRENCH CJ: The Land Trust holds both the legal and the beneficial interest?

MR BURMESTER: Yes, your Honour, and the statement in Meneling relied on in paragraph 9 of the plaintiff’s reply, we say, is not an accurate statement of what the Land Rights Act does. It should not be seen as a statutory restoration or conferral of an underlying common law right, enjoyed directly by Aboriginal persons held by and for those Aboriginal persons.

FRENCH CJ: Is the obligation of the Trust – albeit it acts at the direction of the Council to effectively use the land for the benefit of the traditional Aboriginal owners – enforceable at law by the owners if the Trust fails to administer the land for their benefit? As, for example, the beneficiary of a trust in equity might be able to take action to enforce its proper administration. We are talking, of course, here now the statutory content.

MR BURMESTER: Yes, your Honour, I think it is a mistake to simply say this is equivalent to a trust or their statutory trust with individual beneficiaries who can - - -

FRENCH CJ: No, I am not suggesting that. I am asking really whether the traditional Aboriginal owners would be able to go to law to enforce the proper administration via the Land Trust of its statutory duty to deal with the land for their benefit?

MR BURMESTER: Your Honour, the way I see it is this, that the benefits are benefits for the group of traditional owners, others, they are not confined – it is much more complex than simply saying there are these identifiable beneficiaries and those identifiable beneficiaries could enforce the benefit of the Trust. It is held for the benefit of traditional owners. There are requirements then as to how the powers are exercised, but they refer to another group of people and then there are the section 71 rights. So it is very difficult to simply say there are some clearly identifiable individuals out there who, as individuals, could go to court and enforce the duty.

FRENCH CJ: Well, let me imagine a situation in which, whether by reason of conduct on the part of the Land Council or that of the Trust, the land was being administered for the benefit of somebody outside the class of people for whom the statute provides; family and friends of people on the Land Council, for example. I am not suggesting it would happen, but let us take that example. Are you saying there is no remedy from the point of view of the - - -

MR BURMESTER: No, your Honour, there are statutory obligations and a person with appropriate standing could – I see no reason why they could not come and seek to have the statutory obligations given effect to. All I am trying to say is that in working out who might have standing, and one cannot just assume there are necessarily identifiable individuals given the nature of the particular rights, but, in essence, yes, we do not deny that if statutory powers were being used improperly, there may well be people who could find standing and seek to have that remedied.

FRENCH CJ: Well, it might be that any one or more of the class could go to court for that purpose?

MR BURMESTER: Maybe, your Honour, yes. If I can deal first with the Land Trust who, as I said, own the fee simple? We say that is significant. They are the owners because they are statutory creatures and they have limited powers to act and they could be, in our submission, abolished tomorrow and the fee simple given to some other party. We have already discussed moving the fee simple between one land trust and another land trust, but, given the nature of the land trusts, we say that they essentially hold a fee simple pursuant to the statute, and it is the statute that creates them and controls who they hold the benefit for and how they go about exercising their powers.

As we know, section 6 of the ALR Act means they do not have their own money, their membership is appointed by the Minister, they only exercise their power as owner in accordance with a direction from the Land Council and that then takes one to the Land Council and the directions the Land Council can give, but clearly the Land Trust is not an owner in any ordinary sense of that term in the sense it is constrained very much as to what it can do as owner by directions from the Land Council and, as you will see, the Land Council itself may be subject to constraints as to the sorts of directions it can give.

KIRBY J: But it is not sucked out of any reality that its purpose is obviously for the protection and defence of the Aboriginal people and their Aboriginal elders. Two features were very powerful in Telstra. One was the feature of the insistence, in paragraph 43, on looking at the matter as a matter of substance, not form, and the second was the insistence, in paragraph 51, of looking at the particular legislation in its historical context and given its purposes. Section 51 was really very critical because of the arrangements which had existed at the beginning of Telstra’s existence and of the competitors and therefore the Court was looking behind just the language of the statute to, what it was called in that paragraph, the cardinal features of the context and history.

MR BURMESTER: Yes, your Honour, I accept that and I do not - - -

KIRBY J: We have to do that in this case and we have to keep in mind the background of dispossession, as it is called, in the Land Rights Act against which this legislation has been enacted.

MR BURMESTER: Yes, your Honour. I do not dispute that and the obligation to hold - - -

KIRBY J: So it is not a disembodied issue. We are not simply looking at it as completely disembodied of the history and purpose and the substantially equitable purpose. The very word “trust” is an indication that some sort of purpose of obligation was acknowledged.

MR BURMESTER: Yes, your Honour, I accept that, and that is part of the context, part of the history. But what one has to do is examine that in the context of what actually was put in the statute and what that means in terms of the consequences. It may have certain consequences in terms of that ultimate purpose being there always, but one has to understand the overall and the complete picture, and that is what I am seeking to paint.

Your Honours, it might be useful if we go to some of the sections in the land rights legislation. I think my friend yesterday was using the version under tab 2 in the legislation volume, which was the version before the amendments, so if that is convenient, I will do the same. I want to now talk about the land councils and they are dealt with in section 21, which establishes them, the Minister is the person who establishes them, and section 23, which your Honours have already been taken to but I think it is important we go there again, over on page 68 and 69 and the functions set out in subsection (1) recognise that one of the functions is protecting the interests of traditional Aboriginal owners, that is in (1)(b), and the important provision in subsection (3), over on page 70, which requires the Land Council:

In carrying out its functions . . . consult with, the traditional Aboriginal owners (if any) of the land and any other Aboriginals interested in the land and, in particular, shall not take any action . . . unless the Land Council is satisfied that:

(a) the traditional Aboriginal owners (if any) of that land understand the nature and purpose of the proposed action, as a group, consent to it, and - - -

KIRBY J: Which paragraph is that?

MR BURMESTER: This is section 23(3)(a) over on page 70. So there is first the requirement that the Council be satisfied that the traditional Aboriginal owners understand the nature and consent and there is an obligation that:

any Aboriginal community or group that may be affected . . . has been consulted –

So we accept that is one of the important obligations of the Land Council. Section 35(4) requires the Land Council to pass on payments received – this is on page 93 of the reprint. If they receive a payment under a lease or licence:

under section 19 or 20 . . . the Land Council shall, within 6 months . . . pay an amount equal to that payment to or for the benefit of the traditional Aboriginal owners of the land.

So it is not that they have to pass the money to the traditional owners, but they pay an amount equal to or for the benefit of the traditional Aboriginal owners. If one goes back to section 34, back at page 91, you will see that the Land Councils are not free agents in terms of how they handle their money. There is a requirement there that the Minister approve estimates similar to the sorts of provisions that control many Commonwealth statutory authorities.

In section 39, over on page 100, the Minister may give directions about Land Council finances. So your Honour, the Land Councils, while having an important role in terms of directing the Land Trusts, are themselves subject to significant ministerial control and restriction.

In terms of the Minister’s powers, in appendix A to our submission, 5.1 to 5.3, we have dealt with this. Could I hand up to your Honours some pages from the report by John Reeves in 1998, which reviewed the operation of the Aboriginal Land Rights Act? There are some pages where he summarises the extent of ministerial control. He sets out and summarises the role of the Minister under the legislation.

HAYNE J: How do we get hold of this, Mr Burmester? Why do we take it? Why do we read it? What do we do with it? We are on a demurrer.

MR BURMESTER: Why I am giving this to your Honours is so that you can understand the nature - - -

HAYNE J: Useful background material, is it, Mr Burmester?

MR BURMESTER: No, your Honour. It is critical to understanding the nature of the fee simple. In my argument, one just cannot take the words “fee simple”. You have to look at the fee simple in the statutory context and, as I said at the beginning, one has to ask who is the owner, what control is there on the owner, what Commonwealth control is there because all that infects, in our view, the nature of the fee simple, and that then is important when one comes and asks what does the lease granted in this case under section 31 of the Emergency Response Act actually do and how does that fit in relation to the fee simple?

FRENCH CJ: Is this extract simply a convenient collection of references to the statutory provisions of the Act?

MR BURMESTER: It is a convenient collection, your Honour, of the statutory provisions. That is all I am - - -

FRENCH CJ: Words like “significant and extensive role” are overlaying judgments which we would disregard.

MR BURMESTER: Those are the words I, as a matter of submission, wish to make.

FRENCH CJ: You can say that, but - - -

MR BURMESTER: That is right, but I am not suggesting you take those words as established just because they happen to accord with Mr Reeves’ view. The principal purpose is the various dot points and the footnotes so that if your Honours wanted to get a better appreciation of the extent of ministerial control, one can conveniently find it there.

KIRBY J: Who was Mr Reeves? Did Mr Reeves hold an office or is this a textbook?

MR BURMESTER: He was appointed specifically to report on and review the front page of the Land Rights Act in 1998.

FRENCH CJ: Anyway, we can treat this as simply submission, can we not?

MR BURMESTER: So it is simply a convenient collection of sections which set out the Minister’s control. That is the only reason I am giving it to your Honours. Instead of spending a lot of time myself taking you to each individual section that was an attempt to shorten time.

KIEFEL J: As I understand your argument, it focuses upon the acquisition question. It does not deny, at least with respect to the fee simple, that there is a property interest?

MR BURMESTER: That is correct, your Honour. Yes, it is rather that there is a property that when you look at the nature of that property, given the regulatory and statutory controls around it, what has happened here in giving a lease to the Commonwealth for a particular purpose is not incompatible with the nature of the underlying property interests. It was always vulnerable to that extent but it still, you know, is a lease to the Commonwealth for a particular purpose that is not inconsistent or is at least consistent with the underlying original purpose of the fee simple.

KIEFEL J: Do you rely upon what has occurred in the particular case and the nature of the lease and the nature of the property interest, or do you still contend, as the demurrer has it in paragraph (c), that the property interest is of such a nature that it is not capable of acquisition? This is how I read the first aspect of the contention in paragraph (c).

MR BURMESTER: We are certainly not denying that the fee simple is a form of property, but we say it is not capable of being acquired or which has been acquired within the meaning of 51(xxxi) because - - -

KIEFEL J: There are two propositions there.

MR BURMESTER: - - - it is inherently unstable to the extent that what is involved in the current acquisition, what might otherwise be an acquisition, is simply a readjustment of the control in relation to the land. So, it is not that it is not property at all, but the nature of the property is such that if all that occurs is an alteration of the control of statutory regime around it by in this case giving a lease to the Commonwealth, one of those key players in the regulation and control, then we say that does not amount to an acquisition within the meaning of 51(xxxi), or it is not capable of being regarded as something one acquires within 51(xxxi). What one has done is simply changed the rules around the control of this piece of land, and in the circumstances, that is not an acquisition to which 51(xxxi) applies; that is our argument.

KIEFEL J: But really what I am asking is, are you still contending for the first of the two propositions?

MR BURMESTER: That it is not property capable of being acquired?

KIEFEL J: Yes.

MR BURMESTER: Yes, your Honour, and the reason it is not capable of being acquired is that it is inherently defeasible, at least to the extent of what has happened here. We are not saying it is not capable of being acquired in the sense of if the Commonwealth came along and said, “We are giving a lease to company X”, that that could not be an acquisition. We are saying in this particular case in light of what has actually happened here it is not capable of being acquired by a readjustment of the statutory framework around it. But that does not lead to the conclusion that in some other case that if a lease to a private person was granted over the fee simple that could not be capable of an acquisition; that is sort of why I was hesitating.

KIEFEL J: It seems like it is – I will not go into it in greater depth – part of the same argument in relation to acquisition rather than being a standalone argument.

MR BURMESTER: Yes, I think it is, your Honour. We were not trying to draw distinctions.

KIRBY J: Do you remember that yesterday Mr Merkel said that nothing like this would be done or had been done to other Australians. If there are any analogous actions or analogous legislation directed at Australians who are not Aboriginal, I would like to have those analogies or illustrations drawn to my notice.

MR BURMESTER: Yes, your Honour. It is not our contention that this is similar to anything else. It is unique.

KIRBY J: Do you accept that submission that this is legislation targeted at - - -

MR BURMESTER: No, that is a different submission.

KIRBY J: - - - a cohort of people who are Aboriginal that would not be done to them if they were derived from the white settlers of Australia?

MR BURMESTER: Your Honour, that is a judgment I am not entering into. All I am saying is that this law deals with a unique type of landholding in the Northern Territory that, yes, is held by a particular group of people in the Territory. Whether it could be done to others, would be done, has been done, we are not suggesting it is a pattern of behaviour or anything like that. We place no reliance on that. We are simply saying look at this particular situation.

KIRBY J: If there are even distant analogies, even in wartime, if you can think of them, bring them to our notice because I would like to see them.

MR BURMESTER: If I can think of any, your Honour, I will let you know. Another significant feature, apart from ministerial control, is the Commonwealth’s continuing interests being maintained. That occurs under section 14. I know my friend yesterday suggested these were simply transitional provisions, but we say they are more than that. If I take you to section 14 on page 41, this preserved existing Commonwealth interest in land that was vested in the Land Trust. Then in section 15 you will see that:

If an occupation or use of Aboriginal land to which section 14 applies is for a purpose that is not a community purpose, the Crown shall pay to the Land Council for the area in which the land is situated amounts in the nature of rent –

So when the legislation was originally enacted, the Crown’s interests – I use that word because that is the word in the statute – were continued subject to an obligation to pay rent, except for – and those words we say are significant – a purpose that is not a community purpose. So there was no rent for that. Section 19 is another key section in the regulatory arrangements. This is the ability for a land trust to deal with or dispose of an estate or interest in land vested in it. Section 19(7), which Mr Merkel took your Honours to yesterday, says:

The consent of the Minister is not required for . . . an estate or interest the term of which does not exceed 40 years.

When this section was first enacted in 1976, that was 10 years, so there has been a significance change there. So in terms of the nature of the common law control, it is worth knowing that at the start any significant interest required ministerial consent before it could be given.

There has been some reference to exploration licences and mining provisions. These are generally dealt with in sections 43 and 44, but there have been significant amendments to those provisions, especially in 1987, to alter the balance of the interests involved and the extent to which there had to be agreement by the various Aboriginal interests. So there have been changes throughout the history of the Land Rights Act to key components, including the mining elements. The current provisions were reviewed by Justice Kearney in Northern Territory of Australia v Northern Territory Land Council [1992] NTSC 12; (1992) 81 NTR 1 if one wanted to review the operation of those provisions.

We say in our written submissions, I think, in our reply we have pointed to some of the changes that have occurred in the statutory regime through amendments over the years and they have – particularly the mining ones – changed some of the balance of the interests in terms of when consent was needed, how consent could be given and so on. So, again, we say when one looks at the whole statutory context, there is an ability to shift the balance between who controls, how control is exercised, when it has to be exercised. That then, in our submission, demonstrates that one is not dealing with a fee simple in its purest form.

As this Court have recognised in the Blue Mud Bay Case, there are significance statutory changes to it and we say when one looks at those statutory changes, what they involve is a significance sharing of control between the owner, namely, the Land Trust, the Land Council and the Minister. There are significant restrictions on alienation without ministerial consent. There are public interest alienation provisions in the Mining Act area so that alienation can occur without the consent of the Land Trust and, as I have said, there is a history of legislative change to some of these provisions. They are not, in our submission, merely insignificant tinkering at the edges which, from I think what Mr Walker said this morning, he might have led you to imagine.

So in the light of all that one then asks, well, what has been done to the fee simple? What has the lease granted to the Commonwealth under the Emergency Response Act actually done to the fee simple? We accept that the lease itself is not expressed in its terms to be subject to the same purposes on which the Land Trust holds the fee simple. However, we say that the purpose set out in section 5 of the Emergency Response Act is important and does constrain the basis on which the Commonwealth holds the lease that has been given to it, and we say that purpose is not inconsistent with the purpose of the Land Rights Act under which the fee simple is held, improve the wellbeing of certain communities in the Northern Territory when applied to a community covered by a fee simple under the Land Rights Act is not inconsistent with the purpose for which that fee simple is held and administered by the Land Trust, the Land Council, and the Minister in combination.

This is recognised by the terms determined by the Minister under section 36 in the demurrer book at page 59. I think your Honours were taken to that yesterday. Clauses 2 and 4 in particular reinforces that the Minister envisages the powers under the Emergency Response Act being exercised in a way consistent with the object of that Act.

KIRBY J: Which paragraph of the demurrer?

MR BURMESTER: On page 59 of the demurrer book, the ministerial determination is set out as to additional terms and conditions for leases. On page 63, particularly clause 2 and clause 4 is making clear that the Commonwealth is using its lease “consistent with the fulfilment of the object of the Act”, namely, the benefit of communities in the Northern Territory covered by the lease.

In particular, it is not properly regarded, the lease granted under section 31, as a lease at large given to the Commonwealth for its own private interests. It is a lease for a particular purpose, a purpose compatible and not inconsistent with the ALRA purpose in relation to the fee simple from which it has been carved out.

The various powers given to the Commonwealth under the lease, for instance, to destroy existing interests or to grant new sub-interests, have to be exercised, we submit, having regard to the statutory purpose and there is not therefore an ability at large for the Commonwealth, as I said, to use the leases for its own private purposes.

FRENCH CJ: Does the term “lease” do anything other than give this set of statutory rights a hook into the Law of Property Act?

MR BURMESTER: Your Honour, we say it does not do anything more than that. One has to look at the statutory context. When one looks at the statutory context, it uses language associated with leases – “quiet enjoyment”, “exclusive occupation”. As Mr Walker demonstrated, it does have some consequences in terms of Northern Territory lease law, but not in a way that would be incompatible with what is in the statute. We say it does not make it less or change its character in any way that is significant for our argument, which is that it is a lease for a limited purpose, carved out of a very special type of fee simple.

Your Honour, yesterday Mr Merkel suggested that all the various amendments in the Emergency Response Act had been done to somehow stop a flow of money to particular Aboriginal communities. As I think became clear yesterday, there is no pleading and no details in relation to loss of income, and we say this Court is not concerned with that issue. Much of what Mr Merkel said yesterday can, in my view, in the Commonwealth’s view, be best characterised as wild assertions.

However, in order to give your Honours an alternative picture, can I give you some references to the second reading speech. I think Mr Merkel took your Honours to that yesterday. It is in the volume of extrinsic materials at tab 2 and he quoted from, I think, page 10 of the second reading speech, about limiting cash that was available. If I could take your Honours to page 13 of the second reading speech, at the bottom right-hand column of that page is a heading “Five-year leases”. It sets out the reason why the leases were acquired:

The acquisition of leases is crucial to removing barriers so that living conditions can be changed for the better in these communities in the shortest possible time frame.

It must be emphasised that the underlying ownership by traditional owners will be preserved, and compensation when required by the Constitution will be paid.

This includes provision for the payment of rent. Existing interests will be generally preserved . . .

The leases will give the government the unconditional access to land and assets required to facilitate the early repair of building and infrastructure.

The most significant terms and conditions of the leases are provided for in the legislation. However, additional terms and conditions will be determined . . .

I have just taken your Honours to those additional terms set out in the demurrer book. Then:

The area of land for the five-year leases is minuscule compared to the amount of Aboriginal land in the Northern Territory. It is in fact less than 0.1 per cent. There are no prospects for mining in these locations.

This is no land grab, as some have tried to portray the emergency response. It is only a temporary lease, and just compensation will be paid for that period. We are not after a commercial windfall here – there is simply none to be had.

HEYDON J: Was this idea that the Minister is talking about the result of some report, or was this an idea simply generated within the Commonwealth Government?

MR BURMESTER: Your Honour, there was a report, I think commissioned by the Northern Territory Government, which pointed to some of the major problems.

HEYDON J: “Little Children Are Sacred”?

MR BURMESTER: Yes.

HEYDON J: But that does not sound as though it will be the sort of report that would deal with this technique. Was there any report - - -

MR BURMESTER: No, your Honour. I think it highlighted the social and other problems in certain communities.

KIRBY J: My recollection is that the authors of that – that was Mr Wild, QC, the former Director of Public Prosecutions – were very critical of the legislation, I think.

MR BURMESTER: Yes.

KIRBY J: If we are going into these details - - -

MR BURMESTER: That report, I think, was provided to the Northern Territory Government as a result of the Commonwealth forming a view that something had to be done immediately. The Commonwealth decided this was the way to do it and the aim of it is set out there in the second reading speech. It was not simply to stop the flow of money.

In particular, in relation to section 34(4), assuming it operates in the way Mr Merkel suggested, namely, that the Commonwealth is now entitled to all the rent that would otherwise have gone to the Land Trust, and there is a real issue whether that is in fact the correct interpretation – Mr Walker, I think, disagrees with that; we say your Honours do not have to resolve it – but even assuming it operated that way, there is no evidence that the Commonwealth has in fact received anything in terms of income. It may depend on the terms of the interest. Certainly my instructions are the Commonwealth has received nothing under that provision.

Rents from registered leases are still received by the Land Councils because section 31(3), as we know, excludes registered leases from the area of the section 31 leases. There has been no change to the mining royalties regime. In relation to income quarantining, Mr Merkel suggested this was somehow an extension of that. One has to understand that income quarantining does not deprive a person of the money to which they are entitled; rather it restricts the purposes on which they can spend the money. So instead of having a complete freedom as to what they spend it on they may have to spend it on food or something like that. But there is no taking away of the money as such.

In relation to the statutory regime there was also some discussion of sacred sites, and Justice Gummow touched on this this morning with Mr Walker. We would accept the analysis by your Honour Justice Gummow. We say the section 69 offence is not deprived of operation just because the Commonwealth has exclusive possession over an area. The Commonwealth might have leases in all sorts of parts of the Northern Territory and we would not say that by having exclusive occupation under a lease elsewhere that the offence in section 69 would not continue to operate.

There is a defence in section 69(2A) but that is requiring you to show that what you were doing was a function under the Land Rights Act itself, or provided for elsewhere in the Land Rights Act, or under the Northern Territory law, and our view is that the Northern Territory sacred sites law, there is no reason why it cannot continue to operate. Certainly, there was no intention on the part of the Commonwealth to destroy the protection of sacred sites.

In relation to section 62 and the question of rent, the Commonwealth’s view is different from that of Mr Walker, or it seems some members of the Court. We do not concede that section 62 does impose an obligation to pay rent. We say that subsection (1) says “The Commonwealth Minister may” request, and unless a request is made there is no obligation to settle the rent.

The amendments made in 2008 to section 62, which are set out in tab 6 of the legislation volumes at pages 18 to 20 of that 2008 amendment, only make sense, in our submission, on the assumption that there was no obligation. Those amendments are set out behind that tab in the Indigenous Affairs Legislation Amendment Act 2008, and at pages 18 to 20 in Schedule 2 you will see there is inserted before subsection 62(1) a whole series of subsections.

We say these were designed to allow for agreement on amounts to be paid in respect of leases and to avoid the necessity to go to the Valuer-General as the only course available under section 62, but they in our view assumed that there was no duty, although, your Honours, I have heard the argument about how one could possibly interpret section 62 to impose an obligation, but it is the Commonwealth’s position that properly construed there is no obligation.

FRENCH CJ: The second reading speech on that point, I think, at page 14 under tab 2 in the extrinsic materials, simply says:

It must be emphasised that the underlying ownership by traditional owners will be preserved, and compensation when required by the Constitution will be paid.

This includes provision for the payment of rent.

It is somewhat ambivalent, is it not?

MR BURMESTER: It is, your Honour. I looked at that and thought, well, there is provision, that is section 62, it does not indicate whether - - -

FRENCH CJ: That is all that is said about rent in the second reading speech, yes.

MR BURMESTER: That is all it says and I could not see anything in the explanatory memorandum that helps one way or the other. It is clear there as a facility, an ability to pay rent. The amendments facilitate the payment of rent in the sense they allow for parties to sit down and agree on rent. If rent is not paid under section 62, then that may have consequences for the amount that would need to be determined under section 60, if there was an acquisition to which just terms applied. If rent was paid under section 62, then obviously it would be offset against anything that might be calculated under section 60. So we say at the end of the day it does not matter in terms of constitutional principle if one is into determining just terms.

As to the reason why unimproved value was put in the provision, your Honour, we are in no position to provide any better explanation other than the assumption was the improvements would normally continue to be enjoyed so there would be no reason to pay rent. They would still have the benefit, despite the Commonwealth’s lease. They could still use the community hall and so on. If those facilities were being demolished in order to replace them with better facilities, then again it made no sense to calculate rent by reference to improvements that had been removed. So the idea was that this lease would enable better improvements to be provided, but there is no clear explanation.

So, your Honour, what I have sought to do is set out the nature of the fee simple and to indicate that it is surrounded by a fairly complex statutory regime of control and restrictions. I have then sought to indicate what has been done to the fee simple, namely, a lease has been carved out of it to the Commonwealth for a purpose set out in section 5 of the Emergency Response Act. It is not a carving out of a lease for private purposes. We say, putting it crudely but not inaccurately, what has happened as a result of the lease is a change in the control arrangements about who makes decisions about the use of the land, but the decisions that are being made are still being made for the benefit of the Aboriginal community. That flows from clear purpose of the lease and the legislation.

So while there is a taking out of the fee simple something that if it was an ordinary lease given to a private person may amount to an acquisition, in this particular circumstance where it is really a lease to someone who is already part of the regulatory balance of interest and where the purpose of benefiting the Aboriginal community continues, it is not properly regarded as an acquisition to which 51(xxxi) of the Constitution applies.

Now, as I understand the argument put against us, the first proposition is, well, it is a lease being carved out of a fee simple, surely that is an acquisition. But then the plaintiffs, as I understand them, go further and say, well, in particular, the power of the traditional owners to consent to things done by the Land Council and the Land Trust under section 23(3) of the Land Rights Act and the power to be consulted by another group have been taken away and that that is also an impairment to the fee simple which shows there has been an acquisition of property. But, in effect, the lease was granted without first going through the consent and consultation requirements that would normally need to operate, in section 19, of the Land Council.

Now, your Honours, that has occurred. However, we say, that does not amount in itself to any acquisition or diminution of property for the purposes of section 51(xxxi). We say the statutory regime could always be amended to alter who has to consent to particular leases, to particular activities occurring on the land. All that has happened is that here the consent has been legislated not to be necessary where the Commonwealth itself has directly taken back a lease for a limited purpose. It is not a separate incident of the fee simple to which 51(xxxi) can have any application.

HAYNE J: Mr Burmester, one minor matter of clarification. At the end of your submissions you describe the order you want. Paragraph 79 you speak of the statement of claim being dismissed. Are we to understand that as asking that the action be dismissed?

MR BURMESTER: Your Honour, if the demurrer is upheld then we say it would follow that the statement of claim should be dismissed. Now, it would be possible simply to - - -

HAYNE J: Not just the pleading, you say the whole action goes, do you? That is the point I am trying to understand.

GUMMOW J: Not just to strike out, you see.

HEYDON J: Do you want the writ of summons dismissed?

MR BURMESTER: I think the writ of summons should be dismissed.

HAYNE J: You want the proceeding - - -

MR BURMESTER: I will reflect on that over lunch, and come back - - -

HAYNE J: No, I just want to understand what it is you say should - - -

MR BURMESTER: Yes, if the demurrer is upheld, and we say it is sufficient for the demurrer to be upheld if any one of the three principal arguments is right, whether there is no acquisition requirement, there is no acquisition or just terms is provided, but perhaps I can come back after lunch if there is anything further on that point. After lunch, your Honours, I will move onto the other property rights and the “just terms” requirement.

FRENCH CJ: How long do you think you will be, Mr Burmester?

MR BURMESTER: I think I will only be another half hour, then Mr Lloyd is going to do the “just terms” part of the argument, and I think half an hour.

FRENCH CJ: Thank you, and Mr Merkel in reply?

MR MERKEL: We should not be long, your Honour, 15 minutes.

FRENCH CJ: All right, thank you. We will resume at 2 o’clock. The Court is adjourned until 2.00 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.00 PM:

FRENCH CJ: Yes, Mr Burmester.

MR BURMESTER: Your Honour, if I can move to the next type of property that needs consideration, that is the access rights permit system which is pleaded in paragraph 18 of the statement of claim. It is dealt with in paragraph 48 of our written submissions. The argument, as I understand it, that the plaintiffs make is that the change to the access regime whereby a whole lot of extra people now have permission to enter land under the Aboriginal Rights Act is a form of acquisition in relation to which just terms is applicable.

Your Honour, we say if one examines the statutory provisions which have governed access since the beginning of the Land Rights Act, the current modifications made as part of the emergency response, both in the Emergency Response Act and in the FaCSIA Act, do not amount to an acquisition of property. If I could take your Honours, therefore, to the original version of the Land Rights Act, which is tab 1 in the legislative bundle, page 1653 of that reprint. Section 70(1) made it an offence:

Except in the performance of functions under this Act or otherwise in accordance with this Act or a law of the Northern Territory, a person shall not enter or remain on Aboriginal land.

We say quite clearly the words “in accordance with this Act or a law of the Northern Territory” was not some attempt to freeze things in time but was a recognition that there may be provisions in the Land Rights Act or Northern Territory law from time to time that would give people permission to enter and hence not commit an offence.

That provision has been extensively amended – the whole section has been extensively amended since 1976, but the point for present purposes is that from its very inception, the crime constituted by remaining on Aboriginal land never applied to such action if it was authorised by Commonwealth law under the Land Rights Act itself or by Northern Territory law. At the time, the Aboriginal Land Ordinance made provision for issuing of permits for persons to enter and remain on Aboriginal land. That is now the Aboriginal Land Act, which is contained in the second volume of legislation, but I do not propose to go there, your Honours. So there is an elaborate Northern Territory regime about access to the land contained in that Aboriginal Land Act.

In 1987, section 70 was amended by the insertion of subsections (4) and (7). If one goes to the reprint under tab 2, on page 165 of that reprint, one sees subsections (4) to (7) set out, and they establish an entitlement for a person to enter Aboriginal land by a route agreed with the Land Council or determined by an arbitrator. We say that is an example of an authorisation under the Land Rights Act for persons to enter Aboriginal land in accordance with the Act, the result being that the prohibition that otherwise applied was modified.

In 2001, there were further amendments which inserted what is subsection (2A) on page 164. Section 71(1) and (2) were rewritten, so they are not exactly the same, but we say essentially they are the same thing as the original section 70.

In 2006, subsections (2B) and (2C), which are there on page 164 and 165, were inserted by the Aboriginal Land Rights (Northern Territory) Amendment Act 2006. Then most recently in the FaCSIA Act the provisions 70B to F were inserted, which you will find in the Act in its current form, tab 3, on page 183 and following. We have got section 70A, 70B, 70C dealing with aerodromes, 70D landing places, 70E roads within communities, and 70F, which I think your attention was particularly drawn to, entering and remaining on common areas on Aboriginal land. That is on page 192 of that reprint.

Now, we say those amendments have done no more than was originally contemplated by section 70(1) when first enacted, namely, that neither the Commonwealth Parliament or the Northern Territory Parliament could legislate to extend those categories of persons who could enter Aboriginal land without the need of permission of the local Aboriginal owners. We say one cannot derive from that statutory regime any acquisition of property to which 51(xxxi) applies. If restrictions on access could properly be described as property, then they are clearly inherently defeasible and not caught by section 51(xxxi).

The remaining category of property which needs to be addressed is section 71 property rights and I think the position of the Commonwealth and the Land Trust is fairly similar on this issue. We say the section 71 rights in subsection (1), which one can find in the current reprint on page 195, have always been inherently vulnerable because of subsection (2). Subsection (2), which your Honours have been taken to, makes it clear that the entitlement to enter and exercise a section 71(1) rights:

does not authorize an entry, use or occupation that would interfere with the use or enjoyment of an estate or interest in the land held by a person not being a Land Trust or an incorporated association of Aboriginals.

We say the 71 rights were preserved by section 34(3) of the Emergency Response Act and that the lease granted to the Commonwealth is subject to them, and section 35(1) of the Emergency Response Act makes that clear. It expressly says that the lease is subject to preserved rights under section 34 and we say a proper reading of section 34 is that the section 71 rights are preserved.

Until there is an exercise by the Commonwealth of some use or enjoyment under the lease, then we say the section 71 rights continue unaffected. But if there is some use or enjoyment, for instance, the Commonwealth erects a fence around a new building site so that entry is impossible, then in that situation the section 71 rights are clearly affected. But that has always been an inherent part of their nature that they can be affected if a person having a different estate or interest does something that would mean that an exercise of 71 rights would interfere with that use or enjoyment under that other interest.

KIRBY J: What would be the discrimen by which the Court would judge a right to property that is inherently vulnerable, as you put it, which the Court has spoken of in the past and then one which is not, for this purpose, inherently vulnerable, but the acquisition of which will give rise to the constitutional entitlement, because, in a sense, most, if not all, rights to property nowadays are traceable to some statutory source? So how does one distinguish between the so-called inherently vulnerable category and that which is sufficiently stable for the purpose of giving rise to an entitlement under section 51(xxxi)?

MR BURMESTER: Well, your Honour, if you only had section 71(1), then you might say there is a right granted to a certain group of Aboriginals to enter and occupy land for traditional purposes, but it is because subsection (1) has always been accompanied by subsection (2) that we say they are inherently vulnerable to some inconsistent use or enjoyment. So in the terms of these particular property rights, one sees that inherent defeasibility. So it is not an argument that all property rights are inherently defeasible and these are just another form of property rights, so what is the problem, it is rather these - - -

KIRBY J: I do not think you would get far with such an argument, even with your eloquence.

MR BURMESTER: No, your Honour, and we are not trying to make such an argument. We are saying if you look at section 71 rights and what they have always consisted of, then it has always been recognised that if there was some inconsistent use or enjoyment, then that would impact on the ability to exercise the 71(1) rights. But that is all we are saying. Because of that, one cannot say that therefore if the Commonwealth actually does something to use or enjoy the lease which it is given, that that in some way acquires the section 71(1) rights because it was always contemplated that they might be subject to use or enjoyment.

FRENCH CJ: The estates or interests referred to in section 71(2) – apart from anything created by statute subsequently, what is likely to be the source of those? It would be dealings by the Land Trust itself, I suppose.

MR BURMESTER: Yes, your Honour. That is the most likely source – and any pre-existing rights.

FRENCH CJ: Pre-existing ones, yes.

MR BURMESTER: I think Mr Merkel seeks to draw something from that, in terms of saying that the only way you could have inconsistent use or enjoyment, absent section 31 leases, would have required some action under section 19 which would have given the traditional owners some role.

FRENCH CJ: But if you said all right, there is one class of estate or interest that might be pre-existing; otherwise, subject to legislative action, they are going to be estates or interests created by the Land Trust in the exercise of its functions under the Land Council for the benefit of the relevant Aboriginal people. That does not provide a very strong support for the proposition that these are inherently vulnerable rights, does it?

MR BURMESTER: Your Honour, if you look at the rights being created in section 71 and just look at section 71(1) and (2), we would say that strongly points to them being inherently vulnerable to action under subsection (2). Subsection (2), in its terms, is broad enough to cover the use or enjoyment of an estate or interest wherever derived from. If I say, “If you go back to section 19, where there happens to be a particular regime about when other rights and interests can be created”, you somehow impose that or read that into section 71. We say that is not an appropriate way in which to characterise section 71 because the consent and the consultation under section 19 relates to a different class of persons who have to be consulted. It may include section 71 rights holders, but it includes other people. So there is no link, in our submission, between section 19 and the creation of interests under that, or the exercise of section 71.

CRENNAN J: Do you say these statutory leases are interests under subsection (2)?

MR BURMESTER: Yes, your Honour, we do; and section 34 of the Response Act preserves – or makes them subject to existing interests – makes the leases subject to existing interests. I am sorry, 35(1) makes it clear that the lease is subject to section 74 – section 71, estates and interests. In answer to your Honour the Chief Justice, there are other provisions in the Act where interest can be created without consent such as particularly in the mining area. So we say it would be an error to try and translate or qualify section 1 by reading into it restraints on the creation of interests that may appear elsewhere in the Act, whether it is section 19 or elsewhere, because those constraints are not in any way directly linked to whether or not someone has section 71 rights. They refer to different categories of persons. There may be some overlap, but that is not sufficient, in our view, to mean that the section 71 rights are in some way - - -

GUMMOW J: Mr Burmester, could you just explain your answer to Justice Crennan again? You have 35(1) is subject to section 34. Section 34 talks about - - -

MR BURMESTER: Preserves any existing right, title or other interest. “Other interests” is broadly defined, as subsection (10) makes clear. We say there is no reason why you would read section 34 as not including the interests that exist under section 71.

GUMMOW J: Where does section 71(2) fit into that analysis?

MR BURMESTER: That defines the interest. So the interest is - - -

GUMMOW J: I am being oblique.

MR BURMESTER: They continue to have the section 71 rights until, as in accordance with section 71(2), some use or enjoyment takes place which would prevent the exercise of those section 71 rights.

CRENNAN J: But then you do not consider the preservation of rights, do you, just because of that sequence of events that you have just described? That is what I did not quite follow about your answer.

MR BURMESTER: What we are saying is that the section 71 rights are preserved under sections 34 and 35 and just because the Commonwealth has a lease granting exclusive occupation or use, does not trigger section 71(2) and destroy those 71 rights. That is the first proposition.

GUMMOW J: Why not?

MR BURMESTER: Because we say section 71(2) only destroys the section 71 – “destroy” is probably not the right word – but only affects the section 71(1) rights if there is a use or enjoyment that does not allow them to be exercised. We say “use or enjoyment” in 71(2) is different from, and it cannot be equated with, the Commonwealth simply having a lease granting exclusive possession and quiet enjoyment. In support of that proposition I will refer your Honours to the judgment handed down yesterday by this Court in Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48 and, in particular, Justice Kirby at paragraph 31 and in the joint judgment at paragraphs 69, 75 and 76 where the distinction between use and enjoyment and simply having exclusive occupation was discussed and we say supports the construction - - -

HAYNE J: In a radically different context, Mr Burmester, in a radically different context.

MR BURMESTER: Well, asking a different question, but the broad propositions that I have referred your Honours to, we say, support the view, the interpretation, that in section 71(2) where it talks about use or enjoyment that would not include the Commonwealth simply having a lease providing exclusive occupation and quiet enjoyment.

The Commonwealth might have leases quite aside from the Emergency Response Act over land with section 71 rights, and we would not contend that the mere grant of a lease to someone destroyed section 71 rights. We recognise the significance of section 71 rights and we say it needs more than simply the grant of a lease for those rights to be destroyed. It is only when the Commonwealth in this case actually uses the rights under its lease, such as by erecting a fence around a building site, that those section 71 rights can no longer be exercised. That, as I understand it, is consistent with the argument put forward by the Land Trust.

GUMMOW J: My problem is that I cannot quite see at the moment why the Commonwealth’s lease is not something which is covered by 71(2), but you have been explaining why it is not.

MR BURMESTER: Well, your Honour, yes, we say if one reads the words, “use or enjoyment of an estate or interest”, so it does not say, “would interfere with an estate or interest”, it is the use or enjoyment of an estate or interest, and so until the Commonwealth actually does something the section 71 rights can continue to be exercised.

So the Commonwealth certainly did not envisage when it enacted this legislation that all section 71 rights were being destroyed in relation to all the land covered by the leases. The view was clearly taken that section 34 preserved them, and it was only once the Commonwealth actually did something like putting a fence around a building site that there may be a diminution and that diminution would be nothing more than section 71(2) had always accepted was a possibility.

GUMMOW J: Thank you.

MR BURMESTER: That is essentially the argument. Then there is a separate issue whether the power in section 37 to terminate interests is relevant. The Land Trust says section 37 could not be used to terminate section 71 rights. The Commonwealth does not necessarily endorse that proposition, but we say in the absence of any action under section 37 to terminate rights one cannot point to any diminution of a right that amounts to an acquisition.

So even accepting that, as the plaintiffs would say, section 37 could be exercised to terminate section 71 rights, we say in the absence of any action to terminate they cannot point to any impairment that amounts to an acquisition within the meaning of section 51(xxxi). The attempt to use Meneling to say that having a power to terminate means something is not property, we say that is taken out of context and used for a different purpose.

CRENNAN J: Well, you would accept, would you, if a 71 right was terminated, it might trigger section 60?

MR BURMESTER: It may, your Honour, yes. Assuming the plaintiffs are right on their construction, section 37 does apply to section 71 rights if they are terminated, at that stage that may give rise to a question of acquisition, but - - -

CRENNAN J: Not before?

MR BURMESTER: Not before.

CRENNAN J: Yes, I see.

MR BURMESTER: On the assumption that termination under section 37 is something quite different from the changing ability to exercise imposed by section 71(2).

FRENCH CJ: Anyway, if that be wrong they are inherently vulnerable, and therefore no - - -

MR BURMESTER: Yes, your Honour. They are inherently vulnerable to the extent 71(2) makes that clear, and that is all that has otherwise happened in the absence of an exercise under 73.

GUMMOW J: Well, I may be enamoured with this to the point of obsession, but one way of reading sections 35 and 34 with 71 is that in regards to this particular regime 71(2) does not operate. In other words, it is 71(1) unconstrained by 71(2). So that if you want to put up your fence you are in trouble.

MR BURMESTER: Well, we say, your Honour, that would be strange reading. Section 71 rights are properly only understood with a combination of subsection (1) and subsection (2), and it would be a strange interpretation, in our submission, to take subsection (1) and not take also subsection (2) in identifying rights under section 71. They go together.

HAYNE J: Well, what work are you giving to the words “subject to section 34” in the parentheses in 35(1) in connection with the 71 rights?

MR BURMESTER: We are saying it is precisely because section 34 preserves existing rights, title or interests that it operates to pick up section 71 rights. If section 34 was not there then - - -

HAYNE J: But you say the preservation is conditioned upon physical use of the land by the Commonwealth in exercise of its right of exclusive possession or something. Is that the way it works?

MR BURMESTER: Yes, until we exercise the particular rights under it. Until we use or enjoy the rights that we have as a lessee with exclusive possession there is no reason to read the section 71 rights as being jeopardised and - - -

HAYNE J: That rather reads it as though, subject to section 34 until we say to the contrary, or act to the contrary.

MR BURMESTER: Well, your Honour, that is inherent, we say, in what section 71 rights are all about. So yes, until we do something to the contrary, but that is the nature of the section 71 rights. It comes back to the original nature of the rights. They are not just another lease, another interest that does not have 71(2) attached to it. We say, given beneficial construction, preserving the section 71 rights, subject to inconsistent use by the Commonwealth is an appropriate way to read the provisions. We say that is consistent with the intention of Parliament and read that way – leaving aside section 37 and possible termination – there has been no acquisition.

As with the permit rights we say, in fact, that section 19 may not have constrained the way in which the Commonwealth exercises rights that mean that as a result of 71(2) rights can no longer be exercised; does not change or alter or add to any diminution in a way which would create an acquisition. So, in conclusion, your Honour, we say section 71 rights were never permanent rights that could not be altered by inconsistent use or enjoyment and that inconsistent use or enjoyment and only in that stage is all that is happening when the Commonwealth does something under its lease, but that the lease itself does not destroy the section 71 rights.

Your Honours, I think that is all I have to say on the property question. I now invite you to call on Mr Lloyd to deal with the “just terms” issue. Thank you very much.

FRENCH CJ: Thank you, Mr Burmester. Yes, Mr Lloyd.

MR LLOYD: My submissions will all be directed towards a single proposition that the two challenged Acts – the Emergency Response Act and what I will refer to as the FaCSIA Act both provide - - -

HAYNE J: You will have to speak up Mr Lloyd, even for me.

MR LLOYD: I am sorry, your Honour. My submission simply is that both the challenged pieces of legislation provide just terms, if not by other means, at least by section 60 of the Emergency Response Act or item 18 of the FaCSIA Act. My submissions proceed on the assumption, contrary to the Commonwealth’s case, that the challenged legislation must provide just terms and that the challenged legislation effects an acquisition of one or other kinds alleged by the plaintiffs. The challenged legislation was drafted, obviously, with the possibility in mind - however remote – that it may both be subject to section 51(xxxi) and effect an acquisition of property.

It is convenient to begin by looking at the relevant provision in the FaCSIA Act. The Court has been taken already to the Emergency Response Act. That provision is in volume 2 of the legislation, tab 5. It commences on page 151. The provision addresses the possibility that the changes to the so-called permit system effected by the Act would result in an acquisition of property to which section 51(xxxi) applies.

FRENCH CJ: Sorry, we did not have a complete FaCSIA Act initially, then we received it, yes.

MR LLOYD: I understand this page was missing, yes. So this provision applies to that portion of the plaintiff’s case that alleges the acquisition of property by the amendments to the permit system by the insertion of section 70A through to 70G or H of the Land Rights Act. That, relevantly, is pleaded to be an acquisition of the Land Trust fee simple. There is some reference in the submissions to that idea having some effect upon the section 71 rights, but that is not pleaded and so it does not arise properly on the demurrer. The plaintiffs did not address this aspect of their case in their oral submissions, but obviously they are addressed in written submissions.

Item 18(1) refers to subsection 50(2) of the Northern Territory (Self-Government) Act and provides that it does not apply in relation to any acquisition that would occur as a result of the operation of the Schedule or action taken under it. It is premised on the possibility that section 50(2) of the Self-Government Act might apply at least to administrative conduct of the Commonwealth or others.

FRENCH CJ: That is all it could apply to, the administrative action? You said “at least”. I just wondered what categories were unspoken.

MR LLOYD: Subparagraph (a) refers to the operation of the Schedule, which is, of course, part of the Act which would necessarily have repealed it. So the drafter seems to have put it in for abundance of caution.

Item 18(2) operates by imposing upon the Commonwealth a liability to pay a reasonable amount of compensation to any person whose property has been acquired. This obligation is not contingent, contrary to the plaintiff’s submissions at paragraph 87(a) of their submissions, rather, it is a right, the right is absolute, if on the proper analysis the law effects an acquisition of property of a kind that engages precondition. That approach is an approach which was adopted by Chief Justice Black and Justice Gummow in the case of Minister for Primary Industry v Davey 47 FCR 151. I will just give the Court the reference. Page 167, between letters F and G.

KIRBY J: At some stage, Mr Lloyd, I am sure you will deal with the matter that is concerning me, and that is that this is an attitude to just terms focused on monetary compensation which in many cases will cover the field of what is relevantly just terms for most transactions that people are concerned with but may not address them in the rather unusual and special circumstances of Aboriginal interests which have a dimension beyond the monetary.

MR LLOYD: I understand that, your Honour. I am obviously planning to come to that.

KIRBY J: You come to it in your own time, but that is the matter that is concerning me about promises of reasonable compensation, that that may not be what people are on about. They may be on about a structured access to their sacred sites, even at a time when there are other intrusions into the property.

MR LLOYD: To answer that point, your Honour, on a construction of the Act which my client favours, as my leader just put, there is nothing which prevents any of the plaintiffs from accessing any of the sacred sites at any time; they retain their section 71 rights. Moreover, it remains an offence for anyone else to go onto the sacred site, subject to approval under Northern Territory law. So that, in my submission, just never arises. I know it arises on their case, but on our view of the construction of the Act they continue to have the right to go to sacred sites and it is an offence for anyone else to go to a sacred sites who do not fall within section 69.

KIRBY J: But one would think that the emergency legislation would, on at least some occasions, potentially, on its face, lead to intrusions into sacred and secret areas that were inconsistent with the exercise by indigenous people of rights that are important to them and - - -

MR LLOYD: I understand, your Honour, and I certainly will address the broader possibility that there may be an acquisition – we say there has not been, but there conceivably could be an acquisition of rights that show an attachment that the Aboriginal people have with their land which may be peculiar to them, but the short answer – and I have a longer answer – is that we say that the law compensates people who lose such attachments by money.

GUMMOW J: Are there any decisions on Article 5 of the United States Bill of Rights which says that private property not be taken for public use without “just compensation”? The decisions assume money, I think.

MR LLOYD: Yes, perhaps I can take that under advisement, your Honour, and look into that a bit further and perhaps prepare a note, but I cannot assist the Court with the US jurisprudence. If one loses a limb in a tortious accident, one has an attachment to one’s limb, one nonetheless gets money. Your Honour gave an example yesterday of the Commonwealth for some reason excluding people from a church. The acquisition would be, on that theory, excluding them from a church. If one assumes the Commonwealth has some good reason for that, then - - -

KIRBY J: It was not a very good example, even if I say so against myself, because a church can, by definition, except, I suppose, in some very spiritual circumstances, be rebuilt somewhere else.

FRENCH CJ: I do not think Justice Kirby is speaking against himself anyway; I think I gave the example.

KIRBY J: But with Aboriginal interests the Court has said in many cases that there is a special and spiritual element in it and that is not really to be expressed only in monetary terms.

MR LLOYD: Yes. I will come to it, but my short answer in relation to what this case says is that the Minister – the Commonwealth’s proposition is that just terms is talking about money. The secondary answer is that the Commonwealth is not asking the Court to say there could never possibly in any circumstances be anything else. What we say is that what the plaintiffs suggest is not a requirement of just terms, and if we answer their propositions that is enough to dispose of the case without necessarily disposing of every conceivable thing that someone might imagine could be in addition to money.

GUMMOW J: I should have asked Mr Burmester this, probably, but at page 594 of Newcrest there is a reference to what seem to be decisions in the United States Supreme Court before Federation – that the territories power in the United States to make laws for the government of the territory was subject to the “just compensation” requirements of the Fifth Amendment, and Quick and Garran referred to it.

MR LLOYD: With respect to the Teori Tau point - - -

GUMMOW J: I am indulging in some pure originalism for the moment. This is what Quick and Garran knew.

MR LLOYD: I do not know that I can take it further than my leader did, your Honour.

GUMMOW J: All right.

KIRBY J: Is there anything in the parliamentary debates as to why the Australian founders chose the words “just terms” rather than the Fifth Amendment expression of “just compensation”?

MR LLOYD: I think in part the explanation is because – I do not know the explanation for that. I think there are some linguistic differences because the United States Article 5 is a limitation, as it were, a more general limitation, whereas section 51(xxxi) is also a grant of power. That may have been something that affected the draft. Perhaps I should have said to your Honour Justice Gummow that in our written submissions we have, in relation to your originalist interests, discussed the chronology in which these provisions came into the draft Constitution, which we have advanced in argument supports a view that the Territory’s power was seen as being separate and not connected to and needing to be connected to that power.

GUMMOW J: There has been a similar debate in the United States for a long time.

MR LLOYD: There had been.

GUMMOW J: Yes, but on this particular aspect it seems to have been solved in one way. They got themselves into all sorts of trouble when they acquired an empire with the Philippines and Puerto Rico.

MR LLOYD: Yes. Perhaps I will return to the “just terms” issue. I also wanted to say in relation to item 18 that the condition is, we contend anyway, activated in effect if, but for this section, the Act would be invalid by reason of section 51(xxxi). As to that operation, I refer the Court – I do not ask the Court to look at it now – to the decision of the Full Federal Court in Commonwealth v Western Mining Corporation 67 FCR 153, and in particular to the reasons of Justice Cooper.

KIRBY J: What is the point of that case? I did not catch what you were saying. I am not hearing you either.

MR LLOYD: The relevant point is that the precondition to the liability arising under this kind of clause is that but for the provision of just terms under such a section, the Act would be invalid. It only arises if section 51(xxxi) would lead to the invalidity of the Act.

That is what Justice Cooper held at page 200 between B and C of Western Mining. Chief Justice Black in that case did not have to decide the point at page 169B, and Justice Beaumont’s reasons I think are consistent, although certainly less clear, with Justice Cooper’s view on 191D, or perhaps his Honour just did not need to consider it on the view he analysed it.

Item 18(iii) envisages that there is to be an attempt by the Commonwealth and any relevant person to agree on an amount of compensation, and if agreement is not reached item 18(iii) empowers the person to institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of such reasonable amount of compensation as the Court determines.

Now, what I get from that is it is apparent, in my submission, that that kind of enforceable right for compensation is very different from the mechanisms which my friend, Mr Merkel, relied upon, the Tasmanian Dams one, where it had to go through various committees and long delays. There is no long delay here. The plaintiffs were able to bring these proceedings before the lease even commenced.

Also reliance was placed upon Johnston Fear as another kind of case where it was said, well, you need something, a fair process. Well, Johnston Fear was a process where the Minister determined a price and what you got was the price. This is a court determining just terms. “Just terms”, of course, is ultimately a two-word expression which is a constitutional expression. Content comes from the Constitution and it is appropriate that a Chapter III Court would determine that issue, and that is precisely what this clause allows, and in my submission that is just terms.

So insofar as the plaintiff’s case relies upon unfairness in the mechanism of obtaining compensation, in my submission, it should be rejected. No case stands for the proposition that it is unfair to have to sue in court. Likewise, to the extent that the plaintiffs rely upon a lack of a right to be heard, which was part of their submission, about the amount of compensation, it has no application in this case because they would go to a court and they would be heard in the court about the amount of compensation. It is clear that the object of item 18 is to provide just terms as required by section 51(xxxi), at least if that be necessary for the validity of the Act. It should be construed accordingly.

The Court has already been taken to sections 60 and 61 of the Emergency Response Act. Section 60 is in effectively identical terms to item 18 which I have just gone to. Sections 60 and 61 apply to that portion of the plaintiff’s case that alleges the acquisition of property, namely, the Land Trust’s fee simple. That relates to paragraph 17 of the pleadings, and also the first and second plaintiff’s section 71 rights.

I make that point because although both the written submissions and oral submissions put all the complaints together as if they applied equally to everything, they do not. The two compensation provisions are different. There is no equivalent of section 61 in relation to item 18, and to the extent to which the plaintiff’s case is concerned about section 61 it does not have that general application.

Section 61 creates an obligation on a court that is determining the amount of reasonable compensation to take into account three matters; rent paid, other compensation paid or payable and improvements in the land funded by the Commonwealth. In my submission, it is clear that section 61 does not detract from or alter the object of providing reasonable compensation. That expression is also in the chapeau of section 61. It simply requires the Court to have regard, so far as it is consistent with that objective, to those three matters. The obligation to take account of involves having regard to those matters. It does not require any form of strict accounting, in my submission.

Section 61 requires nothing that would prevent section 60 from providing compensation that fulfils just terms. Also, the three matters noted in section 61 are matters which could properly have been raised absent the existence of section 61 anyway in such a case. So given that one of the core purposes of the leases granted under section 31, indeed, the purpose identified by the Minister in advancing the Act in Parliament, is to carry out improvements in facilities on this land. It is reasonable that the Commonwealth can argue that a court assessing compensation say that moneys spent on improving an old health clinic that has been leased may, in an appropriate case, be considered when assessing reasonable compensation for the lease over that clinic. Ultimately, the court assessing compensation will determine whether any such claims were relevant to just terms and thereby affect the amount of compensation to be paid.

Now I advance two basic propositions against that statutory framework. The first is that the Commonwealth contends that any obligation to provide just terms under section 51(xxxi) is met by the provision of a mechanism for the payment of reasonable compensation for the property acquired and, of course, compensation pursuant to that mechanism. That compensation for what is acquired constitutes just terms in the Commonwealth’s submission. In footnote 84 of our submissions there is a reference to a number of pages in the decision of this Court in Andrews v Howell. It is not on the Court’s list, but we rely upon the references in that footnote for supporting the proposition that compensation is what is required by just terms.

Also, that an obligation to pay reasonable compensation constitutes the provision of just terms is also clear from the unanimous decision of this Court in Telstra at paragraph 42 when the Court held in similar terms to the present terms was sufficient to constitute just terms. On the basis of the first of my two propositions, the formulation for the provision of just terms in the challenged legislation meets the requirements of section 51(xxxi).

Now, if I put aside for the moment questions of the non-monetary compensation issue, in my submission, Telstra is a complete answer to many aspects of the plaintiff’s case. It answers their allegation that a clause in this term lacks specificity or clarity and that such a lack of specificity or clarity is itself unjust terms. It also answers the proposition that interest has to be expressly stated. It is not expressly stated in this case and yet this Court held it to be a valid provision of just terms. Also, the fact that you need to take proceedings to establish that there has been an acquisition under section 51(xxxi), well, Telstra had to take those proceedings and, in my submission, that is all still completely answered by the Telstra Case so as to, in effect, amount to a binding rejection of those arguments of the plaintiff.

As to the last of those matters, the complaint of the Act fails to comply with section 51(xxxi) because the plaintiffs are required to bring this proceeding in this Court is, it said, that the validity of the Act turns on the view taken in the litigation. What I am saying there is that it is said against us that – or they have been forced to take this proceeding to have Teori Tau overturned and so on and so forth, that in itself is unjust. Of course, there is nothing in the Act which says the Commonwealth had to defend the Teori Tau point. The Commonwealth might have not defended that point. Would the Act be valid if the Commonwealth just took a different view to a litigation? That is why, in my submission, there is no merit in that argument.

GUMMOW J: This notion of eminent domain, does that have as part of its components a notion of compensation?

MR LLOYD: I am sorry, your Honour?

GUMMOW J: When we talk about a right of eminent domain in the government and we talk about the common law, or talk about English law anyway, we are talking about a compound concept I think that includes compensation within it?

MR LLOYD: In my submission, not necessarily, no, because the States would have a right of eminent domain and they do not have to provide compensation. Eminent domain is a power in effect of the majority for democratic processes to decide in the circumstances of a particular case that some public good should be advanced, in effect, at private expense.

GUMMOW J: That is because the States have managed to alter the common law, is it not?

MR LLOYD: I am sorry, your Honour?

GUMMOW J: That is because the States have managed to alter the common law of England? I may be wrong.

MR LLOYD: Well, I am not disputing, your Honour, that eminent domain can obviously be done a compensation and I think this Court in Durham Holdings suggested that one would need clear language to indicate that there would be an acquisition otherwise than on just terms, but that power which the States have and are able to exercise in favour of their citizens if a case sufficiently merits it, is a power which, on the view of the plaintiffs, the people of the Northern Territory are unable to exercise communally in their favour. So, as it were, they are being denied the power to do something that the States could do.

FRENCH CJ: That general concept has been relied upon in recent years in the United States, has it not, with the redevelopment of urban areas? I imagine there has been some litigation on that in recent times.

MR LLOYD: Indeed, your Honour.

HAYNE J: If you go back to the Cherokee Nation Case that is referred to in Newcrest[1890] USSC 168; , 135 US 641, at 656 there is reference to a judgment of Mr Justice Bradley in Stockton v Baltimore & N.Y.R. Co 32 F 9 at 19 where his Honour discussed eminent domain and, in effect, made the point that if you observe that the eminent domain is in the States, because the States in the United States are to be regarded as sovereign, because the United States has the position it has in the Constitution, the United States has an eminent domain in respect of the whole of the territory of the United States. If that carries with it the notion that absent, in English terms, exercise of prerogative power during war time, that compensation is to be provided for its exercise, absent statutory modification as is the path that occurs now in state law, what does that say of these areas for debate?

MR LLOYD: My recollection, your Honour, is in Mabo and this Court accepted that the Crown – I think I am using that expression in a way that Justice Kirby will be content with – in 1788 coming here had executive powers to take land and could do so validly and continue to be able to do so validly until, I think, in about 1823 the Crown Lands Act was passed, which required statutory limitations and then after that the real limitation on eminent domain of the States occurred with the Racial Discrimination Act was what limited the power, but it has been accepted in this Court that both the Executive and also later the Parliament could have eminent domain without compensation.

The second proposition in relation to just terms was that “just terms” turns on what is fair and just between the owners of the acquired property and the community. Just terms does not require a precise money equivalent, but connotes fairness. Perhaps I part with my friend, Mr Merkel – we say that where Justice Dixon used that expression in the Nelungaloo Case he had in mind that there may be circumstances where community interests might justify, as it were, a lower price or lower compensation than might otherwise be the case. We respectfully adopt that approach. We are not saying it would happen in every case, and maybe the normal situation is that it would not happen.

These propositions support the view that Parliament was empowered to include section 61(c), which deals with the improvements funded by the Commonwealth. At section 61(c), can I ask the Court to take into account the improvements funded by the Commonwealth and that this is a factor that can be considered, at least where it is fair to do so in a particular case.

Contrary to the plaintiff’s submission, creation of the Commonwealth lease, the section 31 lease, has virtually no impact upon the people in the lease area directly, so they will continue to use the school which is referred to in the pleading, the town hall, the airstrips, the health clinic, et cetera. They continue to be able to use all of this either under the section 71 rights or under the rights granted in section 70A to 70F. As my leader said, there is certainly no evidence of moneys having been diverted to the Commonwealth in this income diversion idea. The impact, in our submission, is very low.

As noted in our submissions, the purpose – and again, Mr Burmester took the Court to this in the extrinsic material – of the lease was to facilitate the carrying out of improvements. This may obviously, while there are building works going on, involve some disruption to people.

It is against that background that one even approaches the question of compensation. The measure of compensation for a lease is rent, a complex question as to what is a fair rent for a lease where everyone is left in the place they were; they can continue to use all the facilities that they could always continue; and all the lessee does is carry out improvements on their facilities. That would be the question, we would say, facing a court looking at a claim for compensation.

We are not denying the possibility that there might be some greater level of disruption in a given case, and so the Act envisages that in such a case the Minister can have a rent determined by the Valuer-General who, in answer to another one my friend’s propositions, we would submit would be bound to hear what interested persons have to say because there is certainly nothing in the Act which excludes natural justice.

Against this background of anticipated use of the lease and in the context of what is pleaded, the Commonwealth contends that section 61(c) is entirely consistent with the provision of just terms. It does not operate in any way to require anything less than reasonable compensation. I just want to deal with three remaining issues. The first is the plaintiffs contend that just terms requires the challenged legislation to provide legal aid for them in order to bring a proceeding such as this. There is nothing to suggest that they are not getting legal aid in the facts, but in any event, it is said that if the plaintiffs were to succeed - - -

KIRBY J: Are we entitled to take judicial notice of the look of astonishment on the part of counsel for the plaintiffs?

MR LLOYD: We are not saying they are getting legal aid, but if it is a fact which is relevant, it is not in the demurrer and so they have left themselves without a relevant fact. If they are going to say it is essential that they get legal aid, they would need to show that they were not getting legal aid. In addition, we say that a costs order, which they would get if they were successful, would be sufficient to meet any just terms requirements. Of course, if they are unsuccessful, then there is not an obligation to give them just terms.

It is further submitted that the requirement to establish that an acquisition has taken place that gives rise to a liability to pay compensation is not oppressive, which is another matter pleaded against us. It is also that this provision does not require the plaintiffs to wait years. Indeed, the original proceeding commenced for an injunction. They did not ultimately press the injunction. This is just not a case where the scheme of the Act requires them to wait years for compensation.

The second issue relates to something I have already touched upon. The plaintiff contends that the challenged legislation does not make express provision for interest. I suppose I agree that it does not make express provision for interest, but it is contended by the Commonwealth that the reasonable compensation formula is sufficient. I just draw to the Court’s attention a decision which I understand was handed up earlier called Albany v Commonwealth 12 ALR 201. It is a decision of Justice Jacobs, sitting as a single judge in this Court. At page 233 his Honour was dealing with a claim. That was an acquisition under the Lands Acquisition Act. The Lands Acquisition Act at that time did provide expressly for interest and also had, in section 31, what might be called a Historic Shipwrecks clause, a clause like the current section 60 and item 18. In that case it was argued that the amount of interest provided was inadequate and was not just terms.

KIRBY J: That was the sort of provision I was really asking Mr Merkel for and he has given me more provisions that have compensation as the formula. So it is clear from what Justice Jacobs says on page 233 that section 31 of the then Lands Acquisition Act used the same constitutional expression of “just terms”. I am pretty sure I have seen it in federal statutes. I may be wrong.

MR LLOYD: The actual expression “just terms” instead of “compensation” or “reasonable compensation”.

KIRBY J: Yes. It is used, as Mr Merkel’s note, in the Olympic Insignia Protection Act, but that is hardly a very singular example.

MR LLOYD: All I extract from this is his Honour Justice Jacobs ultimately says that the amount of interest was just but at the bottom of page 233 his Honour says:

I do not think that the distinction can be drawn between the use of the words “just terms” in s 31 and their use in s 51(xxxi) of the Constitution. The clear intention of s 31 is to ensure that the Act cannot operate in such a way that the constitutional requirements will be infringed.

Now, it is clear, in my submission, that his Honour contemplated that if the interest stated had not been just, this kind of clause would be enough to fill to gap in interest and in those terms reasonable compensation, in our submission, should be understood as including any need for interest. That brings me then to the last issue which is the question of non-monetary compensation.

The plaintiffs agree with the Commonwealth that the need for just terms can never preclude the power to acquire, so that at least is common ground between the plaintiffs and the Commonwealth. The plaintiffs say that just terms requires that the interest be considered before terminating section 71 rights. They plead that the mere passage of section 37 effected that acquisition. So what they must be saying – although they are talking about – the example given was a toilet block on a sacred site, which is no doubt emotive, but that is not what is pleaded, so the Court can put that out of its mind. What is pleaded is that merely creating the power to terminate the right is acquisition. Now, that was done by the Parliament, so, understood in that way, what they are saying is Parliament did not consider the section 71 rights.

KIRBY J: It is a sort of blight argument though, that if the power to terminate has been introduced, there is no doubt that the economic value of land is affected as against what it was when there was no such provision. It is a blight.

MR LLOYD: Well, your Honour, it may well be if you had a fee simple and the Parliament passed an Act specifically saying, “I might terminate your fee simple”, that may well have an effect on the value of that land, but these section 71 rights are non-transferable, they do not get better or worse. Until the point that they are terminated, the plaintiffs can do exactly what they did before they were terminated. One can understand that they are not excited by the fact that the Minister has this power, but it does not actually affect them in what they can do in any way and it does not diminish the value of their section 71 rights. It has, in my submission, no impact whatsoever.

In any event, the point I was making was a different point which was they are challenges to this legislation which does this and they are saying that just terms requires that the interest be considered before the section 71 rights are acquired. Well, because it is Parliament who is doing it, though it was not made clear, what they must be saying is, Parliament have to consider it. Now, we say just terms does not require Parliament to consider that, but we go further and say Parliament is not obliged to give natural justice before it acquires property. We say, in any event, that there is no evidence or pleading that Parliament did not consider that they are rights, that their Act would in fact have those consequences.

The second matter advanced under this head by the plaintiffs is that they make some reference to sacred sites, and I think I have already said that on our contention that the lease just does not affect the sacred sites. They can still go there, they still have the section 71 rights, it is still an offence for other people to go there, so that does not lead to any additional non-monetary just term.

The third matter advanced by the plaintiffs is that acquiring a sacred site should be done only as a last resort. If this were such a constraint, that would ask the Court to say – the Court will then have to enter upon the idea of whether or not in effect to go into the political forum and assess whether the methods chosen by the Parliament were good enough, or whether there was a better way of doing it, that Parliament should have done and it should not have done this, and that this should have been left to a last resort, and there were better things to have been done. In my submission, that is no role for this Court and it is not required by just terms.

Another point made by my learned friend, Mr Merkel, is that to be compensated, the plaintiffs are entitled to a rent. Then he went on to say a fair rent, after criticising the rent provisions. We simply just state that rent is money and if the rent were determined to be inadequate, then section 60 would top it up to a fair level.

Finally, the plaintiffs contend that the real problem was the unfairness of the objects sought to be achieved by the legislation. That is in a context where, according to the plaintiff’s case, the object is to strip money out of the plaintiff’s hand, which obviously we deny was the purpose or the effect. But let us assume, anyway, that that means logically, he says, that Parliament – that “just terms” somehow means that Parliament cannot acquire something for an unfair object, because it is an unfair object. Because it is unfair, it could never be just terms because the object is unfair.

We again say it is not for the Court to assess the fairness of the objects of acquisition – just fairness of terms. So, in my submission nothing advanced by the plaintiffs should make the Court think that the provisions of section 60 and item 18 do not provide just terms in the circumstances of this case. Your Honour Justice Kirby has asked me, in effect, is there – or has asked me to address that question. I have addressed it in a way which does not require the Court to say that necessarily there might never be some circumstance, but it is the Commonwealth’s position that “just terms” is referring to compensation. That is what this Court has determined in the past, although I have to accept that in those cases it was not advanced, that they were not non-monetary cases, but there is plenty of language, of this Court referring to “just terms” and compensation.

In my submission, even if your Honours were to accept everything that the plaintiffs had to say in relation to Teori Tau and acquisition of property, the Court would uphold the demurrer on the basis that just terms are simply provided by this Act by those two provisions if need be, and the action should be – but we are content on the basis that at least of all of our pleadings, if the Court accepts the entirety of the Commonwealth case, the summons should be dismissed and the action should be dismissed. May it please the Court.

FRENCH CJ: Thank you, Mr Lloyd. Yes, Mr Merkel.

MR WALKER: Your Honour, with my friend Mr Merkel’s acquiescence, I wonder if I may make a few comments about two of the points that Mr Burmester made against our argument?

FRENCH CJ: Yes, proceed, Mr Walker.

MR WALKER: The most important concerns the nature of the fee simple which is held by my client. It has to do with the notion that it is, to use one of the metaphors employed by Mr Burmester, hedged around or surrounded by special provisions of a kind to indicate the inherent defeasibility which in turn leads to the conclusion that the taking of the leasehold by the section 31 national emergency response lease would not be an acquisition. Notwithstanding the freehold, the fee simple is plainly property.

In our submission, for the reasons we have tried to put in our written submission and in my address, the provisions in question, all of them, but particularly those to do with traditional owner involvement, other affected Aboriginal persons’ involvement and ministerial involvement, ought to be seen as being in the nature of special provisions concerning the quality of governance and, in particular, the involvement, including by way of actual control, of the very Aboriginal persons who are referred to in the long title of the Act – the long title of the Act being, in our submission, highly informative of the special provisions purpose.

They are provisions which, far from rendering the title inherently defeasible rather show the parliamentary intention that this is a special title the subject matter of which is not to be dealt with except for the very special, some might see it as legislatively privileged, purposes for which the statutory scheme was enacted. By “privilege” I mean the fact that persons other than the owner in law – that is, other than the Land Trust – have veto control over dealings.

In that context, in our submission, this is no more an inherent defeasibility provision than are prudential management or governance controls in relation, say, to corporations holding land, restrictions on related party dealings, for example, or charities holding land, restrictions on how they may be used, may be alienated or may be devoted to other purposes. They rather bespeak the solidity or stability of the interests rather than undermine it. That is the first point.

The second point is that I think my learned friend, Mr Burmester, said in relation to the other part of the question of acquisition of our fee simple, namely, examining the nature of the leasehold, that these national emergency response leases were not leases which can be seen as being just like a lease being given to a third party, a commercial company. May I remind your Honours that under subsection 35(5) of the NER Act, the Commonwealth has an apparently uncontrolled power to sublease, among other things.

FRENCH CJ: Thank you, Mr Walker. Yes, Mr Merkel.

KIRBY J: Mr Merkel, just following on from what Mr Walker has said, is there anything you can say properly on the basis of the record as to why the point of distinction has emerged between you and the Arnhem Land Trust? I may not be understanding exactly why you should find yourselves in different corners. If it cannot be said on the basis of the record then do not say it, but if there is anything – I realise parties have to advance their legal arguments, but normally they do so to protect an interest and I just cannot
quite understand where the traditional owners have separated themselves from the Trust. Is there something that can be properly said, or not?

MR MERKEL: I think there is, your Honour, and it is this.

HAYNE J: On the record, Mr Merkel, from the record of the proceedings in the Court, or are you about to give evidence from the Bar table?

MR MERKEL: No, I am not. I am conscious of the limitation imposed in the answer to the question and - - -

KIRBY J: I framed my question by reference to the record. I do not want to hear anything that is improper.

MR MERKEL: No. I am not going into any background facts as to why there may be a difference. I only want to respond to your Honour on the basis of the arguments that have been put before the Court.

Primarily there seems to be a difference in the approach to section 71(1) rights and arguably the sacred sites issues. What I wanted to make quite clear is that the traditional owners have come to the Court on a basis of a different view of the way in which the legislation has been drafted and may work in practice. May I say quite clearly and explicitly, as far as the traditional owners are concerned, if this Court interprets the Emergency Response Act in the way contended for, namely, that it does not authorise any access to sacred sites and it is not capable of interfering directly or indirectly with section 71 rights, the traditional owners would be very content with that outcome and there has therefore been no acquisition of their property and the question of just terms does not arise. But that is not the way our submissions have apprehended the operation of the Emergency Response legislation.

The concern that the traditional owners have is primarily to ensure that the rights that they have, namely, to have the fee simple held for their benefit, the rights that they have in respect of sacred sites and the rights they have under section 71, are not interfered with by the Emergency Response legislation. If the Court has a view of the Act that differs from the way in which we have put our view, then if it is a beneficial view in the direction that I have identified, the traditional owners have no problem. To the extent the Land Council has put a view of interpretation that would produce that outcome, we have no difficulty with that outcome arising, irrespective of what consequence it has for the case, because it is those underlying rights that have brought the traditional owners to the Court.

They had to come. They did come in the circumstances that occurred because they perceived those rights to have been acquired on the basis of our arguments. As I said, if a different interpretation produces a different result, then that is no problem for them if it is a beneficial result. The concern was that if it is not a beneficial but an adverse result and the Court views the interpretation that we have put forward as the correct one, then the issues arise fairly and squarely, and I was going to address some of those matters in reply.

KIRBY J: Yes, thank you.

MR MERKEL: On the issue of sacred sites, can I just indicate how we understand the Act to operate, but we would, as I said, be delighted if the result were that the response legislation does not authorise access. Our concern essentially is that under section 35 the terms and conditions of the lease are set out giving exclusive possession. Under section 36(1) there is an entitlement to create the additional terms which are set out in the demurrer book at pages 59 to 64. Those additional terms create rights of access, and in particular at page 63:

The Commonwealth is entitled to use, and permit the use of, the Land for any use the Commonwealth considers is consistent with the fulfilment of the object of the Act.

There is access under 3.2 and so forth. It says in 4.1.1:

The Commonwealth may carry out any activity on or in relation to the Land consistent with the Permitted Use.

Now, as we understand section 50 to operate, and again if it does not operate in this way our clients would be pleased with the result, but as we understand section 50 to operate it says that:

Divisions 1 and 2 –

which includes the provisions provided for in section 36 –

have effect despite any other law of the Commonwealth -

Now we would say that it would follow from that statutory scheme, absent some very beneficial construction of it, that a permitted use, pursuant to those terms of the land on the sacred site which is the subject of the lease, pursuant to the exclusive possession given under the section 31 lease, would not constitute a contravention of section 69. That is what we say is the issue arising in respect of the sacred sites.

Mr Walker raised certain questions about the problem that might be incurred with improvements and land which is the subject of a registered lease. We had put in our submissions, but we wish to remind the Court, we have given an explanation at transcript pages 82 and 83 that the Maningrida land has been defined in a way and the leased land has been defined in a way that recognises that registered leases or areas of land covered by registered leases are not the subject of the section 31 lease and they cannot be under the Act so that the land leased and the land pleaded to be leased, on the facts pleaded, are on land that is not the subject of a registered lease and also when we come to the facts pleaded concerning improvements, which is the context in which my learned friend had raised this issue about possibly registered lease improvements being included in the land leased the facts pleaded in respect of the case put under section 62(4) about improvements affecting rent and 61(c) about improvements affecting the amount of compensation is set out at the demurrer book page 23:

(A) the Commonwealth is entitled to use, and permit the use of, the Maningrida land . . . with the fulfilment of the objects . . .

enter and access . . . all improvements –

on the leased land and then in (C) it can remove, replace “any existing improvements” on the land.

So we say that – and in the demurrer book we have set out the improvements that are on the land, leased, that is excluding registered areas, at pages 17 and 18. So we say that the issues raised by reference to the improved and unimproved value of the land under section 62 and taking into account improvements that were not funded in the way set out at page 18 are raised directly by the pleadings, and we say that our submissions deal with those very issues. So we do say that the fact of the improvements and the way in which they are pleaded at pages 17 and 18 directly raise the issues under section 61 and 62 relating to improvements.

Now, we accept that if the Court is not satisfied that the provisions in the Act concerning improvements may not be necessarily unjust, then it still does not enable the demurrer to be upheld. If those matters depend on questions of fact then the statement of claim raises an arguable cause of action that these clauses can operate in an unjust manner and not provide just terms.

What we have endeavoured to do at pages 17 and 18 in respect of the improvements is to say quite simply that the leased land includes all of these improvements. When it comes to taking into account the rent, the Commonwealth gets the benefit of the improvements, including the benefits in the additional terms which enables them to demolish them and change them as they please, but the fact remains that if there is a rent payable then on the unimproved land it is not capable of being said to be necessarily a just term to disregard the fact that the Commonwealth gets the benefit of all of these improvements.

If the Court concludes it is a matter of further evidence, then the demurrer should fail and it would be a matter that would be decided at a hearing. In respect of the improvements taken into account in compensation – that is under section 61(c) – which my learned friend, Mr Lloyd, addressed, what we have said at page 18 in subparagraphs (c), (d) and (e), the improvements we are concerned about, which the Commonwealth are not paying rent for, were funded in part by the Commonwealth and this is over a 50 year period, the Northern Territory Government, Maningrida Council, Bawinanga and other entities, it gets the benefit of all of these improvements on its land, but it does not have to pay rent for them.

Then in (d) and (e) we raise the issues raised by section 61(c). The issue between the parties is that when you look at section 61 – and if I can take your Honours to it – of the Emergency Response Act, if we go down to the end of the whole process and get a court to determine a reasonable amount of compensation, it is required to take into account amount of rent paid and amount of compensation paid to reduce the reasonable amount of compensation. We say that is obviously reasonable. But then (c):

any improvements to the land that are funded by the Commonwealth (whether before or after a lease is granted –

That takes one back to the infrastructure, such as roads, sewerage, all the matters funded by the Commonwealth on the land, and we say that is an unprecedented provision in respect of compensation. The important point is of course it would be reasonable if a term of the funding was that the Commonwealth was entitled to reimbursement, but, as we have pleaded these matters, very few of the improvements, if any, have been funded on that basis. So what we say is that the facts pleaded raise as an issue as to whether it is open to reduce what is a reasonable amount of compensation by the factor that in (c) that is required to be taken into account.

We have cited Sean Investments [1979] HCA 32; 180 CLR 322, Justice Mason at 329, to say “must be taken into account” means treated as a fundamental element in determining the compensation to be paid. We say Parliament intended (c) to be amount in reduction of what would otherwise be payable. The Commonwealth put an argument that that cannot be an operation of section 61(c).

We say there is little point in it being there. That is the argument on construction, but we say that our facts pleaded certainly raise those issues concerning improvements for the purposes of rent and for the purposes of the ultimate amount of compensation if it ultimately be payable.

Can I next move to the question of section 71. We say that ultimately what has been put by the Commonwealth is that there is no collision because, at the end of the day, the rights are subject to when an employee of the Commonwealth or an invitee of the Commonwealth enters and accesses and uses the land at the will of the Commonwealth, then the section 71 right, to the extent it is inconsistent with that use, gives way.

We have put our argument on why the rights are preserved and the fact of making them terminable in the way as has been provided for in the Act is itself an acquisition. But if the Commonwealth’s position is correct, we say that it does not matter because what were once, prior to this enactment, stable and enduring rights, have been reduced to rights enjoyed at the will of the Commonwealth’s servants and agents as to when and how they use the land. We say that is plainly a fortiori an acquisition of those section 71 rights.

My learned friend, Mr Walker, put the argument that the section 71(1) rights are not affected by the Emergency Response Act and if the Court arrives at that construction, as I said earlier, we would be delighted, but the main point put forward is that section 35(5) notice could not be given to the traditional owners. That may in a practical sense mean in some instances there may be difficulty in termination, but the way we have approached section 71(1) is that they are preserved rights terminable in accordance with the statutory scheme, and that is the acquisition.

Mr Lloyd, with respect, does not put our argument correctly when we say that that acquisition is on unjust terms. He seeks to turn it around and say that what we are putting is that it was an unjust acquisition. Our point is that the entitlement to terminate them in the manner provided for is an acquisition and it required terms to be just that ensured the interest of the traditional owners be taken into account as a condition of a valid termination decision. It is the failure to provide for those terms that we say resulted in the acquisition being on unjust terms.

We say that ultimately that comes down to whether other terms could be added other than compensation, and we accept in Nelungaloo the context in which Justice Dixon talked about fair dealing and fair standards was in a sense or a context that may have meant a compensation would be payable which was less than full value. But the point his Honour made that compensation and just terms are not synonymous can work both ways.

It can mean, as was discussed this morning, it may mean that compensation without some additional terms is not sufficient. As was found in the Johnston Fear and the Apple and Pear Case, the failure to give natural justice even though there was a right to reasonable compensation meant that it was not compensation on just terms because you had no right to be heard on the amount. So we say that there is no way this Court should approach the question of just terms other than by the sense of fairness and equity, having regard to the special circumstances of the case, and the special circumstances of this case are the sui generis nature of the rights affected.

My learned friend, Mr Burmester, endeavoured to equate the objects of the emergency response legislation with the wellbeing of the Aboriginal communities in the various areas with the objects of the Land Rights Act, and we say there is a fundamental flaw in that argument, and it is a flaw that goes right through to the approach of the Commonwealth to the emergency response legislation.

The emergency response legislation is declared to have an object for the benefit of the communities. The Aboriginal Land Rights Act has fee simple held for the traditional owners and it is quite wrong to equate the two. So when we look at the incidents of the fee simple and being held for the benefit of the traditional owners, legislation to alleviate problems with the wellbeing of the communities cannot be equated with the interests of the traditional owners.

The other matter I wanted to address was the consequences flowing from the abolition of the permit system. Our case was not fairly represented in respect of the permit system. As was made clear in Blue Mud Bay judgment at paragraph [50], one of the incidents of the right of the fee simple estate was the right to exclude. The right to exclude arose under the access and permit provisions. We had mentioned earlier Gerhardy v Brown [1985] HCA 11; 159 CLR 70, but can I just take your Honours just very briefly to the passage from Justice Brennan which has not been read out at page 117.

So that our claim in respect of the permit system is fully understood, we do not seek the permit system to be regarded as a property right in its own right. It is an incident of the fee simple estate holder and that is how it was approached in Blue Mud Bay. What his Honour said, if I could go down to point 3 at 117. This is concerning the Pitjantjatjaras’ Land Rights Act, but very similar in effect and purpose. His Honour said:

Effect is given to this view by s 19. Control of access by non-Pitjantjatjaras to the lands is ancillary to the enjoyment by Pitjantjatjaras of the rights over or in respect of the lands which the other provisions of the Land Rights Act confer on them. The legal title to the lands is vested in Anangu Pitjantjatjaraku but the traditional owners and, subject to their wishes and opinions, all other Pitjantjatjaras may use any part of the lands without interference from non-Pitjantjatjaras . . . It is clear, however, that the purpose of s 19 is to control the access by non- Pitjantjatjaras to the land in order to secure the uninterrupted enjoyment by Pitjantjatjaras of the use and management of the lands which the Land Rights Act permits.

His Honour then goes on to discuss that topic. We say the permit system is an incident of the fee simple right of the - - -

FRENCH CJ: This is the permit system under the Aboriginal Land Act.

MR MERKEL: Yes, your Honour, in the South Australian one.

FRENCH CJ: In that case, yes. You are directing us back to the permit system under the - - -

MR MERKEL: Yes. We say the same kind of principle is at play in the Aboriginal Land Rights Act, that the permit system, as your Honour said, in paragraph [50] of Blue Mud Bay – as a matter of substance there is a right to exclude, and it is the abolition of a right to exclude as an incident of the entirety of the benefits given to the fee simple holder estate and those on whose behalf it is held – namely, it is the Land Council and the traditional owners. The Land Council and the traditional owners are granted the right to issue permits for access onto the lands. It is the abolition of that right as an incident of the estate and the property rights granted in respect of the fee simple estate which has been abolished by the FaCSIA Emergency Response Act.

So what we say is that far from what occurring being merely a regulation or modification of the right to exclude, which were the kind of examples given by my learned friend, Mr Burmester, of amendments made since the enactment of the Act, what has happened in the emergency response legislation is not merely a regulation or a modification but it is the removal altogether of the right to exclude public entry onto Aboriginal lands – that is, the common areas of Aboriginal lands – for any lawful purpose.

So we say that goes far beyond the kind of modification allowing journalists to enter, allowing categories of government employees to enter, even allowing people on Commonwealth business to enter. That may be the kind of regulation or modification, but what occurred in section 70F of the amending legislation was the removal of the right to exclude the public from entry. We say that is qualitatively a very different category of legislative activity than would fall under the head of regulation and modification of the kind that my learned friends had put forward.

Can we finally say that in respect of the issues raised on the demurrer we accept that the action would be dismissed if the Commonwealth were to succeed on what we described as the first issue which is whether the acquisition is subject to 51(xxxi). If it is not, then the question of just terms does not arise. Our primary case has always been on the property issue that if there is an acquisition of property of the fee simple estate held for the benefit of the traditional owners, then they are entitled to just terms and we say that we are entitled to succeed on that matter.

On the section 71 rights, as I indicated, if those rights are not an acquisition of property because that is not affected by the section 31 lease at all, and the legislative provisions concerning it, then we would be delighted for the demurrer to succeed on that basis, but otherwise we say we are entitled to succeed on the arguments we put on that aspect of the demurrer. If the Court does not accede to our arguments that the statutory provisions are necessarily unjust or there is a failure to provide for just terms, then we say the appropriate course on the third issue is to conclude that we have raised a reasonably arguable case on the matters raised in the pleadings and insofar as those matters are concerned, we accept what was raised by your Honour Justice Hayne that we cannot ask for implications of facts, but we do refer the Court to the passage of Justice Gibbs’ judgment in – it is not on our list of authorities but if I can just cite it – Kathleen Investments (Aust) Limited v Australian Atomic Energy Commission - - -

HAYNE J: His Honour picks up South Australia v The Commonwealth and Chief Justice Dixon’s - - -

MR MERKEL: Yes, your Honour, but the one qualification that his Honour says – not a qualification, sorry, the introductory statement is - - -

KIRBY J: Put the citation on the record.

MR MERKEL: I am sorry[1977] HCA 55; , 139 CLR 117, your Honour. The passage is at 135. What his Honour says:

The only facts which can be taken to be admitted for this purpose are those which are, expressly or impliedly, averred in the statement of claim itself –

Now, what we say is that the facts which we had pleaded in the statement of claim, expressly or impliedly, raised the issues upon which we have based our submissions and, apart from the section 34 point, that is the income stream aspect, we say all of the other matters are raised on any fair reading of the statement of claim and we say that the correct course is for the demurrer to be refused on the basis that it is not established that the facts pleaded could not raise a reasonably arguable case, that the statute does not provide for just terms.

FRENCH CJ: Just going back for a moment – I am sorry – to the permits, the point of the question I was putting to you earlier was really, simply, that you described the permit system as an incident of the fee simple. The permit system was created under a Northern Territory statute, was it not?

MR MERKEL: Yes, your Honour. No; I am sorry. The permit system arises as a result of the Land Rights Act.

FRENCH CJ: Yes, but it is created under the Aboriginal Land Act (NT). That is where the permits are issued by the Land Council.

MR MERKEL: Yes, your Honour, but - - -

FRENCH CJ: That is what we were looking at in the context of Blue Mud Bay, as I recall it.

MR MERKEL: We say that, properly understood, the right to exclude arises under the Land Rights Act.

FRENCH CJ: I understand that. It is just that, when you talk about the permit system that is not, in a sense, an incident of a fee simple, it is a separate mechanism created under a statute of a different polity which empowers land councils to grant permits to enter Aboriginal land, which picks up its definition from the Commonwealth statute, the Aboriginal Land Rights Act.

MR MERKEL: Yes. I am sorry, your Honour.

FRENCH CJ: It is a minor point.

MR MERKEL: No. I accept what your Honour says. Our reliance has to be on the rights, in effect, to exclude, or the right that excludes public entry on Aboriginal land in the Land Rights Act. It is that right that has been removed effectively under the emergency response legislation.

Can I finally just correct a matter relating to how we have put this problem of compensation in a contingent sense and that was the abrogation of section 50(2) which necessitated, we said, the High Court.....practical matter to resolve the Teori Tau issue, or the Newcrest issue, before a claim for compensation could proceed for judgment?

What we really were saying is given the nature of the abrogation and the requirement for this case to be brought, what we were seeking to say is that it meant the exposure of the Land Council or the traditional owners not only just to having to proceed without any aid to do so, but to proceed with the deterrence or the disincentive of a burden of a costs order to have to make good their right to claim compensation, and we would say it is similar to what this Court often does in special leave cases where an issue of public importance is raised to require as a condition of the grant of special leave that there be no costs burden for the person who is in effect seeking to defend their personal rights but the case raises a point of public importance.

It is in that context that we raise both the contingent aspect for saying it would be some years before a financial outcome would arise, and also it is that basis that we had put, that it was not a just term for the Commonwealth to in effect impose this burden on the traditional owners. This is the case in the present case, or on the Land Council, whose costs would eventually be borne by the traditional owners on the basis of it being the usual kind of adversarial litigation.

We say that is not a complaint, that that is a requirement for a shipwrecks clause case, because as we put earlier, this is not such a case. So it is for those reasons we would put that the demurrer should be dismissed.

FRENCH CJ: Thank you, Mr Merkel.

MR MERKEL: If the Court pleases.

FRENCH CJ: The Court will reserve its decision and thank counsel. We will adjourn until 10.15 am on Tuesday, 14 October.

AT 3.47 PM THE MATTER WAS ADJOURNED