HIGH COURT OF AUSTRALIA

                                       Grace Brothers Proprietary Limited

                                                           Vs.

                                                   Commonwealth

                         (Latham C.J., Starke, Dixon, McTiernan and Williams JJ.)

                                                    17 April 1946

Latham C.J.

Demurrer to a statement of claim in an action in which the plaintiff claims a declaration that the
Lands Acquisition Act 1906-1936 is void and that a notification given under the Act that certain land
belonging to the plaintiff was acquired by the Commonwealth under the Act is void. The plaintiff
also moved for an interlocutory injunction restraining the defendants (the Commonwealth and the
Minister of State for the Interior) from altering and demolishing parts of the building upon the land
to which the notification referred. The motion was referred to the Full Court.

The Lands Acquisition Act 1906-1936 was enacted under the power conferred upon the Federal
Parliament by the Constitution, s. 51 (xxxi.), to make laws with respect to the acquisition of
property on just terms from any State or person for any purpose in respect of which Parliament has
power to make laws. It is contended by the plaintiff that the Act does not provide just terms for the
acquisition of land and therefore is invalid (Johnston Fear & Kingham v. The Commonwealth[1]).
The plaintiff also relies upon what is contended to be a failure to comply with the requirement of the
Act that the notification of acquisition should specify the particular purpose for which the land has
been acquired: see the Act, s. 15. The more important question is that of the validity of the Act, and
I propose to deal with that question in the first place.

The Act provides that the Governor-General may direct that any land may be acquired from the
owner by compulsory process (s. 15) and that when the notification referred to in s. 15 (2) is
published in the Gazette the land, by force of the Act, is vested in the Commonwealth, freed and
discharged from all trusts, obligations &c. (s. 16). Section 26 provides that the owner of land which
has been acquired shall be entitled to compensation, and s. 28 provides that in determining
compensation under the Act regard shall be had, subject to the Act, to, inter alia, "(a) The value of
the land acquired." Section 29 (1) is in the following terms:--

       The value of any land acquired by compulsory process shall be assessed as follows:--

             (a)

             In the case of land acquired for a public purpose not authorized by a Special Act,
             according to the value of the land on the first day of January last preceding the
             date of acquisition; and

             (b)
             In the case of land acquired for a public purpose authorized by a Special Act,
             according to the value of the land on the first day of January last preceding the
             first day of the Parliament in which the Special Act was passed.

Section 40 provides that compensation shall bear interest at the rate of three per cent from the date
of acquisition of the land, or the time when the right to compensation arose, until payment thereof is
made to the claimant or until the amount thereof has been deposited in the Treasury.

It is contended for the plaintiff that the Act fails to provide just terms for the acquisition of property
for four reasons. In the first place, s. 29 requires compensation to be assessed according to the value
of the land on the 1st day of January last preceding the date of acquisition. It is argued that an
expropriated owner must, if he is treated justly, be entitled to obtain the value of his property as at
the date of acquisition.

In my opinion this argument takes too narrow a view of the powers of Parliament under s. 51
(xxxi.). Section 51 (xxxi.) empowers Parliament to enact legislation providing a method of
acquiring property, and imposes upon Parliament the necessity of providing just terms for the
acquisition of property. Payment of the value of the property at the time of acquisition would
doubtless be a just basis of compensation in most cases, but there might be particular cases in which
it could reasonably be contended that the payment of the value as at that date was not entirely just.
The value of the property might have been depreciated in advance by Government action, as, for
example, by the acquisition by the Government in a residential area of land near the land as to
which the question of compensation arose, it being the known intention of the Government to use
the land for some industrial or other purpose which had depreciated the value of the land acquired.
In such a case it might be said that it would be unfair to limit the owner to receiving by way of
compensation the value at the date of acquisition. Some criticism of the justice of terms of
acquisition of property depending upon the circumstances of particular cases could often be
advanced with some reason. I do not think that the terms of s. 51 (xxxi.) entitle the Court to declare
a statute providing a general method for the acquisition of property invalid because in particular
cases it was possible to devise a more just scheme. The Court should not, in my opinion, hold such
legislation to be invalid unless it is such that a reasonable man could not regard the terms of
acquisition as being just.

Justice involves consideration of the interests of the community as well as of the person whose
property is acquired. In some cases the announcement of the intention of the Government to acquire
land might itself put up the value of the land. It is at least not obviously unjust to make provision
against the community being compelled to pay higher prices for such a reason.

Section 29 takes the 1st January in the year of acquisition as the date of valuation as being on the
whole a reasonable basis for adjusting the interests of the individual and of the community. In my
opinion this is a not unfair provision. I am not prepared to hold that it is so obviously unjust as to
invalidate the Act.

The second ground of attack was that s. 28 (1) (a) limited compensation to the value of the land
acquired, as distinct from the value of the land to the dispossessed owner. After 1st January in the
year of acquisition a crop might have been grown upon the land, or a building might have been
placed upon it. Plainly, compensation should be paid for the crop or the building. Reference was
made to cases in which it was held that in determining the value of land it was proper to take into
account the actual and potential uses of the land. It was therefore argued that a change in ownership
or in use might affect the value of the land and that the combined effect of s. 28 and s. 29 would be
in some cases to exclude any consideration of the purpose for which an owner was using his land at
the date of acquisition.

The plaintiff relied upon such cases as Inland Revenue Commissioners v. Glasgow & South-Western
Railway Co.[2]; In re Lucas and Chesterfield Gas & Water Board[3], per Fletcher Moulton L.J.:
"The owner receives for the lands he gives up their equivalent, i.e., that which they were worth to
him in money"; Cedars Rapids Manufacturing & Power Co. v. Lacoste[4]; Corrie v.
MacDermott[5]. What these cases establish is that the actual use of land by an owner, and also its
potential use, are elements which should be taken into account in determining the value of the land,
because any vendor of the land and any purchaser of the land would take into consideration the uses
to which the land had in fact been put (that is, actual use) and also the possibilities of profitable user
of the land in other ways (that is, potential use).

But ss. 28 and 29 of the Act do not exclude these considerations. The assessment of value which is
required by ss. 28 and 29 is an assessment of the value of the land acquired; that is, of the land as it
is when it is acquired--in its then ownership and in its then physical state, regard being had to all its
actual and potential uses. Any changes in the land itself and in the possibility of using the land since
the preceding 1st January are taken into account under the Act, though the value of the land so
regarded is taken at an earlier date.

The third objection to the Act is that the Act does not provide adequate interest upon the
compensation money from the date of expropriation to the date of payment. Section 40 provides for
payment of interest at three per cent, and it is said that requirements of justice necessitate the
payment of interest whenever there is delay in payment after the date of acquisition, and that interest
should be paid at the market rate as it may exist from time to time.

This Court has approached, but has not decided, the question whether just terms of acquisition of
property necessarily require the allowance of interest in all cases where there is delay in payment of
compensation. In Commonwealth v. Huon Transport Pty. Ltd.[6] it was held by a majority that no
interest was allowable (as part of compensation) on moneys due by way of compensation for the
temporary use of a vessel. In Marine Board of Launceston v. Minister of State for the Navy[7] the
Commonwealth had acquired the property in a tug. The compensation money was not paid at once.
There were proceedings before a Compensation Board and before this Court. The following
question was submitted to the Full Court--"Whether the Court has any authority or jurisdiction
under the Regulations" [that is the National Security (General) Regulations] "or at all to determine
and order that interest be paid to the Marine Board on the balance of compensation from the date of
acquisition of the tug to the date of payment or for any other and what period of time." The majority
of the Court answered this question in the affirmative, thus holding that the Court has authority and
jurisdiction to order payment of interest in such a case, but not deciding that "just terms" require
either that interest shall be allowed in all cases, or that there shall be a discretion in the Court to
allow interest in all cases. Rich J. did express an opinion to that effect. In the Huon Transport
Case[8] he had said "Just terms therefore involve, as a matter of elementary fairness, the payment to
him" [the expropriated owner] "of interest on the money to which he is entitled for the time during
which it is withheld from him," and he held that interest should be allowed "as constituting a part of
the just compensation." In the Marine Board Case[9] his Honour adhered to the opinion expressed
in the Huon Transport Case[10]. Dixon J. answered the question in the affirmative in the Marine
Board Case[11], but not on the ground that an allowance for interest was part of the compensation
money. He based his decision on the ground that the Court might properly include in its order a
provision for the payment of interest where interest was "independently payable under the principles
of equity"[12]--as in cases where specific performance of a contract to acquire property could be
decreed. McTiernan J. placed his decision upon the same ground. Williams J., who also answered
the question in the affirmative, was of opinion that payment of interest was required "to make the
compensation full and adequate, or in other words just, and the words just compensation in the
regulation are sufficient to authorize the Court to award interest"[13]. His Honour was also of
opinion that the Court had power to apply the equitable rule under which interest was allowed in
cases of compulsory purchase of property where a court of equity could have ordered specific
performance of a contract for the purchase of the property. His Honour, however, did not hold that
just terms or the application of the equitable rule required the payment of interest in all cases from
the date of acquisition. In Australian Apple and Pear Marketing Board v. Tonking[14] Williams J.
allowed interest, not from the date of acquisition of the property, but from the date when the
acquiring authority would, in an ordinary course of business, have been able to sell the acquired
property on the market.

In my opinion there is not, up to the present time, any decision by a majority of the Court that
provision for payment of interest from the date of acquisition must be made in order to render the
terms of acquisition of property just. If there were such a decision the plaintiff would have a useful
starting point for the development of the objection now under consideration. In the absence of any
such decision, however, s. 40, limiting the rate of interest allowable to three per cent may, in my
opinion, be regarded as a provision relating, not to the assessment of compensation, but as a
provision which, while allowing and recognizing the obligation to pay full and just compensation,
prescribes a maximum rate of interest of three per cent, thus imposing a limit upon the discretion of
the Court in applying the rule of equity which was held to be relevant and applicable by the majority
of the Court in the Huon Transport Case[15] and again in the Marine Board Case[16]. If s. 40 is so
regarded, the limitation of the rate of interest to three per cent cannot be relied upon in order to
show that the provisions for compensation contained in the Act are unjust.

The fourth objection to the Act is that proceedings under the Act result only in an assessment of an
amount of compensation, which (s. 38 (4)) is made final and conclusive, the compensation being
payable (s. 42) in the case of claims other than claims by States (as to which see s. 41) upon the
claimant making out to the satisfaction of the Attorney-General a title to the land and executing such
conveyance or assurance as the Attorney-General directs. It is objected that there is no appropriation
of moneys by Parliament to meet the obligation to pay compensation which the Act creates, so that
the assessment of compensation results only in a claim against the Commonwealth in respect of
which a certificate may be given to the claimant under the Judiciary Act 1903-1940, s. 65, which (s.
66) the Treasurer shall satisfy "out of moneys legally available." It is contended that there cannot be
a just scheme of compensation unless it includes a provision making moneys "legally available" for
the satisfaction of claims. In my opinion there is no substance in this objection. The claimant is
given a right to receive moneys from the Commonwealth, it being left to the Treasurer to honour the
obligation of the Commonwealth which corresponds to this right. The Court should not presume
that the Commonwealth will not honour its obligations, judicially declared, and I am unable to see
anything unjust in this provision or in the absence of a further provision actually appropriating
moneys to meet claims.

I am therefore of opinion that the objections to the Act fail.
It is further objected, however, that the procedure prescribed by the Act has not been observed by
the Governor-General. Section 15 (2) of the Act provides that the Governor-General may, by
notification published in the Gazette, declare that land has been acquired under the Act "for the
public purpose therein expressed." I agree with the argument that these provisions require a
particular public purpose to be expressed in the notification published in the Gazette. In the present
case the notification of acquisition published in the Gazette declared that the plaintiff's land was
acquired under the Act "for the following public purposes, namely purposes of the Commonwealth
at Sydney, New South Wales." In my opinion it cannot be held that this notification complies with s.
15 (2).

But the provisions of the Act have been modified by regulations made under the National Security
Act 1939-1943, s. 18 of which provides that a regulation made under the Act shall have effect
notwithstanding anything inconsistent therewith contained in any enactment other than the National
Security Act. National Security (Supplementary) Regulations, reg. 72A is in the following terms:--

       Notwithstanding anything contained in section 15 of the Lands Acquisition Act 1906-
       1936, the public purpose for which any land has been acquired shall be deemed to be
       expressed sufficiently if the notification declares that the land has been acquired under
       that Act for the purposes of the Commonwealth.

If this regulation is valid, then the notification made in the present case that the land has been
acquired under the Act "for the purposes of the Commonwealth" is sufficient and the plaintiff's
objection fails. It is contended, however, that the regulation is not valid, because it has no
connection of any kind with defence purposes. In my opinion this objection fails. The requirements
of defence may make it desirable that there should be no publicity with respect to the acquisition of
land for defence purposes, and therefore that no opportunity should be offered for distinguishing
between acquisitions of land for defence and for other purposes. Accordingly, in my opinion, reg.
72A is valid, and it provides an answer to the objection which would otherwise have been fatal
under the terms of the Lands Acquisition Act considered in themselves.

Therefore, in my opinion, all the objections of the plaintiff to the Act and to the notification fail and
the demurrer should be allowed.

Under the Rules of Court, Order XXIV., rule 10, it is the duty of the Court to give such judgment as
upon the pleadings the successful party appears to be entitled to. The objections of the plaintiff to
the action of the defendants in entering into possession of the land and altering and in part
demolishing the building thereon depend entirely upon the objections to the Act and to the
notification which, in my opinion, cannot be supported. There is no ground for granting the
injunction claimed, and the order of the Court should be that the demurrer be allowed, the motion
refused with costs, and the action dismissed with costs.

Starke J.

Demurrer to a statement of claim, claiming a declaration that the Lands Acquisition Act 1906-1936
is void and alternatively a declaration that a notification of acquisition given pursuant to the Act is
void and other ancillary relief.

The Act is attacked on the ground that it fails to provide "just terms" for the acquisition of lands as
required by the Constitution, s. 51 (xxxi.). This contention was based upon the proposition that the
Constitution requires that any law made by Parliament with respect to the acquisition of lands shall
provide compensation to the owner of any land acquired, the value of the land to him with all its
potentialities and with all the actual use of it by him. Apparently, according to this contention, the
power conferred upon the Parliament is wholly for the protection and benefit of an owner (whether
a State or person) without any regard to the interests of the community as a whole.

But, in my opinion, the contention is radically unsound though it finds some support in the opinions
of members of this Court in the case of the Australian Apple and Pear Marketing Board v.
Tonking[17], and I venture to repeat what I said in Minister of State for the Army v. Dalziel[18]:--
"The constitutional power given to the Commonwealth by s. 51 (xxxi.) is a legislative power and
not, as in the Fifth Amendment of the Constitution of the United States of America, a provision that
private property shall not be taken for public use without just compensation. Under the Australian
Constitution the terms of acquisition are, within reason, matters for legislative judgment and
discretion. It does not follow that terms are unjust merely because the ordinary established
principles of the law of compensation for the compulsory taking of property have been altered,
limited or departed from, any more than it follows that a law is unjust merely because the provisions
of the law are accompanied by some qualification or some exception which some judges think ought
not to be there. The law must be so unreasonable as to terms that it cannot find justification in the
minds of reasonable men."

It is contended that the terms prescribed by the Act are not just because the owner is not given the
value of the land to him. Subject to the special provisions of ss. 28 and 29 the ordinary rule or
practice of compensation has been applied (Spencer v. The Commonwealth[19]; Minister for Home
and Territories v. Lazarus[20]).

The special provisions in s. 28 provide that enhancement or depreciation in value of other land shall
be set off against or added to the amount of the value and damage specified in the section whilst
those in s. 29 provide that the value of the land shall be assessed without reference to any increase in
value arising from the proposal to carry out the public purpose for which the land is acquired. But
such provisions are usual and certainly not unreasonable. But s. 29 also provides that

       The value of any land acquired by compulsory process shall be assessed as follows:--

             (a)

             In the case of land acquired for a public purpose not authorized by a Special Act,
             according to the value of the land on the first day of January last preceding the
             date of acquisition; and

             (b)

             In the case of land acquired for a public purpose authorized by a Special Act,
             according to the value of the land on the first day of January last preceding the
             first day of the Parliament in which the Special Act was passed.

The latter provision (par. (b)) is common enough and its object, I apprehend, is to ascertain the true
value of the land before the exercise of the compulsory powers. And the provision in par. (a) has
much the same object. Once it is known or rumoured that a Government Department is buying or
acquiring land a rise in value may be expected. The true value of the land is thus ascertained about
the time of a compulsory acquisition. These provisions are reasonable in themselves and in my
opinion well within the authority of Parliament. It by no means follows from anything I have said
that Parliament has authority to fix any date it thinks proper for the assessment of compensation.
But it is for those attacking legislation to establish its invalidity. However, if the Parliament were to
fix a date for the assessment of compensation so remote from the date of acquisition of land that it
afforded no reasonable or substantial basis for ascertaining the value of the land to the owner at and
about that time, then the Courts might well conclude that the enactment was beyond power and
invalid.

Other objections to the validity of the Lands Acquisition Act were that the rate of interest on
compensation provided in s. 40 was unreasonably low and that no moneys were appropriated for the
payment of compensation. Both objections I regard as frivolous particularly the latter (R. v.
Fisher[21]). In my opinion, the Lands Acquisition Act 1906-1936, which has been acted upon for
many years, is a valid law.

The contention that the notification of acquisition is bad depends upon the construction of s. 15 (2)
of the Lands Acquisition Act 1906-1936 and reg. 72 of the National Security (Supplementary)
Regulations as amended by Statutory Rules 1944 No. 74. It is provided by s. 15 (2) that "the
Governor-General may ... by notification published in the Gazette, declare that the land has been
acquired under this Act for the public purpose therein expressed."

The notification declares that the land mentioned therein "has been acquired under the Lands
Acquisition Act 1906-1936 for the following public purpose namely: purposes of the
Commonwealth at Sydney, New South Wales."

The Act does not allow the compulsory acquisition of land but for the particular purpose declared in
the notification. And the notification in this case does not declare the particular purpose but for the
purposes of the Commonwealth generally which by the definition of the words in s. 5 of the Act
means, so far as material, any purpose in respect of which the Parliament has power to make laws.

In my opinion, the notification does not comply with the Act and would be bad.

But the provisions of Statutory Rules 1944 No. 74 are relied upon. That Rule provides, clause 2:
"72a. Notwithstanding anything contained in Section 15 of the Lands Acquisition Act 1906-1936,
the public purpose for which any land has been acquired shall be deemed to be expressed
sufficiently if the notification declares that the land has been acquired under that Act for the
purposes of the Commonwealth."

It is contended, however, that this rule is unauthorized by the National Security Act 1939-1943
under which it purports to have been made. Under that Act the Governor-General may make
regulations for securing the public safety and the defence of the Commonwealth and in particular
for a number of purposes set forth in the Act including regulations for authorizing the acquisition,
on behalf of the Commonwealth, of any property other than land. But specifying particular purposes
does not limit the operation or effect of the general words conferring upon the Governor-General
power to make regulations for securing the public safety and the defence of the Commonwealth.
The particular authorities put beyond question the inclusion of those authorities within the general
power.
Next it was said that the regulation, Statutory Rules 1944 No. 74, was not an amendment of s. 15 of
the Lands Acquisition Act but merely an interpretation section which was not inconsistent with the
Act. The National Security Act contemplates regulations affecting existing legislation and s. 18
provides that a regulation made under the Act shall have effect notwithstanding anything
inconsistent therewith in any enactment other than the National Security Act. But there is nothing in
the Act which precludes the Governor-General from re-writing definitions in the legislation of the
Commonwealth if the regulation be for securing the public safety and defence of the
Commonwealth whether it be called an amendment or a mere interpretation clause. If the regulation
is for the public safety and defence of the Commonwealth it is to have effect whether it be or be not
inconsistent with existing legislation. The real question is whether the regulation affords some
reasonable and substantial basis for the conclusion that the regulation is one for the public security
and defence of the Commonwealth. That conclusion is, I think, clear enough in this case (Cf. reg. 72
(2)); indeed the regulation has a much closer connection with defence than many of the regulations
that have been upheld in this Court.

Lastly it was said that reg. 72A was connected with reg. 72 and applied only to cases within that
regulation. But, in my opinion, reg. 72A is a substantive and independent provision. The provision
of the regulation, its context and language, all, I think, support this conclusion.

The result is that the demurrer should be upheld.

Dixon J.

The question upon which this demurrer and notice of motion depend is whether a purported
acquisition by the Commonwealth on 8th November 1945 of the plaintiffs' land and buildings is
valid. The first point taken against its validity is that there was a failure to give the kind of
notification required by s. 15 (2) of the Lands Acquisition Act 1906-1936. A notification was
published in the Gazette, but it contented itself with declaring that the land had been acquired for
the purposes of the Commonwealth at Sydney, whereas s. 15 (2) calls for a declaration that the land
has been acquired under the Act for the public purpose therein expressed, that is, expressed in the
notification or declaration.

The answer made by the Commonwealth is that the failure to state the particular public purpose is
justified by reg. 72A of the National Security (Supplementary) Regulations. That regulation, which
was adopted on 3rd May 1944 by Statutory Rules 1944 No. 74, provides that, notwithstanding
anything contained in s. 15 of the Lands Acquisition Act 1906-1936, the public purpose for which
any land has been acquired shall be deemed to be expressed sufficiently if the notification declares
that the land has been acquired under that Act for the purposes of the Commonwealth.

Unless reg. 72A is ultra vires, there can be no question that it does justify the form of the
notification or declaration. The attack upon the validity of the regulation is put upon the grounds
that it is not restricted to acquisitions for purposes connected with the war, and that, even if it were,
the state of the war in May 1944 provided no support for such a measure.

I think that we must sustain the regulation. It is not hard to understand that during hostilities the
publication of the particular purpose for which any land is required may prove useful to the enemy
and that a general rule should be adopted whether the purpose is connected with the war or not, so
as to avoid the giving of inferential information by declaring purposes when non-military and
suppressing them if military. The fact that the regulation was not passed until so late a stage in the
war may bring the authors within the class of seri studiorum but cannot invalidate the provision.

Passing from this not very elevated ground of attack upon the acquisition of their land the plaintiffs
next proceed to impugn the validity of the Lands Acquisition Act 1906-1936 itself.

Time does not run in favour of the validity of legislation. If it is ultra vires, it cannot gain legal
strength from long failure on the part of lawyers to perceive and set up its invalidity. At best,
lateness in an attack upon the constitutionality of a statute is but a reason for exercising special
caution in examining the arguments by which the attack is supported. In the present instance it is
said that the Lands Acquisition Act, although forty years old and frequently invoked, is not truly a
law with respect to the acquisition of property on just terms from any State or person; it is not truly
such a law because there is an inadequacy of justice in certain of the provisions it makes for
compensating the expropriated owners. The assignments of injustice are four. First, s. 29 (1) of the
Act requires that the land shall be valued as at a date anterior to the actual acquisition. Secondly, s.
28 (1) (a) gives, not the value of the land to the owner, but the value of the land simpliciter. Thirdly,
s. 40 gives interest at the rate of only three per cent per annum. Fourthly, there is no provision
making moneys legally available to pay compensation, and so the actual payment to the owner is
left dependent on parliamentary appropriation.

The argument invoking these grounds appears to me to proceed from the assumption that s. 51
(xxxi.) of the Australian Constitution has the same effect as the last paragraph of the Fifth
Amendment of the American Constitution, and that the case law upon that and upon analogous
constitutional provisions of the American States should be applied in Australia.

I am not able to assent to such an assumption. The material part of the Fifth Amendment says "nor
shall private property be taken for public use, without just compensation." It follows the due process
clause, repeated in reference to the States in the Fourteenth Amendment, which has been construed
as producing the same effect in protecting the proprietary interests of the citizen when the power of
eminent domain is exerted. The clause of the Fifth Amendment concerning just compensation
cannot be dissociated from the due process clause nor, indeed, from the general principles of
American constitutional law animating what is called the Bill of Rights. The framers of the
Australian Constitution preferred to leave those principles, in the main, to constitutional convention
and tradition, as they have been left in England, rather than to follow the American course of
expressing them in the paramount law.

In s. 51 (xxxi.) the phrase "on just terms" is, of course, reminiscent of the Fifth Amendment. But
that paragraph of the Australian Constitution is an express grant of specific power and the phrase
forms part of the definition of the power. Indeed, the plaintiffs rely on this fact for the argument that
if the terms provided in the statute are not just, the whole Act falls, including the power of
acquisition. In the United States the opposite result might be reached, namely, a result by which the
power of acquisition would remain but the compensation would be settled under or moulded by the
Fifth Amendment.

The legislative power given by s. 51 (xxxi.) is to make laws with respect to a compound conception,
namely, "acquisition-on-just-terms." "Just terms" doubtless forms a part of the definition of the
subject matter, and in that sense amounts to a condition which the law must satisfy. But the question
for the Court when validity is in issue is whether the legislation answers the description of a law
with respect to acquisition upon just terms. In considering such a matter much assistance may be
derived from American judicial decisions and juridical writings dealing with analogous difficulties,
but they must be used with care and, in my opinion, cannot be applied directly to s. 51 (xxxi.).
Under that paragraph the validity of any general law cannot, I think, be tested by inquiring whether
it will be certain to operate in every individual case to place the owner in a situation in which in all
respects he will be as well off as if the acquisition had not taken place. The inquiry rather must be
whether the law amounts to a true attempt to provide fair and just standards of compensating or
rehabilitating the individual considered as an owner of property, fair and just as between him and
the government of the country. I say "the individual" because what is just as between the
Commonwealth and a State, two Governments, may depend on special considerations not applicable
to an individual.

The power conferred by s. 51 (xxxi.) is express, and it was introduced as a specific power, not, like
the Fifth Amendment, for the purpose of protecting the subject or citizen, but primarily to make
certain that the Commonwealth possessed a power compulsorily to acquire property, particularly
from the States. The condition "on just terms" was included to prevent arbitrary exercises of the
power at the expense of a State or the subject.

In deciding whether any given law is within the power the Court must, of course, examine the
justice of the terms provided. But it is a legislative function to provide the terms, and the
Constitution does not mean to deprive the legislature of all discretion in determining what is just.
Nor does justice to the subject or to the State demand a disregard of the interests of the public or of
the Commonwealth.

In the United States the question usually is whether in a particular case there has been a taking
without due process or just compensation, as the case may be. Even there it has been said that to
bring about a taking without due process of law by force of a judgment not devoid of error, the error
must be gross and obvious, coming close to the boundary of arbitrary action: Roberts v. New
York[22], per Cardozo J., whose discussion of the matter shows that it is one of degree not
susceptible of definition. Under s. 51 (xxxi.) perhaps the test may be whether the provisions made
might reasonably be regarded as just. It will therefore be of some help, when the justice of the terms
provided by Commonwealth legislation is in question, to see how other British legislatures have
regarded the same matter. This, I think, applies to the first point made against the Lands Acquisition
Act. That point depends upon s. 29 (1), which directs in effect that where the acquisition is not
authorized by a special Act the value of the land should be assessed as at the first of January
preceding the taking, and, where there is a special Act, as at the first of January preceding the first
day of the Parliament in which the special Act was passed.

This provision appears to have been directed to obtaining a value uninfluenced by the prospect of
the Commonwealth's acquiring the land, a thing for which sub-s. (2) of s. 29 attempts again to
provide. It is said, however, to be unjust to fix an anterior date arbitrarily because (1) values may
have greatly changed, and (2) the property may have been improved. The second complaint is not, I
think, in accordance with the meaning of the provision, which appears to me to relate only to values
prevailing and not to the state of the property.

The first complaint depends upon the conception of a value as at the exact date of the acquisition. In
conditions of great economic instability, when the measurement of values in money fluctuated
violently and rapidly, it perhaps might be that just terms would require not only valuation, but
payment, almost as at the date of acquisition. Further, a statute which fixed some anterior date for
the ascertainment of value because values were known generally to be lower might be open to
attack. Here, however, we are not confronted with any such question. The contention is based
simply on the view that justice requires the legislature to accept a date at or about the time of
acquisition.

It is true that under the Lands Clauses Consolidation Act 1845 Imp., the notice to treat was looked
upon as fixing the date as at which the value of the property acquired should be assessed. But that is
not a course uniformly adopted under other legislation. For instance, s. 28 of Act No. 1288 of 1893
of the State of Victoria (Railways Lands Acquisition Act) provided that the purchase money should
not exceed the value of the land taken at the commencement of the session of Parliament in which
the authorizing Act was passed. Section 12 (2) of the Compulsory Acquisition of Land Act 1925 of
the State of South Australia takes a period of twelve months prior to the taking of land or, where
land is not taken, the execution of works, and directs that the value of the land at the beginning of
the period shall be taken to be its value together with that of bona-fide improvements made in the
meantime. Section 35 (1) of the Lands Resumption Act 1910 (No. 11) of Tasmania makes a
provision almost the same as that of the Commonwealth Act now in question. The Railway Act of
the Dominion of Canada makes the date of the deposit of plans that with reference to which
compensation shall be ascertained, provided that the lands are actually acquired within one year of
the deposit: See Toronto Suburban Railway Co. v. Everson[23].

Are we to say that these statutes are based on unjust conceptions?

They are different ways of meeting the same difficulty as the Commonwealth Parliament had in
mind in enacting s. 29 (1). It appears to me that we cannot say that it was not fairly open to the
Parliament to regard that provision as a just expedient. Its logic, efficacy or wisdom is not the matter
in question. Nor do I think that we are required to test its validity by imagining conditions in which
its operation might cease to be just: cf. Australian Textiles Pty. Ltd. v. The Commonwealth[24].

The second ground for impeaching the validity of the Act is that it does not contemplate
recompensing the owner by assessing the value of the land to him. I do not propose to go into the
considerations which are involved in the phrase "value to the owner" in compensation for
compulsory acquisition. For, on the statute itself, the contention seems to me to lose its foundation,
because of the rule adopted in this Court for administering the provisions of the Act. It is enough to
cite the following passage from the judgment of Isaacs and Rich JJ. in Minister for Home and
Territories v. Lazarus[25]: "The ordinary rule has been repeatedly enunciated, and is thus stated in
the latest case dealing with the matter--Fraser v. City of Fraserville2(1917) A.C. 187, at p. 194..
There Lord Buckmaster, for the Judicial Committee, said: The value to be ascertained is the value to
the seller of the property in its actual condition at the time of expropriation with all its existing
advantages and with all its possibilities, excluding any advantage due to the carrying out of the
scheme for which the property is compulsorily acquired, the question of what is the scheme for
which the property is compulsorily acquired being a question of fact for the arbitrator in each case.
That is the rule which applies under the Lands Acquisition Act 1906, subject to s. 29 of the Act."

The third ground of attack on the justice of the terms of the Act is that s. 40 provides that
compensation shall bear interest from the date of the acquisition, or the time when the right to
compensation arose, until payment at three per cent per annum It is said that the rate is so low as to
be unjust, and that the only just course is to fix the rate prevailing for the time being.

The question of interest appears to me to be eminently a matter for the legislature to decide. It was
laying down a general rule for an indefinite period. It was providing for a period occasioned by the
time occupied, whether necessarily or unnecessarily, in assessing compensation, and at the same
time conferring a right on the owner to have it assessed and, subject to parliamentary appropriation,
paid. The Parliament chose to lay down a general rule, a thing to my mind not unreasonable, and to
give interest limited to three per cent per annum.

The difficulties which courts of equity have experienced in adopting and varying a rate of interest
for the different purposes of that jurisdiction are not unfamiliar. See, for instance, the discussion by
Russell J. in In re Baker; Baker v. Public Trustee[27], by Eve J. in In re Beech; Saint v. Beech[28],
by Long Innes J. in Nixon v. Furphy[29], and by Harvey C.J. in Eq. in Skinner v. James Syphonic
Visible Measures Ltd.[30], and also In re Tennant; Mortlock v. Hawker[31]. It is not easy to see why
the judgment of the legislature on this matter should be considered outside the limits of what might
reasonably be thought just.

As to the fourth ground for denying that the terms given by the Lands Acquisition Act are just, it is
enough to say that s. 42 confers on the claimant, who makes title and executes an appropriate
assurance, a right to receive payment of compensation. There is thus a debt due by the
Commonwealth. In New South Wales v. Bardolph[32] we explained the relation of parliamentary
appropriation to contractual liability on the part of the Crown under such fiscal provisions of a
constitution as ss. 81-83 of the Commonwealth Constitution and such procedural provisions as ss.
64-66 of the Judiciary Act.

I can see no reason why an exceptional rule should apply to liability for compensation for property
acquired, or why such a general constitutional rule should be condemned as unjust. The
compensation becomes a debt like other debts of the Crown and that appears to me to be certainly
enough.

There is in the United States authority for the position that under the Fifth Amendment possession
cannot be lawfully taken of property under the power of eminent domain if the statute, though
otherwise constitutional, fails to give adequate assurances of the ascertainment and payment of
compensation (see notes 67 Lawyers Edition, United States Reports, p. 667, col. 1). But these rest
on considerations which in my opinion should not be imported into s. 51 (xxxi.).

I think that the demurrer should be allowed and judgment in demurrer should be given for the
defendants. The motion for an injunction should be refused with costs.

McTiernan J.

I agree that the demurrer should be allowed, the motion for an injunction dismissed and that there
should be judgment for the defendant.

In the action the plaintiff claims that the acquisition of land on the terms contained in certain
provisions of the Lands Acquisition Act is not acquisition of the land "on just terms" and for that
reason that each of these provisions is invalid. It also claims that all of those provisions are not
severable and that the whole Act is therefore invalid.

The words "just terms" are part of the composition of the power contained in s. 51 (xxxi.). It is a
specific legislative power to make laws for "the acquisition of property on just terms" from owners
of the two classes and for the purposes to which s. 51 (xxxi.) refers. It follows that Parliament has a
discretion not only to provide for the acquisition of any property but also to enact the just terms
which it thinks fit to be part of any law which it makes in pursuance of this power. In my opinion, if
the terms enacted by Parliament might reasonably be regarded as just terms, there is no ground for
holding that the law is not a law with respect to the acquisition of property on just terms. The
question whether the terms enacted by Parliament might reasonably be regarded as just terms is for
the Court to decide. If the Court decides that the terms might reasonably be regarded as just it will
not declare the terms unjust and in excess of the power, even if the Court entertained an opinion that
other terms would appear to be fairer. The words "just terms" imply that the terms of acquisition
should be just as between the owner of the acquired property and the Commonwealth.

The plaintiff claims that acquisition upon the terms that in determining compensation regard shall be
had, as s. 28 (1) requires, to "the value of the land acquired" is not acquisition on just terms. It is
contended that it is not just to determine compensation otherwise than upon the basis of the value of
the land acquired to its owner. This contention is met by the passage which my brother Dixon cites
from Minister for Home and Territories v. Lazarus[33]. In this passage the elements of value which
are to be taken into account in assessing compensation are set forth.

The next provision of the Act which was impugned on the ground that it does not contain just terms
is s. 29 (1). Hypothetical cases were put in argument in which, under the rule in the sub-section, the
owner of land compulsorily taken would receive less compensation than if the compensation was
based on the value of the land at acquisition. But there is nothing to show to what extent the rule
would work that way in practice. Indeed, the Chief Justice puts a hypothetical case on the other side
of the line in which the rule would be advantageous to the owner of the resumed land.

In my opinion a presumption that the sub-section does not provide just terms of acquisition cannot
be held to arise merely because the sub-section requires the value of the land to be assessed at a date
anterior to the date of acquisition. The reasons why it may be presumed that Parliament enacted the
sub-section now in question are gone into by the Chief Justice and my brother Dixon and I adopt
those reasons. It is, I think, within the discretion of Parliament under s. 51 (xxxi.) to enact a
provision requiring value to be assessed for purposes of compensation as at a date anterior to
acquisition. It does not seem to me that in fixing the date specified in the subsection Parliament
exceeded its discretion under this placitum. The sub-section is not open to attack on the ground that
its effect would be to deprive the owner of the value of improvements made between the date fixed
by the sub-section and the date of acquisition. According to its proper interpretation the sub-section
requires the compensation to be assessed according to its value at the fixed date, but not according
to its then physical state.

Section 40 was also attacked on the ground that it does not provide just terms. It does not seem to
me that it is unfair or inequitable to lay down as a general rule applicable to any person whose land
is acquired under the Act that he should receive interest at the rate of three per cent per annum on
the compensation for the period specified in the section. I think that it would be driving the
conception of just terms too far to hold that it requires that the rate of interest should vary with any
fluctuation of interest rates.

I agree that there is no substance in the contention that the terms on which the Act provides for the
acquisition of property are not just because the right of the owner to receive compensation is
dependent on appropriation of money by Parliament to pay the compensation. This contention
depends upon the supposition which was put on behalf of the plaintiff that moneys may not be made
available by Parliament to meet a just claim against the Commonwealth or to satisfy a judgment
against the Commonwealth. I do not think that the Court should entertain this supposition in
considering whether this Act authorizes the acquisition of land on just terms.
As to the objection taken to the notification of acquisition published in the Gazette, I agree that it is
justified by reg. 72A of the National Security (Supplementary) Regulations and that this regulation
is within the powers conferred upon the Governor-General in Council by the National Security Act.

Williams J.

By notification published in the Government Gazette on 8th November 1945 purporting to be made
under the Lands Acquisition Act 1906-1936 H.R.H. the Governor-General acting with the advice of
the Federal Executive Council notified and declared that certain land owned by the plaintiff in fee
simple situate at the corner of York, King and Clarence Streets, Sydney, on which there is erected a
building consisting of a basement, ground and eleven upper floors, had been acquired by the
Commonwealth under this Act "for the following public purposes namely, purposes of the
Commonwealth at Sydney, N.S.W." Thereupon the Commonwealth, which was already in
temporary possession of the premises pursuant to the National Security (General) Regulations,
commenced to make substantial alterations to the building. The plaintiff then commenced this action
claiming that the acquisition of 8th November was void on several grounds and obtained leave to
serve short notice of motion for an interlocutory injunction restraining the defendants from selling,
disposing, leasing, further altering, demolishing or otherwise dealing with the land and the buildings
thereon.

Pending the hearing of the notice of motion the defendants demurred to the statement of claim. The
notice of motion raised the same points of law as the demurrer so that for convenience an order was
made under s. 18 of the Judiciary Act 1903-1940 directing that the notice of motion should be
referred to the Full Court and heard at the same time as the demurrer.

These points of law are (1) that the notice of acquisition is invalid because it does not comply with
s. 15 (2) of the Lands Acquisition Act; (2) that ss. 29 (1) and 40 of this Act are invalid because they
do not contain just terms for the acquisition of property within the meaning of s. 51 (xxxi.) of the
Constitution and the invalidity of either of these sections avoids the whole Act because they are not
severable under s. 15A of the Acts Interpretation Act 1901-1941; (3) that the Lands Acquisition Act
is also invalid within the meaning of s. 51 (xxxi.) of the Constitution because it does not provide for
the appropriation of the necessary funds to satisfy claims for compensation under this Act.

As to (1), s. 5 of the Lands Acquisition Act defines "public purpose" to mean "any purpose in
respect of which the Parliament has power to make laws, but shall not include the acquisition of
territory for the Seat of Government of the Commonwealth under the Constitution." Section 13
provides that the Commonwealth may acquire any land for public purposes (a) by agreement with
the owner; or (b) by compulsory process. Section 14 deals with the acquisition of land by
agreement, while s. 15 (1) deals with the acquisition by compulsory process. Neither of these
provisions confines an acquisition of land to a purpose in respect of which the Parliament has power
to make laws but this had already been done by s. 13. Section 15 (2) provides that the Governor-
General may by notification published in the Gazette declare that the land has been acquired under
this Act for the public purpose therein expressed. Where land is acquired under s. 14, therefore, it is
not necessary that the agreement should state the public purpose for which the land has been
acquired provided that it has in fact been acquired for a public purpose within the meaning of the
Act. But where land is acquired by compulsory process the notification must express, that is to say it
must specify, the public purpose or purposes for which it is acquired. The question is whether the
statement that land has been acquired "for the public purposes of the Commonwealth at Sydney" is a
sufficient statement of the public purposes to satisfy s. 15 (2). In my opinion the sub-section means
that the particular public purpose or purposes must be specifically stated in the notification. Indeed
it is necessary to place this meaning on the sub-section if s. 19 is to have an effective operation. This
section authorizes either House of the Parliament, except in certain cases, within a specified time, to
pass a resolution that a notification under s. 15 shall be void and of no effect, and provides that
thereupon the land shall be deemed not to have been vested in the Commonwealth. Unless the
particular purpose is stated in the notification it would be impossible for either House to know
whether or not the acquisition fell within the exceptions. Thus it would not know whether or not it
had power to pass a resolution under this section. The notification of 8th November does not,
therefore, comply with s. 15 (2). But the matter does not rest there because on 3rd May 1944 reg.
72A was added to the National Security (Supplementary) Regulations. It provides that
notwithstanding anything contained in s. 15 of the Lands Acquisition Act 1906-1936 the public
purpose for which any land has been acquired shall be deemed to be expressed sufficiently if the
notification declares that the land has been acquired under that Act for the purposes of the
Commonwealth. It was not contended that the notification of 8th November does not comply with
this regulation, so that if the regulation is valid the notification was effective because s. 18 of the
National Security Act provides that a regulation made under this Act shall have effect
notwithstanding anything inconsistent therewith contained in any other Act. The National Security
Act delegates to the Executive authority to legislate under s. 51 (vi.) of the Constitution for the
purposes stated in the Act. Mr. Mason said that the object of the regulation was to prevent
information reaching the enemy that land had been acquired for some purpose of defence, and that,
unless the regulation was made to apply to every acquisition instead of being restricted to cases
where land was acquired for some purpose of defence, the fact that a notification did not state a
particular purpose would in itself indicate that the land had been acquired for the latter purpose.
This object does not constitute to my mind a very marked connection with defence particularly
having regard to the date on which the regulation was made, but it is clear that in wartime a wide
latitude of discretion must be accorded to the Executive to determine what legislation is required to
protect the safety of the nation. It is not a regulation which affects the rights of the subject to any
material degree. He loses his land whatever the lawful purpose for which it is acquired and the
Commonwealth can subsequently use it for another lawful purpose. The only material effect of the
regulation is to affect the rights of either House under s. 19, and either House could have disallowed
it under s. 48 of the Acts Interpretation Act. In all these circumstances it would not be proper, I
think, to hold that the regulation was not justified as an exercise of the defence power.

As to (2), I have already indicated shortly in Dalziel's Case[34] my own opinion of the proper
approach to the determination of the question whether an Act which provides for the acquisition of
property contains just terms within the meaning of s. 51 (xxxi.) of the Constitution. In
Commonwealth v. Huon Transport Pty. Ltd.[35] and Marine Board of Launceston v. Minister of
State for the Navy[36] I expressed the opinion that in the case of income producing property it is a
necessary incident of such terms that interest should be paid to the person dispossessed between the
date of acquisition and the date of payment of the compensation. Section 40 of the Lands
Acquisition Act provides, so far as material, that the compensation shall bear interest at the rate of
three per cent per annum from the date of acquisition of the land until payment. There is a proviso
to the section that where the compensation awarded in an action is not more than the amount offered
by the Minister in satisfaction of the claim the compensation shall only bear interest to the date
when the offer of the Minister is communicated to the claimant. But a claimant in an action for
compensation who obtained an award of a court which was not immediately paid could enter the
award as a judgment of the court, which would carry the same rate of interest as any other
judgment, and he could do so even when not awarded more than the amount offered by the Minister
because there could be no reason why interest should not be payable upon such an amount awarded
where it is not paid immediately after the award. Thus the direction for payment of interest at three
per cent is a direction which need only operate during the period required to ascertain the amount of
the compensation. Division 2 of Part IV. prescribes the preliminary steps that must be taken before a
claim becomes a disputed claim for compensation. No time is provided within which the Minister
must take the step required by s. 34 (2) but he would have to act within a reasonable time. There is
nothing to prevent a claimant abridging the full time allowed for taking the requisite steps on his
part in which case a relatively brief period need elapse before a claim is settled by agreement or
becomes a disputed claim for compensation which can be determined by an award of a court. Mr.
Barwick contended that in an Act of indefinite duration like the Lands Acquisition Act, it is requisite
that a rate of interest should be provided which would be adequate in all reasonably conceivable
circumstances, or in other words, that the rate must be fixed by some standard which varies as
interest rates vary from time to time, as for instance a provision that the rate should be the same as
the rate for the time being payable on government loans. But the power of Parliament under s. 51
(xxxi.) of the Constitution is not in my opinion circumscribed to this extent. The rate of interest
prescribed by s. 40 is, as I have said, intended to cover a strictly limited period. The rates of interest
upon government loans have varied above and below the rate of three per cent. The rate of interest
usually allowed by the courts is four per cent per annum but this rate has also varied with prevailing
interest rates. The rate of three per cent is, I think, on the low side, but it is substantial and is not in
all the circumstances so low as to be unjust within the meaning of the placitum.

As to s. 29 (1), s. 17 converts the estate and interest of the owner of the land into a claim for
compensation. Division 1 of Part IV.

deals with the right to compensation. Section 26 provides that the owner of the land shall, if
deprived of the land in whole or in part, "be entitled to compensation under this Act." Section 28 (1)
provides that in determining compensation under this Act regard shall be had (subject to this Act) to
(a) the value of the land acquired, (b) the damage caused by the severance of the land acquired from
other land of the person entitled to compensation, (c) the enhancement or depreciation in the value
of other land adjoining the land taken or severed therefrom of the person entitled to compensation
by reason of the carrying out of the public purpose for which the land was acquired; (2) that the
enhancement or depreciation in value shall be set off against or added to the amount of the value
and damage specified in sub-s. (1) (a) and (b).

Section 29 (1) provides that the value of any land acquired by compulsory process shall be assessed
as follows: (a) in the case of land acquired for a public purpose not authorized by a Special Act,
according to the value of the land on the first day of January last preceding the date of acquisition;
and (b) in the case of land acquired for a public purpose authorized by a Special Act, according to
the value of the land on the first day of January last preceding the first day of the Parliament in
which the Special Act was passed.

Apart from these sub-sections the value of the land would be determined as at the date upon which
the owner's rights to the land were converted into a claim for compensation. In the present case that
would be upon the date of the publication of the notification in the Gazette on 8th November 1945.
The effect of s. 29 (1) is to require this value to be assessed as at 1st January 1945. There was a
good deal of argument as to the meaning of this sub-section. In my opinion it means that the
property is to be valued on its actual physical condition at the date of expropriation with all its
existing advantages and all its possibilities, but this value is to be assessed at a sum which a
reasonably willing vendor would have been agreeable to accept and a reasonably willing purchaser
would have been agreeable to pay rather than fail to obtain the property in a friendly negotiation
which took place on the previous 1st January.

It was contended for the defendants that the antecedent dates were fixed because land values are apt
to rise as soon as it is known that it is proposed to pass legislation to acquire land in that
neighbourhood for some public purpose, and that these dates were chosen to ensure that the price
paid for the land was not enhanced in this way. But this danger is guarded against by s. 29 (2) which
provides that the value of the land shall be assessed without reference to any increase in value
arising from the proposal to carry out the public purpose. It is clear in my opinion that to substitute
an arbitrary date for the actual date of acquisition is liable to work injustice in many cases. In
Spencer v. The Commonwealth[37] Isaacs J. said, in reference to a similar section in the Property
for Public Purposes Acquisition Act 1901, that "Prosperity unexpected, or depression which no man
would ever have anticipated, if happening after the date named, must be alike disregarded." His
Honour was there dealing with suburban land, and in the case of such land all kinds of
improvements might take place between the arbitrary date and the date of notification due to causes
which have nothing to do with the proposal to carry out the public purpose for which the land is to
be resumed such as the construction of roads or pavements by the local council, or of water and
sewerage works by the local water and sewerage board. Country land might be subject to a severe
drought on the arbitrary date but might be enjoying a bountiful season on the date of the
notification. Examples might be multiplied almost indefinitely of how the values on the two dates
might differ materially quite irrespective of the carrying out of the public purpose for which the
land was resumed. Mr. Mason pointed out that the difference in values might be in favour of or
against the dispossessed owner but this is to my mind immaterial. It is no satisfaction to an owner
who has not received a fair equivalent in money for property of which he has been dispossessed to
know that another owner has received more than the real value of his land. It is only if the value is
assessed at the date of acquisition that an owner will in every instance be fairly and justly
compensated for the loss of his property. In my opinion, therefore, s. 29 (1) (a) (and it would appear
to follow s. 29 (1) (b)) is not authorized by s. 51 (xxxi.) of the Constitution and is invalid. The
question then arises whether the sub-section is severable under the provisions of s. 15A of the Acts
Interpretation Act. The main purpose of the Lands Acquisition Act to be gathered from its terms is
to confer upon the Commonwealth power to acquire land compulsorily for the legislative purposes
enumerated in s. 51 of the Constitution. In order that the acquisition may be lawful the Act must
provide for compensation which will be just within the meaning of s. 51 (xxxi.) of the Constitution.
The owner's right to his land is converted by s. 17 into a right to receive its equivalent value in
money. Various directions are then given by subsequent sections as to the manner in which this
equivalent in money is to be assessed. These sections can only restrict the application of the
ordinary principles of assessment to the extent to which they are valid. Section 29 (1) is one of the
attempted restrictions. If it is struck out of the Act it still leaves intact the principal direction that the
owner of the land is to receive full compensation, and the purpose for which the sub-section was
inserted is still safeguarded by s. 29 (2). The provisions which are within power are independent and
severable and will continue in every substantial sense to operate in the same manner as they would
have done if the Act as a whole had been valid. I am therefore of the opinion that s. 29 (1) is
severable and that its invalidity does not avoid the whole Act.

As to (3), s. 17 converts the estate and interest of every person entitled to the land into a claim for
compensation. Part IV. provides for the assessment of compensation. Division 5 of this Part
provides for the payment of compensation. Section 42 provides that upon taking the steps therein
mentioned the person to be compensated shall be entitled to receive payment. Sections 37 (d) and 38
(3) place costs in the discretion of the Court in the case of disputed claims for compensation.
Section 61 requires the Commonwealth to pay the costs, charges and expenses of all conveyances
and assurances of the land and of the other documents therein mentioned. The Act therefore imposes
an absolute obligation upon the Commonwealth to pay the compensation moneys and such costs as
it is ordered or becomes liable to pay under the Act. This liability is absolute and not conditional
upon the appropriation of moneys to make the payments. It is true that the obligation could not be
discharged until Parliament appropriated the necessary funds and that under s. 65 of the Judiciary
Act the person dispossessed could not issue execution or attachment against the property or revenues
of the Commonwealth. But such a person could enter judgment under s. 66, and the absolute
obligation already mentioned implies, and s. 66 expressly provides, that on receipt of the certificate
of judgment against the Commonwealth the Treasurer of the Commonwealth shall satisfy the
judgment out of moneys legally available. A suggestion that Parliament would not consider itself
bound in these circumstances readily and promptly to make the necessary moneys legally available
should not, as the Chief Justice intimated during the argument, be entertained for a moment by the
Court.

For these reasons I would dismiss the motion for injunction but overrule the demurrer; and, on the
application of the plaintiff, declare that s. 29 (1) (a) of the Lands Acquisition Act is invalid.

Demurrer allowed. Motion dismissed with costs including all reserved costs. Action dismissed with
costs.

Solicitors for the plaintiff, Laurence & Laurence, Sydney, by Stewart & Dimelow.

Solicitor for the defendants, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

[1] [1943] HCA 18; (1943) 67 C.L.R. 314.

[2] (1887) 12 App. Cas. 315, per Halsbury L.C. at p. 321.

[3] (1909) 1 K.B. 16, at p. 29.

[4] (1914) A.C. 569, at p. 576

[5] (1914) A.C. 1056, at p. 1062.

[6] [1945] HCA 5; (1945) 70 C.L.R. 293.

[7] [1945] HCA 42; (1945) 70 C.L.R. 518.

[8] (1945) 70 C.L.R., at p. 307.

[9] [1945] HCA 42; (1945) 70 C.L.R. 518.

[10] [1945] HCA 5; (1945) 70 C.L.R. 293.

[11] [1945] HCA 42; (1945) 70 C.L.R. 518.

[12] (1945) 70 C.L.R., at p. 533.

[13] (1945) 70 C.L.R., at p. 537.
[14] (1942) 66 C.L.R. 77.
[15] [1945] HCA 5; (1945) 70 C.L.R. 293.
[16] [1945] HCA 42; (1945) 70 C.L.R. 518.
[17] (1942) 66 C.L.R. 77, at pp. 84, 85, 106.
[18] [1944] HCA 4; (1944) 68 C.L.R. 261, at p. 291.
[19] (1907) 5 C.L.R. 418.
[20] [1919] HCA 12; (1919) 26 C.L.R. 159.
[21] (1903) A.C. 158, at p. 167.
[22] [1935] USSC 99; (1935) 295 U.S. 264, at p. 277 [79 Law. Ed. 1429, at p. 1435].
[23] (1917) 54 S.C.R. (Can.) 395, at p. 407.
[24] [1945] HCA 35; (1945) 71 C.L.R. 161, at pp. 179, 180.
[25] [1919] HCA 12; (1919) 26 C.L.R. 159, at p. 165.
[26] (1917) A.C. 187, at p. 194.
[27] (1924) 2 Ch. 271, at pp. 273-275.
[28] (1920) 1 Ch. 40, at pp. 42-45.
[29] (1926) 26 S.R. (N.S.W.) 409; 43 W.N. 108.
[30] (1927) 28 S.R. (N.S.W.) 20; 44 W.N. 156.
[31] [1942] HCA 3; (1942) 65 C.L.R. 473, at pp. 507, 508.
[32] [1934] HCA 74; (1934) 52 C.L.R. 455.
[33] [1919] HCA 12; (1919) 26 C.L.R. 159, at p. 165.
[34] [1944] HCA 4; (1944) 68 C.L.R. 261, at pp. 306, 308.
[35] [1945] HCA 5; (1945) 70 C.L.R. 293, at pp. 333-338.
[36] [1945] HCA 42; (1945) 70 C.L.R. 518, at pp. 537, 538.
[37] (1907) 5 C.L.R. 418, at p. 440.
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