‘On Just Terms’, Revisited

Publication Date01 Jun 2017
AuthorLael K Weis
Lael K Weis*
The Parliament shall have power to make laws with respect to the acquisition of
property on just terms from any State or person for any purpose in respect of wh ich the
Parliament has power to make laws. Constitution s 51(xxxi).
It is now well established that s 51(xxxi) enjoys the status of a constitutional guarantee .
Although it is now generally accep ted that s 51(xxxi) is a constitutional guarantee, it
continues to be applied using characterisation analysis, the method of analysis used to
apply grants of legislative power. This article argue s that this is a mistake: if s 51(xxxi)
is a constitutional guarantee, then it should be analysed like a constitutional guarantee.
It takes to task the High Courts self-consciously comparative defence of characterisation
analysis, which relies on the US Constitutions Fifth Amendment takings clauseas a
foil. The article demonstrates that in some respects the differences between the two
constitutional property clauses have been overstated, while in other respects t hey have
been overlooked. From a broader comparative perspective, the most significant feature
of s 51(xxxi) is not its use of the term acquisition, but its lack of reference to
compensationand use instead of the phrase on just terms. By resituating s 51(xxxi) in
comparative perspective, the analysis provided in this article makes two important
* Lecturer, Melbourne Law School, The University of Melbourne. I am grateful to Anne Carter,
Dale Smith, and Adrienne Stone for their helpful suggestions and discussions; to Skye
Chapman from the Academic Research Service for research assistance with the comparative
materials; and, finally, to Graeme Hill and Jeremy Gans for the initial provocations that
inspired me to write this article. This article has also benefitted from presentations to
colleagues and friends of the Centre for Comparative Constitutional Studies at Mel bourne
Law School. The usual disclaimers apply.
Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480, 509 (Mason
CJ, Brennan, Deane and Gaudron JJ) (‘ATM’). See also Clunies-Ross v Commonwealth (1984)
155 CLR 193, 2012 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ) (holding that
s 51(xxxi) ‘has assumed the status of a constitutional guarantee of just terms’); ICM
Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140, 212 [185] n 301 (Heydon J) (listing
recent judgments affirming the proposition that s 51(xxxi) is a constitutional guarantee) (‘ICM
224 Federal Law Review Volume 45
contributions. First, it deepens existing jurisprudential critiques by providing a more
precise diagnosis of the problem with characterisation analysis. Second, it proposes and
defends an alternative approach that is responsive to that diagnosis, that is better
supported by the text and structure of s 51(xxx), and that is consiste nt with the High
Courts commitment to the thesis that s 51(xxxi) is a constitutional gua rantee.
Despite its unusual structure as a conferral of legislative power, s 51( xxxi) is standardly
cited as among the Australian Constitutions few express rights guarantees. The status of
s 51(xxxi) as a constitutional guarantee has been repeatedly affirmed by the High Court.
Indeed, this status has often been affirmed in the strongest terms: as a very grea t
constitutional safeguard,
as an important provision which deals with individual
and as an express constitutional promisethat is relevant to the fundamental
rights of all persons.
Yet, in interpreting and applying s 51(xxxi), the High Court
notably has not adopted the approach used in the context of other constitutional
guarantees, such as the express freedom of trade, commerce, and intercourse among the
states, or the implied freedom of political communication. This article accepts, for the
sake of argument, the thesis that s 51(xxxi) is a constitutional guarantee.
Its central claim
is that if section 51(xxxi) is a constitutional guarantee, then it ought to be analysed like a
constitutional guarantee. The article provides an important new critical perspective and
it proposes a way forward by drawing on comparative analysis to isolate key features of
s 51(xxxi) that have yet to receive adequate attention.
The method standardly used to determine whether a law is inconsistent with a
constitutional guarantee is rights analysis. In general terms, rights analysis requires
examining whether the law is compatible with the values associated with a particular
interest that inform the purpose of affording it constitutional protection, and with
notions of limitations on the interest that are reasonable in light of those values and that
purpose. By contrast, in determining whether a law is inconsistent with the
constitutional guarantee that the acquisition of pr opertybe on just terms, the High
Court has instead used characterisation analysis . Characterisation is the method of
analysis used to determine whether a Commonwealth law is authorised by a grant of
legislative power. It requires examining whether a law is better described as a law with
respect tothe acquisition of property or as a law with respect tosome other subject
This article will argue that the current approach to s 51(xxxi) is misguided and should
be abandoned. If the High Court remains committed to the thesis that s 51(xxxi) is a
Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397, 403 (Barwick CJ) (‘Tooth).
Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513, 613 (Gummow J) (‘Newcrest
Ibid 655, 661 (Kirby J).
The article therefore makes no effort to defend the view that s 51(xxxi) is correctly understood
a constitutional guaranteemuch less wider propositions concerning the status of property
as a constitutional right or as a human right. Its aim is to consider problems that the High
Court’s commitment to the constitutional guarantee thesis poses for the current approach to
s 51(xxxi), and to prescribe a solution that is consistent with the Court’s acceptance of that
2017 ‘On Just Terms’, Revisited 225
constitutional guarantee, then a different approach is required.
In developing this
argument, the article isolates two key features of s 51(xxxi) that make it unusual from a
comparative perspective: first, its lack of guidance regarding the scope of co nstitutional
protected afforded to property rights; and second, its lack of explicit reference to
compensationin describing the relevant constitutio nal obligation. The significance of
this comparative lens is t hat it helps reposition s 51(xxxi) vis-à-vis the US Constitutions
Fifth Amendment taking s clause. The High Court has frequently invoked the takings
clause as a foil in defending the current chara cterisation approach. In particular, the
Court has long insisted that s 51(xxxi)s reference to the acquisitionof property, as
opposed to the takingof property, justifies the use of characterisation anal ysis.
This article takes that claim to task. It will demonstrate that in one respect the
differences between the two property clauses have been overstated, a nd that in another
respect they have been overlooked. The differences have been oversta ted in that both
property clauses are unusual in the lack of guidance that they provide. At the same time,
the most significant difference between the two property clauses has been overlooked:
whereas the takings clause, like most other property clauses, ref ers to a requirement of
just compensationwhen property rights are burdened in the relevant way, s 51(xxxi)
uses the phrase on just ter msand makes no explicit reference to compensation.
Repositioning s 51(xxxi) in comparative perspective thus invites critical examination of
the High Courts self-consciously comparative defence of characterisation analysis. By
undertaking that examination, this article is able to provide a more precise diagnosis of
the problem with the current characterisation approach, and to identify a way forward
that responds to that diagnosis.
There are two parts to the argument. The first part is critical. It deepens existing
critiques through the use of comparative analysis as a diagnostic tool.
It demonstrates
how Australian and American constitutional property jurisprudence have converged on
a definitionalapproach to the problem of so-called regulatory expropriations’—the
problem of determining when the state must pay co mpensation for the expropriative
consequences of its otherwise legitimate regulatory activities. Definitional approaches
frame this problem in absolute terms: if a constitutionally relevant burden on pr operty
rights exists, then compensation is required; there is no further question about whether
the burden is justified. The article shows how the use of a definitional approach has led
to similar pr oblems in both jurisdictions, notwithstanding the fact that defining the
concept of the relevant burden is approached by using rights analysis in the United
States and by using characterisation analysis in Australia. Thus, whereas existing
jurisprudential critiques of s 51(xxxi) focus on the High Courts inattention to the
provisions underlying purpose and the values that it protectsa conse quence of using
characterisation analysis instead of rights analysisthe article will demonstrate that this
is only one aspect of the problem.
The status of s 51(xxxi) as a constitutional guarantee has been doubted by at least some
commentators: see Rosalind Dixon, ‘Overriding Guarantee of Just Terms or Supplementary
Source of Power?: Rethinking s 51(xxxi) of the Constitution’ (2005) 27 Sydney Law Review 639.
As noted in the conclusion of this article, another possible response to the critique developed
in this article would be to abandon the constitutional guarantee thesis.
It bears emphasis that the purpose of comparison is critical: the analysis does not purport to
be explanatory in the sense of causal or inference-driven. Case-selection principles that
govern inference-oriented explanatory studies therefore do not apply.

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