Newcrest Mining (WA) Ltd & Another v Commonwealth & Another

(1997) 190 CLR 513

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(Judgment by: McHugh J)

NEWCREST MINING (WA) LTD, BHP MINERALS LTD v COMMONWEALTH, THE DIRECTOR OF NATIONAL PARKS & WILDLIFE

Court:

Judges: Brennan CJ
Dawson
Toohey
Gaudron

McHughGummow
Kirby JJ

Subject References:
CONSTITUTIONAL LAW
Validity of proclamations made under National Parks and Wildlife Conservation Act 1975 (Cth)
Whether s 51(xxxi) operates as a limitation on an exercise of the legislative power of the Commonwealth under s 122 of the Constitution.
Characterisation of a law capable of dual characterisation
Whether s 122 can be relied upon to the exclusion of s 51(xxxi) where a law is capable of dual characterisation.
Meaning of "acquisition of property" in s 51(xxxi) of the Constitution
Whether proclamation prohibiting mining effects an acquisition of mining tenements.
MINING
Validity of mining leases
Mining leases purportedly renewed under Mining Ordinance 1939 (NT) after commencement of Northern Territory (Self- Government) Act 1978 (Cth)
Whether right of renewal in existence.
Whether government approval or authority necessary for renewal of particular lease
Whether renewal effective at time of Northern Territory (Self-Government) Act 1978 (Cth).

Other References:
Constitution of the Commonwealth, ss 51(xxxi), 122.
Northern Territory (Self- Government) Act 1978 (Cth) ss 50(2), 70.
Northern Territory (Administration) Act 1910 (Cth).
National Parks and Wildlife Conservation Act 1975 (Cth).
National Parks and Wildlife Conservation Amendment Act 1987 (Cth).
Mining Ordinance 1939 (NT).
Mining Act 1980 (NT).

Judgment date: 14 AUGUST 1997

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Judgment by:
McHugh J

Two principal questions arise in this joint hearing of an appeal against an order of the Full Court of the Federal Court and the determination of a question reserved for the opinion of the Full Court of this Court. The first question is whether the Commonwealth by making proclamations under s 7(2) of the National Parks and Wildlife Conservation Act 1975 (Cth) acquired property of the appellants. The second question is whether, assuming the Commonwealth did so acquire property, the acquisitions are invalid because they failed to provide just terms. The second question turns on whether the exercise of power under s 122 of the Constitution - the territories power - is subject to s 51(xxxi) of the Constitution - the acquisitions power.

The granting of mining leases at Coronation Hill

Between 1947 and 1974, the Commonwealth granted a total of 25 mining leases at a place now called Coronation Hill in the Northern Territory ("the Territory") to the predecessors in title of the first appellant ("Newcrest"). The grants were made at various times under the provisions of the Mining Ordinance 1939 (NT) ("the 1939 Ordinance"). They were for a term of years expiring on 31 December in the 21st year after each grant with a limited right of renewal.

The 1939 Ordinance was made under the Northern Territory (Administration) Act 1910 (Cth). In 1978, the Northern Territory (Self-Government) Act 1978 (Cth) ("the Self-Government Act") repealed the 1910 Act and by s 5 established the Northern Territory of Australia as a body politic under the Crown with effect from 1 July 1978. Section 6 of the Self-Government Act also empowered the Legislative Assembly of the Northern Territory to make laws for the peace, order and good government of the Territory. Subsequently, the Territory legislature enacted the Mining Act 1980 (NT) ("the 1980 Act") which repealed the 1939 Ordinance with effect from 1 July 1982.

The last of the leases did not expire until 31 December 1994, some time after this litigation had commenced. However, relying upon the power conferred on it by the 1980 Act, the Government of the Territory purported to renew the leases known as MLN 19, MLNs 23-28 and MLNs 751- 756. By an agreement dated 18 March 1987 the second appellant, BHP Minerals Limited ("BHP"), sold the mining leases with which this litigation is concerned to Newcrest. An instrument of transfer of title implementing the sale was executed on 20 May 1987. A delegate of the Territory Minister for Mines and Energy, acting under s 173 of the 1980 Act, approved the transfer in June 1987. The Commonwealth was not asked to approve the transfer.

The establishment of Kakadu National Park

By a proclamation made under s 7(2) of the National Parks and Wildlife Conservation Act 1975 (Cth) ("the National Parks Act") on 5 April 1979, the federal Government established what was known as Stage 1 of Kakadu National Park ("Kakadu") by declaring the area specified in the proclamation to be a park for the purposes of that Act. Section 7(6) and (7) provided:

"(6) Where an area is declared by Proclamation to be a park or reserve:

(a)

the subsoil beneath any land within the area, extending to such depth below the surface as is specified in the Proclamation;

(b)

the waters and sea-bed beneath any sea within the area; and

(c)

the subsoil beneath any such sea-bed, extending to such depth below the sea-bed as is specified in the Proclamation;

shall be taken to be within that park or reserve.

(7) Upon the declaration of a park or reserve, any interest held by the Commonwealth in respect of the land (including any sea-bed or any subsoil) within the park or reserve, but not in respect of any minerals, becomes, by force of this subsection, vested in the Director."

The Director of National Parks and Wildlife ("the Director") is a corporation established by s 15 of the National Parks Act.

The proclamation of 5 April 1979 specified a depth of 1,000 metres below the surface of any land within Kakadu as the depth to which subsoil beneath that land was to be taken to be within Kakadu. Except for any minerals, the interest held by the Commonwealth in the Park was vested in the Director.

In October 1989, the federal Government decided to increase the area of what was known as Stage 3 of Kakadu. On 13 November 1989, under s 7(8) of the National Parks Act, the federal Government made a proclamation extending the area of Kakadu. In 1987, the National Parks and Wildlife Conservation Amendment Act 1987 (Cth) ("the 1987 Act") had inserted s 10(1A) into the National Parks Act. Section 10(1A) stated:

"No operations for the recovery of minerals shall be carried on in Kakadu National Park."

By force of s 10(1A) and the 1989 proclamation, neither Newcrest nor any other person including the Commonwealth could exercise mining rights under MLNs 78-89. Moreover, if the proclamation is valid, Newcrest was deprived of compensation for the deprivation of its mining rights brought about by the operation of the proclamation. Section 7 of the 1987 Act declared:

"Notwithstanding any law of the Commonwealth or of the Northern Territory, the Commonwealth is not liable to pay compensation to any person by reason of the enactment of this Act."

By a proclamation made on 21 June 1991, the federal Government again extended Stage 3 of Kakadu. This extension had the effect that s 10(1A) of the National Parks Act prevented any mining under the remaining mining leases.

The appellants contend that the effect of the proclamations was that the Commonwealth acquired Newcrest's interest in the subject land and the minerals and that the Director acquired the interest of the Commonwealth in the land other than the minerals. They also contend that, because s 7 of the 1987 Act prevents them from obtaining compensation for the deprivation of their interests in the mining leases, the Commonwealth has acquired their property other than on just terms and therefore contrary to s 51(xxxi) of the Constitution. The Commonwealth denies that the proclamations resulted in it acquiring any interest of Newcrest. But if they did, the acquisition was valid because it was an exercise of the power conferred by s 122 of the Constitution and property acquired by a law made under that power is not subject to the requirement of s 51(xxxi) of the Constitution. To these contentions of the Commonwealth, the appellants make two replies. First, the source of the power to make the proclamations was not s 122 of the Constitution but s 51(xxix), the external affairs power. Second, if the source of the power was s 122, laws made under that section, like laws made under s 51, must comply with the "constitutional guarantee" that the Commonwealth can acquire property only on just terms.

The history of the litigation

In 1992, Newcrest commenced proceedings in this Court seeking a declaration that the proclamations extending the area of Kakadu so as to affect its mining leases and the provisions of the National Parks Act under which they were made were invalid and a declaration that it was entitled to exercise all rights granted by the mining leases. The Commonwealth was the first defendant. The Director was the second defendant.

On 8 October 1992, Mason CJ remitted part of the proceedings to the Federal Court. Excluded from the remitter were the issues of invalidity arising from Newcrest's contention that an acquisition of property, made under s 122 of the Constitution, must comply with the requirements of s 51(xxxi) of the Constitution. Later, BHP was added as second plaintiff.

French J heard the proceedings and declared that, subject to the effect of the proclamations made under the National Parks Act, Newcrest was the lawful lessee of all the mining leases except MLN 19 ^[F140] . His Honour held that at all material times the Commonwealth and not the Northern Territory was the lessor under the leases. Nevertheless, the learned judge held that the transfer of the leases by BHP to Newcrest was valid because the conduct of the Commonwealth precluded it from asserting that the transfers were made without its approval. Consequently, the interest of the Commonwealth in the minerals under the land comprising Kakadu was subject to the rights enjoyed by Newcrest and BHP under the mining leases.

On appeal, the Full Court of the Federal Court (Black CJ and Foster J, Beaumont J dissenting) set aside the orders made by French J ^[F141] . The majority of the Full Court held that, at the respective times the proclamations were made, MLN 19, MLNs 23-28 and MLNs 751-756 were no longer in force because they had not been validly renewed. The Full Court declared that Newcrest was the lawful lessee of MLNs 78-89 (which had not been renewed) but that these leases were subject to the operation of the proclamations made under the National Parks Act. These leases expired on 31 December 1994. On 21 May 1996, Brennan CJ ordered that the constitutional question which had been excepted from the remitter to the Federal Court be reserved for the consideration of the Full Court of this Court.

Acquisition of property

The Commonwealth contends that by making the proclamations it did not acquire any property in any of the leases. The Commonwealth argues that s 10(1A) of the National Parks Act merely sterilised the use of the land for mining purposes when that section declared that "[n]o operations for the recovery of minerals shall be carried on in Kakadu National Park". The Commonwealth points out that the prohibition in s 10(1A) was universal. Because it applied to the Commonwealth and the Director as well as to Newcrest, the prohibition produced no benefit of a proprietary nature for the Commonwealth or the Director. The proclamations may have prevented Newcrest from mining the land but neither the Commonwealth nor the Director received any corresponding advantage. That being so, the Commonwealth contends that there was no acquisition within the meaning of s 51(xxxi) of the Constitution.

Section 51(xxxi) of the Constitution provides:

"The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:-

...

(xxxi)

The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws".

In my view, the Commonwealth's contention is correct. Two issues arise. First, was Newcrest's interest in the mining leases "property" for the purposes of s 51(xxxi)? The constitutional term "property" has been liberally construed. It encompasses traditional estates and recognised interests in land and chattels and extends to include choses in action, intangible property rights and "innominate and anomalous interests" ^[F142] . There is no doubt that Newcrest's interest in the existing mining leases was "property" within the meaning of s 51(xxxi). Indeed, the Commonwealth concedes that it was.

Second, was this "property" acquired by the Commonwealth? Because no compensation was paid to Newcrest and no benefit or advantage otherwise obtained, if there was indeed an acquisition it seems clear that it was not "on just terms". But the question remains, was there an acquisition? In The Commonwealth v. Tasmania (The Tasmanian Dam Case) ^[F143] , Mason J pointed out that s 51(xxxi) does not apply merely because Commonwealth "legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be."

Newcrest's right to mine was adversely affected by the proclamations. But what interest in property did the Commonwealth acquire? Newcrest's interest in the lease was not forfeited or transferred to the Commonwealth or the Director. They already owned the interests in reversion in the minerals and land. Until the leases expired, the property interests of Newcrest in the land and minerals would continue as before. The effect of the proclamations was merely to impinge on Newcrest's rights to exploit those interests. But even if there was effectively a diminution or extinguishment of all or part of Newcrest's interests, there was no gain by the Commonwealth (or the Director). Both as a matter of substance and of form, the Commonwealth obtained nothing which it did not already have. In colloquial terms, Newcrest lost but the Commonwealth did not gain.

To hold that the Commonwealth has not acquired the property of Newcrest does not preclude the possibility of Newcrest being able to argue, at some future time, that an acquisition has occurred. Newcrest may then be able to point to some action by the Commonwealth, whether legislative or otherwise, that has had the effect of ensuring that a gain accrues to the Commonwealth which constitutes an acquisition for the purposes of s 51(xxxi). To date, however, there has been no acquisition.

Accordingly, if s 51(xxxi) were to govern the outcome of the present dispute, I would hold that there was no acquisition by the Commonwealth of any property of Newcrest within the meaning of the section. However, s 122 of the Constitution governs the disposition of the dispute. Section 51(xxxi) has no effect on the content of the power given by s 122 which is sufficiently ample to authorise the acquisition of property in the Territory with or without just terms.

Section 122 of the Constitution provides:

"The Parliament may make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may allow the representation of such territory in either House of the Parliament to the extent and on the terms which it thinks fit."

The appellants contend that s 122 must be read subject to s 51(xxxi) of the Constitution

The appellants contend that s 51(xxxi) confers power on the Parliament of the Commonwealth to make laws "for any purpose in respect of which the Parliament has power to make laws" and that s 122 is such a purpose. Accordingly, so the appellants contend, s 51(xxxi) applies to the acquisition of land in the Territory. If this contention is correct, then s 122 cannot authorise an acquisition of property and the Commonwealth, if it wishes to acquire property in a Territory, must use s 51(xxxi). That is because the received doctrine ^[F144] is that, in the absence of a contrary indication in the Constitution, s 51(xxxi) withdraws "from other heads of power (including the incidental power) all content which would otherwise have enabled the compulsory acquisition of property" ^[F145] .

If the appellants' argument is correct, the Commonwealth cannot confer power on a self-governing territory to acquire property other than on just terms, which means that a self- governing territory has less power to acquire property from owners in its jurisdiction than a State has power to acquire property from owners in its jurisdiction. Moreover since, ex hypothesi , s 122 does not authorise the acquisition of property, it must follow that the Parliament of the Commonwealth has no power under s 122 to give the self- governing territories power to acquire property. Grants of such power, if they can be given at all, must arise from a combination of s 122 and s 51(xxxi) and perhaps s 51(xxxix) of the Constitution.

There must, however, be grave doubt as to whether those three provisions could be used by the Commonwealth Parliament to confer a power of acquisition on a territory because both s 51(xxxi) and s 51(xxxix) authorise only laws for "the peace, order, and good government of the Commonwealth". But even if they can be used to achieve this result, the self-governing territories would still be in an inferior position to the States, all of whom can acquire property within their jurisdictions other than on "just terms".

A construction of s 122 which leads to the self- governing territories having no power to acquire property under that section or having a power to acquire only on just terms by reason of a combination of s 51(xxxi), s 51(xxxix) and s 122 is not easy to reconcile with Barwick CJ's view ^[F146] that the power conferred by s 122 "is not only plenary but is unlimited by reference to subject matter" and "is as large and universal a power of legislation as can be granted." Nor is it easy to reconcile it with Dixon CJ's view ^[F147] that the power under s 122 is one under "which the Parliament may make every proper provision as part of its legislative power operating throughout its jurisdiction."

The decision in Teori Tau v. The Commonwealth

^[F148] In addition to these difficulties, the appellants face an even more formidable obstacle. Nearly 30 years ago in Teori Tau , this Court unanimously rejected the argument which the appellants now advance. Not only did the Court unanimously dismiss the argument, it thought that it had so little substance that it delivered an oral judgment at the end of the appellant's argument.

Faced with this unanimous judgment of the Court, the appellants seek leave for this Court to reconsider it. In my opinion, there are at least four reasons why leave should be refused.

First, the judgment was unanimous, was consistent with the earlier authorities, has stood for nearly 30 years, and has been applied on at least five occasions ^[F149] without criticism by this Court, the last of which was just over three years ago.

Second, in any event Teori Tau was correctly decided.

Third, it is at least arguable that to overturn that decision would result in grants of freehold and leasehold in the Territory being invalid. This is because freehold grants and perhaps many leasehold grants of land in the Territory have extinguished native title rights and conferred a commensurate and identifiable and measurable benefit on the grantees resulting in an acquisition of the property of the native title owners. Because the grants depend on statute ^[F150] and have been made in a territory as opposed to a State, those grants could not be constitutionally validated without the payment of compensation or a referendum if Teori Tau is overturned. If the decision in Teori Tau was plainly wrong, then justice for the dispossessed holders of native title might justify the Court overruling that decision despite the economic and probable social cost that such a step might bring on the people of the Territory and consequentially on the people of Australia. But I cannot see how at this late stage of the interpretation of s 122, it can be said that Teori Tau is plainly wrong.

Fourth, the decision in Teori Tau may have influenced the Commonwealth to initiate legislative or executive action in sensitive areas of social policy, areas where the Commonwealth knew that later changes in policy could require a reversal of that legislative or executive action. Similarly, the decision may have influenced legislative or executive action that reversed earlier policies. Even the proclamations in this case may have been made wholly or partly in reliance on Teori Tau ^[F151] .

The relationship of s 122 to the rest of the Constitution

In interpreting the Constitution, no section or paragraph can be interpreted without recourse to the other provisions of the instrument ^[F152] . Effect must be given to every word of the Constitution that is capable of a sensible meaning ^[F153] . So far as the Constitution permits, conflicting provisions must be interpreted in a way that maximises the scope for operation of each provision. But this does not mean that, where conflict arises, every provision of the Constitution must be given equal weight. Either expressly or by necessary implication, the Constitution may indicate that some provisions must be read subject to one or more of the other provisions. Thus, to confer a power "subject to this Constitution" is "a standard way of making clear" ^[F154] that, where another provision of the Constitution which is not so qualified conflicts with that power, the unqualified provision is to prevail ^[F155] . It is not possible therefore to treat the phrase "subject to this Constitution" or any similar word or phrase as superfluous or to ignore its declaration of priority. If the provisions conflict, it is a mistake to attempt to reconcile them in a way that gives the maximum possible effect to both the dominant and the subordinate provision.

Section 122 is a non-federal power found in Ch VI of the Constitution, which is headed "New States", while s 51(xxxi) is a federal power found in Ch I, Pt V, which is headed "Powers of the Parliament". In Spratt v. Hermes ^[F156] Kitto J pointed out:

"[T]he first five Chapters of the Constitution belong to a special universe of discourse, namely that of the creation and the working of a federation of States, with all the safeguards, inducements, checks and balances that had to be negotiated and carefully expressed in order to secure the assent of the peoples of the several Colonies, with their divers interests, sentiments, prejudices, ambitions and apprehensions, to unite in the federation. When Chap. VI is reached, and it is found that s.122 gives the Parliament a general power to make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth, or of any territory placed under the authority of the Commonwealth or otherwise acquired by it, a change to a fundamentally different topic is perceived."

Because s 122 is outside "the special universe of discourse", it should cause no surprise that, on any view of the Constitution, many provisions ^[F157] of its federal Chapters have no application to the territories. This does not mean, however, that s 122 is disjoined from the rest of the Constitution ^[F158] or that other provisions do not affect or are not affected by s 122. After all, s 122 refers to the Parliament of the Commonwealth which as Dixon CJ pointed out in Lamshed v. Lake ^[F159] "necessarily refers to s 1 of the Constitution and carries with it the provisions of Pts. I, II, III and IV of Chap. I." Whether or not s 122 affects or is affected by other provisions of the Constitution must depend on the language, subject matter and purpose of those provisions, on whether they are "subject to this Constitution", and the extent to which they would support or undermine the object of s 122.

In some cases the best interpretation of s 122 may be that it overrides the apparently mandatory language of other sections of the Constitution. Thus, because s 122 provides for the making of laws that "allow the representation of such territory in either House of the Parliament", this Court held that the Commonwealth Parliament can legislate to allow representation of the territories in the Senate even though s 7 of the Constitution declares that "[t]he Senate shall be composed of senators for each State, directly chosen by the people of the State" ^[F160] . The Court has also held that s 122 prevails over the requirement of s 55 that "[l]aws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect." ^[F161] The Court regarded s 55 as being connected to the power conferred by s 51(ii) to make laws with respect to "taxation; but so as not to discriminate between States or parts of States" and therefore as directed only to the protection of the States ^[F162] . Similarly, in Svikart v. Stewart ^[F163] the Court held that the exclusive power given to the Parliament by s 52(i) of the Constitution to make laws with respect to "all places acquired by the Commonwealth for public purposes" is confined to places "acquired within a State" ^[F164] . Section 52(i) therefore does not prevent the Parliament from "conferring power upon a Territory legislature to legislate with respect to Commonwealth places in a Territory." ^[F165]

Furthermore, the Court has held that a law of a territory is not a law of the Commonwealth for the purpose of s 80 of the Constitution and that a person charged on an indictment under a law of a territory need not be tried by a jury ^[F166] . The chief reason for that conclusion was that s 80 is found in Ch III which "is limited in its application to the exercise of the judicial power of the Commonwealth in respect of those functions of government as to which it stands in the place of the States, and has no application to territories." ^[F167] However, Spratt ^[F168] made it clear that the proposition that Ch III as a whole is inapplicable to s 122 cannot be supported. Nevertheless, Spratt held that the provisions of s 72 - which provides for security of tenure of federal judges and is found in Ch III - has no application to the judicial officers of a court established by legislation supported by s 122 of the Constitution. And in Capital TV and Appliances Pty Ltd v. Falconer ^[F169] , the Court held that territory courts are not federal courts exercising federal jurisdiction within the meaning of s 73, a section found in Ch III of the Constitution ^[F170] .

The nature of some provisions of the Constitution, however, may make it clear that they apply to s 122 and affect the content of the power conferred by that section. In Capital Duplicators Pty Ltd v. Australian Capital Territory ^[F171] the Court held that Ch IV of the Constitution precluded the Legislative Assembly of the Australian Capital Territory from imposing duties of excise within the meaning of s 90 of the Constitution. Brennan, Deane and Toohey JJ held that, because s 122 contemplated the creation of internal territories, s 90 could not "be seen as relating to the distribution of legislative powers solely between the Parliament and the States." ^[F172] That being so, s 122 "should not be construed as authorizing the Parliament to create a new legislature for an internal territory with power to make laws that might impose duties of customs or excise or to grant bounties on the production or export of goods." ^[F173] This was because the contrary view would undermine "a central objective of the federal compact and ... defeat the express requirements of s 51(iii)" ^[F174] that bounties on the production of goods should be "uniform throughout the Commonwealth". But not all of Ch IV applies to the territories or affects the content of s 122. By its terms, s 92 of the Constitution - which is also in Ch IV - does not apply to trade, commerce or intercourse between a State and a Territory ^[F175] .

Furthermore, the Commonwealth Parliament can enact laws for the government of a territory which protect conduct relating to that territory from the operation of a State law even when the conduct occurs in that State. Laws made for the government of a territory by the Commonwealth are laws of the Commonwealth for the purpose of s 109 of the Constitution and invalidate inconsistent State laws ^[F176] . It may be that sections like s 116 and s 118 of the Constitution also qualify the power conferred by s 122 although I prefer the view that they do not ^[F177] .

The relationship between s 51(xxxi) and s 122 of the Constitution

In interpreting s 122 and its relationship with s 51 of the Constitution, the most striking feature of the relationship is that the powers conferred by s 51 are conferred "subject to this Constitution" while s 122 is unqualified by that expression. Thus the relationship between s 51 and s 122 is very different from the relationship between s 122 and s 90 or between s 122 and ss 116 or 118. The use of the expression "subject to this Constitution" does not itself mean that there is always conflict between s 51 and s 122. But it does mean that, where conflict exists, s 122 must prevail. As Megarry J pointed out in C & J Clark Ltd v. IRC ^[F178] "[w]here there is no clash, the phrase does nothing: if there is collision, the phrase shows what is to prevail." ^[F179] In S v. Marwane ^[F180] , the Appellate Division of the Supreme Court of South Africa had to construe the words "[s]ubject to the provisions of this Constitution". Miller JA, giving judgment for the majority, said ^[F181] :

"The purpose of the phrase 'subject to' in such a context is to establish what is dominant and what subordinate or subservient; that to which a provision is 'subject', is dominant - in case of conflict it prevails over that which is subject to it. Certainly, in the field of legislation, the phrase has this clear and accepted connotation. When the legislator wishes to convey that that which is now being enacted is not to prevail in circumstances where it conflicts, or is inconsistent or incompatible, with a specified other enactment, it very frequently, if not almost invariably, qualifies such enactment by the method of declaring it to be 'subject to' the other specified one."

Laws made under many of the paragraphs in s 51 ^[F182] can operate in the territories without any apparent conflict with s 122. Indeed in Berwick Ltd v. Gray ^[F183] this Court held that, while s 122 authorised the application of the provisions of the Income Tax Assessment Act 1936 (Cth) to residents of Norfolk Island, "the Parliament, by laws enacted pursuant to s 51(ii), may impose and regulate the imposition of income tax in the external Territories." In Lamshed ^[F184] , Dixon CJ said that the power conferred by s 122 was not so ample that it could not be extended by the operation of the incidental power conferred by s 51(xxxix) of the Constitution. In Attorney-General (WA) v. Australian National Airlines Commission ^[F185] , on the other hand, Murphy J said that "[i]t is not easy to see how the incidental power could expand the Territories power." Stephen J also favoured ^[F186] the view that "[r]ather than speak of an implied incidental power in connexion with s 122 it may be preferable to regard the express words of grant as including within the power the entirety of power necessary to legislate for the government of a Territory." Mason J also reasoned ^[F187] that s 122 was sufficient to authorise a law that provided for the transport of goods and passengers within a State in so far as it was exercised for the purpose of making efficient or profitable a service of carrying passengers and goods between a State and a Territory or within a Territory.

Why Parliament should need to resort to any of the paragraphs of s 51 to make laws with respect to the territories when s 122 confers powers of equal or greater content is not, however, easy to see. As Barton ACJ pointed out in Buchanan v. The Commonwealth ^[F188] :

"[I]t must be observed that sec. 122, by itself, contains all the necessary power to legislate for a territory, including the imposition or continuance of any kind of taxation. It does not need any assistance from sec. 51 in respect either of taxation, or of anything else. It would suffice for all its purposes if there were no sec. 51 at all. It is more ample than sec. 51 for all the purposes of a territory."

Indeed, this Court has interpreted the territories power as authorising laws that protect or promote activities in a State if those activities have sufficient nexus with a territory ^[F189] . I think that the view expressed by Murphy J in Attorney-General (WA) v. Australian National Airlines Commission ^[F190] is correct and that s 51(xxxix) cannot add anything to what is already embraced in the grant of power in s 122. Nor does there seem any point in relying on the powers conferred by s 51 to justify a law whose purpose is to do no more than legislate for the government of a territory.

Section 122 needs no support from s 51 to govern the territories effectively. Cases may arise, of course, where the Commonwealth wishes to legislate for the whole of Australia and is content to rely on a s 51 power to do so. In such cases, s 122 will be irrelevant but that is because, as a matter of construction, the law was intended to apply validly throughout Australia and not to be partially saved by reference to s 122.

In Nintendo Co Ltd v. Centronics Systems Pty Ltd ^[F191] , six members of the Court described how s 51(xxxi) operates so as to affect the content of other powers. We said ^[F192] :

"It is well settled that s 51(xxxi)'s indirect operation to reduce the content of other grants of legislative power is through the medium of a rule of construction, namely, that 'it is in accordance with the soundest principles of interpretation to treat' the conferral of 'an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect' as inconsistent with 'any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification'. That operation of s 51(xxxi) to confine the content of other grants of legislative power, being indirect through a rule of construction, is subject to a contrary intention either expressed or made manifest in those other grants. In particular, some of the other grants of legislative power clearly encompass the making of laws providing for the acquisition of property unaccompanied by any quid pro quo of just terms. Where that is so, the other grant of legislative power manifests a contrary intention which precludes the abstraction from it of the legislative power to make such a law." [footnotes omitted]

However, s 51(xxxi) does not operate to abstract power from s 122. Three reasons justify the view that s 51(xxxi) and s 122 operate in different fields. First, s 51(xxxi) is a federal power found in the heart of the federal chapters while s 122 is "a disparate and non- federal" ^[F193] power found in a chapter headed "New States". That makes it unlikely that conflict was intended or can occur.

Second, the reference to an acquisition "from any State or person" in s 51(xxxi) suggests that the power is concerned with acquisitions within the States. It is true enough that the word "person" is at large, but its association with the word "State" and its place in the federal chapters of the Constitution suggest that the better reading of s 51(xxxi) is that the paragraph is referring to an acquisition within a State. This is reinforced by the work that the word "person" must do if the paragraph applies to the territories. If the paragraph does so apply, then the government of a self-governing territory would have to be a "person" for the purpose of s 51(xxxi) - which seems odd given its juxtaposition with the word "State". If "person" does not include the government of a self-governing territory, however, the federal government would either have no power to acquire the property of the government of a self-governing territory or would be able to acquire it other than on just terms - which seems equally odd if s 51(xxxi) applies to natural persons or corporations in the territories.

Third, the terms of s 51(xxxi) are such that the rule of construction referred to in Nintendo ^[F194] has no application to s 122. This is because the terms of s 122 do not satisfy the words "acquisition ... for any purpose in respect of which the Parliament has power to make laws" in s 51(xxxi). In Attorney-General (Cth) v. Schmidt ^[F195] , Dixon CJ said:

"The expression 'for any purpose' is doubtless indefinite. But it refers to the use or application of the property in or towards carrying out or furthering a purpose comprised in some other legislative power."

But when the Commonwealth acquires property in a territory, the acquisition is not carrying out or furthering a purpose comprised in s 122 of the Constitution. When the Commonwealth acquires such property, it does so not under s 122 but pursuant to a law that authorises the acquisition of property within the territory. It is of course true that, without s 122, there would be no such law. But that seems to me to miss the point. If the appellants are to succeed on this part of the case, they must show that s 51(xxxi) deprives s 122 of the capacity to authorise the acquisition of property. But s 51(xxxi) can have that effect only if s 122 itself has a purpose of the kind referred to in s 51(xxxi). However, s 122 does not comprise a purpose of that kind. It is a source of power to make laws. Its purpose is to enable the Commonwealth to govern the internal and external territories of the Commonwealth. In my opinion, s 122 no more comprises a purpose of the relevant kind than the power conferred by s 51 "to make laws for the peace, order, and good government of the Commonwealth" relevantly comprises a purpose to make laws for the acquisition of property.

Accordingly, there is no conflict between s 51(xxxi) and s 122. They operate in different spheres. That being so, the rule of construction that applies when s 51(xxxi) and other powers cover the same ground has no application. Section 122 operates according to its terms and authorises the acquisition of property with or without just terms. On the dubious assumption that s 51(xxxi) as well as s 122 operates in the Territory, the Commonwealth is not bound to rely on s 51(xxxi) to acquire property. It can rely on laws made under s 122 whose content is unaffected by s 51(xxxi).

In any event, if contrary to my opinion there is a conflict between s 51(xxxi) and s 122 and they do occupy the same field, the words "subject to this Constitution" emphatically declare that s 122 is to prevail ^[F196] . If conflict exists, s 51(xxxi) cannot operate to withdraw power from s 122.

The fact that the power conferred by s 122 gives the residents of the territories no constitutional protection against the acquisition of property on unjust terms is hardly a cause for surprise. After all, State owners have no constitutional protection against acquisitions of property by State governments. Nothing in the Constitution prevents a State government from acquiring property from an owner on unjust terms. If a territory has self-government, its government stands in a non-federal relationship to its owners. Its relationship is therefore similar to the relationship between a State and its property owners. If a territory has not been given self-government, then the Commonwealth stands in the same non-federal relationship to the property owners of the territory as the States do to their property owners. It is only when the Commonwealth seeks to acquire property for a federal purpose that the Constitution insists that the Commonwealth must pay "just terms".

Nor in my view does it affect the construction of s 122 that s 51(xxxi) has been described as a "constitutional guarantee". No doubt it is - in federal matters. But s 122 deals with the non-federal relationship of the Commonwealth and the residents and owners of property in territories. When the Commonwealth acquires property from an owner in a territory, the nature of its act is no different from that which occurs when a State acquires property from an owner in the State. In both cases, neither the State owner nor the territory owner receives the protection of the "constitutional guarantee".

For the same reasons, it is of no relevance to the question of construction of s 122 that State owners are protected by the "just terms" guarantee against Commonwealth acquisitions and territory owners are not so protected. The relationship between the State owner and the Commonwealth in such a case is a federal relationship. The relationship between the territory owner and the Commonwealth is non- federal. Moreover, it should not be overlooked that, on any view of the Constitution, territory owners and residents are otherwise disadvantaged compared to State owners and residents. Territory residents are not "people of the Commonwealth" for the purpose of s 24 of the Constitution ^[F197] . Consequently, they have no constitutional right to participate in federal elections for the House of Representatives. They are not "people of the State" for the purpose of s 7 of the Constitution. Consequently, they have no constitutional right to participate in federal elections for the Senate ^[F198] . They are not residents of States for the purpose of the protection provided by s 117 of the Constitution. Consequently, they may be discriminated against in the States by the States and in the territories by the Commonwealth or their own government if they have self-government.

Nor, assuming it to be the fact, can it affect the construction of s 122 that, for a territory purpose, the Commonwealth may acquire property in a State without paying just terms unless s 51(xxxi) applies to the territories. I do not accept the contention that the territories power authorises a law compulsorily acquiring property in a State. But if it does, it provides no reason for ignoring the clear terms of s 122.

No doubt s 122 authorises laws that have an effect on conduct that takes place within a State and the operation of such laws may strike down State legislation by reason of s 109 of the Constitution. That is certainly the result of Lamshed ^[F199] . But properly understood, that case decided merely that s 10 of the Northern Territory (Administration) Act 1910 (Cth) providing for freedom of intercourse between the Territory and the States was a valid law under s 122 and that a State law which impeded its operation by penalising certain conduct within the State was invalidated by s 109 of the Constitution. The decision lends no support to the notion that a law made under s 122 can authorise an acquisition of property in a State. Similarly, Attorney-General (WA) v. Australian National Airlines Commission ^[F200] , when properly understood, does not support the notion. That case decided that s 122 authorised a law that permitted a carrier, without being the holder of a State licence, to carry passengers between Perth and Darwin with an intermediate stop at Port Hedland at which passengers and cargo bound for Perth and Darwin would be loaded or discharged. Since the journey from Perth to Darwin was plainly authorised by s 122, it necessarily followed that the intermediate journey was also authorised as being incidental to the principal journey. But the case is not an authority for the proposition that s 122 would authorise a law that permitted the carrier, in disregard of State law, to make a purely intra-state flight between Perth and Port Hedland.

No State or territory legislature or the Commonwealth exercising its powers under s 122 has any authority compulsorily to acquire property in another jurisdiction. Laws providing for the acquisition of property within a jurisdiction are an exercise of sovereignty. But under long established rules of international law, as Brennan CJ points out in his judgment, no court will give effect to the legislative or executive act of a sovereign in respect of the acquisition of property outside the sovereign's jurisdiction ^[F201] . A sovereign state "has no sovereignty beyond its own frontiers." ^[F202] It is impossible to read s 122 or any State legislative power saved by s 107 of the Constitution as authorising the compulsory acquisition of property in another jurisdiction.

On the other issues in the appeal and question reserved, I agree, for the reasons given by Brennan CJ, that the appellants also fail. The reserved question whether the proclamations are invalid should be answered: No. The appeal should be dismissed.