Taking Property on Just Terms Bill 2014 – a step too far, too soon?

In the context of constitutional law, your property rights extend to things that you would not ordinarily expect to constitute property.

The term ‘property’ has been defined broadly by the Courts to cover a wide range of valuable rights and interests, whether tangible or intangible, including ownership of real property and personal property – “property” covers the spectrum, from an interest in land to intangible rights such as the right to sue and the right to receive a payment of money.

It may be difficult for some to conceptualise, but ‘property’ is not itself a thing, rather, it is a description of a legal relationship with something.

In 2014, a draft bill entitled “Taking of Property on Just Terms Bill 2014” (the Bill) was introduced into the WA Parliament for consideration. The Bill, if passed, will have the effect of requiring public authorities in Western Australia to provide a form of compensation to persons whose “property” is taken by the State. The Bill also defines “property” broadly, as “property of every kind, whether real or personal, tangible or intangible, corporeal or incorporeal, and any interest in property”.

At the Federal level, by section 51(xxxi) of the Constitution (Commonwealth of Australia Constitution Act 1900), the Commonwealth cannot acquire property from any State or person otherwise than “on just terms” – which fundamentally means that fair compensation must be paid or given. This requirement is not however imposed at the State level under Western Australia’s Constitution (Constitution Act 1889). The High Court has confirmed that the legislative power of State Parliaments is not restricted by any requirement that legislation for the acquisition of property must provide just or adequate compensation for that acquisition: Durham Holdings Pty Ltd v State of New South Wales (2001) 205 CLR 399.

Members of the WA Parliament are in the process of debating whether or not the Bill should be passed. It appears that the Bill was introduced with a particular emphasis on the taking of property in the context of real property, being an interest in land, by WA public authorities under certain environmental laws. That is a significant issue causing detrimental impact to innocent landowners. There are however other types of property which when taken can have an equal, if not greater, detrimental impact on the persons from whom the property has been taken.

The law as it currently stands in Western Australia grants the WA Parliament broad powers to make laws governing the State. Those laws have the potential to permit public authorities to take property from West Australians without just compensation. An additional level of concern arises in circumstances where persons, acting in good faith, expend significant amounts of time and money pursuing or defending their (property) interests against the State, and yet the State has the ability to at any time pass legislation, including reform and validating legislation, if it senses defeat. An example of this occurred in 2014 with the passing of the Waste Avoidance and Resource Recovery Validation (Amendment) Act 2014 introduced by the Minister for Environment as a result of arguments propounded by a litigant in Supreme Court legal proceedings which were likely to succeed. The passing of the Act, which had a retrospective validating effect on defective legislation, had the consequence of “taking” the litigant’s “property”, being its right to sue with respect to five causes of action, by extinguishing that right.

The Honourable Mark Lewis said during discussion concerning the Bill, is the Bill a step too far, too soon? We think not. Now is the time for the State to enact such legislation, as proposed in the Bill, to qualify the State’s ability to take property. This form of legislation, if enacted, should encourage the State and its public authorities to engage in a cost versus benefit exercise before making decisions that have significant impact on the property interests of people of this State.