"The Castle", property, ‘just terms’ and the Constitution

by The FindLaw Team

Fans of The Castle can take two things away from the film: a) the Constitution has a ‘vibe’ and b) s 51(xxxi) states that property acquired by the Commonwealth can only be done on ‘just terms’. Most Australians familiarity with the Constitution would arguably be limited at best, however, the s 51(xxxi) provision would resonate with many readers who have seen The Castle, but what does ‘just terms’ actually mean? Yes, that question was also posed by Bud Tingwell’s character in the film, however, there are many elements to s 51(xxxi) which is actually worth exploring because your home, is indeed your castle.

Section 51(xxxi)

Before going into an in-depth exploration of s 51(xxxi), a useful starting off point would be to read the section in full:

“The Parliament shall, subject to this Constitution, 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 which the Parliament has power to make laws.”

There are two components in regards to the section; firstly, it allows the Commonwealth to compulsorily acquire property for certain purposes. Secondly, it can only acquire such property ‘on just terms’.

One of the interesting aspects of the Australian Constitution – as noted with voting rights – is that the Constitution has both implied, and expressed rights, with s 51(xxxi) falling into the express right category, but the express right only binds the Commonwealth.

What does ‘property’ and ‘acquisition’ mean under s 51(xxxi)?

The courts have defined ‘property’ under s 51(xxxi) rather broadly, with the High Court in Minister for the Army v Dalziel, stating that all property interests recognised under property law, may be included within the definition of property under s 51(xxxi), including rental property.

Although the definition of ‘property’ is broadly defined, it is important to note that the protections afforded under s 51(xxxi) are limited in instances when property is acquired for a Commonwealth purpose.

‘Just terms’

When contrasting s 51(xxxi) with the Fifth Amendment of the US Constitution, we see a divergence in how acquired property may be compensated.

The Fifth Amendment requires any private property taken for public use, must result in “just compensation” for the dispossessed party. While in contrast, the Australian Constitution only requires compensation to be made on “just terms”.

Broadly speaking, “just compensation” can be read to mean market value when private property is taken for public use in the US, whilst there appears to be no such implication in s 51(xxxi). However, it should be added that “just terms” can also mean greater than market value in some instances.

The general approach the courts take when compensating a person on ‘just terms’, is one of fairness, and is multifaceted. ‘Fairness’ and ‘just terms’ in relation to s 51(xxxi) is all encompassing because it takes into account the interests of all parties affected, as well as the owner whose property has been acquired by the Commonwealth.

Sure, the impetus of this piece may have been, Darryl Kerrigan, however, there is no harm in learning more about Australia’s Constitution, especially when we consider that it is perhaps the most important legal document in the land. So as we all enjoy the ‘just terms’ provisions afforded under s 51(xxxi), we can perhaps all ask ourselves: ‘how’s the serenity?’, when we’re enjoying the comforts of our own homes.



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