FEDERAL COURT OF AUSTRALIA

Australian Capital Territory v Pinter [2002] FCAFC 186

POWERS OF AUSTRALIAN CAPITAL TERRITORY LEGISLATIVE ASSEMBLY – criminal injuries compensation – claims for an award of compensation under the Criminal Injuries Compensation Act 1983 (ACT) including an amount to compensate for pain and suffering – amendment to criminal injuries compensation legislation, retrospectively extinguishing statutory right to claim an amount for pain and suffering – whether amendment valid in its application to persons who had undetermined applications at time amendment came into force.

Acquisition of property ON JUST TERMS – nature of claim for compensation under Criminal Injuries Compensation Act 1983 (ACT) – whether applicant’s interest in right to apply for compensation for pain and suffering is ‘property’– whether removal of entitlement to apply for compensation for pain and suffering is ‘acquisition of property otherwise than on just terms’.

WORDS & PHRASES – “Acquisition of property on just terms”

Australian Capital Territory (Self-Government) Act 1988 (Cth), ss 22, 23, 28

Criminal Injuries Compensation Act 1983 (ACT)

Victims of Crime (Financial Assistance) Act 1983 (ACT)

Victims of Crime (Financial Assistance) Amendment Act 1999 (ACT), s 16(2)

Smith v ANL [2000] HCA 58; 204 CLR 493, applied

Health Insurance Commission v Peverill (1994) 179 CLR 226, distinguished

Commonwealth v WMC Resources Limited [1998] HCA 8;(1998) 194 CLR 1, applied

Georgiadis v Australian and Overseas Telecommunications Corporation (1993) 179 CLR 297, followed

Newcrest Mining (WA) Limited v Commonwealth (1979) 190 CLR 513, referred to

Commonwealth v Mewett (1997) 191 CLR 471, referred to

Re Criminal Injuries Compensation Ordinance 1983 (1984) 58 ACTR 17, referred to

Mutual Pools & Staff Pty Ltd v The Commonwealth (1993) 179 CLR 155, applied

Minister of State for the Army v Dalziel (1944) 68 CLR 261, referred to

National Provincial Bank Ltd v Ainsworth [1965] AC 1175, followed

R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327, followed

Australian Capital Television v Commonwealth (1992) 177 CLR 106, referred to

Curtis v Wilcox [1948] 2 KB 474, referred to

Australian Tape Manufacturers v The Commonwealth (1993) 176 CLR 480, referred to

Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134, considered

Re Award Under Criminal Injuries Compensation Ordinance; Ex parte Baker (1987) 71 ACTR 44, referred to

Australian Capital Territory v Bullock [1995] ACTSC 63 (unreported, 28 June 1995), referred to

Jenkins v Territory Insurance Office [2001] NTSC 92 (31 October 2001), approved

Yanner v Eaton (1999) 166 ALR 258, referred to

National Trustees Executors & Agency Co of Australasia Ltd v Federal Commissioner of Taxation (1954) 91 CLR 540, referred to

Torkington v Magee [1902] 2 KB 427, referred to

Commonwealth of Australia v Pillifeant (1990) 93 ALR 641, referred to

Gray, “Property in Thin Air” [1991] Camb LJ 252, referred to

Gray and Gray, Elements of Land Law, 93 (3^rd ed, 2001), referred to

Reich, “The New Property” (1964) 73 Yale LJ 733, referred to

Tribe, American Constitutional Law 2^nd ed 1988, 613, referred to

United Nations Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power, Art 12

AUSTRALIAN CAPITAL TERRITORY v PINTER & ORS

A27 OF 2001

BLACK CJ, SPENDER, HIGGINS, FINN & DOWSETT JJ

26 JUNE 2002

CANBERRA

ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

THE COURT ORDERS THAT:

1.      The appeal be dismissed.

2.      The appellant pay the respondents’ costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

REASONS FOR JUDGMENT

BLACK CJ:

1                     This is an appeal from a decision of the Full Court of the Supreme Court of the Australian Capital Territory (“Territory”) allowing an appeal against awards made by the Registrar of the Supreme Court by way of compensation under Territory victims of crime compensation legislation.

2                     The present respondents applied for an award of compensation on various dates after 23 June 1998 under the Criminal Injuries Compensation Act 1983 (ACT) (“the Compensation Act”).  (The Compensation Act first became law as a Commonwealth Ordinance, but following the passage of the Australian Capital Territory (Self-Government) Act 1988 (Cth) and consequential legislation, the Self-Government (Citation of Laws) Act 1989 (ACT) effected the citation change of “Ordinance” to “Act”.)  Each of the respondents made their application prior to 24 December 1999, on which date the Victims of Crime (Financial Assistance) (Amendment) Act 1999 (Cth) (“the Amending Act”) came into force.  

3                     The Amending Act repealed and replaced substantial parts of the Compensation Act.  Part I (“Preliminary”) and Part II (“Compensation”) of the Compensation Act were wholly replaced.  The replacement sections and the remaining sections were re-numbered and the legislation as so amended was re-entitled the Victims of Crime (Financial Assistance) Act 1983 (ACT) (“the Financial Assistance Act”).  

4                     When the applications came before the Registrar of the Supreme Court for determination, he held that he was precluded by s 16(2) of the Amending Act from including in the total amount of compensation awarded any component for pain and suffering.

5                     Section 16 of the Amending Act was one of several transitional provisions. The relevant parts are as follows:

"(1) The Compensation Act continues to apply in relation to an undetermined application for compensation made after 23 June 1998 as if the amendments to the Compensation Act effected by this Act had not been made, subject to this section.

(2) Where, by an undetermined application for compensation made after 23 June 1998, compensation for pain and suffering is claimed -

(a) If no award was made before the commencement day pursuant to the application - any award may not include provision for any compensation for pain and suffering;

..."

6                     It is common ground that at the commencement of the Amending Act, each of the applications made by the appellants was "an undetermined application for compensation" within the meaning of s 16.

7                     Each of the respondents to this appeal, the applicants for compensation before the Registrar, exercised their rights of appeal against the Registrar’s award.   They did so under s 28 of the Compensation Act which provided for an appeal by way of re-hearing to the Supreme Court.   A judge of the Supreme Court subsequently ordered that the jurisdiction of the court be exercised by a Full Court pursuant to s 13(2) of the Supreme Court Act 1933(ACT).

8                     The issue before the Full Court of the Supreme Court, and now before this Court on appeal, is whether, as the respondents contend, s 16(2) is invalid because of inconsistency with s 23 of the Australian Capital Territory (Self-Government) Act 1988 (Cth) (“the Self-Government Act”).

9                     Section 22 of the Self-Government Act confers upon the Legislative Assembly of the Territory general power to make laws for the peace, order and good government of the Territory, but s 23(1) provides that the Legislative Assembly has no power to make laws with respect to:

“(a)     the acquisition of property otherwise than on just terms …”

10                  To explain the respondents’ submission that s 16(2) is invalid by reason of its inconsistency with s 23, it is necessary to refer to s 28.  That section provides that a provision of a Territory enactment has no effect to the extent that it is inconsistent with a law in force in the Territory (that is, a law other than an Territory enactment or subordinate law) but such a provision shall be taken to be consistent with such a law to the extent that it is capable of operating concurrently with that law.

11                  An alternative argument that ss 10 and 11 of the Financial Assistance Act are inconsistent with s 24 of the Disability Discrimination Act 1992 (Cth) was rejected by all three members of the Full Court and that argument was not pursued before this Court. Accordingly, the only issue on appeal is whether s 16(2) of the Amending Act is a law purporting to effect an acquisition of property otherwise than on just terms, and is therefore invalid by reason of s 28 of the Self-Government Act.

Judgment of the Supreme Court

12                  The Supreme Court held by a majority (Miles CJ and Gray J; Crispin J dissenting) that the respondents had interests under the Compensation Act which were property and that s 16(2) of the Amending Act effected an acquisition of that property otherwise than on just terms.

13                  The majority characterised the right that section 16(2) of the Amending Act purported to affect, as a “right to have the application for an award of compensation, including [a component for pain and suffering], heard and determined” or “a right to have a decision made on the application for such an award” (at [27]).  Their Honours acknowledged that there might be room for argument whether the interest was properly characterised as a chose in action, but held that nevertheless it was a substantive right of the kind described.

14                  The majority placed particular reliance on the recent decision of the High Court in Smith v ANL [2000] HCA 58; 204 CLR 493 in which it was held that a provision of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) imposing a time limit on seafarers’ common law actions for damages for work‑related injuries was invalid in its application to persons with a vested cause of action because it effected an acquisition of property otherwise than on just terms. Their Honours considered that the broader principle to be taken from Smith v ANL was that a right in the nature of a chose in action amounted to property for the purposes of s 51(xxxi) and that legislation which extinguishes the value of that right is, or may be, an acquisition of property under s 51(xxxi) (at [20]).

15                  As to rights created by statute, the majority concluded (at [25]):

“There appears to be no authority to the effect that a chose in action is confined to a right at common law or ‘general law’ including equity and does not extend to a right created by statute. It would be surprising if a right under fatal accidents legislation or a right to sue on a statutory cause of action was not a chose in action.”

16                  Their Honours rejected the argument of the Territory that the rights existing under the Compensation Act were no more than statutory entitlements to receive payments from consolidated revenue, not based on antecedent proprietary rights recognised by the general law (as the right considered in Health Insurance Commission v Peverill (1994) 179 CLR 226 was held to be).  The majority concluded that the rights in question in the present cases were different in nature to those considered in Peverill.  They said (at [31]):

“Indeed it may be fairly said that the entitlements to receive payments from consolidated revenue are ‘based on antecedent proprietary rights recognised by the general law’ (see Peverill at 237). Indeed it is difficult to envisage criminal injuries compensation being available in a situation where there are not proprietary rights vested in the victim recognised by the general law. The payment from the general revenue is being provided as ‘compensation’ for those proprietary rights.”

17                  Having concluded that the rights involved amounted to ‘property’ for the purposes of s 23, their Honours considered whether s 16(2) of the Amending Act effected an ‘acquisition’ of that property. Again applying Smith v ANL, Miles CJ and Gray J held that it is sufficient if the beneficiary gains "some identifiable and measurable count[er]vailing benefit or advantage”. Their Honours continued (at [34]):

“On this approach it is difficult to see that, on the state of the authorities, the interests of the appellants were not subject to acquisition by the Territory. The benefit is the saving to the Territory of the amount of compensation likely to have been foregone by the individual appellant in each case.”

18                  As no compensation had been provided for the acquisition it could not be said that it was on just terms. Accordingly, the majority held that s 16(2) was inconsistent with s 23 of the Self‑Government Act and therefore invalid.  The majority concluded that the appeals should be allowed, the awards of the Registrar set aside and the proceedings remitted to him to determine, in the light of their reasons, the amount of compensation to be awarded. 

19                  Crispin J disagreed.  Discussing Peverill, His Honour said (at [59]):

“As Dawson J observed at 246 the statutory scheme enabled patients to enter into an agreement with medical practitioners to assign the right to payment of the relevant benefit to the medical practitioner and for the practitioner to accept such assignment in full payment for the service. Dr Peverill's entitlements to be paid for his services presumably constituted proprietary rights which would have been recognised by the general law. However, the existence of such proprietary rights against third parties did not prevent the conclusion that the provisions under which he was paid by the Commonwealth created statutory entitlements to receive payments from consolidated revenue which were not ‘based on’ antecedent proprietary rights recognised by the general law. Nor did their existence prevent the conclusion that the amending legislating reducing those entitlements was an element in a regulatory scheme for the provision of welfare benefits from public funds. Consequently, I am unable to accept that the decision of the High Court can be distinguished in this case merely by adverting to the fact that claimants for criminal injuries compensation would have had antecedent rights against offenders.”

20                  Crispin J held that the entitlement provided by the Compensation Act prior to amendment was not compensation for the loss of antecedent rights against offenders but compensation for the injuries suffered.  The interests of the claimants were not choses in action, nor were they provided in substitution for antecedent rights against offenders.  His Honour concluded that, as in Peverill, the claimants were previously entitled "to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognised by the general law", and held that “the mere fact that a particular variation of the law involves a reduction in entitlement and is retrospective does not mean that it involves an acquisition of property.”(at [63]).

issues on appeal

21                  Before this Court the appellant and the Attorney-General for the Commonwealth (intervening pursuant to s 78A of the Judiciary Act 1903 (Cth)) argued that the interests in question are not property for the purposes of s 23 of the Self-Government Act and that the amendments made by the introduction of s 16(2) of the Amendment Act do not amount to an acquisition of property for the purposes of s 23. The interests in question, they submitted, are merely rights to have an application for compensation considered, they are not based on common law interests, but are interests deriving solely from statute and inherently liable to alteration or abolition.

22                  Mr Tilmouth QC, counsel for the first, second and third respondents, submitted that once an application for compensation was filed there was a present entitlement to compensation for pain and suffering such as to constitute a chose in action and that, following Smith v ANL, a chose in action is 'property' for the purposes of s 23. He further submitted that, on the authority of Commonwealth v WMC Resources Limited (1998) 194 CLR 1, not all statutory rights are inherently defeasible. Finally, he submitted that the extinguishment of liability on the part of the Territory amounted to an acquisition of those proprietary interests.

23                  It should be noted at this point that although s 23(1)(a) of the Self‑Government Act reflects the wording of s 51(xxxi) of the Constitution, the provisions operate somewhat differently.  It was nevertheless common ground that the present questions are to be determined by reference to the cases decided upon the meaning of s 51(xxxi) and the basis of the intervention of the Attorney-General for the Commonwealth in this appeal was the correspondence between the two provisions.

statutory rights IN THE CONTEXT OF sECTION 51(XXXI)

24                  It is necessary to identify clearly the right purportedly affected by s 16(2) of the Amending Act.  As Miles CJ and Gray J held, the right of the respondents that s 16(2) purports to extinguish can be described as a statutory right to have their application for compensation for criminal injury, including a component for pain and suffering, determined under the Compensation Act by the Court.  It will be necessary to say something more about the nature of this right later. 

25                  In the context of s 51(xxxi) the Parliament’s treatment of rights created by statute has been seen to give rise to two primary issues:  First, whether the rights in question are ‘property’, and second whether the rights are subject to an ‘acquisition’.  Because, to my mind, the second issue has the greater relevance in the context of this appeal I will deal with it first.   I consider the question of “property” at [76]ff below.

26                  Peverill is the appropriate starting point for a consideration of statutory rights and interests in the context of either s 51(xxxi) of the Constitution or, as in this case, s 23 of the Self-Government Act.  In that case the High Court held by a majority that the retrospective reduction of Medicare benefits payable by the Commonwealth Health Insurance Commission to a medical practitioner who had entered into a bulk billing arrangement with his patients did not amount to an acquisition of property otherwise than on just terms.  The Medicare benefits were payable under item 1345 of the schedule to the Health Insurance Act 1973 (Cth). 

27                  Although six of the seven members of the Court accepted that Dr Peverill’s entitlement to payment under the Medicare Benefits Scheme was proprietary in nature (Brennan J, at 243, found that it was not a proprietary interest), they held that the amendments introduced by the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) did not effect an acquisition of that property, or that nothing which answered the description of property was acquired by the Commonwealth.  In their joint judgment, Mason CJ, Deane and Gaudron JJ said (at 237):

“It is significant that the rights that have been terminated or diminished are statutory entitlements to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognized by the general law. Rights of that kind are rights which, as a general rule, are inherently susceptible of variation. This is particularly so in the case of both the nature and quantum of welfare benefits…what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property. …”

28                  On the other hand, Dawson J assumed that a law reducing the rate of a Medicare benefit (which he held to be property) was a law with respect to acquisition of that property (at 249), but that the acquisition fell outside s 51(xxxi) or, alternatively, that the Commonwealth acquired nothing that answered the description of property (at 250 - 251).  Toohey J reached a similar conclusion: at 256.  McHugh J held that, in the absence of a contract, any right or entitlement to a payment created by federal law may be altered or abolished at any time without infringing the provisions of s 51(xxxi):  at 266.

29                  Judgment in Peverill was delivered on the same day as the judgment in Georgiadis v Australian and Overseas Telecommunications Corporation (1993) 179 CLR 297.  That case concerned s 44 of the Commonwealth Employees’ Rehabilitation and Compensation Act 1988 (Cth), which removed the right of injured Commonwealth employees to sue at common law for damages for work-related injuries and replaced it with a statutory compensation scheme.  By a majority (Mason CJ, Brennan, Deane and Gaudron JJ;  Dawson, Toohey and McHugh JJ dissenting) the Court held that, in its application to an employee whose cause of action was not statute - barred before the action was commenced, s 44 of the Commonwealth Employees Rehabilitation Act was invalid because it effected an acquisition of property, namely the right to bring an action for damages, otherwise than on just terms.  In their joint judgment, Mason CJ, Deane and Gaudron JJ said (at 305 - 6):

“ ‘[A]cquisition’ in s 51(xxxi) extends to the extinguishment of a vested cause of action, at least where the extinguishment results in a direct benefit or financial gain (which, of course, incudes liability being brought to an end without payment or other satisfaction) and the cause of action is one that arises under the general law. The position may be different in a case involving the extinguishment or modification of a right that has no existence apart from statute. That is because, prima facie at least and in the absence of a recognized legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course. A law which effected the modification or extinguishment of a right of that kind would not have the character of a law with respect to the acquisition of property within s 51(xxxi) of the Constitution.”

30                  Peverill and Georgiadis show that statutory rights and interests are to be approached differently to common law rights and interests for the purposes of s 51(xxxi), but it is also clear from the later cases of Newcrest Mining (WA) Limited v Commonwealth (1979) 190 CLR 513 and WMC Resources that not every statutory right or interest is to be regarded as inherently defeasible for these purposes.

31                  In Newcrest Mining, the High Court held that the interests of the appellants in mining leases granted under the Mining Ordinance 1939 (NT) over parcels of land in the Northern Territory were acquired by the Commonwealth otherwise than on just terms when it subsequently proclaimed areas subject to the leases to be part of Kakadu National Park and prohibited mining in the Park without providing for compensation to the leaseholders.  That was a case of the constitutional guarantee contained in s 51(xxxi) operating upon a right founded solely in a statute.

32                  WMC Resources came before the High Court on appeal from a decision of this Court holding that rights of WMC Resources under an exploration permit issued pursuant to the Petroleum (Submerged Lands) Act 1967 (Cth) amounted to property, which had been acquired by the Commonwealth otherwise than on just terms.  Acquisition was said to have occurred by reason of the Commonwealth's actions in entering into the Zone of Co-Operation Treaty with Indonesia and enacting legislation to implement the Treaty which effectively prevented WMC from exercising its rights of exploration over certain areas covered by the permit.  Before the High Court it was conceded that the interests held by WMC Resources were proprietary in nature, but the Commonwealth’s submission that there was no acquisition of the interests by the Commonwealth was upheld by a majority: Brennan CJ at [24], Gaudron J at [86], McHugh J at [142] and [146] and Gummow J at [189]; Toohey J at [59] and Kirby J at [238] – [241] dissenting.

33                  In WMC Resources McHugh J, extending the view he expressed in Peverill, concluded that all proprietary rights created by statute are inherently subject to variation.  His Honour said (at [134]):

“The power to make laws with respect to a subject described in s 51 carries with it the power to amend or repeal a law made on that subject.  A property interest that is created by federal legislation, where no property interest previously existed, is necessarily of an inherently determinable character and is always liable to modification or extinguishment by a subsequent federal enactment.”

His Honour continued (at [142]):

“Peverill is a clear authority for the proposition that, where the Parliament has created a vested right of property under a head of power such as s 51(xxiiA) of the Constitution, it retains the power to amend, revoke or extinguish that right.”

In a footnote accompanying the text, his Honour said:

“In this Court’s recent decision in Newcrest Mining (1997) 190 CLR 513, given the manner in which the parties’ arguments were developed, it was unnecessary to consider the proposition that a property right created by federal legislation can be extinguished or varied by subsequent legislation without s 51(xxxi) applying.  Nor was the proposition addressed by any members of the Court in Australian Tape Manufacturers (1993) 176 CLR 480.”

34                  The broad proposition that all proprietary rights created by statute are inherently subject to variation is not, however, supported by the other judgments in WMC Resources.  In his consideration of this question, Brennan CJ (at [16]‑[17]) referred to the passage from the joint judgment of Mason CJ, Deane and Gaudron JJ in Georgiadis at 305 – 306 extracted above at [27], and continued:

“I agree that, where a pure statutory right is by nature susceptible of modification or extinguishment, its modification or extinguishment works no acquisition of property.  But, in my respectful opinion, it does not follow that a law of the Commonwealth which extinguishes purely statutory rights having no basis in the general law can never effect an ‘acquisition of property’ within s 51(xxxi).  If statutory rights were conferred on A and a reciprocal liability were imposed on B and the rights were proprietary in nature, a law extinguishing A’s rights could effect an acquisition of property by B.  In the present case, where the rights of the permitee and of WMC, though created by statute, are properly to be regarded as proprietary in nature, a Commonwealth law which purported to effect a compulsory transfer of those rights to a third party would be a law for the acquisition of property …

Where a law of the Commonwealth creates or authorises the creation of a right, a statutory modification or extinguishment of the right effects its acquisition if, but only if, it modifies or extinguishes a reciprocal liability to which the party acquiring the right was subject …”

35                  Gaudron J said (at [78] – [79]):

“In [Georgiadis], Mason CJ, Deane J and I pointed out that prima facie at least a statutory right is inherently susceptible of statutory modification or extinguishment and no acquisition of property is effected by a law which simply modifies or extinguishes a statutory right that has no basis in the general law.  That is because, ordinarily at least, a law of that kind does not confer an interest in property or any other benefit on the Commonwealth or any person; and, ordinarily at least, it does not constitute a law that is properly characterised as a law with respect to the acquisition of property.  Thus, when s 51(xxxi) is invoked, it may be helpful to ask whether the law in question does no more than modify or extinguish a statutory right which has no basis in the general law and which is inherently susceptible to modification or extinguishment.  However, the questions which, ultimately, have to be answered are whether the law effects an acquisition of property and, if so, whether it is properly characterised as a law with respect to the acquisition of property.

If a law modifies or extinguishes a statutory right which has no basis in the general law in circumstances in which some person obtains some consequential advantage or benefit in relation to property, that law may, and ordinarily, will effect an acquisition.  And there may and, ordinarily, will be an acquisition if a law operates to transfer a right to some other person, even though the right has no basis in the general law and is inherently susceptibile of modification or extinguishment.  So, too, there may and ordinarily will be an acquisition if a law extinguishes a right of that kind (particularly a monopoly right) and vests a similar right or a right with respect to the same subject matter in some other person.  In cases of that kind, there is something more than the mere modification or extinguishment of a right that is inherently susceptible to that course; the law also operates to confer a benefit.”

36                  Gummow J held that while the interests were proprietary in nature, they were not, given their nature, susceptible of acquisition (at [179]). His Honour said (at [195] – [196]):

“[A]ny proprietary rights which were enjoyed by WMC by reason of the interest it acquired in the Permit in 1984 were inherently unstable.  By reason of this nature of the property concerned there could be no acquisition within the meaning of s 51(xxxi).

To accept this proposition is not to assert that the defeasible character of the statutory rights in question denies them the attribute of ‘property’ in the ‘traditional’ sense of the general law.  For example, the vested interest of a beneficiary under a settlement in which the settlor reserved a power of revocation would, pending such revocation, be proprietary in nature.  A revocable trust is enforceable in equity whilst it subsists and the revocation would be without prejudice to prior distribution of income or capital.  The point of present significance is that in some circumstances, of which the statutory rights in this case are an instance, the nature of the property may be such that its defeasance or abrogation does not occasion any acquisition in the constitutional sense.”

37                  The dissenting judges agreed that a property right created by statute may be the subject of acquisition within the meaning of s 51(xxxi).  Toohey J said (at [53]):

“It is clear that such rights as WMC possessed under the Permit existed because of the [Petroleum (Submerged Lands) Act].  They had no existence except pursuant to a law of the Commonwealth.  But it does not necessarily follow that the rights were subject to modification or dimunition by legislation without attracting the operation of s 51(xxxi).  Intellectual property rights which are the creature of statute, may lie within the scope of par (xxxi).  On the other hand, analysis of particular rights created by statute may show that the rights were transient, defeasible and did not give rise to the possibility of acquisition.”

38                  Kirby J observed (at [237], point 5) that Newcrest, and other cases where it was accepted that the statutory rights were “property” (his Honour referred to Commonwealth v Mewett (1997) 191 CLR 471 at 551-552), illustrate that “it is necessary, in every case, to examine the legislation in question so as to determine whether the nature of the interests involved are ‘inherently defeasible’ or, however ‘innominate or anomalous’ so partake of the quality of ‘property’ that the guarantee in s 51(xxxi) is attracted.”  Later in his reasons, his Honour repeated the observation that the mere fact that a property right is created by legislation cannot put it beyond the protection of s 51(xxxi):  at [253].

39                  While the question may still be regarded as an open one (see Smith v ANL at [53] per Gaudron and Gummow JJ), I take the reasons in WMC Resources to suggest that a critical question where statutory rights and interests are concerned is whether those rights are inherently defeasible.   The question is not merely whether the right is defeasible, because in a real sense all statutory rights are inherently susceptible of variation since, s 51(xxxxi) aside, the Parliament is able to uncreate what it has created.  But the mere circumstance that a right or interest is created by statute does not mean the right or interest is inherently defeasible; one must look for something more.   This will involve a careful analysis of the objects and terms of the legislation in question:  compare Smith v ANL at [76] per Kirby J.

40                  As appears from the passage in the judgment of Gaudron J in WMC Resources extracted above, this analysis is consistent with the majority judgment in Peverill.   The analysis also derives some support from the more recent judgment of Callinan J in Smith v ANL.   While it was not necessary to decide the point in that case (the affected right of action being a common law right), Callinan J expressed the opinion that property rights created by statute cannot be excluded categorically from the protection of s 51(xxxi).   His Honour also indicated that he had several concerns with both the view expressed by McHugh J in Peverill and WMC, and Gummow J’s statement of the test of inherent susceptibility in WMC.  His Honour said (at [188] - [189]):

“… Very few enactments over time remain unamended.  I do not think that because an enactment may make specific reference to the possibility of change to it, or to the nature of rights and interests created by or arising under it, that enactment is necessarily to be singled out from other legislation silent about such a possibility.  The position might be different if the legislation were to make provision, in terms, at the outset, for the possible extinguishment, without compensation of rights and interests created by or arising under it.  The Commonwealth, in order to undertake the ordinary business of government enters into innumerable commercial arrangements The capacity of the Commonwealth to engage and act in this way, and the attractiveness of it as a contracting party to others, must depend, even without recourse to the Constitution, upon an underlying assumption that the Commonwealth will neither arbitrarily nor otherwise generally repudiate its obligations, however, created, without compensation …

I do not think that a right to compensation should turn upon the way in which rights have originally arisen or have been created, whether by statute or otherwise.

41                  His Honour also agreed with Kirby J’s observation in WMC (at [239]) that the constitutional guarantee of just terms where the property interests of investors are acquired under federal law is one of the institutional strengths of the Australian economy.

42                  In my view, therefore, the critical question when considering the rights created by the Compensation Act is whether they are inherently defeasible so that their extinguishment does not occasion an ‘acquisition’ for the purposes of s 23 of the Territory's Self-Government Act.  I turn now to consider that question.

THE STATUTORY SCHEME

43                  The long title of the Criminal Injuries Compensation Act 1983 (ACT) (as it read prior to the amendments in question) was “an Act relating to compensation for victims of crime and certain other persons”.  The compensation for which the Act provided was for injury, and in limited circumstances property damage, arising from criminal actions.   Only those provisions relating to personal injury are presently relevant;  in essence, the prescribed property damages provisions concerned damage sustained whilst assisting a police officer.

44                  Section 5 was the primary section under which compensation was awarded.  It provided that where a person sustains a prescribed injury the court “may, by order, award compensation” to or for the benefit of that person and to any person who is responsible for the maintenance of that person and who has suffered pecuniary loss or incurred expense as a consequence of the injury.  The “court” for these purposes was either the Supreme Court of the Territory, the Magistrates Court or the Registrar of the Supreme Court, depending on the nature of the criminal conduct:  see s 2(1).  “Prescribed injury” was defined in s 2 as:

“an injury sustained by [a]  person in the Territory after the commencement of this Act—

(a)               as a result of the criminal conduct of another person; or

(b)                in the course of assisting a police officer in the exercise of the officer’s power to arrest a person or to take action to prevent the commission of an offence by a person.”

45                  Section 6(1) provided that the compensation that may be awarded to a person who had sustained a prescribed injury is the amount equal to the sum of the expense reasonably incurred by that person as a consequence of the injury, the pecuniary loss suffered as a consequence of total or partial incapacity for work due to the injury and “an amount that will reasonably compensate him or her for pain or suffering resulting from the injury”.  Section 6 also made provision for compensation to dependants and others who had suffered loss.  Compensation was not to include any amount in the nature of “exemplary, vindictive or aggravated damages” (s 6(6)) and a maximum amount of compensation was fixed at $50,000:  s 7(1).  The civil onus of proof applied:  s 8.   There were particular policy exclusions; and so compensation was not to be awarded in respect of injury or death arising out of the use of a motor vehicle (s 91(1)(a)) or, where the relevant prescribed injury was pregnancy, in respect of the maintenance of any child born as a result of that pregnancy: s 9(1)(b).  The Act made provision for the way in which an application for compensation was to be made (s 10) and for the determination of applications, for which purposes the Supreme Court and the Magistrates Court were given jurisdiction to determine the applications:  ss 11(1) and (2).  The Registrar of the Supreme Court was given power to do so where an indictment had not been presented or an information laid:  s 11(3).

46                  Section 13 provided that an award of compensation may be made subject to such conditions as the court determined, and s 15 set out factors to which the court should have regard in determining whether or not to make an order awarding compensation, or the amount of compensation to be awarded. These included the behaviour, condition, attitude or disposition of the applicant or the person who sustained the relevant prescribed injury which directly or indirectly contributed to that injury.  Other factors set out in s 15(2) to which the Court was directed to have regard were:

“          (a)        any pension or allowance under the Social Security Act 1947 of the Commonwealth that the applicant is receiving or is entitled to receive as a consequence of the relevant prescribed injury;

            (b)        any damages recovered by or for the benefit of the applicant in respect of the relevant prescribed injury or prescribed property damage or that would, in the opinion of the court, be likely to be so recovered if proceedings for the recovery of those damages were instituted in a court of competent jurisdiction;

            (c)        any compensation paid or payable to or for the benefit of the applicant in respect of the relevant prescribed injury or prescribed property damage under another law of the Territory or under a law of the Commonwealth, a State or another Territory or that would, in the opinion of the court, be likely to be so payable if appropriate action were taken;

            (d)        any order made by a court in favour of the applicant in respect of the relevant prescribed injury pursuant to section 437 of the Crimes Act, 1900 of the State of New South Wales in its application in the Territory;

            (e)        any amount that the applicant has received or is entitled to receive—

            (i)         as a medicare benefit under the Health Insurance Act 1973 of the Commonwealth; or

            (ii)        under a contract of insurance;

            (f)        whether by way of a reimbursement in whole or in part of any hospital or medical expenses incurred or otherwise, as a result of having sustained the relevant prescribed injury or prescribed property damage;

            (g)        any amount that the applicant has received or is entitled to receive under an interim award of compensation made by the court;

            (h)        whether the applicant or the person who sustained the relevant prescribed injury, as the case may be, was, when that injury was sustained, living with the person whose criminal conduct resulted in that injury as the spouse of that person or as a member of the household of that person; and

            (i)         such other circumstances as the court considers relevant.”

47                  Section 20 also gave the Registrar (but not the Supreme Court or the Magistrates Court) a discretion to refuse to make an award if satisfied that the criminal conduct as a result of which the prescribed injury was sustained was not reported to a police officer. 

48                  Section 18 should also be noticed.  It allowed the Court to vary an award of compensation by increasing or reducing the amount of it.   The Court was able to do so on application by the Government Solicitor or by the person in whose favour an award was made.  The potential relationship between the power of variation and other provisions of the Act will be discussed later.

49                  The making of an award of compensation did not affect the rights or liabilities of any person under any other law in force in the Territory in relation to the relevant prescribed injury or prescribed property damage or the relevant criminal conduct:  s 32.

50                  Section 27, which was also an important section, provided that where compensation was awarded, an amount equal to the amount of compensation was payable by the Territory.

51                  Section 29 was a provision against double-recovery.  Section 29A allowed the Territory to recover any sum paid under an award from the offender, but s 29B provided for the Territory to reimburse that money to the offender if the Territory had recovered money from the person to whom compensation had been paid. 

52                  Section 31 provided that the compensation paid or payable was not subject to attachment under a law in force in the Territory (other than a Commonwealth Act), and was not capable of being assigned, charged to taken in execution or made the subject of a set‑off in any proceedings.

Analysis of THE statutory scheme

53                  In considering whether the right in question is inherently defeasible, it is appropriate to begin by considering the objects intended to be achieved by the legislation.

54                  A brief historical commentary was given by the Community Law Reform Committee of the Territory in its Report No. 6, Victims of Crime.   The Committee, chaired by the Honourable John Kelly QC, observed (at [272]):

“The principle of compensating victims of a crime has a long history.   As outlined earlier in this report, offenders’ payments to victims were integral to the criminal justice system in early Anglo‑Saxon society.   Its reintroduction into the criminal justice system was promoted in the 1950s by the British magistrate and social reformer, Margery Fry.   New Zealand introduced pioneering legislation in 1963.   New South Wales was the first Australian jurisdiction to introduce a criminal injuries compensation scheme, in 1967, all other States and Territories eventually following suit.  In 1983, the Criminal Injuries Compensation Act (ACT) came into operation.”

55                  Having noted various theoretical justifications for the payment of criminal injury compensation by the State, the Committee observed (at [275]):

“Whatever the justification used, there is no doubt that criminal injuries compensation is now regarded as an integral part of the criminal justice system.   Article 12 of the United Nations Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power stipulates that States should endeavour to provide compensation for victims of violence and the families of those who have died as a result of a criminal act.”

56                  As I have noted, the origins of the Compensation Act pre-date self-government in the Territory but whilst there are therefore no reports of parliamentary debates to confirm or clarify its objects, it is clear enough that one of the objects was to provide victims of crime with compensation for injuries resulting from the criminal acts of others in circumstances where any common law remedies might well be ineffective because the wrongdoer lacked any ability to pay, or might not even be known.  Thus, whilst the Compensation Act preserved common law remedies and contained provisions to avoid double recovery and other provisions for the recovery of compensation paid from an offender who caused the compensable injury, it established a scheme under which an amount equal to the amount of compensation awarded under the Act was payable by a known and solvent entity, the Territory.  

57                  The Act in its definition of “prescribed injury” covered much the same circumstances as those that give rise to causes of action at common law for damages for injuries tortiously inflicted and although the range of circumstances under which compensation might be awarded under the Act were in some instances wider than those under which an action might lie in common law, there was nevertheless a very substantial degree of overlap.   Moreover, it soon became established jurisprudence in the Territory that the assessment of compensation for the component of pain and suffering should be made according to common law principles for the assessment of damages.  That point was made by the majority in the Full Court in the present case at [10], citing the judgment of Kelly J in Re Criminal Injuries Compensation Ordinance 1983 (1984) 58 ACTR 17, a case decided not long after the scheme was introduced in the Territory.   In concluding that common law principles should be followed, Kelly J relied upon earlier authority in the Supreme Court of South Australia concerning legislation similar to the Compensation Act.

58                  Although much was made in argument by counsel for the appellant of the various matters that the Court considering an application for compensation under the Act was required to take into account, these do not alter the essential character of the legislation as that of a scheme to provide compensation for victims of crime in circumstances where the common law might provide no practical remedy either because the offender was without relevant assets or because the offender might not even be identified.  

59                  The practical inadequacies of common law rights to damages for injuries inflicted by criminal acts have long been notorious.  Thus, in introducing the Criminal Injuries Compensation Act 1972 (Vic), one of the Acts that provided a model for the subsequent Territory legislation, the responsible Minister, the Hon A J Hunt said:

“I suppose lawyer members and any other members of this House know that in bygone days the fashion was to place a great deal of emphasis on the punishment meted out to an offender.  There was little thought of rehabilitation; there was even less thought for the victim of a crime.

In recent years, however, many civilized countries have come to realize that greater emphasis needs to be placed on the unfortunate victims of criminal attacks.   It is true that the victim has a common law right to sue the offender, but often that right is an empty one, because the offender is a man of straw.

A person may be maimed for life and left with little or no opportunity of pursuing his past trade.   He may be killed as the result of a crime, leaving dependants without income.   The issue is whether the State has any responsibility to assist in these cases.   The Government believes it has.”

- Victoria, Legislative Council, Debates, 5 December 1972, p. 2848

60                  The same point was made in 1983 by the Premier of Victoria, Mr John Cain, when introducing an amendment to the Victorian Act.   He observed that before the 1972 Act was passed:

“The injured could look only to the offender for compensation and usually action taken in that regard proved a futile course.”

- Victoria, Legislative Assembly, Debates, 8 November 1983, p. 1614

61                  These observations, which do not of course relate directly to the Territory legislation, reflect the well known deficiencies in the legal system in its application to victims of crime that underlie the Compensation Act and other similar legislation, and which it was the object of the legislatures to remedy.  

62                  When legislation has the object of remedying deficiencies of this nature in the legal system, whilst at the same time preserving common law rights, it is not easy to see how such legislation can be said to be inherently defeasible.  On the contrary, it might be presumed that the legislation is intended to be in the nature of a permanent reform of the law and thus that the rights given under it are not inherently defeasible but that the continuing common law rights and the new rights given under the scheme are to walk hand in hand.  Moreover, the historical position of the Territory scheme as one of many introduced in Australia from 1967 onwards suggests permanence on the legal landscape rather than something inherently defeasible.

63                  The circumstance that this and other schemes of a similar nature have subsequently been changed in character does not point unequivocally to the conclusion that the rights existing under the schemes are inherently defeasible. All Acts are susceptible to modification, but that is not the point. The Compensation Act needs to be considered in the light of its terms and objects at the time of its enactment, not retrospectively in the light of what might later be seen to be better or more affordable policy.   Also, one must not lose sight of the fact that on no view is it being suggested that the rights conferred by legislation of this nature exist forever – it is not contended that the Act can never be changed and the rights never abolished;  the contention is that the present changes, insofar as they impact upon the respondents to this appeal who had already made application for compensation, effected an acquisition by the Territory of their property on otherwise than just terms.

64                  Counsel for the appellant and the Solicitor - General for the Commonwealth both placed particular emphasis upon the circumstance that the scheme was discretionary in that there was, they submitted, no obligation to make an award of compensation, even if all the pre‑conditions to the making of such an award were met.   They noted, too, that conditions might be imposed and that the award might be made subject to conditions concerning disposal or apportionment.   It was suggested also that a claimant would have no way of knowing in advance how much he or she would receive.  

65                  These submissions must be considered, however, in the light of the circumstance that the discretions and other factors to be taken into account in the determination of an application for compensation according to law, all had to be exercised in accordance with law; that is to say, in accordance with general legal principles and having regard to the terms, scope and objects of the Compensation Act.  Given that in the Territory awards of compensation under this legislation were assessed by reference to general common law principles for the assessment of damages, and given the “special damages” nature of the other two of the three components of an award, the prediction of the total amount would (subject to the statutory maximum) be no more difficult than the prediction of the amount of award of damages in a common law action in respect of the same injuries and arising out of the same event.  

66                  It is true, as the counsel for the appellant and the Solicitor - General submitted, that the benefit of compensation under the scheme is in a sense “gratuitous” in that it is a liability that the Territory has assumed, but, given the scheme’s relationship to common law rights it can hardly be seen as a gift.  Nor, to my mind, does the circumstance that the statutory scheme provides for a limit on the monetary amount of compensation that may be awarded point to any inherent defeasibility of the rights given under it.

67                  The fact that s 18 of the Compensation Act conferred upon the Court power to vary an award on the application made by the Government Solicitor or by the person in whose favour an award was made by increasing or reducing the amount of the compensation awarded was relied upon by the appellant but that does not, in my view, point to the right in question being inherently defeasible.  Section 18 must be read in conjunction with s 13, which empowers the Court to make an award of compensation subject to conditions which may include conditions as to the disposal of any amount to be paid and to the holding of any amount to be paid on trust.   It should also be read in the light of the power under s 5(2) to award compensation to persons responsible for the maintenance of a victim.   And it is necessary as well to bear in mind the matters to which, by virtue of s 18(2), the Court must have regard in considering an application to vary.  These include new evidence, the receipt of amounts paid or payable to the person in whose favour the award was made in respect of the prescribed injury and any change in the economic circumstances of the person that has occurred since the date on which the award was made.   This being the context, it is apparent that s 18 and the sections associated with it were an attempt to overcome one of the criticisms frequently made about the common law “once and for all” approach to the assessment of damages in cases of personal injury.   Viewed in this light, the circumstance that an award may be increased or decreased suggests not that the relevant right is inherently defeasible but, rather to the contrary, that it is a right of a permanent character and at least not inherently defeasible. 

68                  In my opinion, despite the discretionary nature of the scheme, the rights held by the respondents were neither ephemeral or prone to ready variation.  The right held by each respondent was a stable and established right to make an application for compensation under the Act and to have that application considered according to law.  The right was exclusive to each of the respondents and, while not transferable, was of real value.  Whether that right amounted to property for the purposes of s 23 is another question.

69                  I have already referred to what I see as the centrally important way in which the right in question here interacts with common law rights. In Peverill, Mason CJ, Deane and Gaudron JJ noted that the entitlements there in question were not “based on antecedent property rights recognised by the general law” and as such they were rights of a kind that “as a general rule” were inherently susceptible of variation, especially in the case of welfare benefits.  Here, although I consider it would be going too far to say that the right “based on” the existence of a common law cause of action for damages for injuries tortiously inflicted (unquestionably “property” for the purposes of s 51(xxxi) even if of no practical value) and although the right may extend more broadly than common law rights, at its core it is closely related to those rights.  This is particularly so where the statutory right provides real compensation for pain and suffering resulting from a prescribed injury.  In such a case, and generally speaking, the statutory right exists and is of real value where the common law would provide a cause of action and where the common law would hold that a plaintiff was entitled to a fair and reasonable amount to compensate her or him for the injury suffered and yet where, if the defendant was a person of straw, the common law would be powerless to see that its right had any practical value for the victim.  A statutory right of this character is far removed in content and durability from mere “statutory entitlements to receive payments from consolidated revenue not based on antecedent proprietary rights recognised by the general law”:  compare Mason CJ, Deane and Gaudron J in Peverill at 237; in Georgiadis at 307.

70                  Similarly, the statutory right in question here can be seen, at its core, to arise in circumstances where there is very likely to be a recognised legal relationship – ultimately that of victim and tortfeasor – giving rise to a like right, albeit often a right of little or no practical value, namely the right to be awarded compensation at common law according to the principles of the common law:  compare Georgiadis at 305-6 per Mason CJ, Deane and Gaudron JJ.

71                  The relationship that I have sought to explain is illustrated by the facts of the case to which I referred earlier in a different context,  Re Criminal Injuries Compensation Ordinance 1983, where a seriously injured victim of rapes and other crimes was awarded what was then a substantial sum for pain and suffering.  That case also underlies the fact that whilst compensation for pain and suffering in some instances may be in respect of relatively minor injuries, the Act covers (subject to the statutory limit) very serious injury and loss.  To the extent that it does so, and for the purposes of determining whether the right in question is inherently defeasible, it is not easily equated with “welfare benefits” which, though no doubt also important to the recipients, are individually small in size.

72                  The notion of a statutory right which has “no basis in the general law” and which is thus, ordinarily at least, inherently susceptible of variation or extinction is not a description that applies to a right, such as that in question here, which in its essence provides an effective practical remedy which the general law, operating in the same circumstances, may well be unable to provide.

73                  For these reasons, I would distinguish Peverill from the present case and conclude that the respondents’ interests are not outside the protection of the guarantee either by virtue of their source in statute or by virtue of any inherent defeasibility of their nature.

74                  Having reached this conclusion, little remains in the way of a conclusion that the respondents’ rights (assuming for the moment that they constitute ‘property’) were acquired by the Territory by operation of s 16(2). Although the Amending Act did not purport to remove the right of a person who suffered a “prescribed injury” to apply for compensation under the Act, and to have that application dealt with according to law, and only purported to withdraw power to make an award for pain and suffering, it does not follow that because there remained a right enforceable by action the law was not proscribed by s 51(xxxi):  see Smith v ANL at [7] per Gleeson CJ; [21] – [22] per Gaudron and Gummow JJ; [90] per Kirby J; Callinan J at [194]; Hayne J at [129] to the contrary.  There is in fact a direct financial gain to the Territory, measured by the reduction of the liability to make payment to the respondents of a component for pain and suffering, and this constitutes an ‘acquisition’:  see Mutual Pools & Staff Pty Ltd v The Commonwealth (1993) 179 CLR 155 at 173 per Mason CJ, 176 per Brennan J, 185 per Deane and Gaudron JJ, 222 – 223 per McHugh J (Dawson and Toohey JJ to the contrary at 195); Georgiadis at 305 per Mason CJ, Deane and Gaudron J; Commonwealth v Mewett at 503 – 504; 530 – 534; 556 – 558; WMC Resources at [17] per Brennan CJ; [56] per Toohey J, [82] per Gaudron J; Smith v ANL at [20] per Gaudron and Gummow JJ.

75                  Having concluded that there has been a relevant acquisition, it is necessary to consider whether the subject of the acquisition is property.

Are the respondents’ interests “property” for the purposes of sECTION 23?

76                  It is well-established that the word ‘property’, in its context in s 51(xxxi), must be construed broadly:  see Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 285 per Rich J, 290 per Starke J, and 295 per McTiernan J; Mutual Pools at 172 per Mason CJ, 184 per Deane and Gaudron JJ and the cases cited (at footnotes 49 and 86 – 88).  As these authorities show, “property” in this context includes every species of valuable right and interest, including real and personal property, incorporeal hereditaments, and choses in action.

77                  But the appellant submitted that s 16(2) of the Amending Act extinguished what was merely “an opportunity to obtain a gratuitous benefit” and that applicants for criminal injuries compensation under the Compensation Act did not have any chose in action or other form of incorporeal hereditament before an award was made.  The appellant pointed to ss 5, 7, 13, 15, 18, 27, 29, 30(3), 31, 32 and 34 of the Compensation Act as supporting the conclusion that the Court, in determining an application for compensation under the Compensation Act, did not adjudicate upon an existing property right. 

78                  Before proceeding I should deal with the appellant’s argument that the respondents’ statutory rights were not based on antecedent property rights recognised by the general law, and therefore were of the same nature as the rights considered by the High Court in Peverill, a point that I have already discussed in a different context.  Although the appellant relies on the passage from the joint judgment in Peverill extracted above at [27] in support of the submission that the respondents’ rights are not “property”,  it is clear that their Honours were in that passage considering whether the retrospective reduction in the Medicare benefit effected an acquisition of property.  It must be kept in mind that their Honours accepted that the Medicare benefit was property (at 235), but held that it did not follow that the legislative substitution of another and less valuable statutory right to receive payment brought about an acquisition.  see also Dawson J at 249; Toohey J at 256; McHugh J at 263, 265. 

79                  In his well known speech in National Provincial Bank Ltd v Ainsworth [1965] AC 1175, at 1247-1248, Lord Wilberforce said:

“Before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.”

80                  That passage has been cited with approval on many occasions since, including by Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 342-343; and by Callinan J in Smith v ANL at [190].

81                  What, then of the respondents right to apply under the Compensation Act, and to have that application, including a component for pain and suffering, determined according to law? That right is definable, identifiable by third parties and stable.  As with common law choses in action, the value of the right lies in the respondents’ ability in the exercise of the right to invoke the jurisdiction of a court of law and to prosecute their claims: see Kirby J in Smith v ANL at [90].  The fact that the value of the compensation awarded might not be great, or that no compensation might be awarded at all, is not a reason for holding that the interest held was not of a proprietary nature: see Callinan J in Smith v ANL at [198].

82                  The fact that s 31 made unassignable any compensation paid or payable to the respondents does not necessitate a conclusion that the right in issue here was not property for the purposes of s 51(xxxi).  Rights that are themselves unassignable have been recognised as property for the purposes of s 51(xxxi).  It has recently been said that all choses in action recognised by law or equity are property for the purposes of s 51(xxxi):  Smith v ANL at [8], [20], [80].  And yet, historically, a right of action in tort was regarded as a “bare” right of action, unassignable, and not property:  see Meagher, Gummow and Lehane, Equity Doctrines and Remedies (3^rd ed) at [695]; O R Marshall, The Assignments of Choses in Action, 1950, Chapter II; J G Starke, Assignments of Choses in Action in Australia, 1972 at [87].  Another example is provided by Dr Peverill’s right to lodge a claim for Medicare benefits, which was held to be property for the purposes of s 51(xxxi), even though it was not assignable by him (by operation of s 20A(5) of the Health Insurance Act:  see Peverill at 240).

83                  There are other authorities that support the conclusion that assignability is not an essential feature of ‘property’ as that term is comprehended in the context of s 51(xxxi).  In Australian Capital Television v Commonwealth (1992) 177 CLR 106, the High Court considered by the appellant’s argument that the introduction by statute of the requirement of "free time" for the broadcasting of "election broadcasts" amounted to an acquisition of property otherwise than on just terms. The property said to have been acquired was the time taken up by the free time broadcasts that would otherwise have been utilised by the broadcasters.  The right was unassignable.  The broadcaster’s argument failed.  Only Brennan J and Dawson J specifically considered the argument that the law offended s 51(xxxi) (McHugh J agreeing with Brennan J), and at [29] Brennan J said, after citing Lord Wilberforce’s observation in Ainsworth:

“Although property is generally assignable, that is not universally so for, as Isaacs J said in Commissioner of Stamp Duties (N.S.W.) v Yeend:

"(a)ssignability is a consequence, not a test" of a proprietary right…

Assignability may therefore be denied to what is, by other tests, properly found to be property. Nonetheless, the want of assignability of a right is a factor tending against the characterization of a right as property.”

84                  Brennan J went on to refer to the judgment of Mason J in Meneling Station  in which Mason J said (at 342-343):

“Assignability is not in all circumstances an essential characteristic of a right of property. By statute some forms of property are expressed to be inalienable. Nonetheless, it is generally correct to say, as Lord Wilberforce said, that a proprietary right must be 'capable in its nature of assumption by third parties’.”

85                  Similarly, in Georgiadis Brennan J referred to the judgment of the Court of Appeal in Curtis v Wilcox [1948] 2 KB 474, where it was held that a wife’s right of action against her husband for an ante-nuptial tort (which was assumed to be unassignable) was part of her ‘separate property’ within the meaning of the Married Women’ Property Act 1882.  His Honour said (at 311):

“Although such a cause of action is not assignable, their Lordships rejected the argument that assignability is the test of whether a claim in negligence was a chose in action … and, in my respectful opinion, rightly so.  It is not by reason of its nature that such a claim is not assignable; it is for reasons of public policy that the courts have held that such a claim is not assignable, thereby avoiding the evils of champerty.  And, as Mason J pointed out in R v Toohey; Ex parte Meneling Station Pty. Ltd:  "Assignability is not in all circumstances an essential characteristic of a right of property.  It needs no extension of the meaning of ‘property’ in s 51(xxxi) to comprehend a chose in action for damages for negligence causing personal injury.  That paragraph, which is construed liberally as befits a constitutional guarantee of just terms, protects common law choses in action which are vested in an individual.”

86                  Thus, the fact that a right is not assignable does not necessarily mean that it is not a proprietary right. Assignability is not necessarily determinative of the essential nature of the thing. The test is whether it is by its nature capable of assumption by third parties.

87                  It is therefore relevant to ask whether the statutory incapacity of assignment of compensation paid or payable provided for by s 31 illuminates the essential nature of the statutory right to compensation in the sense that it can be said that “by reason its nature” the right is not assignable or whether it is the case that non-assignability does not deprive the right of the character it would otherwise have.

88                  The answer to this question becomes clear when the statutory context in which the assignment is dealt with is examined. Section 31 made comprehensive provision for the protection in the hands of the person to whom it was “paid or payable” by excluding attachment (other than under a Commonwealth Act), charge, execution or set-off. In practical terms the evident aim was to protect the award of compensation so as to ensure that it benefited the claimant.  Similar provisions will be found in workers compensation legislation (The provision also emphasises the importance the legislature attached to the compensation payable under the Act).

89                  If it is accepted that non-assignability of the proceeds does not necessarily deprive a right of its characteristic as property, and that by statute some forms of right that are property are expressed to be inalienable, the inquiry must become whether at least as a general proposition the right in question is capable in its nature of assumption by third parties. Here, there was nothing in the essential nature in the claim for crimes compensation that made it incapable of assumption by third parties; rather, there are public policy reasons that protected the fruits of the right by preventing not only assignability but, perhaps more illuminatingly, set–off, attachment and execution.  What the legislature created is a right that has the character of a statutory chose in action.  The circumstance that the compensation “paid or payable” was subject to restrictions in respect of assignment, execution, set-off and attachment does not alter the essential ‘chose-in-action-like’ character of the right.

90                  For these reasons, I consider that the fact that the actual and potential fruits of the right in question was not assignable did not affect the essential characteristics of the right.  It is, I consider, a valuable right in the nature of property for the purposes of s 51(xxxi).  Indeed, as the earlier discussion points out, the right may be far more valuable than then the common law rights – themselves unquestionably property – to which the same criminal acts will, generally at least, give rise.

A Law with respect to

91                  I now turn to the submission made by the Solicitor-General that, if s 16(2) did effect an acquisition of property, it was nevertheless not a law “with respect to” the acquisition of property within the meaning of s 23 of the Self-Government Act. 

92                  There is a “strand” in some of the decisions about s 51(xxxi) that a law will not be a law with respect to the acquisition of property on just terms unless it has a distinct character in that regard:  see Australian Tape Manufacturers v The Commonwealth (1993) 176 CLR 480 at 510 per Mason CJ, Brennan, Deane and Gaudron JJ; Mutual Pools at 189-190 per Deane and Gaudron JJ; Peverill at 237 per Mason CJ, Deane and Gaudron JJ;  Georgiadis at 308 per Mason CJ, Deane and Gaudron JJ; Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 161 per Toohey and McHugh JJ;. 

93                  There are two bases on which a Commonwealth law that effects an acquisition of property might escape characterisation as a law with respect to that acquisition.  The first, is if the law is enacted pursuant to a head of legislative power to which the condition in s 51(xxxi) does not attach:  see, for example, the reasons of McHugh J in WMC Resources at [125] – [134].  There is some uncertainty about the operation of this exception (at least where it is accepted that the law effects an ‘acquisition’ of ‘property’):  compare Newcrest Mining at 569 per Gaudron J; WMC Resources at [62] per Toohey J; [87] per Gaudron J; [237] point 4 per Kirby J.  In the present case there are of course no enumerated heads of power and s 23 of the Self-Government Act effects an abstraction of power from the general conferral under s 22.  This cannot however mean that, for example, the Territory’s centrally important power to make laws with respect to taxation is limited by s 23 in a way that the power of the Commonwealth Parliament would not be limited by the presence of s 51(xxxi).  The legislation in question in the present case however presents no such special features and cases such as Georgiadis and Smith v ANL point against any escape from characterisation as a law with respect to the acquisition of property

94                  The second basis is if a law can be characterised as one for the “adjustment of competing rights and interests as part of the general regulation of some subject matter or area of law”:  see Mutual Pools at 189 – 190 per Deane and Gaudron JJ;  and Mason CJ, Deane and Gaudron JJ in Peverill at 237 (text accompanying footnote 40) and Georgiadis at 306 (text accompanying footnote 27).  But if a law that cannot be so characterised effects an acquisition of property, that fact is capable of imparting to it the character of a law with respect to the acquisition of property.  This converse position is illustrated by the reasoning in WMC Resources.  Gaudron J said (at [87]):

“In my view, a law which effects an acquisition of property will only escape characterisation as a law with respect to the acquisition of property if it adjusts competing claims or interests as part of the general regulation of some subject matter or area of law or if it is ‘an incident of, or a means for enforcing, some general regulation of the conduct, rights, and obligations of citizens in relationships or areas which need to be regulated in the common interest’”

Her Honour concluded that the Consequential Provisions Act was not such a law, because it was “highly specific in its operation” and “in no sense a law effecting the general regulation of a subject matter or area of the law or incidental to the general regulation of conduct, rights or obligations.”.  Toohey J at [63], and Kirby J at [253] – [254] agreed that the Consequential Provisions Act was not one for the adjustment of competing claims in a relevant sense. 

95                  The characterisation of a Commonwealth Act under which property is acquired other than on just terms as a law “with respect to” such acquisition involves an evaluation of the features of the Act.  Where the property acquired under the legislation was created by prior federal legislation, the exercise of characterisation is substantially the same as that undertaken in order to determine whether statutory property rights are of a nature that can be subject to an ‘acquisition’ under s 51(xxxi):  see for example, Peverill at 237; WMC Resources at [253] – [254] per Kirby J; [134] per McHugh J.  It follows that where it has been established that a proprietary right, which has been created by statute where no property interest previously existed, is not inherently liable to modification or extinguishment, the ‘strand’ in the cases referred to provides no ground for saying that the law under which the property right is acquired is not a law with respect to the acquisition.  Thus, in Smith v ANL, Kirby J said (at [102]):

“… [O]nce a party has established that it has lost a valuable “property” right and that such loss is classified as an “acquisition” of such “property” under the impugned law, that party is well on the way to securing the characterisation of such law, or part of it, as one “with respect to” the acquisition of such property.”

See to the same effect Gleeson CJ at [3]; Gaudron and Gummow JJ at [43]; Callinan J at [180].

96                  Thus, for the same reasons that I have concluded that the rights that the applicants held under the Compensation Act were of such a character as to be the subject of acquisition under s 23, I also conclude that the law which effected the acquisition of those rights - s 16(2) of the Amending Act - was a law with respect to the acquisition. 

97                  I would therefore dismiss the appeal with costs.

Associate:

Dated:              24 June 2002

REASONS FOR JUDGMENT

SPENDER J:

98                  The question on this appeal is whether the Full Court of the Supreme Court of the Australian Capital Territory was right in holding that the retrospective extinguishment effected by s 16(2) of the Victims of Crime (Financial Assistance) (Amendment) Act 1999 (ACT) (“the Amending Act”) of the statutory right in each of the respondents to have their application for compensation for criminal injury, including a component for pain and suffering, determined under the Criminal Injuries Compensation Act 1983 (ACT) by the Court was within the power of the Legislative Assembly of the Australian Capital Territory, having regard to s 23(1)(a) of the Australian Capital Territory (Self-Government) Act 1988 (Cth), which denies power to the Legislative Assembly to make laws with respect to “the acquisition of property otherwise than on just terms”.

99                  The curial history of the applications by each of the respondents, the legislation and the submissions on this appeal are set out in the reasons for judgment of the Chief Justice, which I have had the advantage of reading.  I, too, would dismiss the appeal with costs for the reasons which the Chief Justice gives.  I wish to add a few further observations.

100               The rights in question on this appeal are “property”, in my opinion.  The fact that those rights are statutory does not defeat that conclusion.  Rights conferred by statute under the fatal accidents legislation and intellectual property rights, which are statutory in origin, are clearly proprietary rights; so too did the High Court hold with respect to the statutory rights in question in Commonwealth v Mewett (1997) 191 CLR 471.  Six judges of the High Court in Health Insurance Commission v Peverill (1994) 179 CLR 226 accepted that the right in Dr Peverill to payment under the Medicare Benefits Scheme was proprietary in nature.  The rights in question on this appeal, it seems to me, are a fortiori rights of property.

101               It is true that all rights of a proprietary kind created by legislation are able to be modified or extinguished by legislation, but the same is true of rights which owe their existence to the common law.  The possibility of legislative modification or extinguishment of a statutory right does not, in my opinion, determine that the modification or extinguishment by statute does not amount to an acquisition of property.  Here, in my opinion, the retrospective extinguishment of the right to claim compensation for pain and suffering by a victim of crime constitutes an acquisition of property.

102               I respectfully agree with the observations by Brennan CJ in Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at [17]:

“Where a law of the Commonwealth creates or authorises the creation of a right, a statutory modification or extinguishment of the right effects its acquisition if, but only if, it modifies or extinguishes a reciprocal liability to which the party acquiring the right was subject…”

103               In this case, there is, as the Chief Justice notes in his reasons at [75]:

“… a direct financial gain to the Territory, measured by the reduction of the liability to make payment to the respondents of a component for pain and suffering, and this constitutes an ‘acquisition’: see Mutual Pools at 173 per Mason CJ, 176 per Brennan J, 185 per Deane and Gaudron JJ, 222 – 223 per McHugh J (Dawson and Toohey JJ to the contrary at 195); Georgiadis at 305 per Mason CJ, Deane and Gaudron J; Commonwealth v Mewett at 503 – 504; 530 – 534; 556 – 558; WMC Resources at [17] per Brennan CJ; [56] per Toohey J, [82] per Gaudron J; Smith v ANL at [20] per Gaudron and Gummow JJ.”

104               Section 16(2) of the Amending Act does effect an acquisition of property on other than just terms.  It does this because of the retrospective effect of the subsection.  The notion that retrospective extinguishment or modification of rights (or indeed the retrospective creation of obligations) is offensive and truly inconsistent with the notion of the Rule of Law in this country has a pragmatic echo in the reference by Callinan J in Smith v ANL [2000] 204 CLR 493 at [188] to:

“… the underlying assumption that the Commonwealth [or in this case the Territory] will neither arbitrarily nor otherwise generally repudiate its obligations, however created, without compensation…”

105               Finally, s 16(2) is properly to be characterised as a law with respect to the acquisition of property.  The acquisition of property that s 16(2) effects is not merely incidental to some other object.  The observations by Gaudron J in WMC Resources at [87] are apposite:

“In my view, a law which effects an acquisition of property will only escape characterisation as a law with respect to the acquisition of property if it adjusts competing claims or interests as part of the general regulation of some subject matter or area of law or if it is ‘an incident of, or a means for enforcing, some general regulation of the conduct, rights, and obligations of citizens in relationships or areas which need to be regulated in the common interest.’”

106               It follows that I am in respectful disagreement with the view of Finn J that the Territory’s assumption of responsibility to pay compensation to victims of crime was legislation which could be revisited and reformed from time to time without the amending (and, importantly, retrospective) legislation attracting the character of a law with respect to property.

Associate:

Dated:              24 June 2002

ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT

OF THE AUSTRALIAN CAPITAL TERRITORY

REASONS FOR JUDGMENT

HIGGINS J:

107               Each of the respondents is an applicant for criminal injuries compensation pursuant to the provisions of the Criminal Injuries Compensation Act 1983 (ACT) (the “CIC Act”), as they were prior to the enactment of the Victims of Crime (Financial Assistance) (Amendment) Act 1999 (ACT) (the “Amending Act”).  The former was, in its original form, an Ordinance made by the then Governor-General pursuant to the power to make laws for the Australian Capital Territory conferred by the Seat of Government (Administration) Act 1910 (Cth).  The ACT Legislative Assembly substantially amended that Act with effect, relevantly for these proceedings, from 24 December 1999, pursuant to the power to make laws for the Territory conferred by the Australian Capital Territory (Self-Government) Act 1988 (Cth) (the “Self-Government Act”).

108               The intended effect of those amendments, relevantly for present purposes, was to abolish, subject to certain exceptions inapplicable to the present respondents, any entitlement to compensation from the Territory for pain and suffering sustained by them as victims of crime.

109               The respondents contended, successfully in the Court below, that the amendments were invalid insofar as they purported to remove an entitlement to an award of compensation for pain and suffering from persons who, as at 24 December 1999, had suffered personal injury as victims of crime even if they had already made claims for compensation.  It was accepted that each of the respondents, but for the provisions of the amending legislation, would have been entitled to an award of compensation for pain and suffering pursuant to the claims they had then made.  Awards of compensation already made were not affected.

110               The issue for determination, both at first instance and on this appeal, is whether the Australian Capital Territory Legislative Assembly in passing legislation for the ACT, but not, of course, for the Jervis Bay Territory, which deprived the respondents of a substantial portion of the award of compensation to which they otherwise would have been entitled effected an “acquisition of property otherwise than on just terms”.

111               That question arises because, not only is the Commonwealth empowered to make laws with respect to the acquisition of property only upon just terms by virtue of s 51(xxxi) of the Constitution, but the Territory legislature, by virtue of s 23(1)(a) of the Self-Government Act, is forbidden from enacting any law for the acquisition of property otherwise than on just terms.

112               It is accepted by all parties that the same issues arise in respect of s 23(1)(a) as if the issue in question was to be determined by reference to s 51(xxxi) of the Constitution.  That concession might not be valid in all circumstances.

113               Each of the respondents has appealed against a primary decision of the then Registrar of the Supreme Court, made pursuant to the jurisdiction conferred upon him by the CIC Act, as amended and renamed by the Amending Act, refusing to award compensation for pain and suffering in obedience to the terms of s 16(2)(a) of the Amending Act.  That appeal was decided on 15 May 2001.  It was determined 2 : 1 in favour of the present respondents (Miles CJ, Gray J; Crispin J dissenting).

The legislation

114               The legislation, pursuant to which the respondents sought compensation, conferred upon a victim of crime a right to seek and obtain compensation from the Territory for certain injuries.  “Injury”, per s 2(1) of the CIC Act, means “any physical or mental injury” to the person (including various prosthetics).  An injury is a “prescribed injury” eligible for an award of compensation, if it resulted from the “criminal conduct” of a person.  “Criminal conduct” is defined as “an act or omission that constitutes, or is an element of, an offence”.  A prescribed injury also includes an injury sustained whilst the injured person was aiding a police officer in arresting a person for committing, or being about to commit, an offence against a law in force in the Territory.

115               Although “criminal conduct” is conclusively presumed upon the conviction of a person for such an offence (s 3), a claimant will succeed if such a criminal act would have been committed but for the fact the actor was legally incapable of forming a criminal intent (s 4).

116               The jurisdiction to award compensation is conferred on “the court”.  That is defined for certain purposes (that is, where there has been no information laid or indictment presented), so as to include the Registrar of the Supreme Court (s 11(3)).  Otherwise the original trial court has jurisdiction to award compensation in respect of the criminal injury.

117               Subject to the prescribed limit ($50,000) compensation could be awarded for death or injury to the victim of criminal conduct (s 5) (or injury to dependants or carers) (see ss 5(1)(b) and 5(2)(a) and (b)).  The amount of compensation was, subject to the maximum limit, for a person such as these respondents, the sum of:

“s 6(1)(a)        the expense reasonably incurred by him or her as a consequence of the injury;

(b)               the pecuniary loss suffered by him or her as a consequence of total or partial incapacity for work due to the injury; and

(c)               an amount that will reasonably compensate him or her for pain or suffering resulting from the injury.”

118               Subject to the prescribed limit, the compensation which might be awarded mirrors the common law damages which might have been awarded against a tortfeasor inflicting the relevant injury.  (see Re Criminal Injuries Compensation Ordinance 1983 (1984) 58 ACTR 17; Re Award Under Criminal Injuries Compensation Ordinance; Ex parte Baker (1987) 71 ACTR 44).

119               Consistently with that approach the claimant must satisfy the civil onus of proof (s 8).

120               Section 9 excludes claims for injury or death arising out of the use of a motor vehicle (s 9(1)(a)) and maintenance of a child born as a consequence of a criminal act (s 9(1)(b)).

121               Section 15 sets out “considerations relevant to the determination of compensation”,  The “court” may decline to make any award or award less than otherwise would be appropriate compensation by reference to:

“s 15(1)           any behaviour, condition, attitude or disposition of the applicant or the person who sustained the relevant prescribed injury … which directly or indirectly contributed to that injury...”

122               Thus, though the general approach of the “court” is the same in assessing compensation, as the award of damages against a tortfeasor (subject to the provisions of s 15) the discretion to reduce or refuse compensation is broader than the determination of contributory negligence under apportionment legislation.  (see Re Criminal Injuries Compensation Ordinance 1983 and Australian Capital Territory v Bullock [1995] ACTSC 63 (28 June 1995)). 

123               Section 20 provides a further ground for refusal of an award not available to a tortfeasor at common law (or any substituted defendant under relevant legislation):

“Where the Registrar of the Supreme Court has power under subsection 11(3) to determine an application, the Registrar of the Supreme Court may, in his or her discretion, refuse to make an award of compensation to the applicant if he or she is satisfied that the criminal conduct as a result of which the prescribed injury was sustained was not reported to a police officer.”

124               If the Supreme Court or the Magistrates Court is seized of the application it is because there has been a prosecution (whether successful or not) and police already have, formally or otherwise, a report of the matter.  There is some similarity here with the need to give notice to a Nominal Defendant of intention to claim so as to permit the early investigation of the facts relied on to support the claim.

125               There is an appeal from any award or refusal of an award, in respect of the Magistrates Court or the Supreme Court, as with any other matter subject to their jurisdiction.  In the case of the Registrar, there is an appeal to the Supreme Court “by way of re-hearing” (s 28).

126               Section 29, as with Workers’ Compensation, requires a refund to the Territory of so much of the award as is covered by an award of damages or compensation otherwise obtained (for example, from the perpetrator).

127               Section 29A permits the Territory to recover reimbursement of any sum awarded to a claimant from a convicted offender who has not been otherwise sued, much as a negligent, uninsured motorist can be called upon by the Nominal Defendant to indemnify him or her for an award of damages made to an injured party.  If yet another person (for example, a co-offender) becomes liable, pursuant to s 29A or s 29(1), to pay damages or compensation, an offender who has already contributed will be entitled to a refund (or release) to that extent by the Territory.

128               As may be expected, the award, if any, is not enforceable against the Territory by way of attachment but, by virtue of s 30(3):

“On receiving a certified copy of an order transmitted under subsection (1) or (2), the Government Solicitor shall make arrangements for payment of compensation in accordance with the award.”

129               There is no discretion vested in the Executive to refuse to make payment under the award.  Nor is there any express sanction imposed on the Government Solicitor if he or she is unable to “make arrangements for payment”.  Nevertheless, there is a clear obligation on the Executive Government of the Territory to satisfy the award.  That process is consistent with s 13 of the Crown Proceedings Act 1992 (ACT) (Enforcement of judgments against the Crown).

The 1999 amendments

130               The Victims of Crime (Financial Assistance) Act 1983 (ACT) (the “Amended Act”) is re-named.  It no longer includes in its title, the word “Compensation” but, rather, the words “Financial Assistance”.  That change came into effect on 24 December 1999.  The Amending Act not only altered the title of the previous legislation, it entirely replaced its content.  Much of it is, however, but little different.

131               Section 10 of the Amending Act is different from the original Act (the CIC Act).  It relates to the award of “financial assistance”.  It restricts that “assistance” to the sum of:

“(1)(a)the expense reasonably incurred by or on behalf of the victim as a consequence of the injury;

(b)   the pecuniary loss suffered by the victim as a consequence of total or partial incapacity for work due to the injury;

(c)    the expense incurred in making the application for financial assistance, other than by way of fees paid to a legal practitioner;

(d)   unless paragraph (e) or (f) applies – special assistance in an amount of $30,000;

(e)    if the victim is a police officer, ambulance officer or firefighter, and the criminal injury was sustained in the course of the exercise of his or her functions as a police officer, ambulance officer or firefighter – special assistance by way of reasonable compensation for pain and suffering in an amount of no more than $50,000;

(f)     if the criminal injury was sustained as a result of a violent crime consisting of an offence against sections 92A to 92L of the Crimes Act 1900 (Part 3A  ‘Sexual Offences’) – special assistance by way of reasonable compensation for pain and suffering in an amount of no more than $50,000.

(2)  Special assistance for a primary victim may only be awarded by the court under paragraph (1)(d) if –

(a)   the criminal injury is an extremely serious injury; and

(b)   the victim has obtained such assistance from the victims services scheme as is reasonably available, unless the person is physically incapable of benefiting from the scheme.”

132               Section 11 of the Amending Act defines an “extremely serious injury”.  It amounts, at least, to that which would be otherwise understood as “grievous bodily harm”.

133               The new legislation, therefore, unless the victim of the crime was one of the favoured categories of persons identified in s 10(1)(e) and (f) of the Amending Act, restricts the award of “financial assistance”, not only by reference to a cap on the total, but also by deleting any award for pain and suffering, unless s 10(2) of the Amending Act applies.  Even then, the cap on the award is limited to $30,000 rather than the previous $50,000.

134               It is accepted that, but for these amendments, the respondents were entitled, as at the date the Amending Act took effect, to have their then pending applications for compensation determined and to receive an award including a component, subject to the cap of $50,000, for pain and suffering.  They would each, it is accepted, have been entitled to a substantial sum for the personal injury they had suffered.

135               That is the alteration in their rights which the respondents claim is forbidden by s 23(1) of the Self-Government Act.  It is accepted, also, that the ACT Legislative Assembly has no power to make laws inconsistent with the Self-Government Act.

136               That the intention of the Amending Act was to restrict the rights to compensation of all potential claimants, even if their applications for an award were then pending, is not in doubt.

137               Section 16 of the Amending Act continued the provisions of the prior CIC Act in relation to “an undetermined application … made after 23 June 1998”.  However, that transitional saving was subject to s 16(2).  That subsection expressly provides that any award made after the commencement of the Amending Act:

“. . . may not include provision for any compensation for pain and suffering”.

The decision of the Supreme Court

138               Due to the significance of the issue raised by the respondents, the appeal against the Registrar’s decision in each of their matters was heard by a Court of three judges pursuant to s 13 of the Supreme Court Act 1933 (ACT) (see Frank v Australian Capital Territory [2001] ACTSC 42; 161 FLR 262).

139               Miles CJ and Gray J found for the present respondents.  The first step in their reasoning was that the interest each of the then appellants had in an award of compensation was “property” (at [27]):

“Whilst there may be room for argument whether the interest of any of the appellants [present respondents] in receiving an award of compensation for pain and suffering was a chose in action, within the proper meaning of that term, that interest was a substantive right to have the application for an award of compensation, including such a component, heard and determined.  Accordingly it must be recognised that the interest of each appellant was not merely a hope or expectation of receiving an award including a component for pain and suffering, but a right to have a decision made on the application for such an award which application was pending before the Registrar at the time the [Amending Act] came into force.”

140               Their Honours dealt with the submission for the appellant that the rights conferred upon the respondents were similar in kind to the rights withdrawn in Health Insurance Commission v Peverill (1994) 179 CLR 226 (“Peverill”).  More of that decision further on.  Suffice to say that the High Court had therein determined that entitlement to a medical benefit rebate was “inherently susceptible of variation” (at 237).  Hence, a variation adverse to the claimant was not an “acquisition of property”, whatever the justice or otherwise of the terms of that variation.

141               However, the suggested analogy was rejected.  Their Honours regarded the considerations decisive in Peverill’s case as (at [30]):

“. . . not apt considerations having regard to the nature of the payment under the Compensation Act.  These payments are based on the notion of compensating victims of crime for the injury they have sustained.  That notion does not require a consideration of factors susceptible of change so as to raise an expectation that the level of benefits will change from time to time.  It is different from the position here where a variation is made by the legislature in respect of a very important aspect of the compensation scheme.  It is not a variation which would ordinarily be expected.”

142               The “inherent susceptibility” test so referred to does not mean that any right capable of legislative interference is “inherently susceptible of variation” within the meaning of Peverill’s case.  Common law rights to compensation for damages for negligence may be altered or abolished by a valid legislative act, but will not be capable of retrospective abolition by the Commonwealth (or Territory) Parliament without “just terms” in respect of persons who have acquired a vested right to damages under the previous law (see Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 (“Georgiadis”) and Commonwealth v Mewett (1997) 191 CLR 471 (“Mewett”)).

143               In the next paragraph, [31] (at 270), their Honours noted that the nature of the claim for compensation under the CIC Act was not one which bore “the character of a welfare benefit or a social security benefit.”.  Quite the contrary.  A victim of crime would usually have had an entitlement to compensation against the perpetrator (and perhaps others).  To that extent the compensation rights were “based on antecedent proprietary rights recognized by the general law.” (Peverill at 237).

144               That such rights of the respondents were “acquired” was, in their Honours’ view, evident, in that, by limiting the quantum of allowable claims, the appellant’s revenue resources were to that extent, co-relatively benefited.

145               Thus, their Honours held, it followed that, in acquiring the rights undoubtedly already vested, the appellant had exceeded the powers granted to it by the Commonwealth Parliament (even if, consistently with s 51(xxxi) of the Constitution, such powers could validly be conferred without that limitation). 

146               An argument that s 10(1)(e) and (f) of the Amending Act was contrary to the Disability Discrimination Act 1992 (Cth), was considered and rejected by all members of the Court.  It was not agitated before this Court.

147               Crispin J dissented on the question of the applicability of s 23(1) of the Self-Government Act.  His Honour considered that Peverill was, relevantly, indistinguishable.  The rights conferred by the CIC Act upon claimants were, in his Honour’s view, “inherently susceptible to variation”.  His Honour’s reasons for so concluding were expressed as follows (at [61]):

“. . . Welfare laws generally reflect the compassion of the community for those suffering loss or hardship.  They are based not upon antecedent proprietary rights of those to whom entitlements are given but upon the moral responsibility which a humane society accepts for those less fortunate.  The legislature is free to determine the extent to which public funds should be spent on welfare needs and the priorities that should be allocated to various social needs.  Furthermore, it is free to change its mind about such matters.  It is for this reason that interests created by regulatory schemes are inherently susceptible of variation.”

148               In his Honour’s opinion, therefore (at [63]):

“… The legislature may lawfully reduce such entitlements whether they relate to loss caused by natural disasters such as floods or to injuries caused by human acts.  In such cases the mere fact that a particular variation of the law involves a reduction in entitlement and is retrospective does not involve an acquisition of property.  Hence there is no basis upon which a statutory provision of this kind which has been properly enacted by a democratically elected government can be struck down as invalid.”

149               It should be noted that this litigation involves no challenge to the sovereignty of Parliament.  The question is whether the Territory Legislature has exceeded its constitutionally conferred powers. It does not become any the more (or less) entitled to exceed those powers because it has been democratically elected.

150               His Honour distinguished Esber v Commonwealth (1992) 174 CLR 430 (purported abolition of entitlement to redeem weekly compensation), to which the majority had referred, on the basis that, in that case, the legislation was interpreted so as to have only prospective effect.  It was unnecessary to determine whether the abolition of such rights retrospectively would have offended s 51(xxxi) of the Constitution.  Of course, that did not exhaust the relevance of that decision.  To apply the canon of construction against retrospectivity, it was necessary to conclude that the contrary interpretation would affect “any right privilege obligation or liability acquired accrued or incurred” (s 8 of the Acts Interpretation Act 1901 (Cth)).  That includes, but is not confined to, a vested right properly described as “property”.

151               Insofar as the right to compensation under the CIC Act may have been regarded as “property” so as to attract s 8 (supra), Crispin J observed that (at [65]):

“… entitlements to workers compensation may be seen as part of the package of rights which workers receive in return for the provision of services to their employer which in this instance was the Commonwealth.  Consequently, those entitled to apply for such benefits might reasonably have argued that they were based upon antecedent rights vis a vis the Commonwealth.  The same argument cannot be advanced in relation to payments of public moneys to people injured by the acts of third parties.”

The Appeal

152               The Territory, (supported by the Solicitor-General for the Commonwealth intervening), appealed to this Court by Notice dated 1 June 2001.

153               The contention for the appellant Territory was, in essence, that the minority decision should be preferred.  Mr Tracey QC, for the appellant, advanced a number of contentions:

·        That there was no property right vested in an applicant for compensation until an award had been made.

·        That contention was supported by reference to Peverill.

·        The right to seek an award was, like medical benefits, “inherently susceptible of variation”.  The nature of the right was submitted to be “welfare” and thus to be of a “gratuitous nature”.

·        Even though the right to apply for compensation was based on the criminal conduct of a person (or persons) who could, if sued, be liable in tort to the victim(s), that consideration did not overcome the effect of the prior contentions.

154               The Solicitor-General (Mr David Bennett QC), for the Commonwealth Attorney-General, supported these contentions.  He further pointed to the following matters:

·        The making of an award was “highly discretionary” (though so also was the entitlement of the employee in Mewett).

·        The right sought was “inherently speculative and, therefore, undefinable, and is also incapable of assignment.”.

·        Rights under the CIC Act might attract the protection of s 8 of the Acts Interpretation Act 1901 (or its Territory equivalent) as “a substantive right” without necessarily being defined as “property” for the purposes of s 51(xxxi) Constitution or s 23 of the Self-Government Act.

·        The right conferred on a claimant was both statutory AND “inherently susceptible to extinguishment or change”.  (That submission echoed a statement to similar effect in Georgiadis).

·        Though the right is an alternative to seeking damages against an offender under common law, it is “in the nature of a privilege or a grant from consolidated revenue”.

·        It is not relevant whether the variation to entitlements was one which would ordinarily be expected – the issue is whether, objectively, the level of benefits was necessarily the product of government policy and economic circumstances so as to be “inherently susceptible of change”.

155               In essence, Mr Bennett submitted that the extinguishment of a right to what in essence is a gratuity, being always liable to be withdrawn, is not “an acquisition” even though that  extinguishment benefits consolidated revenue.

156               Thus, the issue squarely raised is whether the rights created by the CIC Act were property rights, whose acquisition attracts the limitation of “just terms”, or mere gratuities analogous to the benefits considered in Peverill.

157               The respondents, unsurprisingly, adopted the former as the proper characterisation of the rights in question.

158               Mr Tilmouth QC for the respondents, Pinter and Fokas, submitted:

·        The fact that the right is statutory in origin does not prevent it from being characterised as a property right eligible for protection from unjust acquisition.

·        Nor is it ineligible because its value or existence remains to be defined.

(so it is with any claim for damages for negligence)

·        Nor is it ineligible because there was no antecedent right (for example, Commonwealth v WMC Resources (1998) 194 CLR 1)

·        Once an applicant had validly applied under the CIC Act he or she  had a present right to compensation for pain and suffering subject only to its assessment and the statutory cap.

159               Mr Tilmouth pointed also to a recent decision, Jenkins v Territory Insurance Office [2001] NTSC 92 (31 October 2001), to the effect that withdrawal of a right to obtain relief from government funds rather than from a tortfeasor who might, but for the legislative intervention, otherwise have been liable to the claimant was an “acquisition of property”.

160               Mr Everson, counsel for the respondent, Frank, supported these submissions.

161               The issue, therefore, is as to the nature and character of the rights vested in the respondents, if any, by the CIC Act.

Authorities previous to Peverill

162               Laws imposing monetary penalties, forfeiting contraband goods or other property or imposing taxation have not been regarded as falling within s 51(xxxi) of the Constitution.

163               It is sufficient in that respect to point to Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 (“Mutual Pools”).  In that case sales tax paid to the Commonwealth pursuant to an invalid law was the subject of legislation purporting to extinguish any liability, in whole or part, of the Commonwealth to refund the tax so collected.  That law was, in like manner, regarded as falling outside of s 51(xxxi).  It was characterised as a law with respect to taxation not the acquisition of property (see examples referred to by Mason CJ at 170).

164               There is, however, one distinction to be observed between s 51(xxxi) and s 23(1)(a) of the Self-Government Act.  Some Commonwealth heads of power, such as s 51(xxxiii) (acquisition of State railways), “stand outside” s 51(xxxi) by virtue of the terms in which those powers are conferred.  There are no specific powers conferred on the Territory Parliament.  It merely has its otherwise sovereign powers limited and qualified by certain exclusions.  The power to acquire property is a qualified power.  It is not necessary in the present matter to consider the effect of that difference.

165               Laws of the Territory imposing fines, forfeiting proceeds of crime, and imposing rates and taxes will fall outside s 23(1)(a) just as they fall outside s 51(xxxi).  But is that because there is no acquisition of property or because it is not the kind of acquisition of property to which an expectation of “just terms” can be attached?

166               In Mutual Pools, Mason CJ expressed the view that the law in question was a law with respect to taxation, not the acquisition of property, but even if it was only supported by s 61 (the executive power) and s 51(xxxix) (the incidental power), it was not constrained by s 51(xxxi) (at [175]):

“. . . in this case the tax has been passed on to the pool owners, that is, the pool owners have borne the burden of the tax, they too have an interest in the refund of the taxes collected.  Thus, notwithstanding the Commonwealth’s contractual arrangements with the pool builder [to refund the taxes paid if subsequently found to have been unlawfully collected], the Refund Act [Swimming Pools Tax Refund Act 1992 (Cth)] is in essence a legislative measure directed to achieving a genuine resolution of the competing claims of pool builders, pool owners and the Commonwealth in relation to the refund of moneys in respect of the tax that was invalidly levied.  As such, for the reasons discussed above, extinguishment of the cause of action [under the agreement] does not constitute an acquisition of property within the meaning of s. 51(xxxi), even if the Refund Act is to be supported by reference to ss. 61 and 51(xxxix) in relation to the whole or some of its provisions.”

167               That passage appears to conflate the notion of “just terms” with the notion of “acquisition of property”.  That is, that though the contractual right, a chose in action, is extinguished, it was not unjust to do so in the circumstances, either because taxation is necessarily confiscatory or because the resolution of competing claims was not unjust in the circumstances.  It has often been emphasised that “acquisition of property otherwise than on just terms” is a composite concept.

168               Brennan J focussed on the “sole or dominant character” of the Refund Act.  His Honour considered (at [181]):

“that the extinction of the plaintiff’s claim without the provision of just terms is supportable as an exercise of power under s. 51(ii) or under the combined operation of s. 61 and s. 51(xxxix) or under both but not as an exercise of power under s. 51(xxxi).  Thus the guarantee of just terms is not attracted . . .”

169               Deane and Gaudron JJ considered the Refund Act to be a law with respect to taxation supportable under s 51(ii).  Further, that s 51(xxxi) indirectly reduces the content of other grants of legislative power contained in s 51.  However (at 186-7):

“There are two related matters to be noted with respect to s. 51(xxxi)’s operation to confine the content of other grants of legislative power in s. 51.  The first is that that operation, being merely indirect as a matter of construction, is necessarily subject to any contrary intention either expressed or made manifest by the words or content of those other grants of power.  In particular, some laws which are expressly authorized under other grants of legislative power necessarily encompass acquisition of property unrestricted by any requirement of the quid pro quo of just terms.  Laws “with respect to . . . Taxation” are an example.  The second is that s. 51(xxxi) is, first and foremost, a grant of power, and only secondarily a guarantee of “just terms” . . . acquisitions to which the grant of legislative power is directed are acquisitions of a kind which permit of just terms.  There are some kinds of acquisition which are of their nature antithetical to the notion of just terms but which were plainly intended to be permissible under laws made pursuant to one or more of the grants of power contained in s. 51 … [for example] compulsory forfeiture … for breach of some general rule of conduct . . .”

170               Further examples are detailed at 187-188.  It is difficult to see how s 23(1)(a) of the Self-Government Act could have a different effect merely because the legislative powers which it qualifies are not enumerated.  The essence of the test adopted by Deane and Gaudron JJ seems to be that of characterisation of the laws being scrutinised.  If a law effects an acquisition of property, a question arises as to whether it is of a kind which of its nature excludes consideration of “just terms”.

171               One such category, not attracting characterisation as a law with respect to the acquisition of property, was identified by their Honours as (at 190):

“laws defining and altering rights and liabilities under a government scheme involving the expenditure of government funds to provide social security benefits or for other public purposes.  A law falling within either of those categories may, as an incident of its operation or enforcement, adjust, modify or extinguish rights in a way which involves an “acquisition of property” within the wide meaning which that phrase bears for the purposes of s. 51(xxxi).  Yet, if such a law is of general operation, it is unlikely that it will be susceptible of being properly characterized, for the purposes of s. 51 of the Constitution, as a law with respect to the acquisition of property for a purpose in respect of which the Parliament has power to make laws.  The reason why that is so is that, even though an “acquisition of property” may be an incident or a consequence of the operation of such a law, it is unlikely that it will constitute an element or aspect which is capable of imparting to it the character of a law with respect to the subject matter of s. 51(xxxi).”

172               This proposed test focuses not on whether there has been an “acquisition of property”, nor whether the acquisition is for a Commonwealth purpose but rather whether the requirement for “just terms” is attracted.  That the right extinguished (wholly or partially) is created by statute, is funded by Government revenues, and is of general application, may, but not necessarily will, indicate that the liability to such modification is to be a term or characteristic of the right conferred so that the entitlement to just terms is not attracted.

173               The “adjustment of competing claims” effected by the Refund Act, and the fact that the refund was denied to claimants who had already received the benefit of the refund from their customers, persuaded their Honours that the law was not “within the reach of the guarantee of just terms”.

174               Dawson and Toohey JJ focused on the notion of acquisition as opposed to extinguishment.  However, recognising perhaps, the artificiality of a claim that a debtor who pays a debt, then takes the money back, may have “acquired” property of the creditor but that the destruction of a creditor’s right to recover a debt is mere “extinguishment” (a distinction abandoned in Georgiadis), their Honours went on to adopt a view that money was not “property”.  Though that distinction would explain why laws imposing taxation will fall outside s 51(xxxi), the notion that value, represented by money or a chose in action, is not “property” within the meaning of s 51(xxxi), may now be regarded as having been discarded.

175               McHugh J noted that the original invalid law imposing sales tax could have been validated retrospectively.  To pass a less onerous law was not only valid but was a law with respect to taxation, not, therefore, involving an acquisition of property “within the meaning” of s 51(xxxi).  His Honour sought to explain that conclusion, inter alia, in the following terms (at 219-20):

“When, by a law of the Parliament, the Commonwealth or someone on its behalf compulsorily acquires property in circumstances which make the notion of fair compensation to the transferor irrelevant or incongruous, s. 51(xxxi) has no operation.”

176               For example, taxation necessarily involves an acquisition of property.  It would be “simply absurd” for property, forfeited pursuant to Customs or Proceeds of Crime or like legislation, to be subject to “just terms.”

177               Nevertheless, his Honour warned that (at 223):

“In construing an important constitutional guarantee such as s. 51(xxxi), the Court must be astute to ensure that the Parliament does not evade the guarantee by devices which have the effect that in substance, although not in form, the Commonwealth acquires the property . . . without providing just terms.”

178               The more satisfactory analysis of the reason for determining that what appears to be an “acquisition of property” does not attract the “just terms” protection thus seems to lie in the nature of the right affected.  If it is “inherently susceptible” of abolition whether or not vested, or if it is of a kind necessarily outside the scope of any legitimate expectation of compensation, then no requirement for “just terms” is attracted.  Nor is such an expectation attracted if the nature of a right created, expressly or impliedly, is that it is subject to withdrawal without compensation. On the other hand, if there is an “acquisition of property” a Court should be slow to yield to a conclusion that “just terms” are not required.

179               There had been some consideration afforded to that notion in Georgiadis.  That case had involved the extinguishment of the right to sue a Commonwealth employer for damages at common law in respect of a work injury and its replacement by, admittedly, less favourable entitlements.  The right to sue the Commonwealth for tortious injury had, itself, been conferred by statute.

180               Nevertheless, the majority (Mason CJ, Brennan, Deane and Gaudron JJ) found that, in respect of a chose in action vested upon negligent injury and not statute-barred, an employee could claim the protection of s 51(xxxi) in relation to a claim in respect thereof against the Commonwealth (or an agency of the Commonwealth).

181               Dawson and Toohey JJ took the view, now discredited, that “acquisition” differed from “extinguishment”, hence their dissent.

182               McHugh J dissented on the basis that the right to sue, being statutory, could be statutorily revoked without attracting s 51(xxxi).  His Honour abandoned that view in Mutual Pools.

183               Then there is the decision in Peverill’s case  upon which the appellant principally relies.

184               Dr Peverill had performed (pathology) services for patients.  They were entitled to a rebate if they submitted his bill to the Commission.  Alternatively, they could assign their rights to the treating doctor.  In that case, the doctor lost the right to a fee from the patient.  Instead, he or she would receive the rebate.  This resulted from the provisions of the Health Insurance Act 1973 (Cth).  There was a schedule of rebateable fees.  The Commission claimed that a low rate of fee applied.  Dr Peverill disagreed.  He contended that a higher priced item was applicable.  According to the Federal Court, he was right.  The Commonwealth Parliament passed an amending Act with purported retrospective effect, entrenching the Commission’s position.  It deprived Dr Peverill of an expectation that he would receive a substantial sum of money.  He challenged the amending Act.  The cause was removed into the High Court.  Dr Peverill had not only received the assignments of benefits in reliance upon which he had rendered his services, he had also submitted those assignments  to the Commission which had accepted but not yet paid them (partly due to the dispute settled by the Federal Court) when the amending Act took effect.  Dr Peverill contended that his vested right to payment, based on his contract with his patients and backed by the statutory indemnity provided by the Act, had been acquired otherwise than on just terms.  He lost.

185               Mason CJ, Deane and Gaudron JJ took the view that the statutory devaluation of the property rights acquired by Dr Peverill did not amount to an acquisition, an apparent re-instatement of the view of Dawson and Toohey JJ in Mutual Pools.  It was (surprisingly) conceded by Dr Peverill that extinguishment of the right would not have been  an acquisition.  That would state their Honours’ position too simplistically however.  At 236, their Honours explained that:

“There is no doubt that the derivation by the Commonwealth of a financial advantage in association with the extinguishment of a right to receive a payment from the Commonwealth may constitute an acquisition of property for the purposes of s. 51(xxxi) of the Constitution.  That could even be so in some cases in which extinguishment of the right takes place in the context of some genuine adjustment made in the common interests of competing claims, rights and obligations between another party and the Commonwealth.  However, here, the extinguishment of the earlier right to receive payment of a larger amount has been effected not only by way of genuine adjustment of competing claims, rights and obligations in the common interests between parties who stand in a particular relationship but also as an element in a regulatory scheme for the provision of welfare benefits from public funds.”

186               Reliance was also placed on the fact that the Commission had considered the amended rate of rebate always to have been appropriate.  It was only administrative oversight, corrected by the amending Act, which had enabled Dr Peverill to make the claims he had.  In that respect the denial of compensation for the loss of the additional entitlements was seen an analogous with Mutual Pools.

187               The characterisation of Dr Peverill’s rights (and those of the patients from whom they were assigned) as “welfare benefits”, inherently susceptible of change, was also regarded as significant (at 237):

“Where such change is effected by a law which operates retrospectively to adjust competing claims or to overcome distortion, anomaly or unintended consequences in the working of the particular scheme, variations in outstanding entitlements to receive payments under the scheme may result.  In such a case, what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property.  More importantly, any incidental diminution in an individual’s entitlement to payment in such a case does not suffice to invest the law adjusting entitlements under the relevant statutory scheme with the distinct character of a law with respect to the acquisition of property for the purposes of s. 51(xxxi) of the Constitution.”

188               This is not an assertion that rights conferred as part of a welfare scheme will, for that reason alone, be denied the protection of s 51(xxxi) or its Territory equivalent, s 23(1)(a).  Nor is it authority for the view that the diminution in value of a chose in action will not amount to an acquisition of property within the scope of the constitutional protection of just terms.  Rather, it is an assertion that some rights are created with the inherent defect that they are not to be subject to just terms on withdrawal.  There is in this case also an element of the Mutual Pools “adjustment of competing claims” notion.  It seems that either aspect would be sufficient to exclude s 51(xxxi) or its Territory equivalents from application to rights which can be considered subject to such inherent limitations.

189               Brennan J considered that the nature of the right conferred, not only on the patient treated, but also on the treating doctor taking an assignment of it, was not “property”, but rather “a gratuity”.  It became a “right” only when the Commission actually paid the benefit.  His Honour acknowledged that a medical practitioner might be unpersuaded by such a distinction.  Nevertheless, in his Honour’s view (at 245):

“where a pecuniary benefit payable out of Consolidated Revenue is gratuitously provided by the Parliament to the beneficiary, the amount of the benefit remains until payment within the unfettered control of the Parliament.”

190               Dawson J rested his concurrence with the majority on the somewhat unusual consideration that Dr Peverill had chosen to accept the assignment of his patients’ entitlements voluntarily.  Thus, in his Honour’s view (at 250):

 “Dr Peverill acquired medicare benefits by assignment from his patients for his own purpose and the acquisition therefore falls outside s 51(xxxi).”

191               That, was, in Dawson J’s opinion, analogous to divorce laws providing for compulsory transfers of property between spouses.

192               The latter view was seen by Dawson J as supported by the opinion of Toohey J and himself in Mutual Pools (diminution of liability not an acquisition).  That view did not command majority support then.  Nor has it since.

193               Toohey J focused not on the voluntariness of the assignment, but on the nature of the right assigned.  He accepted that the right so assigned was “property”, contrary to the view of Brennan J, but adhered to the view, also adopted by Dawson J, that the property right, though diminished in value, was not “acquired” by the Commission.

194               McHugh J referred to his reasons in Mutual Pools.  Those reasons, in his Honour’s view, entailed the consequence that the right to medical benefits was to be construed as a “gratuitous statutory benefit”.  In such a case (at 261):

“… the Commonwealth can regulate a federal statutory entitlement to a payment even after the beneficiary of the payment has fulfilled the conditions entitling that person to the payment provided that the entitlement was made subject to the condition that it could be regulated.  It need hardly be said that such a condition may be imposed expressly or by implication or by inference from all the circumstances of the enactment.”

195               His Honour did not adopt the contention, which appealed to Brennan J, that no right vested in Dr Peverill until payment was actually made.  His Honour did take the view that the law, being with respect to medical benefits, fell outside s 51(xxxi).  Presumably that was by reason of the nature of the entitlement.  The right to payment was inherently subject to an implied condition of defeasibility, whether retrospectively or otherwise.

196               McHugh J had no difficulty accepting that the right to payment Dr Peverill acquired was “property” and, indeed, a “speciality debt” comprising a “chose in action”.  It was the inherent defeasibility of that “property” which, in his Honour’s view, took its acquisition outside s 51(xxxi).

197               In Nintendo Company Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134, amending legislation reduced protection otherwise available under the Copyright Act 1968 (Cth) in respect of circuit layouts.  That deprived Nintendo of its monopoly rights, otherwise enforceable under that Act.

198               The Court was united in dismissing Nintendo’s contention that this amending legislation achieved an acquisition of property protected by s 51(xxxi).

199               The Court, (Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ) noted, as to s 51(xxxi) (at 160):

“[t]hat 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.”

200               Intellectual property laws will “inevitably” impact on existing proprietary rights.  The acquisition of property in such a case “precludes the operation of s. 51(xxxi)”.  The “relevant character” of such a law (at 161):

“. . . is that of a law for the adjustment and regulation of the competing claims, rights and liabilities of the designers or first makers of original circuit layouts and those who take advantage of, or benefit from, their work.  Consequently, it is beyond the reach of s. 51(xxxi)’s guarantee of just terms.”

201               In the Territory context, the scope of s 23(1)(a) of the Self-Government Act can best be described as abstracting from legislative power otherwise left to the Territory Parliament, the power to acquire property otherwise than on just terms.  That abstraction from power does not apply to subject matters which are not apt to be described as involving an acquisition of property in respect of which there would be no legitimate expectation of compensation.  The most obvious examples are criminal forfeiture and taxation.  That the Territory Parliament’s powers are not enumerated, therefore, makes little substantive difference to the approach.  The only discernible difference is that, if a specific power of the Commonwealth would attract s 51(xxxi) protection but for its specific wording, that same qualification could not apply to the powers granted to the Territory Parliament by the Self-Government Act.

202               Dawson J, in Nintendo, agreed with the result but for the different reason that the acquisition of property rights in that case was not “for the purposes of the Commonwealth”, but those of a third party.  His Honour expressed a similar view in Peverill’s case.  It has some overlap with the concept that adjustment of competing rights or claims is not within the protection of s 51(xxxi).

203               The concept of acquisition was further tested in Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513.  The company held mining leases over various areas of the Northern Territory.  Legislation designed to protect world heritage interests freed certain of those areas from the liability of being subjected to mining.  The effect was to prohibit mining on those areas of land so excepted.  The legislation expressly declared that no compensation was payable by virtue of its enactment and proclamation.

204               Brennan CJ, Dawson and McHugh JJ held that s 122 of the Constitution was unqualified by reference to s 51(xxxi).  McHugh J, additionally, held that there was no “acquisition”, albeit that the leases were “property”.  Their view was in the minority.

205               Toohey J agreed with both Gaudron J and Gummow J that the law in question was qualified by s 51(xxxi) but on the narrow ground that it was not a law purely for the purpose of the government of the Territory but rather to give effect to another valid purpose, namely, the protection of a world heritage area pursuant to international obligations.  That would, of course, support a contention that, but for s 23(1)(a) of the Self-Government Act, a law of or in respect of the Territory alone would not be constrained by s 51(xxxi).

206               Gaudron J agreed with Gummow J that a law supported by s 122 was so constrained even if not supported by another head of constitutional power.

207               Gummow J noted that s 51(xxxi) applies both to indirect acquisitions as well as those which are direct.  However, in his Honour’s view, it does not apply to acquisitions (at 595):

“ . . . in respect of which “just terms” is an incongruous notion.”

208               That, for example, would be the case with native title because, as his Honour explained (at 613):

“[t]he characteristics of native title as recognised at common law include an inherent susceptibility to extinguishment or defeasance by the grant of freehold or of some lesser estate which is inconsistent with native title rights…”

209               The relevantly affected areas of land, having been freed of the Newcrest’s rights to mine them, were to that extent “acquired” (at 634):

“This is not a case in the category considered in [Peverill] where what was in issue were rights derived purely from statute and of their very nature inherently susceptible to the variation or extinguishment which had come to pass.”

210               Kirby J, in a separate judgment, agreed with the approach adopted by Gummow and Gaudron JJ.  Fortunately, the present case does not call for a decision as to whether the Amending Act would have needed, even without s 23(1)(a) of the Self-Government Act, to conform to s 51(xxxi).  But it may be noted that three of the present justices of the High Court have supported the view that the Territory power (s 122) is itself so qualified (see Newcrest Mining (WA) Ltd (supra)).

211               The question of what was “property” was further considered in Mewett  and Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 (“WMC Resources”).

212               Mewett was a sequel to Georgiadis.  The issue was whether a claim for personal injury of the kind recognised in Georgiadis survived the enactment of s 44 of the Safety, Rehabilitation and Compensation Act 1998 (Cth), notwithstanding that it was statute barred under State (or Territorial) limitation laws.  Those laws allowed for discretionary extensions of time.  The rights of the claimants had, therefore, existence unless the utility of cause of action had been ended by (final) refusal of an extension of time.  That was held to be so even though, in Mewett, that respondent’s cause of action itself, not merely his right to proceed to enforce it, was presumptively barred.

213               A different result followed in WMC Resources.  The respondent, WMC, held exploration licences in the Timor Gap, granted pursuant to statute.  A Treaty was then made with Indonesia.  As a result, certain “blocks” were excised from the Permit area, by way of legislative amendments.  No compensation was provided for or offered.  Brennan CJ, Gaudron, McHugh and Gummow JJ found that s 51(xxxi) did not apply.  Toohey and Kirby JJ dissented.

214               Brennan CJ considered that, as the Commonwealth had no property in the continental shelf, extinguishment of the permit was not an acquisition of property.

215               The mere fact that a property right, in the form of the permit, was extinguished did not, in his Honour’s view, necessarily effect a s 51(xxxi) acquisition.  The case turned, in his Honour’s view, on the fact that no reciprocal liability had been assumed by the Commonwealth in granting the permit so that no benefit accrued to the Commonwealth from its extinguishment (at 17):

“. . . where a law of the Commonwealth creates or authorises the creation of a right that does not impose on the Commonwealth a reciprocal liability, the mere extinguishment of the right effects no acquisition of the right by the Commonwealth.”

216               His Honour considered Peverill to be a case where, though the Commonwealth agency was, by way of contrast, freed from a liability, it was not an “acquisition of property” (at 17):

“[i]f, by repeal or amendment of the statute, the right and the reciprocal duty are modified or extinguished, one of the indicia of acquisition would appear.  But not an indicium of an acquisition of property.  That is because a right so to compel the performance of a public law duty is not itself property, and the modification or extinguishment of such a right and duty is not an acquisition of property.”

217               In his Honour’s view Peverill turned on the nature of the right conferred by the relevant statute.  The view that the rights conferred on Dr Peverill had not been “property” did not, however, attract majority support.  The majority view seemed to be that the inherent character of the right conferred was such as to be inconsistent with any legitimate expectation of compensation for its modification or extinguishment.

218               Gaudron J reiterated her view, expressed in both Georgiadis and Peverill, that (at 35-6):

“ . . . prima facie at least, a statutory right is inherently susceptible of statutory modification or extinguishment and no acquisition of property is effected by a law which simply modifies or extinguishes a statutory right that has no basis in the general law.  That is because, ordinarily at least, a law of that kind does not confer an interest in property or any other benefit on the Commonwealth or any person; and, ordinarily at least, it does not constitute a law that is properly characterised as a law with respect to the acquisition of property.”

219               In other words, her Honour supports the view that to determine whether s 51(xxxi) is attracted  is not merely a question of whether there is acquisition of what can be described as a property right but also whether the right is such that its acquisition will attract s 51(xxxi).  There are said to be “indicia” for and against that conclusion but their significance is not fully explained in her Honour’s judgment.  For example, whether all or only some of these indicia need to be present to exclude “just terms” is not addressed.

220               Her Honour gives some indication, in referring to the facts of the WMC Resources case, of an alternative basis for determining whether s 51(xxxi) is attracted (at 37):

“It may well be that if, after the discovery of petroleum an exploration permit were extinguished or modified with the consequence that the right to apply for a lease or production licence was destroyed or otherwise negated, that would constitute an acquisition for the purposes of s 51(xxxi) of the Constitution.  In that situation, some benefit with respect to that petroleum would accrue to the Commonwealth.”

221               And, further (at 38):

“In my view, the Consequential Provisions Act simply modified a statutory right which had no basis in the general law and which was inherently susceptible to that course and, thus, did not effect an acquisition of property.”

222               Thus, her Honour’s view was that not only was the “right” extinguished “inherently susceptible” of modification, but also that extinguishment was not attended by a corresponding benefit to the Commonwealth.  That warranted the conclusion there was no relevant “acquisition”.

223               McHugh J, however, was more prescriptive than Gaudron J.  In referring to federally created statutory rights, his Honour pointed out that s 51(xxxi) is not a constitutional guarantee of just terms, rather it is a withdrawal of power to acquire property otherwise than on just terms.  His Honour continued (at 49):

“If a federal law extinguishes a property right under the general law and as a result the Commonwealth obtains a corresponding benefit (no matter how small), the Commonwealth will ordinarily be taken to have acquired that property.  If s 51(xxxi) is read as meaning: “No person shall be deprived of his or her property except on just terms”, pension or welfare rights under a federal statute would probably be incapable of reduction or extinguishment.  It would be surprising, however, if the Constitution required that Parliament, once it granted a pension or other gratuity, could not reduce or revoke the entitlement without paying compensation.

The ease with which the Commonwealth can avoid “contravening” s 51(xxxi) when acquiring a property right created by federal law further illustrates that it is a misnomer to describe s 51(xxxi) as a constitutional guarantee.  To avoid “contravening” s 51(xxxi) it would seem that the Parliament need ensure only that the legislation creating the property right contains words to the following effect:

‘Any property interest created by this Act endures only until varied or extinguished by subsequent federal legislation.’”

224               His Honour considered there were two categories of legislation affecting property rights, even those not “inherently susceptible” of revocation, which would not attract s 51(xxxi) (at 50):

“First, where a Commonwealth law merely varies or extinguishes a property interest, without any corresponding gain or benefit (no matter how slight or insubstantial) to the Commonwealth or some other person, s 51(xxxi) does not affect the content of the power authorising the law.  Second, s 51(xxxi) does not withdraw power where the law can fairly be characterised as a law with respect to another s 51 head of power, rather than a law with respect to the acquisition of property within s 51(xxxi).  This will be the case where, for example, the taking of property is an inevitable consequence of the exercise of another s 51 head of power or is a reasonably proportionate consequence of a breach of a law passed under that other head of power.”

225               Neither of these categories, of course, is of assistance in the present case.  The question raised in this case relates more to the applicability of the statement his Honour (a dissentient in Georgiadis) made concerning Peverill (at 55):

“Peverill is a clear authority for the proposition that, where the Parliament has created a vested right of property under a head of power such as s 51(xxiiiA) of the Constitution, it retains the power to amend, revoke or extinguish that right.”

226               Gummow J agreed that s 51(xxxi) did not require just terms in this case (at 73):

“The point of present significance is that in some circumstances, of which the statutory rights in this case are an instance, the nature of the property may be such that its defeasance or abrogation does not occasion any acquisition in the constitutional sense.”

227               His Honour did not proceed on the basis that there had been no acquisition, in the sense of the conferral of a reciprocal benefit upon the Commonwealth.  Rather, it was the defeasible nature of the rights conferred which avoided the application of s 51(xxxi) (at 75):

“ . . . the Permit suffered from the “congenital infirmity” that its scope and incidents were subject to the P(SL) Act in the form it might from time to time thereafter assume.  Any proprietary rights which were created in respect of the Permit were liable to defeasance.  By reason of their nature, upon such defeasance of those rights there would be no acquisition of property to which s 51(xxxi) applied.”

228               His Honour thus advanced two reasons for concurrence with the majority:  no benefit to the Commonwealth, hence no acquisition by it; and that the rights conferred were inherently subject to defeasance and so did not attract “just terms”.

229               In the present case, the ACT clearly gained a financial benefit from revocation of the appellants’ rights to compensation for pain and suffering.  Thus, there was an “acquisition”.  This is not a case where there was no correlative benefit.

230               The nature of the right to compensation directed against the Territory was the same in nature, subject to the cap and some exclusionary provisions, as would have subsisted against the offender.  The right to compensation itself was not “inherently defeasible”.  What, however, of the right to claim, instead of against the offender, against the Territory?

231               That right is statutory, as were the rights of the Commonwealth employees in Georgiadis and Mewett.  Indeed, their case for “just terms” was somewhat weaker.  The right to sue their employer at all (being the Commonwealth) only arose from federal statute law.  In the present case the right to sue the offender(s) arose from common law.  There is effected, by the CIC Act, a change of identity of the person liable to pay compensation for the criminal injury.  The Territory is a party of additional resort (up to the cap and subject to discretionary exclusions).

232               The situation in this case is not relevantly dissimilar from Jenkins v Territory Insurance Office (supra).

233               In that case, the Northern Territory had, before the plaintiff in that case had suffered injury, barred resort to common law damages against motor vehicle tortfeasors.  For those rights were substituted certain limited rights against the Territory Insurance Office (the “TIO”).  Those rights were further amended on 1 September 2000 so as to limit them further.  The question was whether the purported retrospective effect of the amendment was valid by reference to the NT equivalent in its Self-Government Actto s 23(1)(b) (acquisition on just terms) of the Self-Government Act.

234               Riley J rejected the TIO submission that Peverill and WMC Resources was fatal to the plaintiff’s claim, saying (at [12]):

“In my opinion, contrary to the submissions of the defendant, the effect of s 40A and its predecessors was not to interfere with the right of the plaintiff to recover common law damages.  That right was preserved.  The effect of the section was to require that the existing right to common law damages “shall lie, and may be enforced, against the Office and not against the owner or driver of the motor vehicle”.  The right to common law damages remained but the identity of the person against whom the right may be enforced was changed . . .  The effect of that amendment was to modify the pre-existing right of the plaintiff which derived from the common law.  A corresponding benefit was provided to the defendant.”

235               The redirection of the right, albeit modified by statute, was not changed in its character.  Even if that right had been transformed into a statutory right, it did not thereby become a right “inherently susceptible” of abrogation without just terms.  Nor could any legislative intent to create such a defeasible right be discerned.

236               That case was not, nor is this case, one where (at [24]):

“ . . . the acquisition of property without just terms was necessary for the achievement of the objective of the head of power . . . That is not the case with this legislation.  The acquisition of property without just terms is neither necessary to, nor characteristic of, legislation dealing with the subject matter of the scheme established under the . . . Act.”

237               Those words are apt to the situation of these respondents.  I appreciate that those who had a right to claim compensation but had yet to apply may, arguably, also have a right to claim by parity of reasoning but that does not fall for decision in these proceedings.  I express no view as to that situation.

238               It is enough to find that an existing award is not the only precondition for the vesting of a right to compensation under the then CIC Act.  Claimants who had accrued a right to be compensated remain, as did the claimants in Georgiadis and Mewett, entitled to the benefit of the rights vested in them at the time the CIC Act was amended.

239               I would dismiss the Australian Capital Territory’s appeal with costs in each case.

Associate:

Dated:              18 June 2002

ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

REASONS FOR JUDGMENT

FINN J:

240               I have had the advantage of reading the reasons for judgment of the Chief Justice.  Though my conclusion on the proper disposition of this appeal differs from that of the Chief Justice, I gratefully adopt his exposition of the facts, legislation and argument raised in the appeal.  I can state relatively shortly my own reasons for disagreeing with the majority’s conclusion.

241               First, this is not a matter in which it is profitable to engage in extended analysis of the meaning of the term “property” in general or of the term “chose in action” in particular.  It is sufficient to make the following few observations.  As Professor Gray has rightly observed of the word “property”, it is in large part “a category of illusory reference”:  Gray, “Property in Thin Air” [1991] Camb LJ 252 at 305;  a “conceptual mirage”:  Gray and Gray, Elements of Land Law, 93 (3^rd ed, 2001);  see Yanner v Eaton (1999) 166 ALR 258 at 264.  For present purposes I am content to accept that it involves a legally endorsed “power relationship … between a person and a valued resource”:  Gray and Gray, 94-95;  Yanner v Eaton, 264.

242               Secondly, it is well recognised that the term “chose in action” does not admit of comprehensive definition:  see National Trustees Executors & Agency Co of Australasia Ltd v Federal Commissioner of Taxation (1954) 91 CLR 540 at 584;  and that those definitions most commonly repeated are circular in that they presuppose the definition of what they purport to define (eg “ ‘chose in action’ is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession”:  Torkington v Magee [1902] 2 KB 427 at 430 [emphasis added].

243               Thirdly, for the purposes of s 51(xxxi) of the Constitution, hence of s 23(1)(a) of the Australian Capital Territory (Self-Government) Act 1988 (Cth), the word “property”:

“must be construed as extending “to every species of valuable right and interest including real and personal property, incorporeal hereditaments … and choses in action”.  In the context of s 51(xxxi), the word “property” must also be construed as extending to money and the right to receive a payment of money”:  Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 509.

244               As the issue in this appeal does not, in the end, turn upon the question whether the respective statutory rights of the respondent in this matter are, or are not, property it is unnecessary to dwell either upon what the word “property” exhaustively comprehends, or upon whether the respective statutory rights of the respondents are properly to be characterised as choses in action.  I am prepared to assume that, when one has regard to their statutory provenance and purpose, those rights fall within the concept of “property” for s 51(xxxi) purposes.

245               I should, though, make the following comments on the nature of the right acquired by an applicant for compensation under the Act, assuming that person satisfies the requirements for making an application.  On one view, it could be said to be a right to be paid compensation (albeit in an amount to be fixed) save where for limited discretionary reasons (s 15(1)(a) and s 20) the relevant decision maker determines not to make an award of compensation.  Alternatively it may be merely a right to have a determination made as to whether or not an order awarding compensation should be made:  s 15(1)(a).  All of the respondents would seem to submit that the right they acquired was of the former character.  The appellant submits it was of the latter character as, it would seem, was the majority view in the court below.

246               If the right was as the respondents contend, then it clearly is property for s 51(xxxi) purposes, it being a “right to receive a payment of money”:  Australian Tape Manufacturers Association Ltd v The Commonwealth, at 509.  If the right was no more than one to have a determination made (ie compensation was only an expectancy unless and until a favourable determination was made:  cf National Trustees Executors & Agency Co of Australasia Ltd v Federal Commissioner of Taxation, at 557, 571), I am prepared nonetheless to assume that it could be characterised as a “species of valuable right”:  Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 290.  I appreciate this may be a contentious assumption:  cf Reich, “The New Property” (1964) 73 Yale LJ 733;  but I make it for the following reason.

247               By virtue of being a member of a class for whose benefit the compensation scheme of the Act was created, an applicant was given an entitlement to apply for compensation and to have a determination made.  The scheme of the Act can properly be said to have given such an applicant a “contingent right” to be paid compensation, the relevant contingency being the making of a favourable determination.  Though so qualified, that right to secure possible access to a “valued resource” (ie compensation) was sufficient to qualify the right itself as a valuable right.  The obligation to make a determination gave the right its actual value in a given instance (subject to the possibility of later variation:  s 18(1)).  But it did not require such a determination for it to be a valuable right enjoyed by those persons entitled to apply under the Act.

248               The conclusion that the respondents’ rights under the Act are proprietary in character is not of itself fatal to the appeal.  Those rights, as I will indicate, were entirely statutory in character.  And it is well accepted that, in some circumstances, the legislative modification, extinguishment or compulsory transfer of statutory rights will not “occasion any acquisition [of property] in the constitutional sense”:  Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 73;  notwithstanding the proprietary character of those rights.

249               While one cannot as yet indicate with certainty the classes of case in which the legislative modification or extinguishment of a statutory (proprietary) right will escape the limitation of s 51(xxxi) and s 23(1)(a) of the Self-Government Act, two classes – there are others – seem now to be reasonably well accepted.  The first simply acknowledges a form of property of very ancient lineage in the common law.  That is property which itself embodies the possibility of extinguishment or modification.  Common private law illustrations of this are determinable interests in land, and vested interests in trust property subject to an express power of modification or revocation.  It can be likewise with a statutory right or entitlement of a proprietary character.  The terms of the legislation creating it may be such as to make apparent on the face of the statute that the right or entitlement “was inherently susceptible to variation in accordance with amendments which might be made to the statute from time to time”:  Commonwealth v WMC Resources Ltd, at 73-74.  In cases of this class, a legislative modification or extinguishment of the right or entitlement effects no acquisition of property at all.  The susceptibility to modification or extinguishment is a characteristic or attribute of the particular species of property itself.

250               A second class of case is one in which (a) the legislative modification or extinguishment of a statutory right may, or may appear to, effect an acquisition of property but (b) the relevant legislation itself cannot in any event properly be characterised for the purposes of s 51(xxxi) (or s 23(1)(a)) as “a law with respect to the acquisition of property”.  As was observed by Deane and Gaudron JJ in Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 189-190:

“[I]t is possible to identify in general terms some categories of laws which are unlikely to bear the character of a law with respect to the acquisition of property notwithstanding the fact that an acquisition of property may be an incident of their operation or application.  One such category consists of laws which provide for the creation, modification, extinguishment or transfer of rights and liabilities as an incident of, or a means for enforcing, some general regulation of the conduct, rights and obligations of citizens in relationships or areas which need to be regulated in the common interest.  Another category consists of laws defining and altering rights and liabilities under a government scheme involving the expenditure of government funds to provide social security benefits or for other public purposes.  A law falling within either of those categories may, as an incident of its operation or enforcement, adjust, modify or extinguish rights in a way which involves an “acquisition of property” within the wide meaning which that phrase bears for the purposes of s 51(xxxi).  Yet, if such a law is of general operation, it is unlikely that it will be susceptible of being properly characterized, for the purposes of s 51 of the Constitution, as a law with respect to the acquisition of property for a purpose in respect of which the Parliament has power to make laws.  The reason why that is so is that, even though an “acquisition of property” may be an incident or a consequence of the operation of such a law, it is unlikely that it will constitute an element or aspect which is capable of imparting to it the character of a law with respect to the subject matter of s 51(xxxi).”

251               An undertone, if not more (cf Commonwealth v WMC Resources Ltd, at 48ff per McHugh J), in these characterisation cases is that the prohibition on acquisition without just terms is not to operate as an undue shackle  (Tribe, American Constitutional Law 2^nd ed 1988, 613;  but cf Smith v ANL Ltd, at 477 per Kirby J) on a legislature’s capacity to revisit and reform schemes involving the allocation of public resources for public purposes when the right of a member of the community to participate in that allocation (i) derives solely from the statute creating the scheme and (ii) is not itself a replacement for a common law right the person would otherwise have possessed.  So, in Health Insurance Commission v Peverill (1994) 179 CLR 226 at 265 where the Health Insurance Act 1973 (Cth) was amended retrospectively to reduce the prescribed benefits paid for particular pathology services provided by medical practitioners, Mason CJ and Deane and Gaudron JJ commented (at 237):

“It is significant that the rights that have been terminated or diminished are statutory entitlements to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognised by the general law.  Rights of that kind are rights which, as a general rule, are inherently susceptible of variation.  That is particularly so in the case of both the nature and quantum of welfare benefits, such as the provision of medicare benefits in respect of medical services.  Whether a particular medicare benefit should be provided and, if so, in what amount, calls for a carefully considered assessment of what services should be covered and what is reasonable remuneration for the service provided, the nature and the amount of the medicare benefit having regard to the community’s need for assistance, the capacity of government to pay and the future of health services in Australia.  All these factors are susceptible of change so that it is to be expected that the level of benefits will change from time to time.  Where such change is effected by a law which operates retrospectively to adjust competing claims or to overcome distortion, anomaly or unintended consequences in the working of the particular scheme, variations in outstanding entitlements to receive payments under the scheme may result.  In such a case, what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property.  More importantly, any incidental diminution in an individual’s entitlement to payment in such a case does not suffice to invest the law adjusting entitlements under the relevant statutory scheme with the distinct character of a law with respect to the acquisition of property for the purposes of s 51(xxxi) of the Constitution.”

252               Of the two classes of case to which I have referred, it is the second that is of immediate relevance to this appeal.  My reason for referring to the first is for the purpose of differentiating ways in which the operation of s 51(xxxi) and s 23(1)(a) may be avoided – though I do acknowledge that the two classes overlap significantly because the process of characterisation involved in the second can lead to the conclusion that the statutory right in question is inherently susceptible to variation though the legislation creating it does not make this apparent on its face.

253               Turning to the legislation in question in this appeal, I do not consider that the 1999 amending legislation can properly be characterised as a law with respect to the acquisition of property.  My reasons for this are as follows.

254               As I have already indicated the relevant property right of each respondent in this matter was a statutory right.  Importantly though, that right was not given by the Act in substitution for, or in derogation of, a common law right that an applicant would otherwise have possessed.  Likewise the amending legislation did not in turn seek to derogate from common law rights:  cf Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297;  Smith v ANL Ltd (2000) 176 ALR 449.  Rather, both the original Act and the amendment left intact such common law rights to recover damages for the injury suffered by an applicant as the applicant possessed.  Those common law rights were, admittedly, a discretionary consideration of which account was to be taken in determining the compensation to be awarded:  s 15(2)(b).  And where an applicant in fact recovered damages for the injury suffered or was paid compensation under another law, the Act required repayment of a sum equal to the amount of the damages or other compensation recovered, or the compensation paid under the Act (whichever was the lesser sum):  s 29.  The statutory scheme, in other words, acknowledged, and accommodated itself to, co-existing common law rights.  But though autonomous in this sense, can it nonetheless be said that the rights given so reflected those provided at common law as to take on the proprietary character of those common law rights and to attract the same protection if acquired?

255               The statutory right given to seek compensation may well be said to provide a more efficient and expeditious (though not necessarily profitable:  see s 7) source of compensation to a victim of crime than is provided by the ordinary processes of the civil justice system.  For that reason it can be said to be not only an alternative to the civil justice system but also an “integral part of the criminal justice system”:  The Community Law Reform Committee of the Australian Capital Territory, Report No 6, Victims of Crime, 93 (1993);  see also Article 12 of the United Nations Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power.

256               This linkage of the compensation scheme to the criminal justice system is manifest in several ways.  First, compensation determinations are made by courts or court officers:  s 11 of the Act.  Secondly, procedures have been adopted for the making and determination of applications which are “akin to those appropriate to a judicial proceeding”:  Commonwealth of Australia v Pillifeant (1990) 93 ALR 641 at 653.  Thirdly, the heads of damage for which compensation is awarded reflect those acknowledged by the common law.  Fourthly, the purpose of an award is to compensate a victim for an injury sustained.  From this linkage it may in consequence be suggested that the Act was in substance designed to confer a statutory cause of action compensating for a wrong, that cause of action being a true alternative to such other causes of action as an applicant might have in respect of the same wrong.

257               That conclusion would, in my view, incorrectly characterise the legislative scheme of the Act.  While understandably not obliging an applicant to pursue such independent causes of action or rights to compensation as he or she might otherwise possess, the Act makes its own right to be paid compensation subordinate to those independent causes of action and rights:  if they are successfully prosecuted there must be a corresponding accounting to the Territory on account of damages or compensation received under the Act:  s 29.  This characteristic, coupled with the power to make interim awards, is suggestive of a welfare purpose in the compensation scheme.

258               That purpose becomes the more apparent when account is taken of the range and type of matters of which regard is required to be had (a) in determining the amount of compensation to be awarded:  s 15(2);  and (b) in considering an application under s 18 of the Act to vary an award by increasing or reducing the amount of compensation awarded.  Section 18(2)(c), for example, requires the decision maker to have regard to:

“(c)     any change in the economic circumstances of that person that has occurred since the date on which the award was made; and”

The predominant concern arising from the specifically enumerated factors is not entitlement, but need.

259               Distinctly, the existence of the s 18 power to increase or to reduce an award for compensation makes the quantum of compensation awarded expressly susceptible to modification within the scheme of the Act.  A like power was not given expressly to modify the s 6(1) subject heads in respect of which compensation was payable.  Nonetheless the s 18 power to reduce an award is indicative of the “gratuitous” character of compensation payments:  Commonwealth v WMC Resources Ltd, at 73.

260               A further indication that compensation is in the nature of a welfare payment for an applicant’s (or injured person’s) benefit is the prohibition in s 31(b) on assigning not only compensation payable but also compensation paid.

261               Collectively, the characteristics I have noted above are far removed from those characteristically associated with common law causes of action for damages for injury suffered.  They are consistent, though, with a scheme in which “gratuitous” payments were made from public funds for a public purpose.  I use the term “gratuitous” in this setting to signify that these payments do not result from some antecedent relationship with:  cf  National Trustees Executors and Agency Co of Australasia v Federal Commissioner of Taxation;  or liability previously incurred by, the Territory but were ones that, for reasons of public policy, the Territory has assumed responsibility to make.  I am in consequence unable to accept that the Act created, in substance, a statutory cause of action the legislative modification of which would attract the provisions of s 23(1)(a) of the Self-Government Act.

262               Finally, I would add that the 1999 amending legislation embodied not merely significant changes to the 1983 Act, it also amended the Victims of Crime Act 1994 (ACT) making provision for the establishment of a “Victims Services Scheme”.  This again suggests that the amending legislation, no less so than the Acts it amended, was itself a welfare measure directed towards the better provision of services, financial and otherwise, to victims of crime in the Territory.  It is noteworthy that Articles 14 to 17 of the Declaration of Basic Principles of Justice for Victims of Crime and Abuse of Power likewise countenance the provision of non-financial assistance to victims of crime as part of the composite of measures propounded by the Declaration.

263               Given the character of the 1983 Act and the 1999 amendment, it is unsurprising to find that the emphasis in the Explanatory Memorandum to the Bill for the amendment emphasised both eliminating distortions in resource allocations to victims of crime (which it illustrated) and producing better outcomes for a greater number of victims than occurred under the then existing arrangements.  The considerations actually relied upon in the “Outline” section of the Explanatory Memorandum reflected in the setting of providing for victims of crime, the types of consideration adverted to by justices of the High Court in the quotation from Peverill’s case set out earlier in these reasons.

264               The legislative scheme giving effect to the Territory’s assumption of responsibility to pay compensation to victims of crime was one which, in my view, could be revisited and reformed from time to time without the amending legislation attracting the character of a law with respect to the acquisition of property.

265               I would allow the appeal.

Associate:

Dated:              18 June 2002

ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

REASONS FOR JUDGMENT

DOWSETT J:

266               I have read the reasons prepared by Finn J and agree in the orders there proposed.  I gratefully adopt his Honour’s reasons.  I wish only to add some brief comments of my own.

267               Argument in this case has focussed upon cases, primarily decisions of the High Court, concerning the proper interpretation of s 51(xxxi) of the Constitution which provides that the Commonwealth Parliament may 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 … .  Subsection 22(1) of the Australian Capital Territory (Self-Government) Act 1998 (Cth) provides that the Assembly has power to make laws for the peace, order and good government of the Territory.  Paragraph 23(1)(a) limits this power by providing that the Assembly has no power to make laws with respect to the acquisition of property otherwise than on just terms.

268               The similarity between the language in s 23 and that to be found in s 51(xxxi) is obvious, perhaps deceptively so.  Whereas s 23 provides a limitation upon the general grant of legislative power, s 51(xxxi) is itself a separate grant of power.  See Mutual Pools and Staff Pty Ltd v The Commonwealth (1993-1994) 179 CLR 155 per Mason CJ at 168 - 169, per Deane and Gaudron JJ at 184, per Dawson and Toohey JJ at 193 and per McHugh J at 219.  Cases relied upon in argument, including in particular Health Insurance Commission v Peverill (1993 – 1994) 179 CLR 226, have held that the repeal or amendment of a gratuitous statutory entitlement conferred by the Commonwealth Parliament under one of its heads of power may not necessarily constitute an acquisition of property for the purposes of s 51(xxxi). 

269               It is arguable that decisions construing the limitation contained in s 51(xxxi) in the context of the other specific grants of power to the Commonwealth Parliament might not relevantly inform the construction of s 23 as a limitation upon the general grant of power pursuant to s 22.  However, as appears from the reasons of Finn J, the primary issue here is whether or not the legislation in question can properly be characterized as a law with respect to the acquisition of property, an exercise which is prescribed by both provisions.  Further, the wording of s 23 was no doubt borrowed from s 51(xxxi).  For that reason alone, decisions concerning s 51(xxxi) should be treated as relevant to the construction of par 23(1)(a).  In any event, the parties did not seek to distinguish the decisions in question by reference to the different contexts.

270               I consider that the decision of the High Court in Peverill compels us to uphold the present appeals.  I rely particularly upon the extract from the joint judgment of Mason CJ, Deane and Gaudron JJ which appears at 237 and is cited in the reasons published by Finn J.  I also draw attention to the following passage from the judgment of Brennan J (as his Honour then was) at 244-5:

“The Principal Act provides for the payment of what is, as between the Commonwealth and the claimant for the medicare benefit, a gratuitous payment.  If a statute provided for money in a particular amount to be paid to a person from whom property had been acquired, a diminution of the amount to be paid enacted after the acquisition might well attract the protection of the just terms requirement in s 51(xxxi).  Again, if a statute provided for money in a particular amount to be paid to a person who had given good consideration for the payment, the right to payment in that amount might well be regarded as property which could not be diminished by a law enacted after the consideration was given that did not provide just terms.  But the Principal Act does not fall into either of those categories.  True it is that an assignee practitioner acquires a right to claim a medicare benefit under s 20A only by agreement to give up a right to payment of a fee for services rendered but that agreement is between the assignee practitioner and the patient.  Consideration passes from the assignee practitioner to the patient and from the patient to the assignee practitioner.  What the assignee practitioner acquires is a statutory right which, as between the practitioner and the Commonwealth (or the Commission), is a gratuity. 

…

When the right conferred by the Principal Act is thus analyzed, it is clear that the amount which the Commission is commanded to pay to an assignee practitioner whose claim is accepted is the amount prescribed by that Act at the time when the duty to pay is performed.  The Parliament, having power to authorize the Commission by legislation to pay medicare benefits, has power by legislation to vary the Commission’s authority.”

271               McHugh J said at 260-1:

“In my opinion, no acquisition of property for the purposes of s 51(xxxi) occurs when an enactment of the Parliament amends or appeals a gratuitous statutory entitlement conferred by the Parliament.  Nor is the case different when the beneficiary of the entitlement has fulfilled the conditions which govern the entitlement.  It follows that the Parliament may withdraw the statutory entitlement, conferred by s 20 of the Principal Act, to the payment of a ‘medicare benefit in respect of a professional service’ even after that person has incurred the expense of that service. 

As the Solicitor-General for the Commonwealth pointed out, decisions of this Court give little assistance on the question whether laws reducing or abolishing gratuitous statutory benefits payable by the Commonwealth infringe the guarantee embodied in s 51(xxxi).  In Allpike v The Commonwealth [(1948) 77 CLR 62], however, the Court held that no breach of s 51(xxxi) occurred where, pursuant to the authority of a Commonwealth legislative provision, a Commonwealth officer directed that the undrawn and deferred pay of a deceased soldier and the interest thereon should be divided in a way which conflicted with the deceased’s will … .

Allpike is authority for the proposition that, without infringing s 51(xxxi), the Commonwealth can regulate a federal statutory entitlement to a payment even after the beneficiary of the payment has fulfilled the conditions entitling that person to the payment provided that the entitlement was made subject to the condition that it could be regulated.  It need hardly be said that such a condition may be imposed expressly or by implication or by inference from all the circumstances of the enactment.  Moreover, logically no distinction can be drawn between an entitlement subject to a condition of regulation and an entitlement subject to a condition of reduction or revocation.”

272               His Honour then referred to a number of American cases and continued at 262-3:

“Just over fifty years later, Brandeis J in delivering the judgment of the Supreme Court in Lynch v United States could say:

‘Pensions, compensation allowances and privileges are gratuities.  They involve no agreement of parties; and the grant of them creates no vested right.  The benefits conferred by gratuities may be redistributed or withdrawn at any time in the discretion of Congress.’

This principle is seen as a necessary consequence of Congress’ ‘plenary power to define the scope and the duration of the entitlement to … benefits, and to increase, to decrease, or to terminate those benefits based on its appraisal of the relative importance of the recipients’ needs and the resources available to fund the programme’.  Consequently, non-contractual entitlements which the recipient has not yet received are not property for the purpose of the Takings Clause even though the recipient has a legitimate expectation that the entitlements would be received.

The entitlement under s 20 of the Principal Act must be taken to be conferred subject to repeal or alteration – including retrospective repeal or alteration – at the discretion of the Parliament.  The plenary power conferred by s 51(xxiiiA) extends to altering or repealing the entitlement to a gratuitous benefit conferred under that paragraph even where a person has met the conditions giving rise to the entitlement.  It could not be maintained, for example, that a person who had turned sixty-five had a vested right, protected by s 51(xxxi), to receive an age pension or that, consistently with the guarantee, the Parliament could not change the conditions upon which the pension was payable.  Similarly, the right of payment under s 20 to a person who has incurred a medical expense is subject to the condition that Parliament may alter, reduce or revoke the right.  Nothing in s 20 specifically, or in the Principal Act generally, indicates a legislative intention by the Parliament that it will not alter reduce or abolish s 20 entitlements, prospectively or retrospectively.  In the absence of any legislative expression to the contrary, the entitlement conferred by s 20 – like any other statutory entitlement – must be taken to be subject to the condition that it may be altered, reduced or revoked at any time.”

273               In the judgment under appeal the majority, at [31], distinguished Peverill upon the basis that:

“… an award of compensation does not bear the character of a welfare benefit or a social security benefit.  Indeed it may be fairly said that the entitlement to receive payments from consolidated revenue are ‘based on antecedent proprietary rights recognised by the general law’ …  Indeed it is difficult to envisage criminal injuries compensation being available in a situation where there are not proprietary rights vested in the victim recognized by the general law.  The payment from the general revenue is being provided as ‘compensation’ for those proprietary rights. …  The basis for the ‘compensation’ is the proprietary right that the victim has against the offender.”

274               I can see no basis for distinguishing between a compensation payment of the kind presently under consideration and a welfare benefit or a social security benefit.  All are financial benefits paid selectively to citizens who meet prescribed criteria.  The rationale for a payment of criminal compensation is not that the government is in any way responsible for the criminal conduct in question, but rather that the victim deserves assistance, and that such assistance is unlikely to be otherwise forthcoming.  Although the amount of the compensation may be calculated in a way which is similar to that adopted in a claim in tort, the payment is not in any sense dependent upon pre-existing “proprietary rights” or any other rights.  Receipt of compensation does not affect any right to proceed in tort against the offender, although in the event that damages are recovered, part or all of any compensation may be repayable to the government.

275               Whilst the nature of the benefit conferred by any statute must be determined by reference to the terms of the statute itself, it must be kept in mind that the various passages from Peverill to which I have referred indicate that statutory benefits not based on antecedent proprietary rights are inherently susceptible of variation.  Put another way:

“The Parliament having power to authorize the Commission by legislation to pay medicare benefits, has power by legislation to vary the Commission’s authority.”

Again:

“The plenary power conferred … extends to altering or repealing the entitlement to a gratuitous benefit conferred under that paragraph … .”

276               I do not understand these propositions to be mere canons of construction or arbitrary presumptions.  They rather describe the nature of the legislative power as it is understood in a parliamentary democracy.  A right created by statute will usually carry with it the limitations inherent in the possibility of subsequent statutory amendment or repeal.  In other words, legislatures cannot generally bind themselves or their successors as to subsequent exercise of the legislative power.   

277               Finally, it is of some significance that the authority for payment pursuant to the Criminal Injuries Compensation Act 1983 (ACT) was contained in s 27 which provided:

“Subject to this Act, where compensation is awarded to a person an amount equal to the amount of compensation so awarded is payable by the Territory to that person.”

278               There can be little doubt that the reference to “this Act” was to the Act in the form in which it was at any relevant time, including amendments thereto.  This strongly suggests that the availability of the benefit was always subject to variation or cancellation by statutory amendment.  See Commonwealth of Australia v WMC Resources Ltd (1998) 194 CLR 1 per Gummow J at [181].

Associate:

Dated:              18 June 2002