October 2020

Can Commonwealth Government land be compulsorily acquired?

Have you ever walked past Commonwealth Government land and noticed a sign warning you to keep off the land otherwise you’ll be trespassing? Well, you might be interested to know the source of this regulation and its reach.

In the Commonwealth Constitution, the Federal Parliament is given exclusive power to make laws with respect to all land acquired by the Commonwealth for public purposes[1].

For State government authorities and local councils engaged in compulsory acquisitions, this has important consequences because it prevents them from acquiring Commonwealth land. The grant of exclusive power to the Federal Parliament leaves no room for State laws.

State government authorities and councils wishing to acquire Commonwealth land for sewerage infrastructure, electricity services, roads, and parkland need to reach agreement with the Commonwealth or look elsewhere.

As might be expected in a country where there are 3 hierarchical layers of government, State government authorities and local councils cannot compulsory acquire Commonwealth Government land. However, the Commonwealth can acquire property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws[2]. An example of this is land which the Commonwealth wishes to use for rail infrastructure or operational purposes.

The grant of exclusive power to the Federal Parliament with respect to land acquired by the Commonwealth was considered by the High Court in Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996)[3].

In examining the broad legislative power of the Commonwealth Parliament in respect of any place acquired for public purposes, the High Court determined that State legislative power is restricted to the extent that it regulates conduct, activities or things within Commonwealth land.

In Allders, the land in question was Tullamarine airport which was owned by the Federal Airports Corporation (FAC) – Commonwealth Government land.

The FAC granted a lease to Allders to operate a business inside the airport. The Victorian Commissioner of State Revenue sought to apply the Stamps Act 1958 (Vic), a State law, to the lease for the payment of stamp duty. The High Court found that State laws cannot regulate conduct, activities or things in a Commonwealth place. As the Commonwealth owned the land, the State-based stamp duty law did not apply to regulate conduct on Commonwealth land, so the Victorian Commissioner for State Revenue walked away empty-handed.

So if a State or local government authority requires part of a Commonwealth landholding for any purpose, it should forget about compulsorily acquiring it and should instead try to negotiate with the relevant Commonwealth department and seek agreement. This may well result in terms unsatisfactory to the State or council in question, but such is the power of the Commonwealth. Likewise, State-based laws allowing the installation of infrastructure pursuant to notices of entry have no application to Commonwealth land. Attempts to exercise such powers will result in trespass, so the only option is to negotiate an agreement with the Commonwealth.

Authors: Gabrielle Ellis & Peter Barakate

[1] Section 52(i)

[2] Section 51(xxxi)

[3] 186 CLR 630