Calvary and legal glitches

The key to the dispute over the takeover of the public hospital land of Calvary Hospital lies in what is, in effect, the ACT’s Constitution – the Self-Government Act.

That Act is an Act of the Federal Parliament and cannot be changed by the ACT. It provides that the ACT Legislative Assembly “has no power to make laws with respect to the acquisition of property otherwise than on just terms”.

So, as long as the Territory’s enabling legislation provides for “just terms” the ACT can take over Calvary and there is nothing Calvary can do about it except haggle over the terms.

The “just terms” provision mirrors the Australian Constitution which provides that the Commonwealth cannot legislate for the acquisition of property otherwise than on “just terms”.

There is more than 100 years of legal history interpreting those words, with some very surprising results. As things stand, both the ACT and Calvary could be the recipient of such a result.

Quite a few federal acquisitions have failed because the legislation attempted to define, quantify or qualify what “just terms” means.

On the other hand, quite a few hard-ball claims against government for not providing “just terms” have fallen flat because they have misunderstood the precise meaning of “acquisition of property”.

The ACT’s enabling legislation has avoided the trap of trying to define “just terms”, so it means the same as what is in the Self-Government Act. 

But it has strayed from the constitutional straight and narrow in its overarching clause that says the Territory must provide just terms “to a person from whom AN INTEREST is acquired under this Act”. (My emphasis).

It may be that nothing turns on it. But “an interest” (the words used in the enabling legislation) is not the same as “property” (the word used in the Self-Government Act).

General legal principles suggest that if legislation uses different words, they mean different things. There has been so much hair-splitting and arcane reasoning by courts in this area, it would be wise to stick to the constitutional wording rather than go on a risky frolic of your own.

Secondly, after the overarching clause the enabling legislation provides for a whole lot of ways to calculate what it calls “compensation” – again, a departure from the constitutional wording. And the legislation sets out examples of things that would be compensable. It also grants a regulating power to help work out the compensation.

It may be that the overarching clause would save those clauses and the regulating power from being declared invalid as contrary to the Self-Government Act, but it would be more decisive to say that it applies no matter what else is in the rest of the legislation,

The further point is that these, albeit minor, discrepancies could give rise not to just a legal challenge (which might happen anyway) but enough to make it more likely for a court to delay the acquisition until the matter is resolved.

The Territory also has to be mindful that a court could interpret “just terms” as something much greater than mere market land value, given Calvary’s near half century of reputational build up.

On the other side of the equation, we have Calvary. In the past, it has refused to sell to the Territory on what it considered acceptable. It also said any sale would require Vatican approval. That would result in uncertainty and delay. So the Territory went for compulsory acquisition.

The Territory had the option of building on a greenfield site, but it said that would have been more costly and inconvenient to the public.

If Calvary does not come to terms, it cannot stop the acquisition other than by seeking to have the enabling legislation declared invalid and even then, it would only be a delay until the legislation, if found defective, was fixed up. The Territory clearly has power to acquire. The only issue is on what terms.

If Calvary plays hard-ball and demands terms unacceptable to the Territory, it would have to go to court to get a determination on what the “just terms” should be. That is a minefield of uncertainty.

Courts have held that some rights created by statute – such as time-limited mining leases – can be taken away by statute without the government “acquiring property”. First, because there is no “acquiring” and second because there is no “property” left.

Whether a leasehold on land would be similarly treated may be unlikely, but it is a possibility.

Certainly, a leasehold would command less money than freehold in any acquisition, in particular one that was granted for nothing, as the Calvary lease was in 1971. Further it may be that a court could put a very low price on a leasehold with the restrictive covenants that typical ACT leases have. And in the case of Calvary, those covenants are heavily dependent on government largesse to be worth anything.

As to the Territory saying it no longer requires Calvary to provide services under the public hospital contract, that would probably not be an “acquisition of property”.

In short, the parties, particularly Calvary, should do their very best to negotiate a settlement because of the legal uncertainty and also because the Territory has two other big weapons, albeit ones with a lot of political difficulty. 

One would be to acquire the whole of Calvary, public and private and pay whatever a court determined. The other would be to get the Commonwealth to legislate for the acquisition using its territories power which the High Court has held is not subject to any requirement to provide just terms.

Crispin Hull

This article first appeared in The Canberra Times and othr Australian media on 18 May 2023.