Compensation - how adequate?
By David Sharp
Property rights are the guarantee of individual liberty. Freedom requires that we be secure in our
life, our person and what we possess. It is property (in the sense of being able to create acquire use and
dispose of possessions) that enable us to enjoy the fruits of our own labour and otherwise to secure and
advance our life and liberty.
The proper role of government is to protect individual property rights. Accepting that for an
overriding public purpose the government can compulsorily acquire private property it is a sine qua non that
it do so according to set principles and that just and reasonable compensation be paid.
As inhabitants of a free county it should come as no surprise that our law particularly that part known
as "Common Law" (which comprises decisions of judges over the centuries), has tended to reflect this basic
proposition. Thus David Gifford, the author of a widely read text on statutory interpretation in Australia
"It is a well established principle of statutory interpretation that no statute will be construed as abrogating
a fundamental principle of the Common Law unless its intention to do so is clearly expressed."
More specifically in the 1927 Privy Council decision of CSR Ltd v Melbourne Harbour Trust
Commissioners, Lord Warrington said:
"The Board is guided by the well known principle that a statute should not be held to take away private
rights of property without compensation unless the intention to do so is expressed in clear and
These and similar pronouncements over the years have led to a widely held view that although the
Victorian Legislature could legislate to take property without just and reasonable compensation, it would
require a clear expression of legislative intent for a court to find that it intended to do so.
In the recent Supreme Court case of Michael Alesios et al v. The Hon. Alan Stockdale et
anon, the court was called upon to determine the effect of a provision which allowed for the cancellation
of certain scallop fishing licences, and provided for an amount to be paid to the former holders of the
licenses, to be "determined" by the Treasurer and the Minister. It was argued that this did not allow
something to be paid on a standard or non-individual basis as determined by the Ministers. Rather it required
full compensation to be determined individually with respect to each license holder. This argument found
favour with the trial judge. However, the judges of the Court of Appeal were unanimous in rejecting his view.
The thrust of their judgements is to suggest that the legislature had expressed an intention that
compensation was not intended to be a subjective matter, but rather an averaged value of the licences as
determined by the ministers. The implication seems to be that if parliament for full (or even just and
reasonable) compensation to be paid to an individual it will need to say so. Whilst obviously open for the
court to find the intention of the legislature was such, this seeming change of emphasis should be of
concern. Leave to appeal to the High Court was sought but refused.
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