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Common(wealth) Knowledge #58: New Russian Embassy plans cancelled by federal government

The High Court has rejected a Russian challenge to a ban on their new embassy.

Justice Jayne Jagot of the High Court of Australia has upheld the constitutional validity of legislation that allowed the Commonwealth government to terminate the lease of land for the construction of a new embassy by the Russian government. The ruling comes just days after the short-lived rebellion from the Wagner Group.

Government of the Russian Federation v Commonwealth [2023] is a rare case that combines elements of constitutional law and contract law, as the Russian government alleged that the Commonwealth had used unconstitutional legislation to override the principles of contract law, leading to the unlawful and unfair termination of the lease.

The Home Affairs Act 2023 (Cth), which came into effect on June 15th, sought to terminate any interest that the Russian government had in the land in Yarralumla, near Parliament House, which had previously been leased to them for the creation of a new embassy. However, the legislation did not apply to the pre-existing Russian embassy.

On June 23rd, The Russian government filed a case with the High Court that sought to declare the legislation invalid. However, as the Commonwealth government had already terminated the lease, the Russian government needed to stop them from physically taking the land before the court case could be resolved.

Therefore, Russia also sought an ‘interlocutory injunction.’ An injunction is a form of remedy where the court, if it appears likely that the party in the wrong will continue to do the unlawful action, or repeat it in the future.

However, an interlocutory injunction is sought at the start of the proceedings by the plaintiff, the person bringing the case in court. It seeks to maintain the status quo, stopping the other party from doing something, in this case taking the property back, until the case can be resolved.

It was this application for the interlocutory injunction that Jagot J heard.

As affirmed by the High Court in ABC v O’Neill (2006), Jagot J had to answer two questions before she could grant the interlocutory injunction.

The first question before Her Honour was whether there was a ‘prima facie case,’ which is legalese for whether there was enough evidence that Russia would have a reasonable chance at proving that the legislation was invalid.

To answer this, Jagot J had to see if there was any constitutional power that allowed Parliament to pass this legislation. Each constitutional power is known as a ‘head of power.’

Her Honour found that there were several heads of power that could be used to justify the legislation, leading Jagot J to remark “it is difficult to identify a serious question to be tried [in court].”

The first of these is Section 51(xxix) of the Australian Constitution, the ‘external affairs power.’ This is one of the broadest powers in the Constitution, even allowing the government to turn international treaties into Australian legislation, as seen here. As Russia is an external power, Parliament can pass legislation relating to, and affecting, them, so this is a possible head of power.

Secondly, Section 122 grants Parliament complete legislative authority over the Australian territories, including the Australian Capital Territory, which is home to the leased property in question. Any self-governing power that the ACT government has is given to it by the Commonwealth government.

The third head of power is Section 51(xxxi), which requires any property acquired by the Commonwealth to be acquired under just terms. Any property acquired under unjust terms would require reasonable compensation.

The ‘just terms power’ formed the bulk of Russia’s argument, with its government suggesting that the Home Affairs Act 2023 (Cth) would be inconsistent with it. Part of Russia’s argument was that because the government had already spent $5.5 million USD on building a new embassy, the acquisition was on unjust terms.

However, Jagot J didn’t see this as sufficient evidence to allow the granting of the interlocutory injunction. Agreeing with the Commonwealth government, she pointed out that Section 6(1) of the Home Affairs Act 2023 (Cth) stated that if the acquisition was on unjust terms, Russia was to be compensated.

Rather than the legislation being inconsistent with the just terms power, Her Honour concluded that it was actually consistent with the just terms power, thanks to Section 6(1).

The case also hinted at the ‘implied nationhood power,’ which was implied into the Constitution by the High Court, granting Parliament to pass laws regarding anything of a sufficiently ‘national’ character, as being relevant, as the Commonwealth government referred to national security concerns, which may fall under this umbrella. This power was explored more in Common(wealth) Knowledge #42.

The second question that Jagot J had to answer before granting the interlocutory injunction was whether it was fair to both parties to grant it. However, as the case had not passed the first step of the test, it was irrelevant to consider this question.

Of the heads of power mentioned by Jagot J, the least likely to be effective here is Section 122, the ‘territories power.’

A recent ruling by the Federal Court, Yunupingu on behalf of the Gumatj Clan or Estate Group v Commonwealth [2023], which the Commonwealth government has appealed to the High Court, stated that any laws passed under Section 122 must comply with the just terms power, meaning that any acquisition of Aboriginal property by the Commonwealth government in the Northern Territory had to follow those rules.

However, it was not relevant for Jagot J to consider the applicability of that ruling in this case, as there were other heads of power that would have worked anyway. Her Honour was merely stating possible heads of power.

The Russian government is likely to return to the court again if they don’t believe the Commonwealth government has given them any compensation, or not enough compensation, to comply with the ‘just terms’ requirement.

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Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46.


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