## Facts

- New South Wales enacted the Coal Acquisition Act 1981 (NSW), vesting in the Crown all coal not already Crown-owned and providing a statutory compensation scheme for affected owners.
- Durham Holdings Pty Ltd owned land in the Hunter Valley containing substantial coal deposits and expected to obtain significant value from mining-related royalties.
- Under initial valuation assumptions, Durham’s acquired coal interests were valued at more than $93 million.
- The Coal Acquisition (Amendment) Act 1990 (NSW) empowered the executive to enter “Arrangements” and issue instruments that capped compensation below market value.
- Under the capping instruments, Durham’s compensation was limited to $23.23 million.
- Durham challenged the validity of the 1990 amendment and the related instruments; the Supreme Court of New South Wales dismissed the claim, and the New South Wales Court of Appeal affirmed.

## Issues

1. Whether a common law presumption that legislation does not acquire property without adequate compensation constrained the operation of the 1990 amendment, rendering the capping instruments beyond power.
2. Whether New South Wales was constitutionally required to acquire property on “just terms” analogous to Commonwealth Constitution s 51(xxxi), including by reason of the federal Constitution, the Australia Act 1986 (Cth), or the Constitution Act 1902 (NSW).
3. Whether the 1990 amendment and related Arrangements constituted an invalid bill of pains and penalties or otherwise involved an impermissible legislative exercise of judicial power.

## Decision

- The High Court of Australia dismissed the appeal and upheld the validity of the Coal Acquisition (Amendment) Act 1990 (NSW) and the compensation-capping instruments/Arrangements.
- The Court held that New South Wales was not subject to a constitutional “just terms” constraint for State acquisitions of property in the manner alleged.
- The Court accepted a common law interpretive presumption favoring adequate compensation for compulsory acquisition but held it was displaced by clear statutory language authorizing compensation limits.
- The Court rejected the bill of pains and penalties argument, finding the measures were not punitive and did not impose punishment for an offence.

## Legal Principles

- A presumption that Parliament intends to provide adequate compensation for compulsory acquisition is a rule of statutory interpretation, not a freestanding substantive limit on legislative power.
- Clear legislative text can abrogate common law rights or displace interpretive presumptions, including those favoring full compensation for acquisitions.
- Commonwealth Constitution s 51(xxxi) does not, by itself, impose a “just terms” requirement on State legislation acquiring property.
- State plenary legislative power is constrained by express constitutional limits, not by an implied State-level constitutional guarantee of “just terms” compensation derived from common law notions of fundamental rights.
- A bill of pains and penalties requires punitive character (punishment for guilt of an offence); legislation implementing economic/resource policy, even if directed at particular interests, is not invalid on that ground absent punishment or usurpation of judicial power.

## Conclusion

The High Court upheld New South Wales’s statutory scheme capping compensation for compulsorily acquired coal, holding that any presumption favoring adequate compensation yields to clear legislative direction and that no State-level constitutional requirement of “just terms” compensation was shown to apply.


Durham Holdings Pty Ltd v. New South Wales, 205 C.L.R. 399 (Austl. 2001)