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ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51

In ICM Agriculture Pty Ltd v The Commonwealth [2009] HCA 51 (9 December 2009), the High Court upheld 6:1 the validity of state legislation (ground water licences replaced under Water Management Act 2000(NSW) permitting applicants to take less water that previously allowed), enacted in response to a federal funding program under the National Water Commission Act 2004 (Cth). The applicants argued, among other things, that the legislation amounted to taking property on other than just terms, contrary to Section 51(xxxi) of the Constitution. The majority held that:

1. Per French CJ, Gummow and Crennan JJ: There was no acquisition of property within the meaning of the Constitution s 51(xxxi). The ground water was a natural resource and NSW always had the power to limit the volume of water to be taken from that resource.

2. Per Hayne, Kiefel and Bell JJ: There was no acquisition of property as NSW received no identifiable or measurable advantage by cancellation of the licences. The measure of control which NSW had over the resource was unaltered by the cancellation of any particular entitlements to extract ground water.

Heydon J dissented, reasoning that the legislation acquiring the licences was directed towards the acquisition of property in the licences as such. Accordingly, the National Water Commission Act 2004 (Cth) was invalid, because it was legislation providing for the acquisition by NSW of property other than on just terms. The states, subject to their own legislation, were at liberty to make uncompensated expropriations, at least in fields which the Constitution s 109 left open.