IS A CAUSE OF ACTION A CASTLE? STATUTORY CHOSES IN ACTION AS PROPERTY AND S 51 (XXXI) OF THE CONSTITUTION.

Author:Duffy, Michael J.
 
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CONTENTS I Introduction II The Nature of and Justification for Private Property A What Is Private Property? B Philosophical Justifications 1 Human Rights and Freedoms 2 Utilitarian and Economic Arguments 3 Fundamental Private Property--the Dwelling as a Castle 4 Property in the Minds of the Framers C Private Property and the State D Private Property and Choses in Action III Choses in Action A Choses in Action as Property B New Statutory Rights C Reaction to Litigation Involving New Statutory Rights IV Section 51(xxxi) of the Constitution A 'Property' in s 51(xxxi) of the Constitution B Assignability as a Criteria of Property C 'Acquisition' of Choses in Action 1 Causes of Action-Georgiadis 2 Other Statutory Rights 3 General Law Origins of Rights and Accrued Rights 4 'Acquisition' by or to the Benefit of a Third Party 5 The Relationship between Loss and Gain in an Acquisition 6 Characterisation 7 Genuine Adjustment Formula D Summary V Conclusion I INTRODUCTION

Over the last fifty years, the Commonwealth has created a considerable number of new causes of action or litigation rights. The survey of rights in Table A appended to this article identifies over 70 rights of action for pecuniary relief brought into existence since 1966. Some of these are codifications or modifications of earlier rights, but some are quite new. The enforcement of such rights necessarily involves more litigation and the intervention of courts to effectively redistribute property. This trend meets occasional resistance and calls to limit the amount of litigation. But once created, can such rights be curtailed? The High Court has found that accrued rights of action (as choses in action) may be property and thus subject to the potential application of s 51(xxxi) of the Commonwealth Constitution ('Constitution'). If so, the curtailment of such rights may require the provision of just terms which may include compensation.

How far does s 51(xxxi) protect causes of action from curtailment by the legislature? In examining this issue, this article will move from the general (private property rights in principle and the philosophy of these rights) to the particular (private choses in action in the form of accrued statutory causes of action).

The generalist analysis in Part II will give background to the constitutional protection and may shed some light on why the framers of the Constitution believed in private property rights and the need for some constitutional protection of these. It will also seek to provide a theoretical link between the nature of private property and the nature of choses in action through a consideration of the role of the state and the 'social contract'.

In Part III, there will be a short discussion of choses in action and some mention of the types of private federal law statutory rights which have been created over the past 50 years, a selection of which are set out in Table A.

Part IV will conclude with an analysis of the relevant High Court authority on s 51(xxxi) and how it might apply to any abolition or modification of statutory rights. The section will conclude with a short summary of the s 51(xxxi) doctrine and how it applies to private statutory choses in action, as well as some commentary on the background framework and linking theory.

The article concludes by suggesting that certain accrued private statutory choses in action are protected by s 51(xxxi) as property, though subject to exceptions which are not completely certain.

II The Nature of and Justification for Private Property

In this section, I will examine the right of private property, its nature and its justification. This will provide background for the later discussion of statutory choses in action and their treatment in the High Court. The analysis will seek to identify links between private property generally, which is partly protected by s 51(xxxi), and statutory choses in action. Though such connections may not be readily apparent on their face, the argument will be developed to show how the nature of state power (and to a lesser extent, the issue of assignability) can provide frameworks to link the two.

A What Is Private Property?

There is no universally agreed nor understood definition of private property. (1) One definition of property is 'that which is capable of ownership.' (2) Ownership, in turn, has been defined as the 'right to the exclusive enjoyment of a thing' (3) as well as the right recognised by law to exercise rights with respect to property against all persons. (4)

A popular conception is the 'bundle of rights' theory under which ownership is treated as a bundle of rights vis-a-vis others, rather than rights to the thing itself. (5) This notion also explains how ownership can be divided and how it can apply to both tangible and intangible property. (6) This approach, originally developed by Hohfeld (7) and later by Cohen, (8) suggested that property was really a collection of rights such as the rights to use, exclude others, and sell or assign. The 'bundle' approach is pervasive in American legal scholarship, (9) and has seen the development of the concept of 'regulatory takings' whereby regulation of property rights can be argued to be a 'taking' or acquisition of such rights if it goes 'too far' (10) (the 'takings' infringing the Fifth Amendment to the United States Constitution). (11) In Australia, the High Court has stated (unanimously) that

[i]n many cases, including at least some cases concerning s 51(xxxi), it may be helpful to speak of property as a 'bundle of rights'. At other times it may be more useful to identify property as 'a legally endorsed concentration of power over things and resources'. Seldom will it be useful to use the word 'property' as referring only to the subject matter of that legally endorsed concentration of power. (12) Property rights are also tied up to a degree with the power of the state, since it is the recognition of those rights by the law of the state or polity that makes them generally enforceable in that polity. (13) The power of the state in its legislative and judicial arms is relevant to the discussion in this article in a number of ways that can interrelate:

1 the ability of the legislature to create statutory rights;

2 the judiciary's ability to impact on proprietary rights by redistributing property in the course of enforcement of rights of action; (14) and

3 certain courts' ability to rule on the constitutionality of modification or removal of statutory rights by the legislature.

B Philosophical Justifications

As will be seen, the theoretical justifications for private property do not form a substantial part of the jurisprudence on s 51(xxxi). Though described as 'a very great constitutional safeguard', (15) the High Court has rarely been required to go behind that safeguard to ascertain its justification. (16) Nevertheless, this analysis would be incomplete without a brief consideration of the justifications for private property which underlie its protection in s 51(xxxi).

1 Human Rights and Freedoms

Normative arguments for private property tend to focus on innate human rights and freedoms. (17) At a fairly high level of abstraction, Hegel suggested that '[i]n order that a person be a fully developed and independent organism, it is necessary that he [or she] find or make some external sphere for his [or her] freedom.' (18) Private property is said to give an external objectivity to human will, which is otherwise subjective. (19) Hegel stated: 'As a person, I have the right to put my will into everything, which thereby becomes mine.' (20)

The argument has been developed to suggest that this effect is lost if others try to work on the same object for their purposes, which provides the defence for the exclusive control provided by private property and the critique of communal ownership. (21)

In more modern times, noting the issue of strong state power as a potential limiter of freedom, Reich has described how property draws a boundary between public and private power by creating a 'circle' of freedom around individuals. Outside the circle, individuals must justify their actions and show their authority, whereas within the circle they are master and it is the state which must justify any interference. (22)

Other moral justifications to justify the legal right of private property have focused on the individual's right to improve their own material wellbeing through the acquisition of things: food, water and shelter. (23) Private property is also founded upon the concepts of industry and personal exertion. This reflects Locke's conception that, by law of nature, things belong to those who make them. (24) Locke argued that the Earth's resources were common to all people, but that a person had unique property in his or her own person and the labour of their body and hands. (25) Thus, if removed from the state of nature and mixed with labour, a person added something to that common resource (ie their labour) that was unquestionably their own, and thereby made it their property. (26) Locke argued that this was an interest that the state must respect. (27)

Another normative justification for private property was the argument that discoverers of truly unclaimed property who take possession should have rights of ownership of the property. (28)

2 Utilitarian and Economic Arguments

Somewhat unsurprisingly, many early utilitarian (29) philosophical justifications for private property focused heavily on land. (30) These go as far back as Aristotle, who asked: 'What is the proper system of property for citizens who are to live under an ideal constitution?' (31) Anticipating 20th century political experiments in property ownership, he compared private property and communal ownership, noting difficulties with the latter such as that '[t]hose who do more work [on the land] ... will be bound to raise complaints against those who get a large recompense and do little work'. (32) Social...

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