“Ladies and gentlemen, welcome to the Canberra Theatre. Patrons are advised that, for tonight’s performance of The Castle, the role of Mr Darryl Kerrigan will be played by Mr Vladimir Putin.”

In the classic 1997 Australian movie, Kerrigan’s case turned on Section 51(xxxi) of the Constitution which provides that the Commonwealth can only acquire property “on just terms”.

Andrew Fraser

And so it is in 2025 in Government of the Russian Federation v the Commonwealth of Australia, in which the Russian Government argues that its Australian counterpart did not have the power to  make a special Act that took back the lease granted to Russia — way back in 2008 — for a new site for its embassy. If, however, it did have that power, then Russia says it should receive reasonable compensation. It paid $2,750,000 plus associated fees for the site, which was never developed.

For its part, the Australian Government says the Home Affairs Act 2023 (enacted with Opposition support and assented to in the same single day it was announced) thwarted a palpable risk to the operation of Parliament chiefly because of the site’s proximity (at about 300 metres) to the Parliament building. It says the Home Affairs Act could have been made under the territories (s122) or external-affairs (s51, xxix) powers of the Constitution.

The High Court has reserved judgment after written and oral submissions for Russia from Bret Walker SC and for the government from Solicitor-General Dr Stephen Donaghue KC.

If brevity, simplicity and directness of submission were all that counted, Walker would win in a canter, in my view, but Donaghue’s more intricate and involved arguments may catch judicial eyes and ears.

The court has set three questions (not counting the ubiquitous question of costs):

1. Is the Home Affairs Act invalid in its entirety on the ground that it is not supported by a Commonwealth head of power?
2. If no, does the Act result in the acquisition of property to which the “just terms” provision applies?
3. If yes to Question 2, is the Commonwealth liable to pay a reasonable amount of compensation?

The lease was entered into on Christmas Eve 2008 and, Walker noted, “at no time prior to the passage of the [Home Affairs] Act had the lease been terminated”, as of course it could have been under one of its very own clauses in any of the intervening 15 years, had our government chosen to.

“The Act does not state the reason for the termination, identify the lessee or identify any other relevant matters. In particular, it neither specifies nor refers to any concerns regarding the defence of the Commonwealth or the desire to abide by any international obligation,” Walker submitted. “It is clear that… where the Commonwealth passes an Act which, on its face, bears no relation to any head of legislative power, there is no presumption of validity and the Act cannot be found to be valid except on the basis of facts, proved or judicially noticed, to connect it with power.”

There were no facts about the supposed threat the new Russian mission posed, but Donaghue argued that the Act addressed what its explanatory memorandum described as the “very clear security advice as to the risk presented by a new Russian presence so close to Parliament”. That’s 15 years new. Donaghue went on to note that the prime minister had said the legislation was “based upon very specific advice” about the nature of the construction proposed, the location of the site and “the capacity that would present in terms of potential interference with activity that occurs in this Parliament House”.

He conceded that, “It is true that the advice in question is not before the court, as public interest immunity prevents it from being put into evidence”.

But it’s the location that’s supposed to be all important. The site hasn’t changed since 2008. It just happened to acquire special status in the year after Russia’s invasion of Ukraine.

Walker put it neatly: “As land adjacent to the [Russian site] is leased to other foreign nations, it cannot be said that ‘national security’ interests are engaged merely because the [site] is near Parliament.

“Neither house of Parliament nor this court have been informed of the facts which purport to justify why [Russia] was singled out for the termination of its lease.”

In his reply to Donaghue’s submissions, Walker noted that it was the Australian Government that granted the lease in the first place; that the level of risk had been put at its highest in the Albanese press conference as a “potential” only; and that the National Capital Authority had approved the supposedly dodgy embassy building.

I can’t do anything like justice to the nuances of the arguments put by both sides, particularly the abundant case law, the analysis of the Constitution Convention Debates and the pre-federation authorities from the US drawn on by the solicitor-general. The silks know a whole lot more law than I.

But the vibe?

Putin’s Government is perhaps second only to Benjamin Netanyahu’s as the world’s most reviled litigant.

He is no cuddly Darryl Kerrigan, yet his side should win here, in my view, at least in significant part, and for similar reasons.

The judgment will be clothed in layers of precedent and elaborate legal reasoning, but my guess is the bottom line will be:

1. The Parliament will be found to have had the power to make the Home Affairs Act. The government may be altogether too timid, too easily swayed by ASIO and too keen to keep us all in the dark, but Parliament is still supreme.
2. The Act’s operation will be found to have resulted in the acquisition of property to which the “just terms” provision applies.
3. A reasonable amount would have to be paid, and the purchase price would be but the starting point.

https://johnmenadue.com/post/2025/08/the-russians-lost-plot-will-they-find-serenity-or-are-they-dreaming/

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