Russia has failed in a high court bid to build a new embassy in Canberra, but the federal government will have to pay compensation for cancelling its lease, and cover the costs of the case.
The high court ruled in a majority decision that it was legal for the lease to be cancelled in 2023.
But it found that Russia should be compensated after the 99-year lease signed in 2008 for $2.75m was cancelled.
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Lawyers for the Russian federation had described the compensation bid as its “fallback case” if it was prevented from building a new embassy on the site.
The court noted in its decision that Anthony Albanese said in cancelling the lease the government had “received very clear security advice as to the risk presented by a new Russian presence so close to Parliament House” and that the proposed legislation to cancel the lease was “based upon very specific advice … about the nature of the construction that’s proposed for this site, about the location of the site, and about the capability that that would present in terms of potential interference with activity that occurs in this Parliament House”.
The seven justices who heard the case delivered three different judgments, though the majority decision noted that there was no agreement between the parties as to the risk that Albanese had referred to in his press conference about the cancellation.
The special case raised three principal issues that required answers, the court found, relating to the Home Affairs Act and the constitution.
Chief Justice Stephen Gageler and justices Gleeson, Jagot and Beech-Jones said in their majority decision that the laws relied upon to cancel the lease stated that it was designed “to protect Australia’s national security interests with regard to land within the area adjacent to Parliament House”.
“Underlying those answers is the conclusion that termination of the lease by operation of the Act constituted an acquisition of property from the Russian Federation within the meaning and scope of … the Constitution,” the majority decision said.
“The acquisition was for a purpose for which the Commonwealth Parliament has power to make laws … the Act is therefore valid and the Commonwealth is therefore liable to pay compensation to the Russian Federation under the act.”
The justices rejected the Commonwealth’s argument that Russia did not need to be compensated for the property being acquired in circumstances where “the sole object of that acquisition is to eliminate a legislatively perceived albeit unproven risk that the foreign state might use that property to interfere with the national security of Australia and in particular with the security of Parliament House”.
“The force of the argument is diminished when it is borne in mind that the Lease was granted by the Commonwealth and paid for by the Russian Federation in accordance with Australian domestic law and that use or potential use of the Land by the Russian Federation has not been suggested to involve breach of any term of the Lease or contravention of any domestic legal norm,” the majority found.
