ACT Supreme Court reveals why it allowed Calvary Hospital takeover

A full bench of the ACT Supreme Court released its reasons on Friday, rejecting Calvary's claims that it would be unable to enforce an "aspirational" requirement for the acquisition to be done on "just terms".

Calvary Health Care ACT challenged the validity of what it described as "extraordinary and unique" takeover legislation earlier this month, asking three judges to declare it invalid.

At the heart of Calvary's argument, presented by David Williams SC, was its contention that the legislation did not provide any mechanism for Calvary to obtain "just terms".

Mr Williams said the "hostile" takeover" was "anything but just", adding that Calvary would have to comply with "oppressively vague" obligations while transitioning its Bruce hospital to government hands.

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Lawyers for the ACT government, led by solicitor-general Peter Garrisson SC, argued it was sufficient for the takeover legislation to state Calvary's entitlement to just terms, including "reasonable compensation".

In the judgement published on Friday, Chief Justice Lucy McCallum, Justice David Mossop and Justice Belinda Baker, agreed with the government.

The judges noted the legislation said "the territory must provide just terms".

"That language is indicative of an actual obligation rather than a mere aspiration or exhortation," the court wrote.

While Calvary challenged the validity of the legislation as a whole, it also attacked a number of individual sections and failed in doing so.

The court is yet to rule on the validity of associated regulations that relate to the terms of the acquisition, including how the government will compensate Calvary.

"It would be possible for the regulations to be invalid in whole or in part, yet the Act not equivalently invalid," Friday's judgement notes, leaving open the possibility a small part of Calvary's challenge may yet succeed.

Any change to the regulations is unlikely to stymie the process of transitioning the hospital to government hands by the planned acquisition date of July 3.

But Calvary's lawyers may yet appeal against the decision to dismiss their challenge to the legislation, with an indication expected when the matter returns to court for an administrative hearing next Friday.

Mr Williams previously flagged the possibility of appealing once the court had made it reasons known.

The ACT government plans to ultimately build a new public hospital on the site of the existing facility.

Controversy surrounding the acquisition is still raging, with a federal Senate inquiry set to examine the takeover.

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