The PNG Supreme Court's order to close the Manus Island detention centre will have serious flow-on effects for Australia, and could include millions in compensation and the transfer of detainees to our shores. Whoever wins this election will deal with this almost immediately, writes Greg Barns.

It has had little or no airplay during this election campaign but the consequences of the April decision by the Supreme Court of Papua New Guinea ordering the closure of the Manus Island immigration detention centre will confront whomever is elected on July 2 almost immediately.

On April 26 the PNG Supreme Court found that the detention of asylum seekers on Manus Island was unconstitutional and unlawful. It heard further argument in the case this week and on Tuesday lawyers for the PNG government will hand to the court a complete list of the detainees who are currently housed on Manus Island. It is about 800-1000 individuals.

For the Australian government there are two challenges. The lawyers for the Manus detainees are seeking compensation for their clients because they have been detained unlawfully and are seeking orders for their release and return to Australia. While Australia is not a party to the court action it is possible the PNG government will ask Australia to pay compensation given the poor state of the PNG budget and the fact that Australia has financed the detention centre.

When it comes to compensation the quantum sought is likely to be substantial, possibly between $500 million and $1 billion. This is not only because the detainees have, in the main, been on Manus Island for up to three years but also because of the nature of the detention.

One of the documents filed in the PNG Supreme Court case last year is what is termed an Agreed Statement of Facts. This is a legal term for a document that opposing parties in a case file with the court to indicate there is no dispute about certain facts. In the Manus Island case the Agreed Statement of Facts was filed by lawyers for the PNG government and the lawyers for the detainees.

It makes for illuminating reading because it deals with the question of whether the Australian government is liable for those detained and how they have been treated while in detention.

The statement makes it clear that the running of the Manus Island centre is effectively a joint venture between Australia and PNG. PNG appointed an administrator of the centre but the Australian government is responsible for the engagement and supervision of contractors like security company Transfield (now Broadspectrum), Wilson Security and medical services. A "joint committee" of PNG and Australian immigration officials have "responsibility for the oversight of practical arrangements required to implement the" memorandum of understanding that the Australian government and PNG government signed in 2013.

The significance of these arrangements is that they suggest claims by Australian politicians that PNG is primarily responsible for what happens on Manus Island are simply not true.

The statement then chronicles various aspects of treatment of the detainees since 2013. It notes that when the centre was opened in July 2013 between then and the end of that year nearly 1200 asylum seekers were transferred to Manus Island. Before they arrived they had all their personal belongings including mobile phones, which contained numbers of family members and friends, medical aids and medications "confiscated" by Australian immigration authorities. The statement also indicates that shortly after these asylum seekers arrived on Manus Island they were told by PNG officials their cases could take "between 2 and 5 years" to process. Many of the detainees still "do not have any idea when they will be released".

The statement sets out the fact that international law does not support "indefinite placement", that seeking asylum is not an unlawful act and that "restrictions on liberty imposed on persons exercising this right need to be provided for in law, carefully circumscribed and subject to prompt review."

So a court assessing the compensation claim against governments that have detained individuals in these circumstances might be inclined to award what are termed exemplary damages, in addition to compensation for each day of unlawful imprisonment. Exemplary damages are designed to do as the name suggests, make an example of an individual or organisation by making it pay more money in compensation.

The reasoning of the court here could be along the lines that PNG knew its obligations to treat asylum seekers fairly and compassionately and to process their claims expeditiously. PNG and Australia have not allowed this to happen and therefore the court might "punish" the PNG government via the means of extra compensation. As noted above it is possible any compensation order could be paid by the Australian taxpayers.

The issue of what happens to detainees now is yet to be resolved by the legal process in PNG. But having declared that the detention is unlawful the PNG Supreme Court is now being asked to order that the detainees are transferred back to Australia. If the Court orders this to occur, then short of a legislative intervention by the embattled PNG prime minister Peter O'Neill to stop this occurring a Turnbull or Shorten government will be faced with the prospect of detainees being issued with travel documents by Mr O'Neill's government and turning up at Australian airports seeking asylum.

The claims made by both the Coalition and ALP that asylum seekers who arrive by boat will never be allowed to set a foot on Australian soil will sound hollow.

Greg Barns is a barrister and Spokesman for the Australian Lawyers Alliance.