Constitutional Law Guidebook [2 ed.] 0195594002, 9780195594003

Citation preview

CONSTITUTIONAL LAW

GUIDEBOOK Second Edition

Bede Harris

v

Contents Preface viii How to Answer Problem Questions ix

Part One: Constitutional Fundamentals

1

Chapter 1: What is Constitutional Law? 3 Introduction 3 The doctrine of constitutionalism 3 Where do we find constitutional law? 5 An additional source of rules: constitutional conventions 6 Where did our institutions come from? 10 Constitutional amendment 15 An Australian republic? 16 Chapter 2: Fundamental Concepts of Australian Constitutional Law 17 Introduction 17 Representative government 17 Responsible government 21 The doctrine of separation of powers 25 Federalism 28 Precedent 35 Chapter 3: The Legislature 36 Parliament 36 The monarch 37 The House of Representatives 37 The Senate 39 Qualifications for election to Parliament 42 Legislative procedures 43 Parliamentary privilege 51 Chapter 4: The Executive Who comprises the executive? The Crown The Governor-General Executive powers exercised independently The Constitutional Crisis of 1975 The Cabinet and the bureaucracy Executive power

57 57 58 58 60 61 64 67

Chapter 5: The Judicial Branch and Separation of Powers The courts Separation of judicial power Defining ‘the judicial power of the Commonwealth’ Separation of powers and State courts

74 74 81 86 89

vi

Contents

Chapter 6: Characterisation and Interpretation 95 Interpretation as a technique 95 Characterisation 96 Incidental powers 101 Proportionality 102 Constitutional prohibitions—the ‘practical effect’ test 104 Contemporary meaning 105 Invalidity and severance 105 Chapter 7: State and Territory Constitutional Law State Constitutions State legislative competence Procedural restraints Extraterritorial legislation by the States The constitutional position of the Territories

109 109 111 113 121 123

Chapter 8: Express and Implied Rights Rights and the law Jury trial Freedom of religion Equal treatment as between residents of States Acquisition of property on just terms compensation The implied freedom of political communication The implied freedom from arbitrary detention The implied right to vote

127 128 130 131 133 134 141 148 149

Part TWO: Enumerated Powers

153

Chapter 9: Trade and Commerce Interstate and overseas trade and commerce

155 155

Chapter 10: Corporations The corporations power The scope of the corporations power The trade and commerce power compared with the corporations power

161 161 164 168

Chapter 11: External Affairs The external affairs power Treaty implementation Events outside Australia International law and domestic law The States as international actors

170 170 170 175 176 177

Contents

Chapter 12: Defence The defence power The purposive nature of s 51(vi) The varying scope of the power

179 179 181 182

Part THREE: Financial Relations and Federalism

187

Chapter 13: Taxation, Grants and Expenditure The taxation power Geographical discrimination and preference Section 96 grants Commonwealth expenditure: ss 81 and 83

189 189 193 196 199

Chapter 14: Excise Duties Duties of customs and excise Defining excise duties

204 204 205

Chapter 15: Freedom of Interstate Trade, Commerce and Intercourse Section 92 Interpreting s 92 Intercourse between the States

211 211 212 216

Chapter 16: Inconsistency Section 109 Tests for inconsistency Impossible to obey both laws Commonwealth law confers a right denied by State law Commonwealth law ‘covers the field’

221 221 223 223 223 224

Chapter 17: Intergovernmental Immunities The intergovernmental immunities issue Statutes binding the Crown Can one level of government bind the other? Commonwealth laws binding the States State laws binding the Commonwealth Other provisions affecting Commonwealth–State immunities Laws of one State binding another

235 235 236 237 238 241 245 246

Table of Cases 248 Table of Statutes 257 Index 262

vii

viii

Preface As part of his comprehensive codification of Roman law in the sixth century, the Emperor Justinian ordered the publication of a brief book cupida legum iuventus (‘for young people wishing to study the law’). The result was the publication in the year 533 AD of the Institutes, a short summary of the law written levi ac simplici (‘in a light and elementary manner’)—that is, in such a way as to ensure that students would not become frustrated in their studies, but would rather gain confidence through being introduced to the study of law ad quod leniore via … sine mango labore (‘by a gentler path … and without great labour’) (Inst. 1.1.2). This book presents constitutional law in a ‘light and elementary manner’, by providing students with a concise summary of constitutional law in Australia. The book explains the basic principles of the law and how they have been applied in leading cases. It is designed as a foundation for students who are new to the topic, and also as a ready reference point for those engaged in revision. Much of this book derives from my experiences as a lecturer, and I have endeavoured to write the type of book that I would like to have if I was studying constitutional law for the first time. This second edition of the book brings the case law up to date and incorporates other changes that seemed desirable in light of experience using the first edition. A key facet of this book—and of the others in the Oxford University Press Guidebook series—is the learner-centred features that appear in each chapter. These include ‘cases to remember’, which explain the key cases relevant to each chapter; ‘alerts’, which draw students’ attention to problematic areas of the law; and ‘examples’, which illustrate how constitutional law impacts on everyday life. In addition, Chapters 7–17 contain problem questions, which challenge students to apply the knowledge they have learned. Guidelines indicating issues students should consider when answering these problem questions (but not the full answers!) can be found on the Oxford University Press website at www.oup.com.au/harris2e. This website also contains an example of how one might structure a legal advice on a constitutional law matter, which I hope will be found useful by those who find themselves in a career where such a skill is called for. I would like to thank the many people who worked on this project: Michelle Head, Publishing Editor at Oxford University Press, who commissioned this second edition; Shari Serjeant, Development Editor, Tiffany Bridger, Editorial Co-ordinator; and Trischa Mann, who did the copyediting. Needless to say, any shortcomings in the work are my own. The law is stated as at 31 October 2014. Bede Harris November 2014

ix

How to Answer Problem Questions Because problem questions are the most commonly encountered form of assessment in law, it is important for you to obtain practice in how to answer this type of question, which presents you with a hypothetical fact situation to which you have to apply the law you have learned. At the end of each of chapters 7–17 of this book there is an Assessment Preparation section containing at least one, and sometimes two, problem questions for you to answer. The technique which I recommend you use in answering problem questions is the Issues, Law, Application, Conclusion (ILAC) format, widely used in law schools in Australia.

Issues The first step required in answering problems is the identification of the legal issue— or issues, because there will usually be more than one—presented by the problem. Here it is important to realise that even though your statement of the law aspect of ILAC comes after identification of the issues, you cannot correctly state the issues unless you know the law, and thus can determine what legal questions need to be answered. It is therefore advisable, when framing the issues, to think about what the legal problem areas the facts potentially give rise to. For example, if the problem involves an Act of the Commonwealth imposing an obligation to pay money, there are several aspects of constitutional law that might be raised by the facts, and a careful analysis of the question in light of the law will be needed to determine which of these are relevant. For this reason, at various points this book contains ‘Alert’ boxes, drawing your attention to areas which are particularly difficult and which involve analysis of several legal issues. Given that a single problem question will usually raise more than one issue, what is the best structure to adopt: using ILAC to deal with each issue in turn, or dealing with all issues, then with the law relevant to each, then with the application, et cetera? This is a matter of personal preference, although it is probably better to deal with all the issues, then with all the law (dividing the law relevant to each issue into separate paragraphs), then with the application of the law to each issue and finally with the conclusion on each issue, because this will enable your lecturer to obtain a view of your answer to the whole problem. The method recommended in the preceding paragraph also has the advantage of allowing you to conveniently deal with the situation where different solutions to the problem you are dealing with could be reached depending on how one of the issues is disposed of. For example, it may be that, depending on how one issue is decided, all the others become moot. However this does not mean that you should dispose of the problem just by dealing with that one issue: you will be marked down for failing to deal with the others that would remain relevant if there was a different solution to the first issue. Grouping all the issues, all the law and all the applications together will remind you of the need to answer the problem comprehensively.

x

How to Answer Problem Questions

Finally, in relation to structuring your answer, it is very useful (particularly in an exam) to spend a few minutes drawing a horizontal tree diagram or mind-map in pencil, with main branches for each issue, and then sub-branches for each of the statutes and cases relevant to that issue coming off it. This will enable you to obtain a view of the entirety of your answer at a glance, help you structure your answer logically—and, as you write the answer itself, enable you to go back and jot down a point or case that has occurred to you so that you don’t forget to include it in your answer.

Law In this part of your answer you should discuss relevant statutes and cases, demonstrating your familiarity with the legal principles required to address the issues. The key word here is ‘relevant’—there is nothing to be gained by adopting a ‘shotgun’ approach and writing down all the rules of law relating to the broad area to which the problem relates. In fact, such an approach may give rise to a suspicion in the mind of the examiner that you do not know what law is relevant, and that you are attempting to cover all bases by writing a general essay on the area of law. Instead you should give a carefully targeted exposition of the rules relevant to the issues. When mentioning cases you should take care to state the name of the case and the principle of law for which the case stands. If the answer is being written as a piece of assessment during the semester, your lecturer will usually require you to adhere to a style guide, including referencing conventions. In an exam this is unlikely to be the situation and so, for example, cases need be referred to only by name, omitting citations.

Application In this section you should apply the law you have laid out in the previous section to the issues you identified at the start of your answer. Here it is important to refer back to the specific facts of your problem, showing how the rules of law you have identified apply to them. This may involve pointing to similarities between the facts of your problem and decided cases (where you are arguing that the cases are applicable) or to differences between the facts of your problem and decided cases (where you are arguing that the cases are distinguishable). Given the uncertainties inherent in law, it is perfectly permissible, and indeed advisable, for you to note that courts might reach different conclusions on the question of how the law is likely to be applied to the facts of the problem. In these circumstances, you should qualify your answer by saying something like: ‘In my view, a court is therefore more likely to reach the conclusion that …’ Your lecturer is going to want to see that the conclusion you reach in the final part of your answer has been reached after a process of applying the law to the facts.

How to Answer Problem Questions

Simply stating a bare conclusion after your discussion of the law is not enough. The application stage constitutes a vital link between those two stages.

Conclusion The conclusion is likely to be the briefest part of your answer. In it you will say what the outcome of the case is likely to be—for example, who will be liable, whether an act is lawful, or whether legislation is valid. You should take care, if the question asked you to advise a particular party, to frame your conclusion as advice to that party. Here it is also important to remember the issue, discussed above, of what happens if there would be different solutions to the problem as a whole, depending on which of two or more alternative solutions to a particular issue was adopted by a court. In those circumstances, you should make sure to mention all possible outcomes, while stating which you think is most likely. In other words, do not ‘fence-sit’: give the lecturer a definitive opinion as to what you think the most likely outcome is.

xi

Part one

Constitutional Fundamentals

3

CHAPTER 1

What is Constitutional Law? Covered in this chapter After reading this chapter you will understand: • what constitutional law is • how the doctrine of constitutionalism serves to define and limit government power • what the sources of constitutional law are • the importance of non-legal rules called conventions • how Australia came under United Kingdom sovereignty and how it has become independent • what the Constitution requires for its amendment.

Cases to remember Entick v Carrington (1765) 19 St. Tr. 1030 Madzimbamuto v Lardner-Burke [1969] 1 AC 645 Mabo v Queensland (No 2) (1992) 175 CLR 1

Introduction Constitutional law is the study of the law governing the interaction between the organs of government, and between the government and the people. Although all lawyers are likely to advance reasons as to why their branch of the law has the greatest impact on society, in the case of constitutional law such claims are arguably true, because constitutional law contains the rules prescribing how other rules of law are made, administered and adjudicated.

The doctrine of constitutionalism The doctrine of constitutionalism is at the foundation of constitutional law. This doctrine states that the powers of the organs of government should be defined and limited by law. A country where the doctrine of constitutionalism is respected, and the powers of the government are limited by law, can be contrasted with a country subject to arbitrary government, where the government acts as it pleases. The classic example of the operation of the doctrine of constitutionalism is provided by the following case.

4

Part one: Constitutional Fundamentals

A case to remember Entick v Carrington (1765) 19 St. Tr. 1030 is one of the most famous cases in constitutional law. Entick was an anti-government pamphleteer. Carrington, who was a Secretary of State (that is, a government minister), ordered troops to enter Entick’s house, search it, and take away documents. The troops had no warrant. Entick brought an action against Carrington seeking damages for trespass. Carrington’s defence was that it was lawful for him to order the search simply because he was acting as a minister of the Crown. This was rejected by the court, which held that in the absence of any common law rule or statutory authority authorising the entry onto Entick’s property, such acts were unlawful. The case establishes that the government and its agents are just as much subject to the law as anyone else, and that ‘acting on behalf of the government’ is not in itself a defence to unlawful conduct.

The government could have circumvented the decision in Entick simply by enacting legislation permitting searches in the relevant circumstances. This raises a different issue, which will be addressed later in Chapter 8, about whether a Constitution can restrain Parliament from enacting unjust laws. But Entick did not deal with that point—all it is authority for is the proposition that the government must act in accordance with legal rules. Nevertheless this is a vitally important doctrine, because it ensures that the government is subject to the law just as an individual is. Whether the doctrine of constitutionalism is adhered to in a country is usually not a question to which one can give a ‘yes’ or ‘no’ answer—it is a matter of degree, because the extent to which governmental power is constrained by law can change over time. A good example of this is provided by the United Kingdom. Prior to the signing of Magna Carta in 1215, it would be true to say that the doctrine of constitutionalism was hardly adhered to at all—the monarch had absolute power, was above the law and could indeed make law himself. The signing of Magna Carta was an event of enormous significance, because in that document King John recognised that monarchical power was subject to at least some restraints, particularly relating to the right to a fair trial. Another important event in which the powers of the Crown were subject to further limitation was the passage of the Bill of Rights Act 1689 (Eng), which stated that the monarch could not impose taxes, make law or maintain a standing army without Parliament’s consent. It is true to say that at each of these points in history, the doctrine of constitutionalism was adhered to, to a greater or lesser degree. In the contemporary world it would be possible to arrange countries along a continuum measuring the degree to which the doctrine of constitutionalism is adhered to—from those ruled by despots who operate without any legal restraint, to those where the power of government is heavily circumscribed by a range of

CHAPTER 1: What is Constitutional Law?

constitutional rules. We are fortunate that the Australian constitutional system defines the powers of government and limits what it can do to a significant extent although, as we shall see, there are important restraining features missing from our Constitution, notably a Bill of Rights.

Where do we find constitutional law? Australian Constitutional law comes from three sources: the Constitution, constitutional statutes, and the common law.

The Constitution The most important source of constitutional law in any jurisdiction is the Constitution. Note the capitalisation of the word ‘Constitution’. This signifies that reference is being made to a specific document called ‘the Constitution’, as distinct from constitutional law in general, which refers to the rules derived from several sources of law. All jurisdictions in the world (bar the United Kingdom and Israel) have a written Constitution which incorporates at least the most important rules of constitutional law. In Australia, the Commonwealth and each of the States has a Constitution. The Territories do not have Constitutions—their governmental institutions are regulated by Self-Government Acts enacted by the Commonwealth Parliament. The Constitution of a jurisdiction is the first place one should look in researching a point of constitutional law. However, one must be careful not to read any of the Australian Constitutions as if they automatically incorporated common law rules. Rather, one must give primacy to their texts and refer to common law doctrines only if the text does not give an answer to the problem at hand. The Commonwealth Constitution, which created the Federation, was enacted by the United Kingdom Parliament and is contained in the Commonwealth of Australia Constitution Act 1900 (UK), which came into effect on 1 January 1901. The States had begun their existence as separate colonies during the nineteenth century, and the United Kingdom Parliament had passed a Constitution Act for each. Some of the States still retain their (now heavily amended) colonial-era Constitution Acts (for example, Queensland’s Constitution Act 1867 (UK)), while others have replaced their colonial Constitutions with their own documents (for example, the Constitution Act 1934 (SA)). A key difference between the Commonwealth Constitution on the one hand and the State Constitutions on the other is that the Commonwealth Constitution mandates special procedures for its own amendment, whereas the State Constitutions have the status of ordinary Acts of Parliament and can, except for a few specific provisions in some of them (see Chapter 7), be amended by another ordinary Act of Parliament.

5

6

Part one: Constitutional Fundamentals

Constitutional statutes The second source of constitutional law is constitutional statutes. All jurisdictions in Australia supplement their Constitutions with statutes dealing with constitutional matters. In the case of the Commonwealth of Australia, some of these statutes, such as the Statute of Westminster Adoption Act 1942 (Cth) and the Australia Act 1986 (UK and Cth) deal with Australia’s relationship with the United Kingdom. Others, such as the Parliamentary Privileges Act 1987 (Cth) and the Commonwealth Electoral Act 1918 (Cth) regulate the operation of governmental institutions. The States too have statutes dealing with constitutional matters—for example, the Electoral Act 2004 (Tas) and the Parliamentary Elections and Electorates Act 1902 (NSW), which regulate elections in those States.

The common law In the absence of a rule being found in a Constitution or a constitutional statute, constitutional questions are governed by the common law. This means that English legal doctrines, as developed by the Australian courts, underpin the common law of the Constitution in Australia.

An additional source of rules: constitutional conventions In addition to the sources of constitutional law discussed above, students of constitutional law must also pay attention to non-legal rules governing constitutional practice, called ‘conventions’. An example of a convention serves to illustrate what they are: although s 58 of the Commonwealth Constitution states that once a Bill has been passed by both houses of Parliament, the Governor-General shall declare ‘according to his discretion’ whether or not he or she assents to the Bill, by convention the Governor-General always gives consent. In other words, the rule of constitutional law is affected in its actual operation by a rule contained in a constitutional convention. Conventions are unique to constitutional law. The above example gives one a clue as to the origin of constitutional conventions. Most of them arose in the United Kingdom as a means of transferring power from the monarch to Parliament. This process of evolutionary change, which occurred from the late seventeenth century, allowed constitutional practice to develop beyond constitutional law, and to moderate it. Thus, although, as a matter of law, the Queen could refuse royal assent to a Bill passed by Parliament, she has never done so (the last time royal assent was denied was in 1707), and although, as a matter of law, the Queen could engage in the day-to-day running of government, by convention this is left to the Cabinet, led by a Prime Minister whom the Queen could freely choose,

CHAPTER 1: What is Constitutional Law?

but who by convention is the person who can command a majority in the House of Commons. Conventions should therefore be seen as political practices, which are regarded as obligatory (even though they are not laws) and which regulate the way in which constitutional powers are exercised. Thus a breach of a convention would certainly be regarded as unconstitutional, even if not unlawful. The delegates from the colonies who attended the Constitutional Conventions (here the word ‘convention’ has a different meaning from above, and refers to an assembly convened for the purpose of drafting a Constitution) held in Australia from 1891 to 1898 drafted the Commonwealth Constitution on the assumption that these conventions, which had operated in the six colonies, would also operate in the context of the Commonwealth Constitution. Therefore, when one reads the Commonwealth Constitution (and indeed the State Constitutions) one must remember that some of the rules of law as written often bear little relation to how people actually conduct themselves. As we will see in Chapters 3 and 4, the conventions are of particular importance to those parts of the Constitution regulating the relationship between the executive branch of government (headed by the Queen as represented by the Governor-General) on the one hand and Parliament on the other. This is because, as stated above, most of the conventions which emerged in the United Kingdom, and which were transplanted to the Australian colonies, came into being as a result of political changes designed to remove real power from the monarch and place it in the hands of Parliament. Therefore, although as a matter of law the powers of the Governor-General appear from the text of the Constitution to be extensive, as a matter of practice most of those powers are exercised subject to conventions, and to that extent, the text of the Constitution seen in isolation from the conventions gives a completely misleading picture of how government operates.

Example Although s 61 of the Australian Constitution vests executive power in the GovernorGeneral as the Queen’s representative, in reality the Governor-General exercises almost all of his or her powers on the advice of government ministers. Similarly, although s 64 vests the Governor-General with a discretion to choose ministers, in reality convention dictates that the Governor-General must choose as Prime Minister a person who is able to command a majority in the House of Representatives, and then act on that person’s advice in appointing the other ministers.

Although conventions have the beneficial effect of giving the Constitution flexibility by allowing constitutional practice to develop ahead of constitutional law, the fact that there is no authoritative way of ‘making’ a convention, and that they are identifiable only by observing what people do, means that there is an element of uncertainty about their content. This became evident during Australia’s Constitutional Crisis of

7

8

Part one: Constitutional Fundamentals

1975, when Governor-General Kerr dismissed Prime Minister Whitlam. In Chapter 4 we will look at the way in which conventions operated in 1975.

The unenforceability of conventions Despite the importance of conventions to the operation of the Constitution, it is crucial to remember that they are not laws and are therefore not enforceable by the courts. A famous case from the international Commonwealth (that is, the former British Empire) illustrates this point.

A case to remember Madzimbamuto v Lardner-Burke [1969] 1 AC 645 was a case in which a court had to consider the enforceability of an established convention. In 1965, the Government of Southern Rhodesia, which was a British colony, unilaterally declared independence from the United Kingdom. The United Kingdom Parliament enacted legislation declaring the Rhodesian Government’s actions unlawful, using provisions in the Southern Rhodesia Constitution Act 1961 (UK) which made express provision for the United Kingdom to enact legislation for Southern Rhodesia. This was despite a longstanding convention, which had been recognised in correspondence between previous United Kingdom Prime Ministers and Southern Rhodesian Premiers, to the effect that the United Kingdom would not exercise this legislative power without the agreement of Southern Rhodesia. Madzimbamuto was a political activist who had been detained by the Rhodesian Government under provisions that had been declared unlawful by the United Kingdom legislation. His wife brought a habeas corpus application against the Rhodesian Minister for Law and Order, who argued that, because of the convention, the United Kingdom legislation overriding the Rhodesian detention law was invalid. The case reached the Privy Council, which rejected this argument. The Privy Council held that the convention was not a law. It was therefore not enforceable and had no effect on the legal position, which was that the United Kingdom had the power to pass laws for Southern Rhodesia.

The fact that conventions are not enforceable does not, however, prevent their existence from being recognised by the courts. Thus in R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 264, Aikin J stated: In the present constitutional framework of the Commonwealth and the States and now of the Northern Territory, the Governor-General, Governors or the Administrator are not in personal control of the executive government. The executive power is vested in the Governor-General in Council, the Governor in Council or the Administrator in Council, as the case may be. The executive powers are therefore exercised by the ­Governor-General by and with the advice of such Ministers of the Crown …

Given that conventions are unenforceable even though they are regarded as binding, what happens if they are breached? First, a breach of convention is likely

CHAPTER 1: What is Constitutional Law?

to cause political controversy—the more important the convention, the greater the political outcry that would occur if it was breached. Thus, if the GovernorGeneral were to refuse to sign a Bill into law, there would be a constitutional crisis, the outcome of which could only be guessed, but which would no doubt include the Prime Minister asking the Queen to dismiss the Governor-General. Second, although a breach of some conventions may lead only to political consequences, in the case of others, actual breaches of the law may eventually ensue. For example, if the Governor-General did not follow the convention that, in exercising the powers under s 64 of the Constitution to appoint a Prime Minister, he or she should appoint whoever could command a majority in the House of Representatives, and instead appointed a member of a minority party as Prime Minister, the government led by that Prime Minister would be unable to get parliamentary approval for its taxation and expenditure Bills, and would eventually find itself in breach of s 83 of the Constitution if it carried on spending money. This illustrates how practical considerations underlie many of the conventions—the convention that limits the Governor-General’s discretion under s 64 serves the practical purpose of ensuring that the government is able to obtain financial authorisation and thus carry on functioning.

Enacting conventions into law Given the paradox that conventions are important and yet unenforceable, why not enact them into law? Some writers argue that, because conventions have developed to give the Constitution flexibility, enacting them into law would mean losing that flexibility. It is indeed true that enactment of a convention into law would mean that it would be enforceable and that it would therefore be legally, rather than just politically, mandatory to comply with it. But surely if everyone agrees that conventions are indeed mandatory, should they not be given force of law, rather than being left to people’s discretion whether they follow them? The very fact that conventions are flexible constitutes a weakness, in that it leads to doubt both as to their content and as to the circumstances in which they apply. The other argument is that the content of conventions is too uncertain to allow them to be formulated into legislation. Although the contents of most conventions are, in fact, very well known, it is true that disputes sometimes arise on the question of whether a particular convention exists and, if it does, what its precise content is. But arguably the very importance of conventions adds strength to the argument that their content should be definitively determined and put into statutory form. There are numerous instances in which countries have enacted conventions into law. Many Commonwealth countries have codified the conventions that regulate the relationship between their Governors-General (if the Queen is still Head of State) or their Presidents (if they are republics) and their governments. Conventions have also

9

10

Part one: Constitutional Fundamentals

been enacted into law in Australia. The pre-existing convention recognised by the United Kingdom Government in the Balfour Declaration of 1926—that the United Kingdom would not legislate for six colonies that had Dominion status without the request of those colonies—was enacted into law in the Statute of Westminster 1931 (UK) and adopted by the Australian Parliament by the Statute of Westminster Adoption Act 1942 (Cth). There would therefore seem to be no good reason why the Constitution should not be amended so as to include the conventions in accordance with which everyone, in any event, acts.

Where did our institutions come from? To understand the structure of the Commonwealth and State Constitutions, we need to know something about the history of Australia’s governmental institutions. The reception and development of principles of United Kingdom constitutional law into Australia can be conveniently divided into four main periods.

Settlement and the reception of United Kingdom law Captain Cook claimed sovereignty over Australia on behalf of the British Crown in 1770. This claim was reiterated when Governor Phillip arrived with the first convict settlers in 1788. This assumption of sovereignty—and the subjugation of Australia’s Indigenous people that it entailed—was justified on the basis of United Kingdom common law rules and principles of international law as then understood. International law recognised three methods by which one country could obtain sovereignty over another: • settlement—applicable where the country being acquired was uninhabited, in which case the law of the incoming power applied there • conquest—where the original inhabitants were conquered, in which case their law continued to apply unless and to the extent that it was formally overridden by a law proclaimed by the conquering power • cession—where the sovereignty over the acquired country was ceded to the incoming power (either by the inhabitants or the country under whose sovereignty they were), in which case the law then applying in the acquired country continued to apply until overridden. The acquisition of sovereignty over Australia by the United Kingdom proceeded on the basis that it had occurred by settlement. Clearly this theory was at variance with the facts, given that Australia was obviously inhabited by its Indigenous people. However, according to eighteenth-century international law, and in particular the writings of the theorist Emmerich de Vattel, a land was deemed to be uninhabited, or ‘terra nullius’, where its population lacked what contemporary Europeans

CHAPTER 1: What is Constitutional Law?

considered to be the hallmarks of a ‘civilised’ legal system. Therefore, since the United Kingdom did not consider that Indigenous Australians had a recognisable system of law or government, English law was deemed to be applicable, and Indigenous law non-existent.

A case to remember The decision in Mabo v Queensland (No 2) (1992) 175 CLR 1 effected changes to this view of the law. The case concerned the specific issue of whether Torres Straits Islanders had retained title to their land after colonisation. The High Court rejected the terra nullius doctrine and held that pre-existing Indigenous rights to land—referred to as native title—continued in existence after the assumption of sovereignty by the United Kingdom. People who could prove that they held native title, which would be done by reference to Indigenous customary law, would be entitled to continue to exercise the rights they had under such title unless it had been overridden by some positive legal act. However, the High Court did not take the step of saying that sovereignty had been acquired over Australia by conquest or cession and that all Indigenous law not displaced by a positive act had survived—even though one might think this was the logical consequence of the court’s rejection of terra nullius, and its statement that reference could be had to Indigenous law in proving the existence of native title. Instead, the court maintained the position that Australia had been acquired by settlement and that United Kingdom law had become the general law, holding that when sovereignty was acquired by the United Kingdom, native title continued in existence as part of the common law of Australia, not as the product of a surviving Indigenous sovereignty. This outcome is unsatisfactory, in that it mixes a consequence of acquisition by conquest (survival of Indigenous law, at least as a method of proving legal rights) with a consequence of acquisition by settlement (reception of the common law).

Nevertheless it remains the case that, according to the common law as subsequently reaffirmed by the High Court in Coe v Commonwealth (No 2) (1993) 118 ALR 193 and Walker v New South Wales (1994) 82 CLR 45, any Indigenous sovereignty that existed at the time of colonisation was extinguished, and Indigenous customary law no longer survives. This differs from the situation in the United States, for example, where although the United States Government has overriding sovereignty and could theoretically wholly extinguish the power of Indigenous nations, there are aspects of Indigenous sovereignty which are traceable back to the period before colonisation, and which have not been extinguished. The Indigenous authorities that exist by virtue of that continuing sovereignty continue to exercise original (not delegated) law-making power, because colonisation did not have the legal effect of extinguishing all of their sovereignty.

11

12

Part one: Constitutional Fundamentals

Colonial constitutional development The extension of British settlement throughout the Australian landmass and Tasmania saw the establishment of six colonies. The colonies went through the varying stages of constitutional development at different times but essentially followed the stages of development undergone by New South Wales: • Initially, the Governor sent from London had both legislative and executive powers—in other words, he could make laws and was in charge of the government that enforced them. • Subsequently (from 1823, in the case of New South Wales), the Governor was assisted in his legislative role by an appointed Legislative Council, which had to approve legislation. However laws had to be introduced by the Governor—the Legislative Council could not make laws on its own initiative. The colony was also subject to legislation enacted for it by the United Kingdom Parliament. An Executive Council (similar to a Cabinet) was also created to assist the Governor in the exercise of his executive powers. • From 1842, as a result of political demands by the colonists, legislation was passed by the United Kingdom establishing representative government in the various colonies, which meant that the Legislative Council would be elected— although it should be noted that the franchise was restricted to white males who owned property above a certain value. The Governor could however refuse his assent to laws, and he continued to govern through his Executive Council without any legal requirement to refer to the wishes of the colonists. • The next step in constitutional development, which took place between 1855 and 1890, saw the United Kingdom enact Constitutions establishing responsible government in each of the colonies. This was a significant development because it saw the transplantation into Australia of the laws and conventions which governed the relationship between Crown and Parliament in the United Kingdom. This change also coincided with the establishment of bicameral (that is, two-chamber) legislatures, with a lower house elected on a wider franchise than the upper house (but with the franchise still restricted to white males). The doctrine of responsible government meant that the Governor would no longer run the government himself. Instead he would select as Premier of the colony the person who commanded a majority in the lower house of the legislature, and take that person’s advice on whom to select as ministers in the colony’s Cabinet. Because the government—in the sense of the Cabinet—was required to have a majority in the lower house, and depended for its continued tenure on the retention of that majority, the government was said to be ‘responsible’ to the legislature. • Despite the advances made by the colonies in their internal constitutional arrangements, their colonial status meant that they were still subordinate to the

CHAPTER 1: What is Constitutional Law?

United Kingdom. This subordination was made clear by the Colonial Laws Validity Act 1865 (UK). Its essential provisions were as follows: • Section 2 provided that colonial Parliaments could not legislate repugnantly to United Kingdom Acts that applied to the colonies. • Section 3 confirmed that colonies could legislate contrary to the common law. • Section 5 stated that colonies could amend their Constitutions, provided that they complied with any procedural restrictions contained therein. It should also be noted that, under the common law, colonies lacked the capacity to enact extraterritorial legislation.

The establishment of Federation Concerns within the colonies about their perceived military vulnerability, along with a desire to remove economic barriers to trade between them, saw discussions start between the colonies, and between them and the United Kingdom, on the idea of establishing an Australian federation. Between 1891 and 1898 a series of Constitutional Conventions were held around Australia. Each colony elected delegates to the Conventions, at which the proposed text of a federal Constitution was negotiated, prior to being put to the voters in each colony for approval. The proposed Commonwealth Constitution was approved by the voters in all the colonies in 1899 (bar Western Australia), and was enacted by the United Kingdom Parliament as the Commonwealth of Australia Constitution Act 1900 (UK) on 9 July 1900. (Western Australia approved the Constitution by referendum in August 1900.) The Act came into effect on 1 January 1901. It is important to note that the Act passed by the United Kingdom Parliament had nine sections, with the Commonwealth Constitution contained in s 9. The other eight sections, often referred to as the ‘covering clauses’, are not part of the Constitution itself, but contain provisions establishing an ‘indissoluble Federal Commonwealth’ under the Crown of the United Kingdom (in the preamble), stating that references in the Act to the Queen extend to her successors (s 2), and addressing matters relating to the coming into force of the Act and certain transitional matters (ss 3–9). The creation of the federation saw the birth of a new entity, the Commonwealth of Australia. The six colonies carried on their existence as States, with their Constitutions continuing to regulate their relationship with the United Kingdom.

Australia’s gradual independence from the United Kingdom The Commonwealth of Australia had the status of a colony, which meant that it was subject to the legislative restrictions contained in the Colonial Laws Validity Act, and to the common law rule that colonies lacked extraterritorial legislative competence. Political changes within the British Empire in the wake of World War I affected the relationship between the United Kingdom and its six most constitutionally advanced

13

14

Part one: Constitutional Fundamentals

colonies (Australia, New Zealand, South Africa, Ireland, Canada and Newfoundland), which became known as ‘Dominions’. Although the United Kingdom had the power to legislate for the Dominions (because they were still legally colonies), that power was essentially a dead letter (indeed, it was never used with respect to Australia), and a convention developed to the effect that the United Kingdom would not legislate for the Dominions except at their request. This convention was expressly recognised by the United Kingdom Government in the Balfour Declaration of 1926, issued by the then United Kingdom Prime Minister at the 1926 Dominion Conference. A number of the colonies (in particular South Africa and Ireland) were anxious to have the convention enacted into law, and this led to the passage of the Statute of Westminster 1931 (UK), which stated that: • the Colonial Laws Validity Act would no longer apply and the Dominions could legislate repugnantly to United Kingdom legislation applying to them (s 2) • the Dominions could legislate with extraterritorial effect (s 3) • the United Kingdom Parliament would not legislate for the Dominions except at their request (s 4). Australia, which had not pressed for the enactment of the Statute of Westminster, was given the option in the Act of determining whether it should apply to Australia. This it eventually did when, partly in order to affirm Australia’s autonomy in the conduct of World War II, the Australian Parliament enacted the Statute of Westminster Adoption Act 1942 (Cth), which made the Act effective in Australia with retrospective effect from 3 September 1939. It is important to note that the Statute of Westminster applied only to the Dominions, not to their component parts. Thus the relationship between the States and the United Kingdom Government was unaffected by the passage of that Act. The States continued to be subject to the Colonial Laws Validity Act and to lack the legislative competence to alter United Kingdom legislation applying to them or to legislate with extraterritorial effect. The Australia Act 1986 (UK and Cth) marked the termination of the United Kingdom’s power to legislate for Australia, and was the final stage in the evolution of Australia’s constitutional relationship with the United Kingdom. This Act was enacted by both the United Kingdom Parliament and the Commonwealth of Australia Parliament so as to remove any doubt as to its validity. Its essential provisions were as follows: • the United Kingdom Parliament no longer has the power to legislate for the Commonwealth or the States, even at their request (s 1) • the States have extraterritorial legislative capacity (s 2) • the States are no longer subject to the Colonial Laws Validity Act and can therefore legislate contrary to United Kingdom statutes applying to them (s 3),

CHAPTER 1: What is Constitutional Law?

except for the Commonwealth Constitution, the Statute of Westminster and the Australia Act itself (s 5). Given that the United Kingdom can no longer legislate for any of the Australian jurisdictions, the only constitutional link that still exists between the United Kingdom and Australia is the Crown. The preamble to the Commonwealth of Australia Constitution Act 1900 (UK) states that the Commonwealth was formed ‘under the Crown of the United Kingdom’, and s 2 of that Act provides that references in it to the Queen (then Queen Victoria) apply to her heirs and successors. The monarch appoints a Governor-General (in the case of the Commonwealth) and a Governor (in the case of each of the States) to exercise her constitutional powers on her behalf, although the power of appointment is, by convention, exercised on the advice of the Commonwealth and State Governments respectively. The Commonwealth and State Constitutions vest the Governor-General or Governor with a range of constitutional powers, most of which, subject to a few important exceptions, are exercised on the advice of the government. We will discuss the powers of the Queen and her representatives in detail in Chapter 4. Practically speaking, Australia is independent of the United Kingdom because the United Kingdom Parliament cannot legislate for Australia, but as a matter of law the monarch remains the source of executive power, and so the link with the United Kingdom has not been entirely severed.

Constitutional amendment The Commonwealth Constitution cannot be amended by an ordinary Act of Parliament: it requires a special procedure. For this reason, it is classified as ‘rigid’, rather than ‘flexible’. The amendment procedure is laid down in s 128, which requires that amendments must be passed by both houses of Parliament (or, failing agreement by both houses, then by one house, on two occasions at least three months apart) and then approved of in a referendum of voters in the States and Territories by: • a majority of voters in a majority of States (note that the Territories are not relevant here); and • a majority of all voters in the country. If a proposed amendment would alter the representation of a State in the Federal Parliament or the boundaries of a State, a majority of voters in the particular State(s) so affected would have to approve the amendment. Of the 44 referenda held since 1901, only eight have succeeded in acquiring the requisite majorities for amending the Constitution, indicating how difficult it is to amend the Constitution. One consequence is that constitutional reform has lagged far behind reform in other areas of the law.

15

16

Part one: Constitutional Fundamentals

Example In 1999 a referendum was held on whether Australia should become a republic, with a President nominated by the Prime Minister and Leader of the Opposition and approved by a two-thirds majority of Parliament. The proposal failed to obtain a majority nationwide or in any of the States.

An Australian republic? If Australians wanted to sever their link with the monarch, how would this be done? Amendment of the Commonwealth Constitution to remove references to the monarch and replace them with some other office would not be difficult. However, such constitutional amendment would raise the questions of to whom the powers of the Governor-General should be allocated, how that person should be chosen, and whether it would be convenient to codify the conventions regulating the way in which the powers of the office are exercised. As an alternative to having a person operate the levers of the Constitution, it would be possible to amend the Constitution in such a way as to make it self-executing—for example, for the Constitution to state that, on losing a vote of confidence the Prime Minister would have to resign, instead of providing by law (as some Constitutions do) or by convention (as is the case under the Commonwealth Constitution) that the person exercising the office of GovernorGeneral (or its equivalent) may dismiss the Prime Minister if he or she fails to resign. It would also be relatively easy for the States to amend their Constitution Acts in such a way as to remove the office of Governor; however one should note that it would also be legally possible, although perhaps politically anomalous, for the Commonwealth to sever its link to the Crown while the States maintained theirs. Finally, there remains the issue of the Commonwealth of Australia Constitution Act and its preamble and first eight sections (the ‘covering clauses’) which are not part of the Constitution but which contain provisions referring to Australia’s link to the Crown. These provisions, not being part of the Constitution itself, cannot be amended using the s 128 procedure. Although the establishment of a republic would be effective if only the Constitution was amended, a repeal of the remainder of the Commonwealth of Australia Constitution Act would be desirable from an historical point of view. Does the Commonwealth Parliament have the capacity to do this? The answer is ‘yes’, because s 51(xxxviii) contains a power in terms of which the State Parliaments, if they act unanimously, can request that the Commonwealth Parliament exercise any power which the United Kingdom Parliament could, at the time the Constitution came into effect, have exercised. Since the United Kingdom Parliament could obviously have repealed the first eight sections of the Commonwealth of Australia Constitution Act, it follows that the Commonwealth Parliament could, with the concurrence of the States, do this itself, effectively stepping into the shoes of the United Kingdom Parliament.

17

CHAPTER 2

Fundamental Concepts of Australian Constitutional Law Covered in this chapter After reading this chapter you will understand: • the basic doctrines underlying Australian constitutional law • what the concept of ‘representative government’ means • the extent to which the concept of ‘responsible government’ makes the executive government responsible to Parliament • the theory of ‘separation of powers’ and the different ways in which it operates in the United States and in Australia • how the Australian system of ‘federalism’ works • how legislative power is distributed between the Commonwealth and the States • the extent to which the High Court regards itself as bound by precedent.

Cases to remember Roach v Electoral Commissioner (2007) 233 CLR 162 McGinty v Western Australia (1996) 186 CLR 140 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129

Introduction Before examining the provisions of the Commonwealth, and later the State, Constitutions, it is useful to obtain an overview of four fundamental concepts— representative government, responsible government, separation of powers and federalism—that you will frequently encounter. This chapter deals with those concepts. It ends with a discussion of the approach that the High Court adopts to the rules of precedent when interpreting the Constitution.

Representative government The concept of representative government means that laws are made with the consent of those who are subject to the law, through their representatives. In Chapter 1 we saw how the granting of representative government to the Australian colonies marked an important milestone along the road of their constitutional

18

Part one: Constitutional Fundamentals

development, as it deprived the Governor of his power to legislate on his own, and required that laws be approved by the colonial legislatures. Providing for representative government in a country’s Constitution is therefore a precondition of that country being considered a democracy. Representative government is provided for in the Commonwealth Constitution, in that s 7 states: ‘The Senate shall be composed of senators for each State, directly chosen by the people of the State …’, while s 24 states: ‘The House of Representatives shall be composed of members directly chosen by the people of the Commonwealth …’. The State Constitutions similarly provide for the election of members of their legislatures.

Legislative structures The Commonwealth Constitution and the State Constitutions all contain bicameral legislatures. The only exception to this is Queensland, which abolished its second chamber in 1922. The tradition of bicameralism, which reflects the existence of the House of Commons and the House of Lords in the United Kingdom, was a feature of the Constitutions given to the Australian colonies in the mid-nineteenth century. Those Constitutions provided for a lower house with a relatively wide franchise, and an upper house with a restrictive franchise (property qualifications for the upper chamber in New South Wales were abolished only in 1933), which was meant to act as a restraint on the lower house. However, it was always recognised that the lower house was the more important of the two, as under the conventions of responsible government, it was the leader of the largest party or coalition in the lower house who would be chosen by the Governor to form a government, and it was only to the lower house that the government was responsible. Given that a bicameral system requires that legislation must pass both houses to become an Act, some system must be provided for resolving disagreements between the houses. This is examined in Chapter 3.

Is there a ‘right’ to vote? Although the constitutional system must embody representative government if it is to be considered democratic, that in itself is not a sufficient condition for democracy, as the degree to which a country is democratic depends upon who has the right to vote.

Voting in State elections So far as franchise at State level is concerned, the franchise was initially (that is, in colonial times) restricted to white males who owned property above a certain value. Franchise rights were progressively extended during the nineteenth and twentieth centuries. Property-owning qualifications were the first to be removed, and women were enfranchised in all Australian jurisdictions by 1908, although it was not until the 1960s that full franchise rights were extended to Indigenous Australians. Electoral laws in the States now provide the same qualifications to vote in State

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

elections as are prescribed in Commonwealth legislation, either by setting the same qualifications of Australian citizenship and being aged over 18 years as appears in the Commonwealth legislation (see, for example, s 20 of the Parliamentary Elections and Electorates Act 1902 (NSW)), or by expressly linking entitlement to vote in State elections with an entitlement to enrol under Commonwealth legislation (see, for example, s 31 of the Electoral Act 2004 (Tas)).

Voting in Commonwealth elections A right to vote in Commonwealth elections arises by implication from the Constitution. So far as the Commonwealth Constitution is concerned, the only provision to mention voting rights is s 41, which states that anyone who had, or acquired, a right to vote under State law for the most numerous house of the State Parliament (which, practically speaking, meant the lower house) could not, while that State right existed, be denied the right to vote for the Federal Parliament. However this did not guarantee anyone a vote for federal elections—all it did was provide that the qualifications to vote at federal elections could not be any narrower than they were for State Parliaments, but if a State Parliament chose to narrow the franchise, the Commonwealth could follow suit. The Commonwealth Constitution further originally stated that, until Parliament provided otherwise, a person would be able to vote at elections for the House of Representatives if they had a vote for the more numerous (that is, lower) house of their State Parliament (s 30), and that such people could also vote for the Senate (s 8). As we have seen, the States have now linked entitlement to vote in elections for their Parliaments to the same criteria that apply under Commonwealth legislation, which means that, despite s 41, practically speaking it is up to the Commonwealth Parliament to determine who may vote in Commonwealth and State elections. The Commonwealth Parliament used its power under s 30 of the Constitution to provide (in s 93 of the Commonwealth Electoral Act 1918 (Cth)) that a person is entitled to enrol as a voter for federal elections if they are an Australian citizen aged over 18 years. Does the apparent vulnerability of franchise rights to ordinary legislation enacted by the Commonwealth Parliament mean that the right to vote is subject to the whim of Parliament? The answer to this question is ‘no’, because the Constitution has been held to contain an implied right to vote.

A case to remember In Roach v Electoral Commissioner (2007) 233 CLR 162 a prisoner challenged the constitutional validity of provisions introduced into the Commonwealth Electoral Act 1918 (Cth) in 2006 that denied the right to vote to any person serving a sentence of imprisonment. A majority of the High Court held that the requirement contained in the Constitution that members of the House of Representatives (s 24) and of the Senate (s 7) be

19

20

Part one: Constitutional Fundamentals

‘directly chosen’ by the people meant that the Constitution conferred a right to vote in Commonwealth elections. Furthermore, although ss 8 and 30 of the Constitution confer on Parliament the power to prescribe qualifications for voting, the fact that the Constitution was founded upon a system of representative democracy meant that that power is not unconstrained. Only limitations on voting that have some rational basis would be constitutional—an example being the denial of the vote to someone who, because they were of unsound mind, was incapable of understanding the nature of voting. In determining whether restrictions on voting were constitutional, the court used a proportionality test to determine whether the restriction was reasonable (or ‘appropriate and adapted’) in a system based on representative government. The court held that, as a matter of principle, it was constitutionally permissible to mark society’s disapproval of crime by denying prisoners the right to vote. However, because the legislation denied the vote to all people serving terms of imprisonment, no matter how short, it imposed a disproportionate limit on the right to vote, as it took no account of the severity of the person’s transgression and thus their sentence. The court did however uphold the constitutionality of the provision as it previously was, which denied the right to vote to persons serving a term of imprisonment of longer than three years, as in that instance the law did seek to distinguish between crimes on the basis of their seriousness.

In similar vein, in Rowe v Electoral Commissioner (2010) 243 CLR 1 the High Court invalidated an amendment to the Commonwealth Electoral Act 1918 (Cth). The amendment had prevented unregistered voters from registering once an election was called. It also shortened the time within which voters could change their registration details (such as their new place of residence) to a mere three days. The court held that this disproportionately limited the constitutional requirement that Parliament be directly elected by the people. The court’s ruling had the effect of restoring the law that applied prior to the amendment, in terms of which voters had seven days to register or change their details. Despite accepting the principle that a Constitution based on representative government protects the right to vote, the courts have refused to extend this to prescribing what type of electoral system must be used.

A case to remember In McGinty v Western Australia (1996) 186 CLR 140, the High Court considered a challenge to the validity of Western Australian legislation determining the boundaries between State electoral districts and the number of voters in each. The basis of the challenge was that since s 73 of the Constitution Act 1889 (WA) impliedly established representative government in the State (by referring to MPs ‘directly chosen by the people’), the fact that the Electoral Distribution Act 1947 (WA) permitted a 15 per cent numerical disparity between urban and rural electoral districts was unconstitutional because the resultant imbalance in voting strengths meant that legislators were not ‘directly elected’ by the people.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

A majority of the court rejected the argument, holding that the concept of representative government embraced a range of electoral systems, and that the disparity provided for in the Electoral Distribution Act was not such as to place the electoral system it established outside the range of those fulfilling the requirement of ‘direct election’. However, Gaudron J stated obiter that the requirement for direct election contained in the Commonwealth Constitution (and, by parallel reasoning, the State Constitutions) would not be satisfied if the franchise was restricted on grounds of gender, race, property ownership or educational qualifications.

The extent to which the doctrine of representative government, as embodied in the Commonwealth and State Constitutions, offers protection to franchise rights can thus be summarised in the following rules: • No particular electoral system is mandated by the constitutional provisions. • An electoral system will be consistent with the doctrine even if it permits a modest deviation from the average in computing the number of electors in electorates. • Restrictions on voting rights must satisfy the proportionality test—in other words, they must be appropriate and adapted to a system based on representative government. Applying this test, it would not be constitutional to place limits on the franchise based on race, gender, property ownership or educational qualifications. Restrictions on prisoners’ voting rights must take into account the seriousness of the crime and thus the duration of the sentence.

Responsible government ‘Responsible government’ means that the executive relies on the support of the legislature to stay in office. As already noted, incorporation of the institution of responsible government in the Constitutions of the Australian colonies marked an important milestone in their constitutional development. The doctrine of responsible government is a set of rules—partly statutory, partly conventional—designed to ensure that the government (as represented at its apex by the Cabinet) is answerable to the legislature and holds office only so long as it has majority support in the legislature.

Purpose—controlling the executive To understand the current workings of the doctrine, it is necessary to understand its historical origins. The doctrine arose during the eighteenth century, when the monarch withdrew from active participation in government, and chose a leader of the government to head the ministry on his behalf. Although the term ‘Prime Minister’ came into use only in the nineteenth century, it is generally recognised that Sir Robert Walpole (appointed to head the ministry in 1721) was the first person to wield powers similar to those of contemporary Prime Ministers. There was a recognition then, as now, that to be

21

22

Part one: Constitutional Fundamentals

effective in governing (that is, to be able to get legislation through Parliament, and in particular to get Parliament to authorise taxation and expenditure) the ministry had to retain the support of Parliament and was, in that sense, ‘responsible’ to it. A ministry that could not maintain a majority (because some of the MPs whose support it could formerly count on had decided to vote against it) would have either to resign, leaving it to the monarch to select whoever could obtain majority support to form a new ministry or, alternatively, would have to ask the monarch to dissolve Parliament so that an election could be held. If the ministry won the election—that is, regained its majority in Parliament—it would remain in power, but if not, it would have to resign in favour of whoever did have a majority. In the political environment of the eighteenth century, when political parties in the modern sense were only nascent, and there certainly was not the level of party discipline that there is today, it was a real challenge for Prime Ministers and their Cabinets to maintain the support of a majority in Parliament, and in particular in the House of Commons. This led to eighteenth-century politics being notoriously corrupt, with the monarch and his Prime Minister attempting to secure the support of MPs by bribery and other underhand practices. However, the system at least had the benefit of making the ministry genuinely subordinate to Parliament and nervous of losing its support. All this changed during the nineteenth and early twentieth centuries. Parties became formalised and rigid, and could use the threat of disendorsement and withdrawal of financial support from members who failed to vote in support of policies formulated by the Cabinet, as directed by the party whips. This in turn meant that MPs—at least those of the governing party—were unlikely to expose or criticise those of their members who were in the Cabinet if the latter engaged in wrongdoing. This diminution in the power of Parliament vis-à-vis the Cabinet, and the consequent erosion of the doctrine of responsible government, were already becoming evident when the institutions of responsible government were introduced into Australia. This became more pronounced during the twentieth century, to the extent that the members of the majority party in the Commonwealth and State Parliaments (the ‘caucus’) are now controlled by their colleagues in the Cabinet, who have virtually no reason to fear that they will ever lose the support of the members of the caucus, even though, under the doctrine, they (the Cabinet) are supposed to be responsible to (that is, subject to control by) Parliament.

Responsible government in operation The following rules—some legal, some conventional—indicate how the doctrine operates. The description that follows relates to the Commonwealth Constitution, but the same rules apply (although the mix of statute and convention may vary) in the States.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

Section 61 of the Constitution states that executive power vests in the Queen and is exercisable by the Governor-General as her representative. • Section 64 states that the Governor-General may appoint officers to administer departments of state, and that such officers are members of the Executive Council. • Section 62 states that the function of the Executive Council is to advise the Governor-General in the exercise of his or her executive powers. The combined effect of ss 62 and 64 is, therefore, that the Executive Council consists of all ministers of the Crown plus the Governor-General. Although, formally speaking, the Executive Council advises the Governor-General in the exercise of the executive power of the Commonwealth, the reality is that by convention the Governor-General always follows the advice of the Executive Council. Thus, in reality, executive power vests in the government of the day. Section 64 requires that members of the Executive Council be members of either house of Parliament or become such within three months of being appointed. Thus, if a minister was to lose his or her seat in an election, that minister could retain office only if another MP from the party resigned and the minister was successful in the resulting by-election. Both s 62 and s 64 state that members of the Executive Council hold office ‘during the pleasure’ of the Governor-General, however the Governor-General’s power under s 64 to appoint and dismiss ministers is in practice exercised subject to the convention that he or she must choose as Prime Minister whoever is able to command a majority in the House of Representatives, and take that person’s advice on whom to appoint as the other members of the Executive Council. The Prime Minister then decides which of the members of the Executive Council will also be members of the Cabinet, which is a purely conventional body consisting of those ministers whom the Prime Minister has chosen as his or her inner circle of advisers. The Governor-General would dismiss a minister only if advised to do so by the Prime Minister. Dismissal of the Prime Minister (and, consequentially, of the government as a whole) is subject to the conventions discussed in the next few paragraphs and in Chapter 4. Convention dictates that, once appointed, the Prime Minister holds office so long as he or she has the support of a majority in the House of Representatives. Note that, for purposes of responsible government, it is irrelevant whether the government has the support of the Senate. Indeed the doctrine would be inoperable if that was a requirement, because governments frequently do not have a Senate majority. The effect of a government not being able to govern because it cannot get Senate support for its taxation and appropriation legislation will be explored in Chapter 4, where the Constitutional Crisis of 1975 is discussed. •

23

24

Part one: Constitutional Fundamentals

Lack of support by the House of Representatives would be indicated by a successful vote of no confidence, or if the government failed to obtain passage through the house of legislation, which it had said it would take as determinative of confidence. If that support is lost, by convention the Prime Minister must either: • advise the Governor-General to dissolve Parliament and call an election, or • resign, allowing the Governor-General to invite whoever can command a majority in the house to form a government or, if there is no such person, to call an election. If a Prime Minister refused to adopt either of these courses, convention would allow the Governor-General to exercise his or her s 64 power to dismiss the Prime Minister. This is an example of one of the ‘reserve powers’ of the Governor-General, that is, a power which convention allows the Governor-General to exercise on his or her own initiative, rather than on someone’s advice. The reserve powers are discussed in detail in Chapter 4. The strength of party discipline means that nowadays governments do not fall because of loss of confidence resulting from defections from the ranks of its own MPs—the last time that happened in Australia was in the case of the Scullin Government in 1931. Instead, for all practical purposes, the obligation to resign becomes relevant only when a government loses a general election. By convention the Prime Minister and his or her government must then resign, allowing the Governor-General to appoint as incoming Prime Minister whoever leads the party or coalition that won a majority at the election. It is usually easy to identify who this is, but if the post-election situation is such that a minor party holds the balance of power in the new Parliament, the Governor-General would have to wait until he or she was approached by someone who indicated that they had managed to secure an undertaking from the minor party to support their government. Here everything depends upon the participants acting in good faith—the sitting Prime Minister resigning, and the incoming Prime Minister being confident that he or she does indeed have a majority in the new Parliament.

Example A period of uncertainty can occur in these circumstances, as in Tasmania after the 1989 election, where it was not clear whether the Greens, who held the balance of power after the election, would support the sitting Liberal government or would go into coalition with Labor. They eventually took the latter course, but it was some days before the Labor Party was able to secure a commitment from them.

In such circumstances, and failing a clear indication of who should be Prime Minister or Premier, a Governor-General or Governor would have to wait until the newly elected Parliament was convened and a motion of no confidence voted on, to see whether the previous government or a new one had majority support.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

Finally, although s 28 of the Constitution sets a maximum duration of three years for the House of Representatives (calculated from the first day it sits after the previous election), the Prime Minister has the strategically important power to advise the Governor-General to dissolve the house and call an election at any time the Prime Minister wishes. By convention, such advice would always be accepted by the Governor-General (unless there had just been an election and the new Parliament had not yet assembled). This means that the timing of elections is effectively determined by the Prime Minister.

The doctrine of separation of powers The doctrine of separation of powers developed during the eighteenth-century Enlightenment, a period when political philosophers were developing modern democratic theory. One of them, the French theorist Baron de Montesquieu, published a book entitled L’Esprit des Lois (The Spirit of the Law), published in 1748. In it, he identified three branches of government: • the legislative branch, consisting of the Parliament, which makes laws • the executive branch, consisting of the government ministers, the public service and police force, which implements the law • the judiciary, consisting of the courts and judges, which interprets the law and resolves disputes. Montesquieu argued that tyrannical rule could be avoided only if the three principal functions of government—legislative, executive, and judicial—were separated. According to Montesquieu, effective separation required both functional separation (that is, separation in the sense that no branch of government should exercise a function belonging to either of the others) and physical separation (that is, that no individual should be able to be a member of more than one branch of government at the same time).

Separation of powers in the United States The drafters of the United States Constitution of 1787 were strongly influenced by Montesquieu, and that document embodies a strict form of separation of powers, as is illustrated in Figure 2.1. In this system, both the legislature (collectively known as Congress, and consisting of the House of Representatives and the Senate) and the head of the executive (that is, the President) are directly elected by the voters. Members of the House of Representatives serve two-year terms, while senators serve six-year terms. The President holds office for four years. The judicial branch, consisting of the Supreme Court and other federal courts beneath it, is the sole repository of judicial power. Judges are appointed by the President and enjoy security of tenure.

25

26

Part one: Constitutional Fundamentals

Figure 2.1 The US political system Supreme Court Federal Courts Bills Public servants

Cabinet

Senate

Bills

President Election

House of Representatives Election

Election

Voters

Because there is strict separation of powers, the President is not responsible to Congress for his or her tenure in office. Furthermore, the President can select whoever he or she chooses to be a member of the Cabinet. Unlike in systems based on responsible government, where members of the Cabinet are required to be members of the legislature, any member of the legislature selected for Cabinet office would have to resign as a member of the legislative branch. Although the President holds office irrespective of whether his or her party has a majority in either of the houses (which might lead one to think that the executive branch is even less subject to legislative control than it is in Australia, with its system of responsible government), paradoxically the balance of power between executive and legislature is far more even than it is in responsible government systems. The President cannot dissolve Congress in the way that a Prime Minister can ask for Parliament to be dissolved. Furthermore, not being present in Congress, the President and Cabinet have far less influence over its members. Even those members of Congress who belong to the same party as the President do not necessarily always vote on legislation in accordance with the President’s wishes, and as party organisations in the States have far more control over candidate selection than does any national party organisation, members of Congress do not have the same fear of losing pre-selection as do MPs in a parliamentary system. Separation between the branches of government is complemented by a system of checks and balances which give each branch some influence over the other. Legislation enacted by Congress must be assented to by the President, and the President is free to veto (that is, refuse to sign) legislation. However the President’s veto can be overridden if the legislation obtains a two-thirds majority in each house. This has the result that, in practice, legislation is usually the product of negotiation between Congress and the President—unlike in a responsible government system, where the Prime Minister and Cabinet effectively control the legislative process. The President appoints the Cabinet and Supreme Court judges, but such

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

appointments are subject to approval by the Senate, whose approval is also needed for appointments to the Cabinet and for international treaties. The Supreme Court has jurisdiction to resolve constitutional cases, and can invalidate legislation and executive acts which are unconstitutional.

Separation of powers in Australia Under Australia’s Constitution, separation of powers applies only to the judicial branch. This is because the system of responsible government effects a fusion between the legislature and the executive branch, at least in relation to the upper echelons of the latter, because members of the Executive Council (and thus the ministers who head the government departments) are required to be members of the legislature and, as discussed above, hold office only so long as they have a majority in the House of Representatives. Separation of powers is adhered to only in relation to the judicial branch, whose members, once appointed by the Governor-General (on the advice of the Attorney-General), enjoy security of tenure. The way in which separation of powers operates in relation to the judicial branch is considered in some detail in Chapter 5. The Australian system is illustrated in Figure 2.2 (note that although some members of the Cabinet may be drawn from the Senate, for the sake of simplicity the diagram assumes that they are all in the House of Representatives). Figure 2.2 The Australian political system GovernorGeneral

Bills Senate Bills

House of Representatives Majority Public servants

Minority

Prime Minister and Cabinet

Election

Election Voters

Another way in which there is overlap between the executive and legislature in Australia (although this is also true even in countries like the United States, where separation of powers is more rigorously adhered to) is that Parliament frequently delegates legislative power to the executive. From a practical point of view, it is

27

28

Part one: Constitutional Fundamentals

simply impossible for Acts of Parliament to cover all the detail of a topic, and in Victorian Stevedoring and General Contracting Co Ltd v Dignan (1931) 46 CLR 73 it was held that the ability of Parliament to delegate legislative power to the executive was implicit in the system of government established by the Constitution and did not contravene the doctrine of separation of powers. The amount of delegated legislation produced by the executive is vast. A mechanism to assist Parliament in controlling how powers it has delegated are used is provided by s 38 of the Legislative Instruments Act 2003 (Cth), which requires that delegated legislation must be tabled before each house of Parliament. Section 42 of the Act states that (subject to exceptions mentioned in s 44), delegated legislation may be disallowed by a resolution of either house within 15 days of it being tabled.

Example An example of how the executive uses its regulation-making powers is provided by the way in which it put new administrative procedures in place when rates of child support payments were changed. Section 6 of the Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Act 2006 (Cth) conferred on the Governor-General the power to make regulations ‘prescribing matters … relating to the amendments or repeals made by this Act’. This power was used to promulgate the Child Support Reform (New Formula and Other Measures) Regulations 2007 (Cth), which make detailed provisions relating to how child support payments are to be assessed under the amended Act.

Federalism While there were significant differences between the delegates to the Constitutional Conventions of the 1890s, it soon became apparent that all were agreed that, if the colonies were to form a single country, that country would be a federation. Most of the debates therefore focused on what type of federation best suited Australia, and how the balance of power between the Federal Government and the State Governments would be struck.

The nature of federalism Before discussing the specifics of Australian federalism, it is necessary to understand the difference between unitary and federal systems. Under a unitary system, such as that in the United Kingdom, although there may be levels of government—for convenience these can be called ‘sub-national units’—the Constitution vests all legislative power in the national government, and the national government allocates powers to the sub-national units. The national government is therefore the repository of all original power, while the sub-national units exercise only delegated power, which the national government can withdraw. Figure 2.3 illustrates this constitutional structure.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

Figure 2.3 Constitutional structure in a unitary system Constitution National Government Sub-national Units

By contrast, in a federal system the Constitution divides power between national and regional governments, allocating some legislative power to the national government, and some to the sub-national governments. Both levels of government therefore exercise original legislative power. Furthermore, in order to ensure that the federal balance cannot be unilaterally altered by either level of government, the procedure for amending the Constitution will require assent at both national and sub-national levels. Figure 2.4 illustrates the structure of a federal system. Figure 2.4 Constitutional structure in a federal system Constitution

National Government

Sub-national Units

At the time the Australian Constitution was drafted, the delegates to the Conventions believed that one of the key determinants of the balance of power between the national and sub-national units was where the Constitution placed the residuum of power—in other words, which level of government had its legislative powers specified (and therefore restricted) and which was presumed to have the capacity to legislate on all other matters not specifically mentioned. Delegates to the Constitutional Conventions paid close attention to the federal systems already operating in the United States and in Canada. The United States system was designed in the belief that the powers of the national government should be limited, and that this would be achieved by defining a (narrow) set of powers to be exercised by the national government, by implication leaving the (wide) residuum of powers with

29

30

Part one: Constitutional Fundamentals

the States. By contrast, the Canadian system was to allocate a limited set of powers to the provinces, leaving the lion’s share to the national government. The delegates followed the United States model, by defining the powers of the Commonwealth and leaving the residuum to the States; however, this has not achieved the desired effect of limiting the powers of the Commonwealth. The key reason for this is the decision in the Engineers Case.

A case to remember In Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129 the High Court abandoned its previously applied ‘reserved powers’ approach to constitutional interpretation, by which the powers of the Commonwealth Parliament had been narrowly construed on the assumption that the drafters of the Constitution intended to reserve most legislative powers to the States. The High Court instead adopted a broad and generous interpretation of Commonwealth powers.

The reasoning in the Engineers Case exposed a flaw in the theory that specification of the powers of one or other of the levels in a federal system necessarily means that the powers of that level will be restricted. If those powers are numerous and broadly phrased, and the courts take the approach adopted in the Engineers Case, then the federal level with the specified powers may, in fact, turn out to be more powerful than the level with the residuum. The rationale for the judges’ change of approach in the Engineers Case is difficult to discern, but among the theories that have been suggested are that the High Court believed that the experience of World War I had demonstrated the need for an enhanced role for the national government, and that the Constitution would not be fully effective in achieving this unless Commonwealth legislative powers were given their full rein.

Australian federalism The federal structure of Australia is founded upon the following provisions in the Constitution: • Section 106: subject to the Commonwealth Constitution, the Constitutions of the States remained in force after the establishment of the Commonwealth. • Section 107: the powers of the State Parliaments continue in existence, except for those powers which the Commonwealth Constitution reserves exclusively to the Commonwealth Parliament or withdraws from the States. • Section 128: a referendum to amend the Commonwealth Constitution requires approval by a majority of voters nationwide, as well as a majority of voters in a majority of States, and that if the proposed amendment would change the boundaries of any State or alter its representation in the Commonwealth Parliament, a majority in that State has to approve the amendment.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

The combined effect of these provisions is to maintain the States as political entities, to maintain their legislative competence subject only to the provisions of the Commonwealth Constitution, and to prevent amendment of the Constitution in ways adverse either to the Commonwealth or the States by requiring that amendments be approved by majorities at both levels. This last provision thus serves to protect the federal balance. The federal balance is also protected by an interpretative principle, called the ‘implied federal principle’, adopted by the High Court in Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31, which is discussed in detail in Chapter 17. In essence, the implied federal principle is that neither level of government can use its powers in such a way as to impair the core functions of the other. All federal systems require some mechanism for resolving clashes between legislation enacted by the national government and that enacted by the sub-national units. In the case of the Commonwealth Constitution, that resolution is achieved by s 109, which provides that in the event of a conflict between a law of a Commonwealth and a law of a State, the Commonwealth law overrides the State law to the extent of the inconsistency. The various interpretative tests used by the courts in determining whether inconsistency exists are discussed in Chapter 16.

The distribution of legislative powers The most structured way of understanding how legislative power is divided between the Commonwealth and the States is to examine the steps that need to be taken to determine whether a statute enacted by each level is valid.

Validity of State legislation State Constitutions confer what is called ‘plenary power’ on State Parliaments. Plenary power means full power and, in the context of legislative power, means the power to legislate on any topic whatsoever. State legislation on any topic will, therefore, be valid, unless any of the following four circumstances exist.

Alert • The State legislation is on a topic which is reserved to the exclusive legislative power of the Commonwealth Parliament (whether the Commonwealth has, in fact, chosen to legislate on the topic or not), namely: • • • • •

s 52(i)—Commonwealth places s 52(ii)—Commonwealth public service s 90—imposition of customs and excise duties ss 51(vi) and 114—defence ss 51(xii) and 115—coinage.

31

32

Part one: Constitutional Fundamentals

• The Commonwealth Parliament has legislated on one of the topics over which it has been given authority (most of which are found in s 51 of the Constitution) and the Commonwealth legislation is inconsistent with the State legislation, in which case s 109 of the Commonwealth Constitution provides that the Commonwealth legislation overrides the State legislation to the extent of the inconsistency. • The State legislation infringes one of the express or implied prohibitions contained in the Commonwealth Constitution, which are as follows: • s 92—prohibition against interference with interstate commerce and intercourse • s 117—prohibition of discrimination on grounds of residence of a State • prohibition of infringement of the implied rights to political communication and to vote • Chapter III’s protection of the separation of the judicial power of the Commonwealth in so far as it applies to State courts. • The State legislation does not comply with a special procedure required by the State Constitution.

In relation to the second point above, it should be emphasised that there is nothing to prevent the States from legislating on the non-exclusive legislative topics of the Commonwealth (in other words, those topics listed in s 51 of the Constitution). These topics lie within the legislative power of the Commonwealth and the States concurrently. If, however, the Commonwealth decides to legislate on one of these topics and the legislation is inconsistent with the State legislation, then the State legislation will be overridden by virtue of s 109.

Validity of Commonwealth legislation The Commonwealth has only those legislative powers that are conferred upon it by the Constitution. Thus, the following principles apply in determining the validity of Commonwealth legislation.

Alert • Commonwealth legislation must fall within one of the topics over which the Commonwealth has been granted legislative authority and which are found in the following sections: • • • • • • •

s 51—topics listed under the so-called ‘enumerated powers’ s 52(i)—Commonwealth places s 52(ii)—Commonwealth public service s 81—appropriations s 90—duties of customs and excise s 96—grants s 122—the Territories.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

In addition, the Constitution has been interpreted as conferring upon the C ­ ommonwealth Parliament implied legislative authority over matters of national concern—the ‘nationhood’ power. • Assuming that the legislation does relate to a topic over which the Commonwealth has legislative authority, it may, nevertheless, be invalid if it infringes a condition or an express or implied prohibition or freedom contained in the Constitution: • • • • • • • • •

s 51(ii)—prohibition of geographic discrimination in taxation laws s 51(xxxi)—requirement of just terms compensation upon acquisition of property s 80—right to jury trial for indictable offences against the Commonwealth s 81—requirement that all revenue be paid into a consolidated revenue fund s 92—prohibition of interference with interstate commerce and intercourse s 99—prohibition of geographic preference in trade, commerce and revenue laws s 116—freedom of religion s 117—prohibition of discrimination on grounds of residence of a State the implied rights to political communication, to vote and not to be subject to ­arbitrary detention • the implied federal principle of not undermining the existence of the States (the ­Melbourne Corporation principle) • Chapter III’s prohibition of interference with separation of judicial power. Note that the Commonwealth Constitution imposes more prohibitions on the ­ ommonwealth than it does on the States. C • Finally, the legislation may be invalid if it does not comply with rules relating to form and procedure, as required by the following sections of the Constitution: • s 54—requirements regarding appropriation (expenditure) laws • s 55—requirements of form regarding laws which impose taxation or duties • s 57—procedural requirements in cases of conflict between the Senate and the House of Representatives.

Summary of distribution of powers Figure 2.5 illustrates how legislative power is distributed by the Constitution. • The outermost circle (A) represents all the topics upon which it might conceivably be possible to legislate. Because the States have plenary legislative power, they are prima facie able to legislate on all these topics. • A sub-set of these topics is contained within the second circle (B), which represents the topics upon which the Commonwealth Parliament may legislate. • A sub-set of these topics is contained within the third circle (C). This represents the topics which are within the exclusive legislative competence of the Commonwealth, and which the States can therefore not legislate on. It is important to note that whereas the States can never legislate on topics falling within (C), they can legislate on topics falling within (B); but if the Commonwealth has chosen to legislate on one of those topics, and the Commonwealth legislation is inconsistent with the State legislation, the State legislation will be invalid under s 109.

33

34

Part one: Constitutional Fundamentals

Figure 2.5 Distribution of legislative powers in Australia A: State legislative competence

C: Exclusive Commonwealth legislative competence

B: Commonwealth legislative competence

Referral of powers by the States and cooperative agreements Before leaving the topic of distribution of legislative powers, we must note one avenue by which it is possible for the Commonwealth’s legislative powers to be supplemented. Section 51(xxxvii) states that the Commonwealth Parliament has the power to legislate on matters referred to it by State Parliaments. This allows State Parliaments to give (or ‘refer’) to the Commonwealth Parliament the power to legislate on matters that would not otherwise fall within its legislative capacity. Commonwealth laws enacted by virtue of such a referral will be effective only in those States that referred powers, but in practice referrals are almost invariably made by all the States, following an agreement between themselves and the Commonwealth, in order to achieve uniformity in some matter.

Example In 2001 each of the States enacted a Corporations (Commonwealth Powers) Act, referring to the Commonwealth the power to enact a uniform Corporations Act for the whole country. This thereby addressed the limitations of the s 51(xx) corporations power, which empowers the Commonwealth to legislate for the activities of corporations but not for their actual formation.

In addition to formal referrals, the States and the Commonwealth often enter into cooperative agreements whereby each jurisdiction agrees to enact complementary or uniform legislation on a particular topic.

CHAPTER 2: Fundamental Concepts of Australian Constitutional Law

Precedent The High Court may depart from its own precedents, like other final appeal courts in the common law world. This is important in relation to constitutional law, because constitutional development would otherwise be very difficult—in the absence of a new interpretation of the Constitution by the High Court, the only way to effect constitutional change is by the cumbersome procedure mandated by s 128. There are several instances of the High Court overruling its earlier decisions and thereby significantly altering the interpretation of the Constitution. In Ha v New South Wales (1997) 189 CLR 465, the court overruled its longstanding (and oft reaffirmed) interpretation in Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 of what constituted an excise duty for the purposes of s 90. Similarly, Street v Queensland Bar Association (1989) 168 CLR 461 overruled the interpretation given to ‘discrimination’ in s 117 in Henry v Boehm (1973) 128 CLR 482, while Cole v Whitfield (1988) 165 CLR 360 overruled the test that had been applied for determining whether s 92 had been breached since Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1. However, the need for flexibility in development of the law has to be balanced against the need for certainty, and for this reason the High Court does not lightly depart from precedent. There is therefore a degree of tension between the value of precedent and the judges’ commitment, contained in their oath, to apply the law—that is, to apply the law as they truly believe it to be. An example of precedent triumphing over individual opinion is provided by Queensland v Commonwealth (Second Territorial Senators Case) (1977) 139 CLR 585, in which some members of the court, who had dissented from the majority opinion on the same issue in Western Australia v Commonwealth (First Territorial Senators Case) (1975) 134 CLR 201, sided with the majority in the 1977 case solely out of respect for the precedent set in the 1975 case, notwithstanding their continuing opinion that the majority view was wrong.

35

36

CHAPTER 3

The Legislature Covered in this chapter After reading this chapter you will understand: • the structure and composition of the Commonwealth Parliament • the rules governing qualification to stand for election to Parliament • the procedures used to enact legislation • how conflicts between the House of Representatives and the Senate are resolved • the law governing parliamentary privilege.

Cases to remember Cormack v Cope (1974) 131 CLR 432 Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81 Western Australia v Commonwealth (First Territorial Senators Case) (1975) 134 CLR 201 Stockdale v Hansard (1839) 9 Ad & E 1; 112 ER 1112 R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157

Parliament Chapter I of the Constitution governs the Parliament. Section 1 states that the legislative power of the Commonwealth is vested in a Parliament consisting of the Queen, the Senate and the House of Representatives. This means that for legislation to be enacted by Parliament it must be passed by the House of Representatives and the Senate, and then receive royal assent. As is discussed in more detail below, the composition of the houses reflects one of the most important compromises that led to the colonies with smaller populations agreeing to enter the federation. While representation of the States in the House of Representatives is in proportion to the population of each State (subject to each original State being entitled to at least five representatives), each State is entitled to equal representation in the Senate. In addition, the Senate has the power to block legislation, including even financial legislation upon which the government (which had a majority in the House of Representatives) depends for its viability.

CHAPTER 3: The Legislature

The monarch Section 2 states that the Queen is represented by a Governor-General who may exercise those of the Queen’s functions that are assigned to him or her. Although this provision appears in Chapter I, its terms are broad enough to enable the GovernorGeneral to exercise both legislative and executive functions on behalf of the monarch. The Governor-General’s legislative functions consist of the powers: • to summon Parliament—that is, call upon Parliament to meet (s 5) • to prorogue Parliament—that is, to suspend Parliament in order to allow a break between sessions (a procedure that is not used, as each Parliament has always sat in one long session during its three-year life, with breaks marked by the less formal procedure of an adjournment) (s 5) • to dissolve the House of Representatives—that is, to end the life of one Parliament, following which an election will be called for a new Parliament (s 5) • to give royal assent to legislation (s 60). The fact that these powers are subject to the convention that they are exercised on the advice of the government means that it is effectively the government that determines when and for how long a Parliament meets during its lifetime. This is subject to only two requirements: • Section 5 of the Constitution requires that Parliament must meet within 30 days of the ‘return of the writs’ (that is, the finalisation of results) after a general election. Since s 159 of the Commonwealth Electoral Act 1918 (Cth) states that the writs must be returned no longer than 100 days after the day they were issued (that is, after the day the election was called), this means that the maximum time allowed between the calling of an election after the dissolution of one Parliament and the first meeting of the next Parliament is 130 days. • Section 6 requires that Parliament must meet at least once every year. In addition to the powers listed above, the Constitution confers two legislative powers on the monarch which are now considered redundant: • the power to reserve legislation—a discretion given to the Governor-General to refrain from either giving or withholding royal assent until the monarch has been consulted; this has been used only once when, as required by s 74, an Act removing the right to appeal to the Privy Council was reserved for the Queen’s assent (s 58) • the power to disallow legislation—a power that enables the monarch to annul the legislation; this has never been used (s 59).

The House of Representatives The Constitution ties the size of the House of Representatives to the size of the Senate. Section 24 provides that the number of members of the House of Representatives shall, ‘as nearly as practicable’, be twice the number of senators.

37

38

Part one: Constitutional Fundamentals

Composition Currently there are 76 senators and 150 members of the House of Representatives (the fact that there are not 152 members of the house derives from the complexities of the method of calculation embodied in s 48 of the Commonwealth Electoral Act 1918 (Cth), which requires rounding up and rounding down of the numbers of representatives for each State and Territory). Section 24 also states that the number of representatives allocated to each State is to be calculated proportionate to the State’s population, subject to each original State (that is, each State that existed at the time of Federation) having a minimum of five members, which means that there will not be absolute proportionality whenever a State’s population would entitle it to less than five members (as indeed is currently the situation in relation to Tasmania). Section 29 states that the boundaries of electoral divisions (that is, the geographic areas from which MPs are chosen, also sometimes referred to as electorates or constituencies) cannot cross State borders—an obvious consequence of the allocation of seats to States. Section 122 permits Parliament to provide for the representation of the Territories in Parliament. After some controversy (discussed below), the Territories were given representation in the House of Representatives proportionate to their respective populations and were also given two seats each in the Senate. The allocation of seats in the House of Representatives is currently as follows: New South Wales

48

Victoria

37

Queensland

30

Western Australia

15

South Australia

11

Tasmania

5

ACT

2

NT

2

Section 28 states that the term of the House of Representatives is three years from the day it first met. This means that the house must be dissolved within three years of the day it first sat after the previous election. Section 28 also says that the Governor-General may dissolve the house before the end of its term. This is what usually happens—the government advises the Governor-General when to dissolve Parliament at whatever point in the life of Parliament it believes will maximise its chances of re-election.

CHAPTER 3: The Legislature

Elections Elections for the House of Representatives are conducted using the ‘alternative vote’ system. This system requires that, in order to be elected, a candidate must obtain more than 50 per cent of votes cast within the division in which they are standing. Since it is unusual for a single candidate to obtain an absolute majority of primary votes, voters indicate ordered preferences among candidates. On each round of counting, the votes received by the candidate with the lowest number of preferences are transferred to the remaining candidates in accordance with the voters’ preferences, until a candidate finally obtains more than 50 per cent of the votes. As is the case with any electoral system based on geographic electoral divisions (as opposed to those that incorporate some element of nationwide proportional representation), the outcome of elections is heavily influenced by where the boundaries between electorates are drawn relative to where a party’s voters are. If boundaries cut across areas where a party has strong support, that party’s chances of winning seats is reduced. Conversely, if boundaries incorporate a party’s areas of support, the party is likely to do well. The distortions inherent in the system mean that it is not uncommon for a government to win a majority of seats in the house even though it obtained fewer first-preference votes than the party that finds itself in opposition. It also means that minor parties that may have significant support nationwide but no concentrated support in specific electorates fail to gain any representation in the house. Despite these anomalies, the cases relating to voting discussed in Chapter 2 indicate that the High Court has on several occasions rejected the argument that the requirement contained in s 24 of the Constitution that members of the House of Representatives be ‘directly chosen’ by the people mandates any specific type of electoral system.

The Senate Section 7 of the Constitution requires that each State must have an equal number of senators. The granting of equal representation to each State in the Senate was crucial to getting the colonies with smaller populations to agree to federation.

Composition The Constitution set the number of senators at a minimum of six for each original State. However, s 7 gives Parliament the power to increase that number, which in 1983 was increased to 12. The Territories are each represented by two senators, which brings the total to 76. The States with smaller populations feared that the States with larger populations would be able to dominate the federation unless the legislature was structured in such a way as to balance the numerical superiority that the States with larger populations would enjoy in the House of Representatives.

39

40

Part one: Constitutional Fundamentals

The granting of equality of representation to each State in the Senate was meant to address this problem, because it was assumed that the Senate would operate as a ‘States’ house’—that is, a house in which the senators from each State would vote in accordance with their particular State’s interests. However the reality has been quite different. From the beginning, party discipline has been no less rigid in the Senate than in the House of Representatives, and senators have voted along party rather than State lines when considering legislation. In addition, although senators from each State are elected on a system of proportional representation within each State (which gives minor parties a reasonable chance of achieving representation in the Senate), the fact that seats are allocated equally to States irrespective of population means that representation in the Senate is highly disproportionate when considered from the perspective of the ordinary voter. For example, the fact that both Tasmania and New South Wales elect an equal number of senators means that when one takes into account their relative populations, a vote in Tasmania is worth 13 times as much as a vote cast in New South Wales.

Elections Elections for the Senate are conducted using the ‘single transferable vote’ system of proportional representation. Under this system, a voter may either indicate their preference for all the candidates standing for election to the Senate in the voter’s State (called ‘voting below the line’), or may simply indicate a political party, in which case their vote is counted in accordance with the preferences lodged by the party with the Australian Electoral Commission (called ‘voting above the line’). On election day a quota for election to the Senate is calculated by dividing the total number of votes cast by the number of Senate seats being elected and adding 1 (which, since six Senate seats usually fall vacant at each election means that the quota is 1/6 of the votes cast plus 1). Votes are counted over a number of rounds, with the votes of the candidate with the lowest number of preferences being eliminated in each round and their votes being transferred to other candidates according to the voters’ preferences, until a candidate accumulates enough votes to reach the quota, in which case they are elected. The process continues until enough candidates successively reach the quota required to fill the Senate seats being filled. This system favours minor parties which may have significant but widely spread support, because it is easier for such a party to win enough votes in the State to fill a quota than it is for them to win seats in the geographically based system used for elections to the House of Representatives.

Rotation of Senators Section 7 of the Constitution provides that senators serve six-year terms, but this is subject to s 13, which establishes a system of senatorial rotation.

CHAPTER 3: The Legislature

When the first Senate was convened, s 13 required that senators from each State be divided into two classes. The division was made according to how many votes each senator had obtained when they were elected. Those senators falling into the top half from each State would serve the full six-year term, while those falling into the bottom half would serve only three years. Senators elected to replace those who had served three-year terms would serve normal six-year terms. This has the consequence that an election for half the Senate is held every three years. The rotation carries on functioning automatically unless a double dissolution election— that is, an election of the House of Representatives and of the whole Senate—is called under s 57. In such circumstances a division of senators into six-year and three-year senators has to be done again. Rotation does not apply to senators elected from the Territories—they serve three-year terms. Under the Commonwealth Electoral Act 1918 (Cth), elections for half the Senate are held at the same time as elections for the House of Representatives; however under s 13 of the Constitution, Senate terms begin on the following 1 July. This means that the ‘old’ Senate carries on in existence for about six months after an election. This rule does not apply to senators elected from the Territories. They take office when the new House of Representatives convenes.

Territorial representation In the mid-1970s controversy arose in relation to representation of the Territories in Parliament. Prior to this, the Territories had been represented only in the House of Representatives, but in 1974 the government enacted legislation allowing each Territory to elect two senators. The validity of this legislation was challenged by the States, who feared that power to give representation to the Territories might be used by a government to its political advantage—for example, by giving increased representation to a Territory in which it enjoyed electoral strength. In Western Australia v Commonwealth (First Territorial Senators Case) (1975) 134 CLR 201 the appellants argued that the legislation granting Senate representation to the Territories was unconstitutional in that s 7 of the Constitution stated: ‘The Senate shall be composed of senators for each State’—in other words, the Constitution did not contemplate senatorial representation of the Territories. The appellants also argued that to allow Parliament a free hand in granting representation to the Territories would upset the federal balance that the drafters of the Constitution had intended to create. The contrary argument presented by the Commonwealth, which was accepted by the High Court by a 4:3 majority, was that the language of s 7 had to give way to the very broad terms of the Territories power in s 122, which states: ‘The Parliament may … allow the representation of such territory in either House of the Parliament and to the extent and on the terms which it thinks fit.’

41

42

Part one: Constitutional Fundamentals

A second challenge to senatorial representation of the Territories was brought with a different State as plaintiff in Queensland v Commonwealth (Second Territorial Senators Case) (1977) 139 CLR 585. By a 5:2 majority the High Court reaffirmed the approach it had adopted in the First Territorial Senators Case.

Qualifications for election to Parliament Section 34 of the Constitution states that Parliament may determine qualifications for election to the House of Representatives, while s 16 states that qualification for elections to the Senate shall be the same as qualifications for election to the House of Representatives. Parliament exercised its power under s 34 to provide in s 163 of the Commonwealth Electoral Act 1918 (Cth) that to be eligible for nomination as a candidate for the House of Representatives or the Senate, a person must be an Australian citizen over the age of 18 years and registered or entitled to be registered as a voter in elections for the House of Representatives. An important corollary to the eligibility criteria are the provisions of s 44 (i)–(v) of the Constitution, which state in what circumstances an otherwise qualified person would be disqualified from being elected or sitting as a member of either house of Parliament. The fact that s 44 applies both to candidates and to sitting MPs means that its provisions can be used to have a candidate declared ineligible for election, or to disqualify an already sitting member who is found either to have been ineligible when they were elected or to have become ineligible while they were a sitting member. Disputes relating to the eligibility of candidates prior to their becoming members of Parliament are heard by the High Court exercising its jurisdiction as a Court of Disputed Returns under s 354 of the Commonwealth Electoral Act 1918 (Cth). Under s 47 of the Constitution (and the common law doctrine of parliamentary privilege), any dispute relating to the eligibility of a person who has already been sworn in as a member of a house of Parliament would be decided by the house of which they are a member. However, s 376 of the Commonwealth Electoral Act provides that a house may refer such questions to the High Court. This is obviously the preferable course, as the question of the member’s eligibility is then decided by an independent institution. However, on occasion the house itself has determined the question, as in 1998 when the government used its majority in the House of Representatives to declare an MP eligible to be a member despite his having breached the provisions of s 44(v) relating to pecuniary interests in government contracts. The categories of person which s 44 disqualifies from election to, or membership of, Parliament are as follows: holding the citizenship of a foreign power; being convicted for treason; serving a sentence of imprisonment for one year or longer; being an undischarged bankrupt or insolvent; holding an office of profit under the Crown; receiving a pension from the Crown or having an interest in a Commonwealth contract other than as a member of a company that has more than 25 members.

CHAPTER 3: The Legislature

The scope of the provision relating to the ineligibility of foreign citizens has been examined by the High Court in a number of cases. • A person who was not an Australian citizen at the time they are nominated to stand for election does not become qualified by subsequent conferral of citizenship (Re Wood (1988) 167 CLR 145). • A person who wishes to renounce foreign citizenship must take reasonable steps to do so, in accordance with the formalities required under that other country’s laws—it is not sufficient to renounce that country’s citizenship under Australian law (Sykes v Cleary (No 2) (1992) 176 CLR 77). • The United Kingdom is a ‘foreign power’ for the purposes of s 44, notwithstanding that citizens of both Australia and the United Kingdom owe allegiance to the same monarch—she has different legal personalities in each country (Sue v Hill (1999) 199 CLR 462). The rule disqualifying persons holding offices of profit derives from sixteenthcentury England, when the monarch would attempt to buy votes in Parliament by conferring offices (which frequently carried a large salary for little or no work) on MPs. This prohibition also serves to preserve the political neutrality of the public service, as it means that public servants must resign before standing for election. A necessary exception to the rule (recognised in the final clause of s 44) relates to ministers of the Crown. The doctrine of responsible government, which requires that ministers be members of the legislature, could obviously not operate if the rule applied to them. Section 44 also exempts recipients of military pensions from the prohibition that would otherwise apply to them. Finally it should be noted that in Sykes v Cleary (No 2) (1992) 176 CLR 77 the term ‘office of profit’ was interpreted as including employment as a State school teacher (in other words, s 44 covers both State and Commonwealth public servants).

Legislative procedures The Constitution sets out various procedures governing financial legislation, conflicts between the Houses and the operation of special parliamentary committees.

Enactment of legislation The enactment of legislation requires that a Bill be passed by the House of Representatives and by the Senate and then receive the royal assent, at which point it becomes an Act. A Bill may originate in either house, the only exception being taxation or appropriations legislation which, under s 53 of the Constitution, must originate in the House of Representatives. In practice, most Bills originate in the House of Representatives, simply because most ministers sit in that house and government-introduced legislation dominates the legislative program. A short amount of time is, however, given during sessions of Parliament to what are called

43

44

Part one: Constitutional Fundamentals

‘private members’ Bills’—that is, Bills introduced by members on their own initiative rather than as part of the government’s legislative program. Sections 22 and 39 of the Constitution give Parliament the power to enact legislation determining the quorum of the Senate and of the House of Representatives. Parliament has used this power to set the quorum for the House of Representatives at one-fifth and that of the Senate at one-quarter of their total memberships respectively. Sections 23 and 40 provide that questions are decided upon in each house by a majority vote. Because of this constitutional prescription of what is required to enact legislation, Parliament is not able to entrench an Act—that is, make it more difficult to amend or repeal by requiring adherence to some special procedure, such as a two-thirds majority. The only way in which this could be done would be by amending the Constitution using the procedure contained in s 128 so as to create an exception to ss 23 and 40. Parliament’s internal procedures are governed by a set of rules called ‘Standing Orders’. Under these rules, Bills receive three ‘readings’ in each house, which means that each house has three opportunities to accept or reject the Bill. The purpose of the readings is as follows: • First reading—this does not mean that the text of the Bill is read verbatim, simply that members receive a copy of the Bill and vote to proceed with it. • Second reading—the person introducing the Bill (almost always a minister, as the government controls the business of the House of Representatives) explains its underlying policy and it is passed a second time. • Committee stage—the Bill is debated clause by clause (subject to how much time is allocated to the Bill). This is usually the stage at which any amendments are introduced. • Third reading—the Bill is given its final passage. After going through three readings in one house, the same occurs in the other. Either house may refer the Bill to one of its own committees, or to a joint committee of both houses, for further deliberation. At this stage, members of the public have an opportunity to appear before the committee and comment on the Bill. The final element in the passage of legislation is royal assent. This is a formality because, as discussed above, convention dictates that the Governor-General always assents to Bills presented to him or her.

Special procedures—financial legislation The Constitution contains special rules relating to laws that impose taxation or authorise appropriation (that is, laws that authorise government expenditure of money). To understand the rationale behind these provisions, it is important to note that although the drafters of the Constitution understood that the government would be

CHAPTER 3: The Legislature

responsible only to the House of Representatives, they were also determined that the Senate—which they envisaged would be a ‘States’ house’—would have equal power with the lower house. This is expressly stated in s 53 of the Constitution, which regulates the relationship between the houses and which states in its final clause that the Senate has equal powers to the House of Representatives in relation to the passage of legislation. Thus all Bills have to pass both houses in order to be enacted, unlike, for example, the situation in the United Kingdom, where the House of Lords may only delay legislation for a year. The requirement that both houses approve legislation applies even in respect of taxation and appropriations (spending) Bills. Section 53 does not define ‘taxation’ other than to say that it excludes penalties, fees for services and licence fees (a distinction which is fully examined in Chapter 13). The government in the House of Representatives relies upon taxation and appropriations legislation for its ability to function lawfully, as s 83 of the Constitution states that money may not be appropriated for expenditure unless the appropriation is authorised by legislation. This makes a government which does not have a majority in the Senate vulnerable to denial of taxation and spending authority by that chamber. This is what precipitated the Constitutional Crisis of 1975, when the coalition-controlled Senate refused to pass the Labor government’s supply legislation. These events are dealt with in detail in Chapter 4. Sections 53–55 of the Constitution also require that certain special procedures be followed because of the special nature of financial legislation. Section 53 provides that: • only the House of Representatives may originate Bills which impose taxation or appropriate expenditure • the Senate can ‘suggest’ amendments to the House of Representatives but, failing such suggestions being acted upon, must either pass or reject such Bills— the Senate itself cannot amend them. These provisions operate in favour of the House of Representatives by preventing the Senate from tinkering with the government’s budgetary proposals—the Senate must either approve them or reject them, but cannot alter them. Sections 54 and 55 operate in favour of the Senate, as they prohibit what is called ‘tacking on’; that is, the Senate being forced to pass or reject taxation or appropriations legislation that is linked to other (non-tax) legislation, or legislation that couples a tax the Senate approves of with one it wishes to reject. These measures prevent the House of Representatives from putting the Senate in the invidious political position of accepting legislation that it does not want in order to avoid the public opprobrium that might ensue if it were to take the drastic step of rejecting linked taxation legislation needed by the government in order to allow it to continue functioning. This objective is achieved in the following ways.

45

46

Part one: Constitutional Fundamentals

Section 54 provides that appropriation laws may deal only with appropriation. Section 55 provides that laws which impose taxation may deal only with the imposition of taxation, that any other provisions will be invalid, and that the entirety of the legislation will be invalid if the non-taxing provisions are not severable. • Taxation laws shall deal with one subject of taxation only (that is, only one tax can be imposed by the law). • Laws imposing customs or excise may deal only with the imposition of duties of customs or excise, but can impose more than one duty (a practical necessity, given the range of goods that might be subject to duty). The question of whether a law ‘deals only with taxation’ for the purposes of s 55 was addressed in Re Dymond (1959) 101 CLR 11, where Fullagar J stated that a law would be taken as dealing only with taxation so long as it only imposed the tax and covered matters ‘narrowly related to’ the imposition, which he defined as ‘the specification of the persons who are liable and the definition of liability’ (at 20). This is the origin of the legislative drafting practice whereby, when a tax is imposed, one Bill imposes the tax while another contains ancillary matters, such as those relating to assessment and appeals. The High Court broadened its interpretation of s 55 in Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388, where a majority of the court held that a law would be taken to ‘deal with’ taxation if it dealt with the ‘assessment, collection and recovery’ of a tax. Therefore, combining the rationes in both cases, it would be true to say that s 55 is not breached if a law imposing a tax goes no further than to: • specify who is liable to pay the tax • specify the extent of their liability, and • regulate the assessment, collection and recovery of the tax. This formulation means that a wider range of matters can be dealt with in legislation imposing a tax than was previously the case. Finally in relation to s 55, it is necessary to consider the position where a taxing provision is inserted into a pre-existing Act that deals with matters other than taxation. This was dealt with by the High Court in Air Caledonie v Commonwealth (1988) 165 CLR 462, where a so-called ‘fee’ for immigration clearance was inserted by an amendment into a non-tax statute (the Migration Act 1958 (Cth)). The court held that the ‘fee’ was really a tax, at least as far as Australian citizens were concerned, because they have a right to enter the country anyway and should not, therefore, have to pay to have an application to enter processed by the immigration authorities. Did the insertion of the amendment breach the s 55 prohibition against laws that impose taxation dealing with other matters? In answering this question, the court held that it was not sufficient to consider the validity of the amendment alone (which dealt • •

CHAPTER 3: The Legislature

only with tax): it was necessary to look at the whole Act that it was inserted into. The court concluded that, since the Migration Act dealt with non-tax matters, it could not have a taxing provision inserted into it. This is a strange decision—why could the court not simply have considered the validity of the amending section on its own, which, since it dealt only with taxation, would have been valid? The protective function of s 55 (as read with s 53) did not require the court to consider the law plus the amendment as a whole—the Senate had been given an opportunity to consider the law imposing tax (the amendment) on its own. After finding that the amended Act breached s 55, the court declared the amendment invalid, on the ground that it was the amendment that had caused the illegality. But is this not contrary to the plain wording of s 55, which requires that the non-tax parts of an offending law be invalidated? Obviously, the court wanted to avoid doing this, as it would have meant declaring the rest of the Migration Act invalid, but the decision does, nevertheless, appear to be anomalous. The ‘one subject of taxation’ rule in s 55 was tested in State Chamber of Commerce and Industry v Commonwealth (1987) 163 CLR 329, in which the court had to determine whether legislation that imposed fringe benefits tax on employers in relation to a variety of benefits received by their employees infringed s 55. The court held that the rule was not infringed—it gave a broad interpretation to fringe benefits as meaning benefits received by employees from any source (not just from employers), and thus found that the Act dealt with one subject of taxation.

Conflict between the House of Representatives and the Senate A bicameral legislative system cannot operate without some mechanism for resolving conflicts over legislation between the houses. In the case of the Commonwealth, the deadlock-breaking procedure is contained in s 57, which envisages the following steps: • The House of Representatives passes a Bill and the Senate either rejects it, fails to pass it or amends it in a way that is unacceptable to the House of Representatives. • Three months after the Senate’s rejection, the House passes the Bill once more, only to have it rejected by the Senate a second time. • The Governor-General (acting on the advice of the government) may order a double dissolution election of the house and the Senate. • The new House of Representatives passes the Bill and the new Senate rejects it. • The Governor-General (again acting on advice) may then convene a joint sitting of both houses to consider the legislation. • If it passes the joint sitting, it will become law. There have been six double dissolution elections, but in only one instance (in 1974) was it necessary to convene a joint sitting to get legislation passed. Section 57

47

48

Part one: Constitutional Fundamentals

thus gives a government (which, by definition, controls the House of Representatives) a means of overriding a recalcitrant Senate, but this can only be done after the issue has been returned to the voters, who may or may not return a hostile Senate (and, indeed, may or may not re-elect the government). Section 57 has been interpreted in the following three important cases.

A case to remember The case of Cormack v Cope (1974) 131 CLR 432 arose when the House of Representatives passed the Petroleum and Minerals Authority Bill (PMA Bill) on 12 December 1973. On 13 December, the Senate resolved to adjourn debate until after the Christmas recess. The Senate rejected the Bill on 2 April 1974. The House of Representatives re-enacted it on 8 April 1974, and it was rejected again by the Senate on 10 April 1974. The Governor-General ordered a double dissolution.

The election produced a result which indicated that the Bill was likely to pass a joint sitting. The High Court was asked to enjoin the joint sitting on the ground that three months had not passed between the Senate’s rejection on 2 April 1974 and the second passage by the house on 8 April 1974. The court refused to examine the merits of the case or to grant the injunction, saying that the proper time for the courts to be engaged was after the legislative process was completed, and that in any event—even if the requirements of s 57 had not been fulfilled in respect of the Bill (the validity of which was considered in the subsequent case of Victoria v Commonwealth (PMA Case), see below)—the fact that there had been other Bills on which the houses were deadlocked would mean that the double dissolution would be valid in respect of them, since they had satisfied s 57. Inclusion by the Governor-General in his joint sitting proclamation of a list of Bills that had triggered the double dissolution was held not to be a constitutional requirement, and so, even though the PMA Bill was in the list, this did not invalidate the joint sitting. The PMA Bill was enacted at the joint sitting held in August 1974, and the challenge deferred in Cormack v Cope was then brought in Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81. The plaintiff argued that s 57 had not been fulfilled because three months had not passed between the first rejection by the Senate on 2 April 1974 and the second passage by the House of Representatives on 8 April 1974. The Commonwealth’s argument was that the Senate’s postponement of consideration of the Bill on 13 December 1973 amounted to the Senate having ‘failed to pass’ the Bill, as that term was used in s 57, and that three months had elapsed between 13 December 1973 and 8 April 1974.

CHAPTER 3: The Legislature

The majority held that, although mere prevarication by the Senate would not be allowed to frustrate s 57, and the Senate must consider legislation within a reasonable time, the fact that the Senate had, on 13 December 1973, merely postponed the legislation until its next sitting day could not be said to amount to prevarication. The majority, therefore, concluded that the PMA Act was invalid. Clearly, it is very difficult to determine what amounts to ‘a reasonable time’ and, thus, to decide when it can be said the Senate has ‘failed to consider’ legislation— this is essentially a political question, and the failure of s 57 to set a time limit is an unfortunate omission. It was also held that, even if a double dissolution election was called on the basis of legislation that had failed to meet the requirements of s 57, the fact that a dissolution and election could not be ‘undone’ meant that the resultant Parliament would be validly elected—the only effect of a breach of s 57 would be that the particular piece of legislation, in reference to which the election had been called, would not be able to be enacted by a joint sitting. (Note that, in the specific case of the PMA Bill, there were in any event other Bills in respect of which the three-month requirement had been satisfied and upon the basis of which the election had been called.) Western Australia v Commonwealth (First Territorial Senators Case) (1975) 134 CLR 201 related to three Bills (including Bills giving representation to the Territories in the Senate) that had been passed by the House of Representatives during 1973 and, by November, had been twice rejected by the Senate, thereby fulfilling the s 57 requirement. In April 1974, the Governor-General dissolved Parliament. After the ensuing double dissolution election in May 1974, the Senate again rejected the legislation, leading the Governor-General to convene a joint sitting in August, which passed the Bills. The validity of the legislation was challenged inter alia on the ground that the November 1973 to April 1974 gap was too long to allow s 57 to be activated (in other words, that disagreements between the houses could not be ‘stockpiled’ so as to enable the government to request a double dissolution long after the disagreement had arisen). The High Court held that there was no period within which the Governor-General had to call a double dissolution after the requirements of s 57 had been satisfied. No time limit was expressed by s 57 and none could be implied. Thus, a disagreement between the houses can be stockpiled by a government and used any time during the life of a Parliament to secure a double dissolution. The cumbersome and time-consuming nature of the s 57 procedure clearly makes it unsuited to solving deadlocks between the houses when time is of the essence. This became important during the Constitutional Crisis of 1975, when the Senate had blocked the government’s taxation and appropriations legislation and there were only a few weeks left before the previous year’s spending authorisation expired. In such circumstances s 57 offered no solution to the deadlock.

49

50

Part one: Constitutional Fundamentals

Parliamentary committees Parliamentary committees exist to give members an opportunity to consider legislation in detail, to collect information on matters of public interest on behalf of Parliament, and to scrutinise and ask questions of government ministers and public servants. They also provide a forum for citizens to make representations to Parliament on proposed legislation. Both the House of Representatives and the Senate have committees that deal with various legislative portfolios, and it is to the relevant committee that legislation dealing with a particular area may be referred. Some committees are joint committees; in other words, they draw their membership from both the House of Representatives and the Senate. Standing committees have permanent existence and deal with topics that are always the subject of governmental activity. Select committees are convened to investigate a particular issue, and are dissolved once they have reported to Parliament. As the rules governing committees currently stand, the government is given a majority of votes on standing committees of both the House of Representatives and of the Senate (even when it does not have a majority in the Senate). For this reason, standing committees are unlikely to make adverse reports on government conduct (although opposition members of such committees might choose to issue critical minority reports). However, this does not mean that standing committees are entirely ineffectual. Twice every year, each committee acts in its ‘estimates’ capacity (and is then often referred to as an ‘estimates committee’). On these occasions it inquires into how the government has spent the money allocated to it by Parliament for the portfolios falling under the particular committee’s areas of responsibility. Because all government activity requires the expenditure of money, committees have extended the scope of their inquiries at estimates hearings to include all areas of government activity. This gives opposition senators an opportunity to question ministers and public servants on any matter pertaining to the operation of the departments for which they are responsible. Perhaps the most effective check on government arises when the opposition controls the Senate and uses this power to establish select committees to deal with particular matters of public concern—a prime example from recent years being the committee established to investigate the ‘children overboard’ affair. Unfortunately, such opportunities do only arise when the opposition has a Senate majority. Scrutiny of the executive by Senate committees is considered in more detail in Chapter 4. Committees have extensive powers, including those of summoning witnesses and compelling the production of documents. Failure to comply with a committee’s request can lead to a finding of contempt of Parliament under the law of parliamentary privilege, which is considered below.

CHAPTER 3: The Legislature

Parliamentary privilege The law of parliamentary privilege is a body of common law rules, supplemented by statute, that serve to prevent interference in the work of Parliament and protect its independence.

The origins of parliamentary privilege This branch of the law developed during the struggle in seventeenth-century England between the Crown and Parliament. The Stuart monarchs, and in particular Charles I, frequently sought to interfere in the activities of Parliament, including prosecuting MPs for what they said in Parliament. After two wars between King and Parliament, it came to be accepted that the common law gave Parliament the power to make its own internal rules and to enforce them and, crucially, also gave Parliament the jurisdiction to summons, arrest and punish anyone (including outsiders) who transgressed those rules. This aspect of the law of parliamentary privilege thus conferred powers, both legislative (in relation to internal rule-making, as distinguished from Parliament’s general legislative power) and judicial (in respect of its jurisdiction to try and punish offenders) on Parliament. It was also accepted that the existence of legislative and judicial powers necessitated the recognition of a corresponding immunity from exercises of power by other branches of government. Thus no other institution of government, including the courts, can supplant Parliament in the exercise of its powers. The immunity also extends to denying the courts jurisdiction to admit evidence of anything said during the course of parliamentary proceedings. This has the effect of shielding persons from liability outside Parliament for anything they have said during the course of such proceedings.

Parliamentary privilege in Australia Section 49 of the Commonwealth Constitution states that, until Parliament provided otherwise, the House of Representatives and Senate would enjoy the same privileges as were then enjoyed by the House of Commons in the United Kingdom. Parliament availed itself of the power in s 49 when it enacted the Parliamentary Privileges Act 1987 (Cth), which reformed and clarified certain aspects of the law of parliamentary privilege. However, s 5 of this Act confirms that the common law remains in force in so far as it is not inconsistent with the Act. So far as the States are concerned, the common law position, enunciated in Barton v Taylor (1886) 11 App Cas 197, was that colonial Parliaments (to which the State Parliaments are the successors) did not enjoy the full range of privileges enjoyed by the House of Commons. Rather, they had only such privileges as were necessary to enable them to function effectively. Although this did indeed include

51

52

Part one: Constitutional Fundamentals

many of the powers and immunities that had developed in the United Kingdom, it did not include the power to punish those who transgressed privileges. This remains the position in Tasmania and New South Wales, as was reaffirmed by the High Court in Egan v Willis (1998) 195 CLR 424. In that case the court held that the Legislative Council of the New South Wales Parliament enjoyed such privileges as were reasonably necessary for it to function as a legislative chamber under the system of responsible government embodied in the State’s Constitution. This included the power to require a minister to provide the house with government documents, and a power to exclude him from the house for a brief period if he refused the request (which was considered to be a defensive power, designed to maintain the authority of the chamber, rather than a punitive one). However the house’s privileges would not extend to summonsing non-members to answer questions and to punish them if they did not. Subsequently, in Egan v Chadwick (1999) 46 NSWLR 563, it was held that, just as Parliament’s privileges existed in order to allow the institution of responsible government to function effectively, so too might they be limited by the requirements of that form of government. On this basis the court held that the Legislative Council’s power to request documents from the executive was limited by the defence of public interest immunity, and could not be used to compel the production of Cabinet documents, because the institution of responsible government required protection for the confidentiality of Cabinet deliberations. In other States, the full range of privileges as they existed on a specific date in the United Kingdom has been incorporated into State law by statute (see, for example, s 9 of the Constitution of Queensland 2001 (Qld) and s 1(b) of the Parliamentary Privileges Act 1889 (WA)). In such States the Parliaments, like the Commonwealth Parliament, enjoy the full range of common law privileges, including the punitive element, subject to any variation by statute.

Immunity from inquiry by the courts One of the key aspects of parliamentary privilege is the immunity found in Article 9 of the Bill of Rights 1689 (UK), which provides that: freedom of speech and debates or proceedings in Parliament ought not to be ­questioned or impeached in any court or place outside Parliament.

The Bill of Rights was received as part of the law of all the Australian colonies and thus forms part of the law applicable to the Parliaments of the States and the Commonwealth. In addition, its application to the Commonwealth Parliament was expressly confirmed by s 16(1) of the Parliamentary Privileges Act 1987 (Cth).

CHAPTER 3: The Legislature

The purpose and scope of the immunity The purpose of Article 9’s exclusion of the jurisdiction of the courts from inquiring into parliamentary proceedings is twofold: • to ensure the independence of Parliament in determining whether its privileges have been breached (either by a member or an outsider) and, if so, what punishment should be imposed, and • to ensure that people can express themselves freely during the course of parliamentary proceedings without fear of being subject to civil suit or criminal prosecution. The Parliamentary Privileges Act 1987 (Cth) makes the following provisions in relation to the scope of the immunity. • For the purposes of the immunity, ‘proceedings in Parliament’ include not just debates in the houses but anything connected with the business of a house, such as evidence (oral or written) given to a committee (s 16(2)). • The immunity prevents any court or tribunal from receiving evidence concerning proceedings in Parliament for the purpose of questioning or drawing inferences from anything forming part of those proceedings (s 16(3)). • The immunity does not prevent the courts from referring to a record of proceedings in Parliament for the purpose of determining whether s 57 of the Constitution has been complied with or for the purpose of interpreting legislation (s 16(5)). Since these provisions confirmed longstanding interpretations of Article 9 of the Bill of Rights, similar rules would in all likelihood be applied in determining the scope of the immunity as it applies to State Parliaments. The strictness with which the immunity is applied is illustrated by the following cases. • In Amman Aviation (Pty) Ltd v Commonwealth (1988) 19 FCR 223, the appellant brought an action against the Commonwealth alleging that the Commonwealth had been influenced by a competitor of the appellant not to perform a contract which it (the Commonwealth) had with the appellant. The court ruled inadmissible the contents of a speech made to the Senate in which the senator in question admitted that he had had contact with the competitor company. The court held that the content of speeches or documents could not be admitted for the purpose of drawing inferences from them. • In Hamsher v Swift (1992) 33 FCR 545, members of a religious group whose applications for permanent residence in Australia had been rejected sought to introduce as evidence earlier statements by the Minister for Migration that suggested he would grant them permanent residence (the appellants were arguing

53

54

Part one: Constitutional Fundamentals

that the minister was then estopped from denying them permanent residence). The court held that parliamentary privilege prevented a court from drawing inferences from anything said in Parliament, and also confirmed that the privilege belongs to a house as a body, so that even if a member has no objection to a parliamentary statement being admitted, the house could prevent that from occurring. The immunity becomes particularly relevant in defamation cases, where a plaintiff alleges that they have been defamed during the course of parliamentary proceedings, but is prevented from bringing an action because either or both of the elements of the defamation action (that is, reference to the plaintiff and a defamatory statement about them) can be proved only with reference to what was stated during the course of parliamentary proceedings. In these circumstances the plaintiff is without remedy. It is important to note that this applies even if the person who uttered the defamatory statement during the course of parliamentary proceedings states outside Parliament that they stand by (or ‘adopt’) what they said inside Parliament (some erroneous decisions to the contrary by State courts notwithstanding). So long as they do not repeat the defamation itself, it remains non-actionable. These rules can of course lead to abuse of the immunity, when a member of a house uses the cover of parliamentary privilege to make defamatory statements which they are unable to prove the truth of, and which they are therefore unwilling to utter outside of parliamentary proceedings. However, on balance, the need for absolute freedom of speech in Parliament outweighs the harm that can be caused when the immunity is abused. Most legislative chambers have rules that make it a breach of privilege for members to abuse the immunity in this way, which can lead to the member being disciplined by the house, although this may be cold comfort to the person who was defamed.

Limits to the immunity Although Parliament’s immunity from inquiry into its proceedings is an important rule, it would be a mistake to think that the ambit of this immunity is for Parliament to determine. The law of parliamentary privilege is not a free-standing body of law. It is simply a set of common law rules (supplemented by statute) and, as such, its scope is determined by the courts as part of their normal function of stating the common law (and, where statutes are involved, interpreting statutes).

A case to remember The role of the courts in determining the scope of parliamentary privilege became controversial in Stockdale v Hansard (1839) 9 Ad & E 1; 112 ER 1112, in which the appellant sued the respondent for defamation. The respondent’s defence was that he had been authorised to publish the defamatory material by Parliament.

CHAPTER 3: The Legislature

The court held that, because parliamentary privilege is part of the common law, the courts have power to determine what is a privilege, but once a privilege has been recognised, Parliament’s response to the breach cannot be inquired into by the courts. Such an inquiry would itself amount to a breach of privilege under Article 9 of the Bill of Rights. However in the instant case, the court held that under the common law Parliament did not have the privilege to authorise someone to publish defamatory material, and so the respondent’s defence failed. In response to this, the United Kingdom Parliament enacted legislation conferring privilege on publications of parliamentary proceedings.

The principle in Stockdale v Hansard became relevant again in Case of the Sheriff of Middlesex (1840) 11 Ad & E 273; 113 ER 419, in which a habeas corpus application was brought before the court to obtain the release of a person who had been arrested by order of the House of Commons for breach of parliamentary privilege. Realising under the precedent of Stockdale v Hansard that if the warrant of arrest disclosed the reasons for the arrest, the courts would examine the warrant in order to determine whether the conduct alleged by Parliament did, indeed, amount to a breach of privilege, the House had issued a ‘general’ warrant (that is, one that did not disclose the particular privilege alleged to have been breached). Since Article 9 of the Bill of Rights prohibited the court from going behind the warrant in order to inquire into what had occurred, the court had no option but to deny habeas corpus to the prisoner. (This is why s 9 of the Parliamentary Privileges Act 1987 (Cth) now prohibits either house of Parliament from issuing general warrants—see below.) The law as enunciated in Stockdale v Hansard has been accepted in Australia.

A case to remember In R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157, Dixon CJ stated at 162: it is for the courts to judge the existence in either House of Parliament of a privilege, but, given an undoubted privilege, it is for the House to judge of the occasion and of the manner of its exercise.

This rule thus establishes the boundary between the courts’ power to determine the content of the law of parliamentary privilege and the immunity Parliament enjoys under Article 9 of the Bill of Rights to determine the consequences of a breach of a privilege that is free from scrutiny by the courts (assuming that the privilege is acknowledged by the courts to exist under the common law or has been created by statute).

55

56

Part one: Constitutional Fundamentals

Specific rules Some of the more important common law and statutory rules of parliamentary privilege are as follows (references are to sections of the Parliamentary Privileges Act 1987 (Cth)): • Houses may make Standing Orders regulating procedure and conduct; however, in accordance with Article 9 of the Bill of Rights, non-compliance with such rules cannot be inquired into by the courts and thus this is not a ground for the invalidation of legislation. An exception is procedural rules contained in the Constitution (s 16(5)). • The power of a house to declare conduct to be a contempt (that is, a breach of privilege) is limited to conduct that amounts to an interference with the functions or authority of a house or with the performance of a member’s duties (s 4). • It is up to a house as a whole, not individual members or committees, to assert privilege. Breaches of privilege are referred to a privileges committee, which then relays its findings to the house for it to decide upon a course of action. • Houses have the power to imprison a person for up to six months for breaching parliamentary privilege and may also impose fines (s 7). The power to imprison has been used only once (in 1955 where the House of Representatives found that the contemnor had tried to intimidate an MP). There is no instance in which a fine has been imposed. • Houses do not have the power to expel members for breach of privilege (s 8), but may suspend them. • A house may not issue a general warrant for arrest for contempt—warrants must specify the particulars of alleged breaches of privilege (s 9). • A house or its committee may summons a person to give oral evidence or present documents. Records of evidence or documents may not be published without the consent of the house or committee. • Reports of parliamentary proceedings cannot found a defamation action (s 10 and Article 9 of the Bill of Rights). In addition, the Parliamentary Papers Act 1908 (Cth) protects publishers of parliamentary papers from criminal and civil liability arising from reports of what transpires in Parliament, while the Parliamentary Proceedings Broadcasting Act 1946 (Cth) makes similar provision in respect of broadcasters. • As they are part of the law that exists to protect Parliament as an institution, privileges cannot be waived either by a member or by a house.

57

CHAPTER 4

The Executive Covered in this chapter After reading this chapter you will understand: • the composition of the executive branch • how convention impacts upon the Governor-General’s exercise of powers • the reserve powers of the Governor-General • the Constitutional Crisis of 1975 • the role of the Cabinet • the limited extent to which Parliament can call the executive to account • the prerogative powers of the executive • the unusual nature of the ‘nationhood’ power.

Cases to remember Case of Prohibitions del Roy (1607) 12 Co Rep 63; 77 ER 1342 Case of Proclamations (1611) 12 Co Rep 74; 77 ER 1352 Attorney-General v De Keyser’s Royal Hotel [1920] AC 508 Pape v Commissioner of Taxation (2009) 238 CLR 1

Who comprises the executive? Under s 61 of the Constitution, the executive power of the Commonwealth is vested in the Queen and is exercisable on her behalf by the Governor-General as her representative. The Commonwealth of Australia was established under the Crown of the United Kingdom, as stated in the preamble to the Commonwealth of Australia Constitution Act 1900 (UK), and the monarch is the source of all executive power. However, by convention executive power is in reality exercised by ministers; accordingly the explanation of the structure of the executive in this chapter must be read in conjunction with the rules of responsible government, partly statutory, but mostly conventional, analysed in Chapter 2.

58

Part one: Constitutional Fundamentals

The Crown The constitutional position of the Crown can be summarised as follows: • The Queen is a component of Commonwealth Parliament (s 1 of the Constitution), and legislation requires the assent of the Crown. • The Queen is head of the executive but appoints a Governor-General to act as her representative and to exercise her powers on her behalf (see, for example, ss 2, 58, 61 and 68). • Appointment of the Governor-General is the only power that the Queen exercises personally, but, by convention, that power is exercised on the advice of the Prime Minister. The Prime Minister can also advise the Queen to dismiss the ­ Governor-General and, by convention, she would have to comply. • The same model is followed in each State—the Queen is head of the executive of each State, but her powers in each are exercised by a Governor, as provided for by s 7 of the Australia Act 1986 (UK and Cth). • Although the Queen is Head of State of Australia, by virtue of her having succeeded to the throne of the United Kingdom (as provided for by s 2 of the Commonwealth of Australia Constitution Act 1900 (UK)), her title in Australia is Queen of Australia, as provided for by the Royal Style and Titles Act 1953 (Cth). She thus has a separate legal persona in Australia (as the ‘Crown in right of the Commonwealth of Australia’) from that which she has in the United Kingdom. • Inheritance to the Crown in right of the United Kingdom is regulated by United Kingdom law. Any change to that law would not be effective in Australia, given that, under s 1 of the Australia Act 1986 (UK and Cth), the United Kingdom no longer has the power to legislate for Australia.

The Governor-General The Governor-General exercises power on behalf of the Queen (ss 2 and 61 of the Constitution). The Governor-General’s formal standing instructions are contained in Letters Patent, last issued in 1984, which deal with such matters as contingencies where the Governor-General is absent or incapacitated and the GovernorGeneral’s powers to appoint deputies. The Balfour Declaration of 1926 affirmed that Governors-General of the various Dominions (as self-governing colonies were called in the early part of the last century) had a relationship with their governments analogous to that which the monarch had with the United Kingdom Government; that is, they acted on advice. Furthermore, the 1930 Dominion Conference affirmed a convention that the appointment of Dominion Governors-General by the monarch was to be on the advice of the government of the Dominion, not that of the United Kingdom.

CHAPTER 4: The Executive

The powers of the Governor-General can be classified into three categories: legislative powers, executive powers exercised on advice and executive powers exercised independently (the so-called ‘reserve powers’).

Powers relating to legislation The powers of the Governor-General relating to the passage of legislation are purely formal: s 58 of the Constitution gives the Governor-General the power ‘according to his discretion’ to assent to Bills passed by Parliament, to withhold assent, or to reserve a decision pending advice from the Queen. However, in reality, convention dictates that the Governor-General always assents to Bills. The power of reservation has been used only once, in respect of a law removing the right of appeal to the Privy Council, which had to be reserved for the Queen’s assent under s 74 of the Constitution. There is no other provision in the Constitution that compels reservation, so this procedure is now redundant. Section 59 gives the Queen (and thus the Governor-General) the power to disallow legislation. This power has never been used and was indeed declared redundant at the 1926 Balfour Conference.

Executive powers exercised on advice It is clear that the vast majority of the Governor-General’s powers are exercised on the advice of the government of the day, rather than according to his or her own discretion. In some cases where the Constitution confers power on the Governor-General, the relevant section expressly refers to the ‘Governor-General in Council’, defined by s 63 as meaning the Governor-General acting on advice. Examples of this are calling an election of the House of Representatives (s 32), creating government departments (s 64), appointing public servants (s 67) and appointing federal judges (s 72). However, even where the Constitution does not expressly refer to the ‘GovernorGeneral in Council’, but only to the ‘Governor-General’, the conventions of constitutional monarchy still require that the Governor-General acts only on the advice of the government, for example to: • summon, prorogue and dissolve Parliament (s 5) (but see the discussion of the reserve powers, below) • recommend money Bills to Parliament (s 56) • order a double dissolution and convene a joint sitting (s 57) • assent to legislation (s 58) • appoint members of Executive Council (s 64)—a power exercised on the advice of the Prime Minister • serve as Commander-in-Chief of the armed forces (s 68) • submit constitutional amendments to a referendum (s 128).

59

60

Part one: Constitutional Fundamentals

The High Court recognised in Western Australia v Commonwealth (First Territorial Senators Case) (1975) 134 CLR 201 and Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81 that any discretion apparently vested in the Governor-General is, in reality, exercised at the behest of the government of the day. Although the Governor-General is within his or her rights to ask the government to reconsider the advice it is tendering, ultimately, effect must be given to that advice.

Executive powers exercised independently The reserve powers of the Governor-General are those exercised in circumstances where it is evident that the Governor-General cannot take advice. However, while reserve powers are exercised independently, they are still subject to conventions, which restrict the circumstances in which the powers may be exercised and the ways in which the Governor-General’s discretion must be used.

Appointing a Prime Minister The power to appoint a Prime Minister is subject to the convention that the GovernorGeneral must appoint whoever leads the party or coalition with a majority in the House of Representatives. The operation of this convention requires cooperation between politicians and the Governor-General: an incumbent Prime Minister who loses the majority in the house after an election must comply with convention and resign, leaving it open to the Governor-General to appoint whoever is able to command the support of the House. In the possible but unlikely event that a general election produced a result where no one was able to command a majority in the house, convention would require the incumbent Prime Minister to advise the Governor-General to dissolve Parliament and call another election.

Dismissing a Prime Minister The power to dismiss a Prime Minister is the most controversial of the reserve powers. It can be exercised where: • an incumbent Prime Minister loses his or her majority in the House of Representatives and refuses either to resign or to ask the Governor-General to call an election • a Prime Minister who had lost an election refuses to resign and to allow the Governor-General to appoint a new Prime Minister • a government persists in unlawful action. The dismissal power has been used only once at State and once at Commonwealth level.

CHAPTER 4: The Executive

Example In 1932 the Governor of New South Wales dismissed Premier Lang for refusing to comply with a Commonwealth law requiring the payment of certain debts owed by the State to the Commonwealth. It is doubtful whether this dismissal was in accordance with convention— although the Premier’s actions may have been prima facie unlawful, the Governor should have waited for a judicial finding to that effect before he acted. Dismissal at Commonwealth level occurred in 1975 when Governor-General Kerr dismissed Prime Minister Whitlam. This is discussed separately below.

Dissolving Parliament Usually, the Governor-General dissolves Parliament on the advice of the Prime Minister. However the Governor-General could exercise this power on his or her own initiative after dismissing a Prime Minister (in accordance with the rules described above) if there was no one else able to command a majority in the House of Representatives. In these circumstances the deadlock could be resolved only by Parliament being dissolved and an election being held.

Refusing to dissolve Parliament It has been argued that, if a government has recently been elected but shortly thereafter loses the confidence of the House of Representatives, the GovernorGeneral has the power to refuse a request by a Prime Minister to dissolve Parliament if there is someone else who can form a government. However, given that the conventions all serve the doctrines of representative and responsible government, the better view is that a Governor-General can never refuse a Prime Minster’s request to refer to the voters the question of who should form the government.

The Constitutional Crisis of 1975 The constitutional conventions relating to the reserve powers were put to the test during the Constitutional Crisis of 1975, when Governor-General John Kerr dismissed Prime Minister Gough Whitlam. The sequence of events was as follows: • Whitlam’s Labor Government had a majority in the House of Representatives but not the Senate. In October 1975, the Liberal-controlled Senate refused to pass the government’s Appropriation Bills (sometimes referred to as the supply legislation) unless the government agreed to call an election. Without parliamentary authorisation, government expenditure would become unlawful under s 83 of the Constitution, meaning the government would not be able to pay its running expenses (including the salaries of public servants) and therefore effectively be unable to function.

61

62

Part one: Constitutional Fundamentals

•

•

•

•

•

•

•

In early November, Kerr advised Whitlam that, as Whitlam was unable to secure financial supply, he should resign. Whitlam refused, arguing that it was contrary to convention for the Senate to block supply. With less than three weeks’ supply available, Kerr asked Chief Justice Sir Garfield Barwick to advise whether Kerr could dismiss Whitlam if Whitlam persisted in his refusal to resign. Barwick advised that he could, because his view was that under the conventions of responsible government, a Prime Minister who cannot secure the passage of appropriations legislation can no longer govern, and if such a Prime Minister refuses to resign, he can be dismissed by the Governor-General under the latter’s reserve powers. On 11 November, Kerr summoned Malcolm Fraser, leader of the Liberal opposition in the House of Representatives. Kerr advised Fraser that he would dismiss Whitlam and appoint Fraser as ‘caretaker’ Prime Minister, provided that Fraser agreed to instruct the Liberal majority in the Senate to pass the Appropriation Bills and to advise Kerr to dissolve Parliament once he was appointed as caretaker Prime Minister. Kerr then met with Whitlam and dismissed him. Fraser was appointed as caretaker Prime Minister and advised the Governor-General to dissolve Parliament. The Senate passed the Appropriation Bills. Meanwhile, in the House of Representatives, Whitlam succeeded in passing a motion of no confidence in Fraser’s Government (which, of course, had no majority in the House of Representatives). Before the Speaker had the opportunity to convey the result of the vote of no confidence to the Governor-General, the latter’s secretary read a proclamation on the steps of Parliament ordering the double dissolution that had been requested by Fraser. Fraser won the subsequent general election. The following points can be made in relation to the constitutionality of the above: The Senate was fully within its rights under s 53 of the Constitution to block supply. Whitlam’s argument—that the fact that this had never previously occurred had established a convention that supply could not be blocked (itself a debatable point)—was irrelevant in the face of s 53. The Governor-General should not have involved the Chief Justice. Contrary to what the Chief Justice himself said in his advice to Kerr, the issues he was asked to address could conceivably have come before the courts because, in dismissing the government, the Governor-General was acting under s 64 of the Constitution. Accordingly, in theory, his exercise of this power could have been reviewed by the courts (although, given that ministers hold office ‘at pleasure’ under s 64, substantive review would have been unlikely to succeed). The Governor-General’s proper legal adviser was the government’s Attorney-General, although, understandably, Kerr would not have wanted to inform him of his plans to dismiss Whitlam!

CHAPTER 4: The Executive

•

•

•

•

So far as the dismissal itself is concerned, there is no doubt that s 64 gives the Governor-General the power to dismiss a Prime Minister, and so Kerr’s action was certainly lawful. Whether it was constitutional—that is, whether it was in accordance with convention—is a point upon which people continue to argue. • It is clear that, under the conventions of responsible government, a government needs the support of only the House of Representatives (not the Senate) to remain in office. Whitlam argued that this meant he was entitled to continue in government even though he could not get his Appropriation Bills through the Senate. • However, this is to ignore the rationale for the rule that the party that has a majority in the House of Representatives is entitled to govern, which is that that entitlement to govern stems from its ability to govern. A party that is unable to obtain supply is unable to govern, and the inherent problem in the Australian Constitution (which was not remedied even in the wake of 1975) is that the Senate—the house to which the government is not responsible—has the power to block supply, and thereby deprive the government of the ability to govern. • It is upon this reasoning, which certainly makes sense from a practical point of view, that Kerr relied in asserting that convention dictated Whitlam ought to have resigned and that Kerr himself was acting in accordance with convention in dismissing him when he (Whitlam) did not. It could be argued that Kerr acted prematurely and should have waited a few more days to see if the political impasse might break before taking the step of dismissal. Whitlam might have resigned or the Senate might have passed the Bills, which would have averted the crisis. The problem was, however, that there was a high level of anxiety in the community over the continued payment of government salaries, as the government’s authority to spend money would have expired in less than three weeks. Of major concern to Kerr was the fact that, had he warned Whitlam that he was risking being dismissed if he did not resign, Whitlam could have asked the Queen to dismiss Kerr. The Queen would have been bound by convention to accede to such a request, whereupon Whitlam could have replaced Kerr with a compliant Governor-General. Leaving aside the issue of the conventions of responsible government, had Whitlam been allowed to stay in office until after supply ran out, any further expenditure of government money would then have been unlawful under s 83. Persistence in unconstitutional activity would have given Kerr a different ground upon which to dismiss Whitlam, but only after the matter had been tested in the courts. Should Kerr have waited until the country reached that position?

63

64

Part one: Constitutional Fundamentals

The Cabinet and the bureaucracy The Cabinet is the inner circle of ministers chosen by the Prime Minister to be his or her inner group of advisers. As stated in the discussion of responsible government in Chapter 2, it is the purely conventional body called the Cabinet that makes policy and wields executive power from day to day. The Executive Council, consisting of the Governor-General and all the ministers (both Cabinet and non-Cabinet) has a purely formal role. Since the practice is for the Governor-General to appoint all ministers as his or her deputies, any of them can preside over the Executive Council in the Governor-General’s absence, and so, the daily business of government can progress without the Governor-General’s presence. Decisions taken by the government are then relayed to the Governor-General for formal approval as necessary. The doctrine of collective responsibility requires that ministers give public support to the Cabinet. The government must speak with one voice, and so, while varying views may be heard in the privacy of Cabinet deliberations, once a decision is made, all members of the government must support it. By convention, members of the Cabinet must keep its deliberations secret, and the Archives Act 1983 (Cth) prohibits public access to Cabinet documents for 30 years. A further dimension of collective responsibility is that all members of the Cabinet must resign if the government as a whole loses the confidence of the house. The ministers, assisted by their personal staffers (who are political appointees governed by the Members of Parliament (Staff) Act 1984 (Cth)) constitute the political leadership of the various government departments, which are staffed by apolitical professional public servants. This division between the political and professional personnel within the executive branch can sometimes produce tension, particularly when ministers disagree with the advice they receive from public servants.

Controlling the executive In Chapter 2 we saw how the reality of how responsible government works is far removed from the theory upon which this system is based, because a party’s leadership in Parliament (which in the case of the government means the Cabinet) dominates the other members of the party’s caucus. To what extent does the executive oversight aspect of responsible government work?

Political responsibility Ministers are politically responsible not only for their personal conduct in office but also for the conduct of the public servants in their government departments. A public servant who makes an error may be subject to internal disciplinary procedures, but is shielded from the political consequences of their actions by the tradition of public service anonymity.

CHAPTER 4: The Executive

The days of a minister’s own party withdrawing parliamentary support because of personal error, misconduct or maladministration by the minister’s department are, unfortunately, long since gone in Australia, although this convention is still recognised in the United Kingdom. The consequences of such events are rarely determined by the application of principle (idealistic Cabinet codes of conduct notwithstanding), and depend instead on the degree of embarrassment felt by the government as a result of the instance of error or misconduct concerned. How gross the misconduct must be before a minister will be asked to resign is thus a political question, and ultimately depends on a pragmatic decision by the government as to whether the political cost of retaining the minister makes that course of action worthwhile. Holding ministers accountable therefore depends on the existence of a vigorous opposition in Parliament, which uses question time to expose ministerial misconduct, and a free press which scrutinises the government.

Scrutiny by the legislature An important role of the legislature is its power to inquire into government conduct. In Chapter 3 we saw how parliamentary committees, and in particular committees set up by the Senate when it has an opposition majority, serve the function of inquiring into government activity. To what extent can legislative committees, and in particular Senate committees, call ministers to account and compel them, their staff and public servants to answer questions and produce documents? As noted in Chapter 3, the Commonwealth Parliament enjoys the same privileges as were enjoyed by the House of Commons in the United Kingdom (subject to the provisions of the Parliamentary Privileges Act 1987 (Cth)). Under the common law these privileges certainly include the power to subpoena persons and papers. Furthermore, even in a jurisdiction where there was no whole-scale adoption of common law privileges (New South Wales), the High Court held in Egan v Willis (1998) 195 CLR 424 that the Legislative Council enjoyed such privileges as were necessary for it to discharge its functions in a constitutional system embodying responsible government, and that those powers included the power to require a minister who was a member of the chamber to produce documents requested by the chamber. In the subsequent case of Egan v Chadwick (1999) 46 NSWLR 563, it was held that the power was subject to the qualification—equally important to the doctrine of responsible government—that documents which form part of Cabinet deliberations should be kept confidential; however this did not undermine the general principle established in Egan v Willis. Assuming therefore that the powers of a legislative chamber and its committees do extend to summoning persons and requiring the production of documents, to what extent has this power been effectively used by the Commonwealth Parliament? The first problem is that, under the rules of parliamentary privilege, the House of

65

66

Part one: Constitutional Fundamentals

Representatives and the Senate disclaim any power to compel (as opposed to request) ministers who are members of one chamber to answer questions before committees of the other. Furthermore, even in cases where a chamber does claim the right, under the law of parliamentary privilege, to compel attendance by its own ministers, a minister who fails to comply with such a request risks being punished for contempt only when the opposition controls the chamber—the power to punish for contempt belongs to the chamber as a whole, not to a committee or any individual member, and it is virtually impossible to imagine that a government with a majority in a chamber would use that majority to censure its own minister. Finally, irrespective of what the powers of houses may be in theory, as a matter of practice government ministers frequently refuse to appear before committees and instruct their staffers and public servants not to appear or not to answer certain questions, even when the opposition controls the chamber, because unfortunately there is little likelihood that the opposition will call the minister to task.

Example Examples of this in recent times include former Coalition Defence Minister Peter Reith’s refusal to appear before a committee investigating the ‘children overboard’ affair; the government’s instruction to a military officer not to appear before an investigating committee when defence force personnel became aware of abuses at Abu Ghraib in Iraq; and the government’s instruction to public servants not to answer certain questions put by a committee investigating the AWB bribery scandal. Why then did the Senate not take action to enforce its powers by holding the relevant ministers in contempt, taking the matter to court if necessary, so that the Senate’s claim of what the common law of parliamentary privilege is could be confirmed—an outcome that would have been likely, given the decision in relation to the New South Wales Legislative Council in Egan v Willis? The answer to this is, unfortunately, that while the minor parties in the Senate would have welcomed such a step, the Labor Party, whose support in the Senate was necessary for contempt proceedings to be initiated, did not want to establish a precedent that could be used against it when it next formed government. In other words, the major parties have a vested interest in not obtaining a conclusive judicial affirmation of the investigative powers of Parliament and its committees. Failing court action or legislative enactment confirming this aspect of Parliament’s claims, the oversight role of the legislature over the executive will remain limited in its scope.

Legal remedies The executive is subject to restraint by the possibility of legal action. The most important source of legal restraint is review of administrative action by the Federal Court using the jurisdiction given to it by the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act). An analysis of the rules governing judicial

CHAPTER 4: The Executive

review is the subject of administrative law. In addition to review under the ADJR Act, the Commonwealth is subject to the constitutionally guaranteed review jurisdiction conferred on the High Court by s 75(iii) and (v) of the Constitution. This is examined in Chapter 5. The executive is also restrained in its conduct by the prospect of civil liability. Section 64 of the Judiciary Act 1903 (Cth) removes the common law immunity of the Crown to civil suit. This means that suits to recover damages arising under the law of tort and contract can be brought against government departments and against ministers acting in their official capacity.

Executive power Executive power under s 61 of the Constitution includes both executive power delegated by Parliament and inherent common law power.

Section 61 Section 61 confers the ‘executive power of the Commonwealth’ upon the Queen, and states that that executive power ‘extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth’. It is clear that this wording confers on the executive the power to discharge such functions as are conferred upon it by Parliament in order to give effect to laws that Parliament enacts.

Prerogative powers The executive powers referred to in s 61 include not only those executive functions conferred by Parliament but also certain inherent common law executive powers. Some dispute (originating in debates between academics in the United Kingdom) exists in relation to the nomenclature that should be given to these common law powers. Dicey argued that the term ‘prerogative powers’ may be used to refer to all the common law powers of the executive, whereas Wade argued that the term ‘prerogative’ should be used only in relation to those common law powers of the executive that are unique to it. Thus, to take an example, the power to enter into contracts—which is a common law activity that the executive shares with its subjects—would be included in the term ‘prerogative’ under the Diceyan approach but not under that of Wade. On the other hand, matters such as the conduct of defence and foreign affairs and the issuing of passports are activities that are unique to government and would therefore be included under both the broad and narrow definitions of the prerogative. In this book the wider version of ‘prerogative’—meaning all common law powers of the Crown—is used, unless otherwise indicated. The first important point to note about the prerogative powers is that as they derive from the common law, it is for the courts, exercising their jurisdiction of

67

68

Part one: Constitutional Fundamentals

interpreting the common law, to determine their scope—the executive itself cannot simply create new prerogatives. Important limits were set to the prerogative by judicial decisions early in the seventeenth century.

A case to remember In Case of Prohibitions del Roy (1607) 12 Co Rep 63; 77 ER 1342 the great English Chief Justice Coke (pronounced ‘Cook’) held that the prerogative did not include any judicial element, and that therefore a claim by James I to have the right to prohibit the courts from hearing cases and to hear them himself had no legal basis.

Similarly, in Case of Proclamations (1611) 12 Co Rep 74; 77 ER 1352 Coke CJ held that the prerogative did not include any legislative element and that a proclamation by the King purportedly prohibiting the construction of buildings above a certain height in London was invalid. (Perhaps unsurprisingly, Coke’s vigorous assertion of judicial independence led to his dismissal by James I, and it was the memory of this and other interferences with the judiciary by the Stuart monarchs that prompted Parliament to prohibit monarchical exercise of judicial power in the Bill of Rights Act 1689 (UK).) The prerogative can conveniently be separated into four categories: • Powers: • defence • declaring war and making peace • conducting foreign affairs • appointing diplomats • awarding honours • pardoning offenders • issuing passports • appointing public servants • establishing Royal Commissions • entering into contracts and forming corporations • Rights: • the proprietary right to treasure trove • Privileges: • the Crown’s privilege as preferential creditor • Immunities: • the Crown is presumed not to be bound by statute • the Crown is immune from civil liability • the Crown is immune from execution of civil process • the monarch enjoys personal legal immunity.

CHAPTER 4: The Executive

The fact that Australia is a federation means that neither the Commonwealth executive nor those of the States are able to exercise the full range of prerogative powers—rather, those prerogatives that were appropriate to the Commonwealth were transferred to it, while the State executives exercise the remainder. This point is of particular importance in relation to the prerogative powers to enter into contracts and form corporations. If this aspect of the prerogative was allowed unlimited application, it might provide an avenue for the Commonwealth to involve itself in activities lying beyond what the drafters of the Constitution intended its range of operation to be. In other words, the Commonwealth cannot, by means of commercial enterprise, extend its range of activities beyond the areas over which it is given legislative and executive responsibility by the Constitution. The fact that the prerogative derives from the common law means that it is subject to legislative override. Furthermore, if an aspect of the prerogative is legislated upon, the common law prerogative power is no longer available to the executive. The executive can then avail itself only of the statutory version of the prerogative, subject to whatever conditions or restrictions the legislation imposes.

A case to remember In Attorney-General v De Keyser’s Royal Hotel [1920] AC 508 the owner of a hotel in London, which had been expropriated during World War I for use as office space by the military, sued the United Kingdom Government for compensation. The government argued that, under the common law, the Crown had a right to expropriate property for defence purposes without paying compensation. The court held that, even if this was the case, the fact that expropriation was covered by the Defence Act 1842 (UK) (which did require compensation) meant that the common law power had been superseded and was no longer available to the Crown. If the Crown expropriated property, it had to use the statutory power to do so and had to comply with the statutory obligation to pay compensation.

The same principle was applied in Australia in Brown v West (1990) 169 CLR 195, where an opposition MP challenged an executive decision to increase postal allowances for MPs. The court held that, even if there was a prerogative entitling the executive to spend money on its own initiative (which there is not—s 83 of the Commonwealth Constitution expressly states that money may be appropriated only upon statutory authorisation), the fact that a tribunal had, under a statutory power, already determined the postal allowance meant that the Crown’s prerogative was superseded and was no longer available. However, legislation will be taken to have overridden the prerogative only if, as was held in Oates v Attorney-General (Cth) (2003) 214 CLR 496, it does so ‘by

69

70

Part one: Constitutional Fundamentals

express words or necessary implication’. In Barton v Commonwealth (1974) 131 CLR 477 the High Court considered whether the Commonwealth executive had the power to request the Brazilian Government to extradite a fugitive to Australia. The Extradition (Foreign States) Act 1966 (Cth) conferred this power where the Commonwealth had entered into an extradition treaty with a country; however there was no such treaty with Brazil. It was held that, under s 61, the executive enjoyed such powers as were necessary to enable the Crown ‘to undertake all executive action which is appropriate to the position of the Commonwealth under the Constitution and to the spheres of responsibility vested in it by the Constitution’ (at 498). This included such powers as were necessary to enable Australia to conduct itself as an independent nation, of which requesting the extradition of fugitives from other countries was one. The prerogative to request extradition from countries with which Australia did not have a treaty had not been extinguished by the Act, which covered requests only from those countries with which Australia did have a treaty. In Ruddock v Vidarlis (2001) 183 ALR 1, the Full Court of the Federal Court held that, despite the fact that Parliament had enacted the comprehensive Migration Act 1958 (Cth), the executive still had a common law power to exclude aliens from landing in Australia, and that therefore the Commonwealth had acted lawfully when it despatched troops to prevent refugees on the MV Tampa from coming ashore and availing themselves of the procedures provided for by the Act. It is nevertheless true that many prerogatives have been displaced by statute, in particular by legislation enacted under the s 51(xxix) external affairs power and the s 52(ii) public service power. Thus, the issue of passports is governed by the Passports Act 1938 (Cth), while the employment of public servants is regulated by the Public Service Act 1922 (Cth). Similarly, the Crown’s rights as preferred creditor in relation to insolvent corporations have been displaced by s 556(1) of the Corporations Act 2001 (Cth), which provides that when a company is liquidated, holders of fixed charges and employees take priority over other creditors, while among the other creditors the Crown enjoys no special position in relation to tax and other debts that might be owed to it. Similarly, the Crown’s immunity from civil liability was removed by s 64 of the Judiciary Act 1903 (Cth), and the Crown’s immunity from statute is often displaced by a provision in legislation stating that the statute in question binds the Crown.

The nationhood power An aspect of Commonwealth executive power that has been recognised by the courts is the so-called ‘nationhood’ power.

CHAPTER 4: The Executive

A case to remember In Pape v Commissioner of Taxation (2009) 238 CLR 1 a challenge was launched against the constitutionality of Commonwealth legislation that gave a payment to most individuals who had submitted an income tax return in the preceding tax year. The legislation was enacted as part of the government’s economic stimulus package, designed to deal with the world financial crisis of 2008−09. The payments were not rebates, because a taxpayer need not have had a tax liability in order to receive the payment. For this reason the legislation did not fall within the s 51(ii) taxation power in the way that a rebate would. The payments were thus essentially in the nature of a gift. The High Court held that the s 51(xxxix) incidental power could be used in support of the s 61 executive power as the basis for the legislation. The court held that addressing the 2008−09 world financial crisis was something that lay peculiarly within the realm of responsibility of the national government, and was therefore supported by the nationhood power. The court emphasised that the so-called ‘nationhood power’ was an executive power, falling within s 61. Once something had been identified as falling within that power, Parliament would be able to legislate in support of that s 61 power, using s 51(xxxix) (the express incidental power). The court therefore rejected the previously held view that s 61 created a freestanding legislative power which enabled Parliament to legislate on matters falling outside the parameters of s 51.

Quite apart from the limitation set in Pape which restricts what the executive may spend money on, the executive must have statutory authorisation for spending. This was established in Williams v Commonwealth (No. 1) (School Chaplains Case) (2012) 288 ALR 410, where the appellant challenged the validity of the National School Chaplaincy Program. The Commonwealth had contracted with the Scripture Union Queensland to provide chaplaincy services in schools. While the expenditure was authorised by a general appropriation (and so did not breach s 81), the chaplaincy program itself was not established by any specific legislation. The Commonwealth argued that the prerogative conferred on it the same capacities as a natural person to enter into agreements to spend money—or, as an alternative, that it did at least include the capacity to spend money on matters relating to any topic that fell into the Commonwealth’s legislative power. The High Court rejected both arguments and held that the Commonwealth did not have the power to spend money without specific statutory authorisation. It held that the Commonwealth’s capacity to spend public money was governed on a different basis from that of a private person’s entry into contracts. The court took into account considerations relating to representative government and federalism in reaching its decision, and the fact that Parliament had passed a general appropriation for the ordinary expenses of government was

71

72

Part one: Constitutional Fundamentals

not enough to authorise the expenditure. Under s 53 of the Constitution, and in contrast to appropriations for new projects, general appropriations cannot be amended by the Senate, so the Senate would not have had the opportunity to participate in the formulation of the program on which the money was spent, or to consider the conditions attached to the funding. (The different types of appropriation are discussed in Chapter 13.) The court also noted that by spending the money directly, instead of making a grant to Queensland under s 96, the Commonwealth had avoided the need to obtain that State’s agreement to receive money to be used for a program in its schools. Subsequently, in an attempt to maintain the chaplaincy program, the Commonwealth enacted legislation authorising the expenditure of money on it, but in Williams v Commonwealth (No. 2) [2014] HCA 23 the High Court held that because the legislation was not supported by any of the Commonwealth’s legislative powers, the expenditure was not lawful. Whether the nationhood power includes any coercive element—that is, whether it can be used to prohibit conduct and impose penalties—is controversial. Certainly, in light of the finding in Case of Proclamations (1611) 12 Co Rep 74; 77 ER 1352 that the common law executive prerogative does not include any power to create offences, it would seem by analogy correct to argue that the executive dimension of the s 61 nationhood power also does not include any coercive element. So far as the legislative element of the nationhood power is concerned, the courts have drawn a distinction between general legislative activity and legislative activity directed towards protecting national security. In Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1 the High Court said that the nationhood power would not support Commonwealth legislation prohibiting the construction of a dam in Tasmania and imposing penalties for non-compliance (the law was however found to be justified by other, express, powers). Subsequently in Davis v Commonwealth (1988) 166 CLR 79 the court drew a distinction between ‘facultative’ uses of the nationhood power (that is, beneficial uses, such as the establishment of artistic or scientific institutions) which were intra vires the nationhood power, and coercive uses, which were not. On this basis the court invalidated provisions in the Australian Bicentennial Authority Act 1980 (Cth) that prohibited the use of words such as ‘200 years’, ‘Bicentenary’ or ‘Bicentennial’; also finding that this was a disproportional (in the sense of unreasonable) use of the nationhood power. The court did however concede that the implied nationhood power would support coercive legislation designed to protect internal security, pointing to the fact that, in cases such as R v Sharkey (1949) 79 CLR 121 and Australian Communist Party v Commonwealth (1951) 83 CLR 1, the High Court had recognised that the Commonwealth has the inherent power to enact laws designed to prevent and

CHAPTER 4: The Executive

punish threats to internal security. This was an important, and perhaps unfortunate, exception for the court to have created, because such laws can lead to wide-ranging intrusions into individual freedom. Although the nationhood power appears potentially very wide in its scope because the range of activities relating to the existence of Australia as a nation are numerous, the courts have been careful not to recognise the existence of the power except in the few instances discussed above. The general rule remains that Commonwealth legislation must be justified by one of the express legislative powers given to Parliament. The nationhood power is very much an exception.

73

74

CHAPTER 5

The Judicial Branch and ­Separation of Powers Covered in this chapter After reading this chapter you will understand: • what is meant by ‘Chapter III courts’ • the jurisdiction of the Chapter III courts • how State courts can exercise federal jurisdiction • the need for a ‘matter’ to exist before the courts can exercise jurisdiction • the two dimensions of the doctrine of separation of powers • exceptions to the doctrine • what is meant by ‘the judicial power of the Commonwealth’.

Cases to remember Plaintiff S 157/2002 v Commonwealth (2003) 211 CLR 476 Re Judiciary and Navigation Acts (Advisory Opinions Case) (1921) 29 CLR 257 New South Wales v Commonwealth (Wheat Case) (1915) 20 CLR 54 Australian Communist Party v Commonwealth (1951) 83 CLR 1 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51

The courts Chapter III of the Constitution governs the judicial branch and embodies a system of rigorous separation between the judiciary and the other branches of government. Section 71 vests the judicial power of the Commonwealth in the following three types of court: • the High Court of Australia, created by s 71 • other federal courts created by Parliament under s 71 • other (State) courts upon which Parliament confers federal jurisdiction under s 77.

CHAPTER 5: The Judicial Branch and ­Separation of Powers

Section 72 states that justices of the High Court and of other federal courts created by Parliament (together often referred to as ‘s 71 courts’) are to be appointed by the Governor-General in Council—which, in reality, means on the advice of the government of the day. Section 72 further provides that their tenure is protected, in that: • they may not be dismissed from office, other than by an address by both houses of Parliament on the grounds of misbehaviour or incapacity, and • their remuneration may not be reduced while they are in office. These provisions are vital in ensuring the independence of the judiciary. Although the protection afforded by s 72 does not extend to justices of State courts exercising federal jurisdiction, the legislation of all States and Territories contains similar provisions protecting judicial independence. Section 72 also requires that justices of s 71 courts must retire at the age of 70. It is now convenient to examine the jurisdiction exercised by the different types of court in which the judicial power of the Commonwealth is vested.

The High Court The High Court enjoys two types of jurisdiction—original and appellate.

Original jurisdiction The original jurisdiction of the High Court is divided into two types: • the constitutionally mandated jurisdiction conferred by s 75, which may never be removed, and • what might be called the ‘optional’ original jurisdiction in s 76, which is determined by Parliament: Sections 75 and 76 provide as follows. 75 Original jurisdiction of High Court In all matters: (i) arising under any treaty; (ii) affecting consuls or other representatives of other countries; (iii) in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party; (iv) between States, or between residents of different States, or between a State and a resident of another State; (v) in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth; the High Court shall have original jurisdiction.

75

76

Part one: Constitutional Fundamentals

76 Additional original jurisdiction The Parliament may make laws conferring original jurisdiction on the High Court in any matter: (i) arising under this Constitution, or involving its interpretation; (ii) arising under any laws made by the Parliament; (iii) of Admiralty and maritime jurisdiction; (iv) relating to the same subject‑matter claimed under the laws of different States.

The most important parts of s 75 are paras (iii) and (v), as they provide litigants with a direct avenue to sue the Commonwealth under s 75(iii) or to seek judicial review of the acts of one of its officers under s 75(v), even in the absence of any other court having jurisdiction to hear the case. These provisions help ensure that the doctrine of constitutionalism is respected, as their existence means that it is always possible to bring legal action against the Commonwealth.

A case to remember In Plaintiff S 157/2002 v Commonwealth (2003) 211 CLR 476 the High Court confirmed that because its s 75(v) jurisdiction is constitutionally guaranteed, Parliament cannot remove it, and that any ouster (or ‘privative’) clause that attempted to do so would be invalid.

In similar vein, in Bodrudazza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651, the court invalidated a time limit set on the period within which applications for s 75(v) review had to be made to the High Court in certain cases arising under the Migration Act 1958 (Cth). Under the Act, time began running from the date a decision about an applicant was made, not the date upon which the applicant received notification. The court held that while not all time limits set for s 75(v) review would be invalid, a time limit that directly or as a matter of practical effect impaired the ability of applicants to seek relief would be unconstitutional to the extent that it was incompatible with the role of s 75(v). The time limit in question was invalid because it did not take into account the fact that circumstances beyond an applicant’s control might delay the communication of a decision to them. A practical effect of this over the past decade has been that when the government radically reduced the jurisdiction of the Federal Court to hear appeals in migration cases, the workload of the High Court vastly increased as it was the only court that migrants could approach in order to seek review of Commonwealth decisions relating to migration matters. What do the s 75(v) remedies of mandamus, prohibition and injunction (often collectively referred to as the ‘constitutional writs’) empower the courts to do?

CHAPTER 5: The Judicial Branch and ­Separation of Powers

The writ of mandamus enables the court to compel a decision maker to perform their duty according to the law. • The writ of prohibition prevents a decision maker or tribunal from exceeding its powers. • An injunction is available to ensure the effectiveness of the remedies of mandamus or prohibition. It is also likely that in cases of jurisdictional error (as was held Plaintiff S 157/2002 v Commonwealth (2003) 211 CLR 476), the courts could avail themselves of the ancillary writ of certiorari, which means that the court issues an order declaring the decision void. It is important to note that these writs are available only in cases of ‘jurisdictional error’. Whether an error is jurisdictional or not is a subject for administrative law, but in essence the position is as stated in Craig v South Australia (1995) 184 CLR 163: a member of the executive (or an administrative body) falls into jurisdictional error where they act in excess of their powers under the enabling legislation (often called ‘simple ultra vires’), does not act according to the dictates of procedural fairness, or makes erroneous findings of fact (often called ‘extended ultra vires’). So far as the High Court’s additional original jurisdiction (under s 76) is concerned, Parliament has conferred original jurisdiction on the High Court by means of various provisions of the Judiciary Act 1903 (Cth), the most important of these being the jurisdiction to hear matters arising under the Constitution or involving its interpretation. In general, leaving aside the particular instance of migration law, the High Court’s original jurisdiction is rarely engaged, and most Commonwealth law matters commence in the federal court. •

Appellate jurisdiction The High Court’s appellate jurisdiction is conferred by s 73, the essential parts of which provide as follows. 73 Appellate jurisdiction of High Court The High Court shall have jurisdiction, with such exceptions and subject to such ­regulations as the Parliament prescribes, to hear and determine appeals from all ­judgments, decrees, orders, and sentences: (i) of any Justice or Justices exercising the original jurisdiction of the High Court; (ii) of any other federal court, or court exercising federal jurisdiction; or of the Supreme Court of any State, or of any other court of any State from which at the establishment of the Commonwealth an appeal lies to the Queen in Council; (iii) of the Inter‑State Commission, but as to questions of law only; and the judgment of the High Court in all such cases shall be final and conclusive.

77

78

Part one: Constitutional Fundamentals

The text of s 73 gives Parliament the power to determine the scope of the court’s jurisdiction. Sections 34(2) and 35(2) of the Judiciary Act 1903 (Cth) state that appeals from the original jurisdiction of the High Court and from State Supreme Courts require the leave of the High Court. The same applies to appeals from the federal courts. Leave applications are decided with reference to criteria contained in s 35A of the Act, which essentially relate to the degree of importance of the issue.

Federal courts created under s 71 The federal courts serve to reduce the workload of the High Court by hearing matters falling within the original jurisdiction of that court. The Commonwealth Parliament has used its s 71 power to create the Federal Court of Australia, the Family Court and the Federal Magistrates Court. Section 77(i) of the Constitution states that Parliament may determine the jurisdiction of these courts, subject to the requirement that that jurisdiction relate to the matters listed in ss 75 and 76. • The Federal Court has jurisdiction over a wide range of matters, including taxation, corporations law, intellectual property, trade practices, bankruptcy, administrative review, and conciliation and arbitration of industrial disputes. • The Family Court has jurisdiction over matrimonial and custody disputes. • Appeals from the Federal Court or the Family Court are heard by their respective Full Courts, and appeals from these Full Courts are heard by the High Court. • The Federal Magistrates Court has limited jurisdiction over matters falling within the jurisdiction of the Federal Court and the Family Court. • Decisions of the Federal Magistrates Court can be appealed to the Full Court of the Federal or Family Court.

Jurisdiction relates to ‘matters’ A key word used in all the sections of Chapter III governing the jurisdiction of the courts is that the jurisdiction relates to ‘matters’, and the use of this seemingly unimportant term significantly impacts on the jurisdiction of the courts.

A case to remember In Re Judiciary and Navigation Acts (Advisory Opinions Case) (1921) 29 CLR 257, the court invalidated provisions of the Judiciary Act 1903 (Cth) that empowered the Governor-General to ask the High Court to rule on the validity of Acts. The majority held (at 265) that, where s 76 gave Parliament the power to confer jurisdiction on the High Court in respect of ‘matters’, this meant that there must be a ‘subject matter for determination in a legal proceeding’ and ‘some immediate right, duty or liability to be established’ by the court involving actual litigants—in other words, there must be a genuine controversy between parties before the courts can become involved, and courts cannot give opinions in the abstract.

CHAPTER 5: The Judicial Branch and ­Separation of Powers

The question of whether there is a ‘matter’ is closely connected to the question of whether the parties to a case are genuine parties, in the sense that they have standing. This means that the parties must have real rights and interests, as distinct from merely intellectual interests in having a case heard by the courts. In Croome v Tasmania (1997) 191 CLR 119, the High Court held that a ‘matter’ will exist where a person is liable to prosecution under a law, and such a person will have standing, even though the executive has not taken steps to enforce the law. The fact that the person was subject to potential liability sufficed to create a ‘matter’ that the court could determine. Similarly, in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591, the High Court held that the requirement that there be a ‘matter’ did not invalidate ss 80 and 163A of the Trade Practices Act 1974 (Cth), which granted to ‘any person’ the right to apply to the courts for a remedy against corporations alleged to have infringed the Act. In this particular case, the appellant company, established by activists who were opposed to the construction of a motorway, contended that the respondent company had breached s 52 of the Act by making misleading statements to the public relating to the necessity of the motorway. The court held that a ‘matter’ existed because the Act created a remedy designed to serve the public interest by preventing the making of misleading statements to the public, and any member of the public could therefore vindicate this interest by bringing an action. In Pape v Commissioner of Taxation (2009) 238 CLR 1 the High Court held that a taxpayer who was entitled to receive a $250 bonus as part of an economic stimulus package had standing to contest the validity of the legislation authorising the payment of the bonus. By contrast, in Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 the High Court held that the Bishops Conference lacked the standing to seek reversal of a decision of the Victorian Supreme Court relating to the provision of IVF treatment in that State. Simply because the Bishops Conference disagreed with the outcome of the case (between a medical practitioner and State authorities) did not bring into existence a ‘matter’ between the bishops and any other party.

State courts exercising federal jurisdiction In order to allow matters involving both State and federal law matters to be heard by one court, s 71 permits Parliament to vest State courts with the judicial power of the Commonwealth. As in the case of the federal courts, s 77(iii) states that the jurisdiction that may be vested in State courts is restricted to matters falling within the ss 75 and 76 jurisdiction of the High Court. In fact, Parliament has vested in the State courts only jurisdiction over matters falling within s 76, but this still allows most litigants who have matters involving both State law and federal law to commence the case in their State Supreme Court.

79

80

Part one: Constitutional Fundamentals

In order to further facilitate the hearing of cases involving both State and federal law, the States and the Commonwealth enacted legislation in 1987 (the Commonwealth version being the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)) which conferred on the federal courts the authority to hear matters involving State law. This would have enabled litigants with combined State and federal law matters to commence their cases either in the State or the federal courts. However, that part of the legislation by which the federal courts were empowered to exercise jurisdiction given to them by the States was ruled unconstitutional in Re Wakim; Ex parte McNally (1999) 198 CLR 51. This was because Parliament’s power under s 77(i) to define the jurisdiction of federal courts is restricted to those matters in relation to which the High Court has jurisdiction under ss 75 and 76, and so the Figure 5.1 Hierarchy of Commonwealth courts and of State courts exercising ­federal ­jurisdiction High Court (appellate)

High Court (original)

Federal Court (appellate)

Federal Court (original)

Family Court (appellate)

Family Court (original)

Federal Circuit Court

State Supreme Court

CHAPTER 5: The Judicial Branch and ­Separation of Powers

federal courts could not be given the jurisdiction to hear cases involving State law as such matters do not appear in those sections. Appeals from decisions of State Supreme Courts on matters of federal law are heard by the Full Court of the Federal Court. Figure 5.1 illustrates the hierarchy of Commonwealth and State courts exercising federal jurisdiction, and the avenues of appeal from each court.

Separation of judicial power In contrast to the relationship between the legislature and the executive, the Constitution requires rigorous separation between the legislature and the executive on the one hand and the judiciary on the other. The essence of the doctrine is that: • only s 71 courts may exercise judicial power of the Commonwealth, and • s 71 courts may, in exercising federal jurisdiction, exercise only such power as fits the definition of the ‘judicial power of Commonwealth’—in other words, they may not discharge non-judicial functions. Note that, as was held in Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322, Territory courts are created under s 122. They are not Chapter III courts and the doctrine of separation of powers does not apply to them.

Only courts may exercise judicial power In a number of cases, the purported exercise of judicial power by bodies that are not s 71 courts—that is, whose members do not enjoy the security of tenure provided by s 72—was held to amount to a breach of the doctrine of separation of powers. This is an important principle, because without it, Parliament might be tempted to establish a ‘court’—perhaps even one superior to the High Court—whose members were subservient to the will of the government. This principle has been applied in a number of cases.

A case to remember In New South Wales v Commonwealth (Wheat Case) (1915) 20 CLR 54, the High Court held that the Inter-State Commission Act 1912 (Cth), which purported to confer judicial power on the Inter-State Commission to determine disputes between States, was invalid. Inter-State Commissioners served for seven years, and this non-permanent tenure was incompatible with s 72. The Commission was therefore not a s 71 court and thus could not be vested with judicial power.

A similar decision was reached in Waterside Workers’ Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434, where the High Court invalidated the establishment of the Commonwealth Court of Conciliation and Arbitration, which was staffed by judges serving seven-year terms. This court had the power to arbitrate

81

82

Part one: Constitutional Fundamentals

between disputants, to incorporate its settlement into awards and to penalise breaches thereof. The Commonwealth amended the Act so as to convert the tenure of judges to that required by s 72. In another group of cases, it was alleged that the legislature had attempted to interfere with the courts in their exercise of judicial power, for example by depriving the courts of their jurisdiction to hear particular matters (by means of ‘ouster clauses’) or by passing legislation that in some way restricted or directed the courts in their application of the law.

A case to remember The preservation to the judiciary of the function of determining the validity of laws is a fundamental value underpinning the Constitution. In Australian Communist Party v Commonwealth (1951) 83 CLR 1, the High Court declared invalid a law purporting to give the Governor-General the power to make a conclusive determination (that is, a determination that was not reviewable in any court) that an organisation threatened the defence of Commonwealth and was therefore liable to be banned by means of a law passed under the s 51(vi) defence power. The legislation was held invalid on the grounds that: • only a court could discharge the judicial function of making a conclusive legal ­determination, and such a function could not be given by the legislature to an officer of the executive • the legislation purported to remove the High Court’s s 75(v) jurisdiction to review the actions of members of the executive.

A similar case was that of Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1. The High Court considered the validity of amendments to the Migration Act 1958 (Cth), which defined a particular class of illegal migrant as ‘designated persons’; made conclusive a determination by a member of the executive that a migrant was a ‘designated person’; and prohibited the courts from ordering the release of such persons. The amendments were designed to target a specific group of migrants whose applications for release were then pending before the courts. The court held that the ouster of the court’s jurisdiction was invalid. It was noted that, even if a person ceased to satisfy the statutory definition of a ‘designated person’, he or she could nevertheless be detained unlawfully ad infinitum, as the courts would be powerless to intervene. The ouster clause was held to infringe s 75(v) because it purported to give an unreviewable power to the executive to make a conclusive determination of a legal question. It should be noted that there is a difference between Parliament purporting to give a member of the executive the power to make judicial decisions, and Parliament affecting the outcome of a case by changing the law upon which the court has to

CHAPTER 5: The Judicial Branch and ­Separation of Powers

make a decision. The former amounts to a breach of separation of powers, the latter does not. This is illustrated by Australian Building Construction Employees’ and Builders Labourers’ Federation v Commonwealth (1986) 161 CLR 88, in which the court considered amendments to the Conciliation and Arbitration Act 1904 (Cth). As it originally stood, this Act conferred a right to apply to a court for a hearing as to the validity of an administrative decision to deregister a union. Such a decision to deregister had been made, and the union was about to challenge that decision in the courts. In order to forestall this, amendments were passed which cancelled the union’s registration, thereby effectively terminating the case. The High Court held that exercising legislative power so as to remove rights that were the subject of litigation did not amount to Parliament exercising judicial power. Parliament was not deciding the case; all it had done was simply change the substantive law so as to make the pending proceedings redundant. This is not to deny that legislation could have the effect of impermissibly vesting judicial power in the legislature. An example of this was given obiter in Polyukhovich v Commonwealth (1991) 172 CLR 501, in which members of the court said that an Act of Attainder (legislation in which Parliament declares a specific persons or person to be guilty of an offence and imposes a penalty on them, all without a court hearing) would infringe the doctrine of separation of powers, because it would amount to the legislature applying the law and finding guilt—functions that are quintessentially judicial.

Courts may not exercise non-judicial power The second aspect of separation of powers is the rule that the courts cannot discharge non-judicial functions, meaning their role is confined to deciding cases between parties, and cannot extend to giving advice in the abstract or making policy decisions. The first inkling of this aspect of the doctrine appeared in Re Judiciary and Navigation Acts (Advisory Opinions Case) (1921) 29 CLR 257, where it was held that

A case to remember The most important case on this point is R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254, in which the High Court examined the constitutionality of legislation that vested both judicial and arbitral functions in the Court of Conciliation and Arbitration, a s 71 court. The case revolved around the concept that, whereas arbitral bodies create rights and duties between parties, effectively making new rules regulating their future behaviour, courts declare the rights and duties of parties under existing law. The court noted that separation of the judicial power is essential to a federation because the judiciary maintains the balance between the Federal Government and the States, and that the fusion of judicial and non-judicial functions in the court had breached the doctrine.

83

84

Part one: Constitutional Fundamentals

This decision was upheld by the Privy Council in Attorney-General (Commonwealth) v The Queen; Ex parte Australian Boilermakers’ Society [1957] AC 288, however neither court made it entirely clear why vesting the courts with non-judicial functions was contrary to separation of powers. Perhaps the best way of understanding the outcome of these cases is that by arbitrating between parties, and setting fair industrial awards, the court was making what were essentially social and economic policy questions, thereby becoming engaged in political matters. This could have tarnished its independence in the eyes of the public.

the courts were purely adjudicatory bodies that determined cases between litigants, and that they could not give abstract advisory opinions. The decision in Boilermakers led to reform of the legislation and the creation of a commission (now the Industrial Relations Commission) that performs arbitral functions and determines minimum wages, leaving to the courts the function of deciding disputes between litigants.

Exceptions to the doctrine Despite the importance of the doctrine of separation of powers, the courts have interpreted the Constitution in such a way as to permit exceptions to it in certain cases. The first three instances involve exceptions to the rule that only courts may exercise judicial power. • As part of its privileges conferred by s 49, Parliament has jurisdiction under the Constitution to determine and punish contempts. In R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157 the High Court confirmed that, despite the doctrine of separation of powers, s 49 should be interpreted as incorporating the judicial power that the legislature had historically enjoyed over MPs in the United Kingdom. • In R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 453, it was held that Parliament could validly establish courts martial staffed by army personnel (who are members of the executive) to hear disciplinary offences in the armed forces. This view was reiterated in Re Tracey; Ex parte Ryan (1989) 166 CLR 518, in which it was held that the organisation of the defence forces required, as a practical necessity, the exercise of judicial power by the organisation itself. Furthermore, in White v Director of Military Prosecutions (2007) 231 CLR 570, it was held that the courts martial created under s 51(vi) could be vested with the jurisdiction to hear charges (for example, assault) that would also be triable under civilian law, as the maintenance of military discipline required that such offences be punishable by service tribunals. Courts martial were allowed to operate outside the doctrine of separation of powers precisely because they were bodies

CHAPTER 5: The Judicial Branch and ­Separation of Powers

exercising disciplinary power and not courts exercising judicial power (although they were expected to act judicially in the sense of being fair to the accused). However when, in an attempt to put military justice on the same footing as that provided by civil courts, the Commonwealth established the Australian Military Court, staffed by judges acting outside the chain of military command, Chapter III was found to have been infringed. In Lane v Morison (2009) 239 CLR 230 the High Court held that because the Australian Military Court was exercising judicial, rather than disciplinary power, it was a ‘court’ within the meaning of Chapter III, and because its judges lacked security of tenure, it did not satisfy the requirements of s 72; its establishment was therefore unconstitutional. In the wake of this decision, the previous system of courts martial was re-established. • An exception has also been developed in relation to legislation that permits courts to delegate some of their functions to non-judicial officers. In Harris v Caladine (1991) 172 CLR 84, the High Court held that the delegation of power to registrars of the Family Court to make orders by consent was not an unlawful delegation of s 71 powers, as long as judges still exercised the judicial power in respect of the more important aspects of cases and had effective supervision by way of appeal or review. Similarly, in Commonwealth v Hospital Contribution Fund (1992) 150 CLR 49 it was held that, where Parliament had conferred the judicial power of the Commonwealth on a State Supreme Court, it was permissible for that court to exercise the jurisdiction through an officer of the court if that was how the court operated—in other words, the Commonwealth had to take the State court as it found it. The next two exceptions are to the rule that the judiciary may not exercise nonjudicial power. • In R v Joske; Ex parte Shop Distributive and Allied Employees’ Association (1976) 135 CLR 194 it was held that, along with judicial power per se, s 71 courts could exercise such non-judicial incidental powers as were necessary to discharge judicial power. Such incidental powers derived from s 51(xxxix). Exercises of an incidental power must not be inconsistent with judicial power and must bear sufficient relation to it to be considered incidental. A good example of such a power is the courts’ power to make rules of court. • Perhaps the most far-reaching exception is that created by the case of Hilton v Wells (1985) 157 CLR 57, where it was held that a judge may discharge nonjudicial functions when acting as a persona designata, that is, as a person chosen to perform a non-judicial role. In this case, the role was that of approving, on behalf of the executive, the issue of wiretap warrants under s 20 of the Communications (Interception) Act 1979 (Cth). A majority of the court held that, while the power was clearly administrative, conferral of the power upon a ‘Judge of Federal Court’ was not a conferral of power on the court itself. The power

85

86

Part one: Constitutional Fundamentals

was conferred on a judge in a different capacity from that of a judicial officer, and for the purpose of ensuring that someone other than police officers determined whether the statutory requirements for a warrant had been fulfilled. • In Grollo v Palmer (1995) 184 CLR 348, a majority of the High Court held that there were limits to the persona designata rule, stating the general principle that a judge could not be asked to perform non-judicial tasks which were incompatible with judicial ones or which would interfere with the proper discharge of the judiciary’s functions as an institution. Such was found to be the case in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1, where legislation conferred on a judge the function of reporting to the executive on whether areas should be classified as Aboriginal heritage sites. It was held that this breached the doctrine of separation of powers because it involved the judge giving political advice to the executive, and this gave rise to a risk of a diminution of public confidence in the judiciary through the involvement of that branch in political matters.

Defining ‘the judicial power of the Commonwealth’ It can be a difficult task to distinguish between judicial powers (which only courts may exercise) and non-judicial powers (which courts may not exercise) in the context of the term ‘the judicial power of the Commonwealth’ in s 71 of the Constitution. For example, while it is true that courts apply law to facts to determine rights, a multitude of decisions taken by members of the executive (such as whether to grant an export licence, a passport or permanent residence) also involve an application of law to facts in such a way as to affect peoples’ rights. How then does one tell the difference between these two types of decision?

A case to remember In Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357, Griffith CJ defined judicial power as follows: I am of the opinion that the words ‘judicial power’ as used in sec 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action.

CHAPTER 5: The Judicial Branch and ­Separation of Powers

However, in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 and Precision Data Holdings v Wills (1991) 173 CLR 167 the High Court recognised that a determination of whether a power is judicial requires the weighing of a range of factors. These factors, which were discussed in Visnic v ASIC (2007) 231 CLR 381 and Albarran v Members, CALDB (2007) 231 CLR 350, are as follows: • The decision-making process • The application of law so as to determine pre-existing rights is a judicial function, whereas creation of new legal rights is a non-judicial function (essentially legislative, but sometimes executive where power is delegated by statute). Thus, determining guilt or innocence under the criminal law or determining liability under the law of contracts, torts and trusts are quintessentially judicial functions. The level of policy involved is also important—the wider and the more policy-laden the discretion, the less likely the decision is to be judicial. • The enforceability of the decision • The handing down of decisions that are binding between parties, in the sense of being enforceable, is a hallmark of judicial decision making. By contrast, non-judicial exercises of power, even if legally valid, ultimately rely on a court order to be put into effect. • The conclusiveness of the decision • A final and conclusive decision is judicial in nature, whereas a decision that is subject to appeal to a court on matters of law is likely to be non-judicial. • The procedure adopted by the decision maker • If the body investigates matters on its own initiative and makes decisions or recommendations, it is likely to be non-judicial. If disputants approach the body, it is likely to be judicial. It must also be noted that it would be unconstitutional to confer a power upon a body which was stated to be unreviewable by the High Court because, as was held in Plaintiff S 157/2002 v Commonwealth (2003) 211 CLR 476, to do that would be to intrude upon the jurisdiction guaranteed to it by s 75(iii) and (v) of the Constitution. In light of the above factors, we can examine a number of cases in which the courts have been called upon to determine whether judicial power was being conferred upon a non-judicial body or whether non-judicial power was being conferred upon a judicial body: • R v Spicer; Ex parte Australian Builders Labourers’ Federation (1957) 100 CLR 277: The High Court held invalid a provision of the Conciliation and Arbitration Act 1904 (Cth) that gave the Industrial Court the power to disallow rules of industrial organisations on a number of vague grounds, including unreasonableness. It was held that the provision impermissibly conferred administrative functions

87

88

Part one: Constitutional Fundamentals

•

•

•

•

on the Industrial Court, it being significant that the court could act on its own initiative and that the criteria for disallowance were vague and discretionary (a hallmark of an administrative, policy-based function), rather than being based on defined rules. R v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (1960) 103 CLR 368: Parliament sought to correct the defect found in Spicer by amending the provision in the Act relating to disallowance of union rules, so as to make it operational only on application, and by stating that the court could invalidate rules where they were unreasonable in the light of objectives specified in the Act. In Amalgamated Engineering Union, the High Court upheld the validity of the new provision. The court noted that under the new provision, the Industrial Court heard and determined a controversy brought to it by parties and determined their rights by deciding law and fact against the background of existing legal rules—it did not itself create legal rules. British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1925) 35 CLR 422: The High Court considered provisions in the Income Tax Assessment Act 1922 (Cth), which conferred upon the Taxation Board of Appeal (whose members served seven-year terms) the power to hear tax assessment appeals. The Board’s findings on questions of fact were final and unappealable, although findings of law could be appealed to the courts. It was held that the Act impermissibly conferred judicial power on a non-judicial body. Shell Co of Australia v Federal Commissioner of Taxation [1931] AC 245: Following the British Imperial Oil Co decision, the legislation was amended to create a Taxation Board of Review. The Board’s members had the same limited tenure as those on the Board of Appeal. However, the amended provision stated that the Board’s decisions were of equal standing as those of the Commissioner—in other words, the Board was in the nature of the Commissioner’s delegate rather than a court above the Commissioner. Furthermore, since the Commissioner did not have to abide by the Board’s decisions, they were not conclusive and therefore not judicial. Appeals to the courts on points of law were provided for. The Privy Council held that the amendments sufficed to make the Board’s decisions nonjudicial. Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245: The Human Rights and Equal Opportunity Commission was granted the power to applicants who claimed that they had suffered discrimination and, where such claims were proved, to make a finding that discrimination had occurred and that damages should be paid. Such declarations were expressly stated to be nonconclusive as between the parties. However, the declarations were nevertheless enforceable as an order of court, once registered with the Federal Court, in the absence of any appeal against the order. The court found that the Commission

CHAPTER 5: The Judicial Branch and ­Separation of Powers

•

was, in effect, making an enforceable ruling, because the role of the Federal Court was a façade—it was the Commission, not the Court, that made the ruling, and, unless a party took the ruling on review before the court, the ruling would come into effect without the court exercising any judicial discretion. Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542: In this case a challenge was launched to the validity of provisions contained in the Corporations Act 2001 (Cth). These provisions conferred on the Takeovers Panel the power to make findings that conduct engaged in during a corporate takeover amounted to ‘unacceptable circumstances’. The panel could make certain remedial orders directing parties to deal or not to deal with securities in certain ways, although such orders became effective only on application to the Federal Court for an order to that effect. The High Court held that the panel had not been vested with judicial power. The power it had been given was an administrative one of making a finding of fact based in part on policy considerations and leading to the creation of new rights between the parties. Furthermore, its orders relating to remedies were not binding because they needed a court order to become effective.

Separation of powers and State courts The fact that State courts may sometimes exercise federal jurisdiction has implications for how those courts operate. It is clear from cases such as Clyne v East (1967) 68 SR (NSW) 385, Gilbertson v South Australia [1978] AC 722 and Mabo v Queensland (No 1) (1988) 166 CLR 186 that State Constitutions do not embody the doctrine of separation of powers. This means that State Parliaments can vest judicial power in non-judicial bodies. This is illustrated by Momcilovic v The Queen (2011) 245 CLR 1. This case involved the power of the Supreme Court of Victoria to issue a declaration that a law was incompatible with the Charter of Human Rights and Responsibilities Act 2006 (Vic). Because the issuing of a declaration had no legal effect (as the Act specifically stated that it did not result in the invalidity of legislation that was incompatible with the Act), the High Court held that the declaration amounted to an exercise of non-judicial power. However, because the doctrine of separation of powers did not apply to State courts, it was permissible to vest such a power in them. Even so, there are limits on what legislation State Parliaments may enact in relation to State Supreme Courts. The High Court has held that because the existence of State Supreme Courts is contemplated by ss 71 and 73 of the Commonwealth Constitution (which means that they form part of an integrated system of courts), and because State Supreme Courts can be vested with the judicial power of the Commonwealth, Chapter III of the Commonwealth Constitution imposes certain basic requirements that State judicial systems must satisfy.

89

90

Part one: Constitutional Fundamentals

A case to remember In Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51, the High Court considered the Community Protection Act 1994 (NSW), which applied to only one named individual (Kable) and which empowered the Attorney-General to apply to court for a detention order against that individual, on the ground that he posed a danger to public safety. The court had to grant the order if the statutory grounds for it were made out. This device was designed to ensure that Kable could be held in prison, even after completing a sentence he was serving, it being anticipated that he would act violently towards members of his family. A majority invalidated the Act on the ground that, because State Supreme Courts exercise the judicial power of the Commonwealth, those courts cannot be required to perform tasks that are incompatible with the judicial function, as this would lead to a diminution of public confidence in the integrated court system established by Chapter III, of which the State courts are a part. The court held that the task the New South Wales court had been asked to perform in respect of Kable was incompatible with the judicial function, because it involved the imprisonment of a person for what he might do, rather than for what he had done, and effectively made the courts a tool of the legislature. The court also held that because the Commonwealth Constitution assumed the existence of State Supreme Courts, it would be impermissible for a State to abolish its Supreme Court.

Note that the finding in Kable was made even though the New South Wales Supreme Court was not exercising the judicial power of the Commonwealth in that particular case—the requirement that State Supreme Courts must not be vested with functions that diminish their integrity derived simply from the fact that such courts exercise the judicial power of the Commonwealth from time to time. In several cases laws relating to the powers or composition of State Supreme Courts have been challenged, with differing degrees of success. In Forge v ASIC (2006) 228 CLR 45, Gummow, Hayne and Crennan JJ stated (at 76) that it was not possible to make a single all-embracing statement of the defining characteristics of a court. Nevertheless, the cases have certainly established that among the key characteristics of a court are that it is independent and impartial and that it exercises its powers in accordance with the principles of procedural fairness and open justice. Legislation which alters the way a Supreme Court functions to such an extent as to be incompatible with these characteristics will be held to infringe the Kable principle. In Fardon v Attorney-General (Qld) (2004) 223 CLR 575 the High Court upheld the validity of a Queensland statute that enabled the Attorney-General to apply to the Supreme Court for orders against prisoners who had completed their sentences. The court distinguished the case from Kable on the grounds that the statute was of general application and not ad hominem; it applied to a specific class of offences; and, most importantly, it gave the court a discretion as to whether to impose an order, and of what type. Thus it was not a law which directed a court as to what conclusion it had to reach.

CHAPTER 5: The Judicial Branch and ­Separation of Powers

In Forge v ASIC (2006) 228 CLR 45 the High Court rejected a Chapter III challenge to statutory provisions allowing New South Wales to appoint acting judges to its bench. In that case, Gleeson CJ formulated the Kable principle as follows (at 67): legislation which purports to confer upon such a [State] court a function which ­substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid … It follows from the terms of Ch III that state Supreme Courts must continue to answer to the description of ‘courts’. For a body to answer to the description of a court it must satisfy minimum ­requirements of independence and impartiality.

The requirements of independence and impartiality were also held not to have been breached in Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532, in which a challenge was launched against legislative provisions which allowed the police to claim that evidence relevant to proceedings before Western Australian Supreme Court should not be disclosed, even to parties to the proceedings. The High Court held that the provisions did not subject the courts to external control, as the courts retained the ultimate discretion to either accept or reject non-disclosure applications by the police. In Pollentine v Bleijie [2014] HCA 30, the High Court heard a challenge against s 18(1) of the Criminal Law Amendment Act 1945 (Qld), which permitted the courts to order that sexual offenders who were deemed incapable of controlling their sexual instincts be detained during Her Majesty’s pleasure (that is, indefinitely, unless released by the Executive). The High Court held that the Act was not inconsistent with Kable. It rejected the argument that the Act impermissibly ‘outsourced’ sentencing to the executive, noting that the courts retained their normal sentencing discretion, and were not compelled to issue an order rather than impose a sentence of determinate length. Furthermore, even when an order had been made, an offender could make an application for parole, which would be determined according to statutory criteria, and decisions were subject to the protection afforded by judicial review. In other cases, however, the High Court has not hesitated to invalidate legislation which it has considered to be incompatible with the essential characteristics of a court. In International Finance Trust Company Ltd v New South Wales Crime Commission (2009) 240 CLR 319, the appellant challenged the validity of s 10 of the Criminal Assets Recovery Act 1990 (NSW), which enabled the NSW Crime Commission to apply to the Supreme Court for a restraining order in relation to property owned by persons whom the police suspected of having engaged in serious criminal activity. If the Supreme Court concluded, on the basis of affidavits presented by the police, that there were reasonable grounds for suspecting that the target of the application had engaged in serious criminal activity, it had to issue

91

92

Part one: Constitutional Fundamentals

a restraining order. The High Court found fault with a number of aspects of the process. Applications by the police were ex parte and, in contrast to other orders given without notice which were usually temporary, the restraining orders given as a result of such applications were permanent. Furthermore, a person could have a restraining order lifted only if they could prove on a balance of probabilities that the property was acquired lawfully. The High Court held that because the legislation put in place a scheme of mandatory, indefinite sequestration of property on mere suspicion of wrongdoing, without notice to the person affected and which required proof of a negative for the order to be lifted, it had vested the Supreme Court with a function that was ‘repugnant to a fundamental degree to the judicial process as understood and conducted throughout Australia’ (per Gummow and Bell JJ at 367), and was therefore invalid. In Kirk v The Industrial Court of New South Wales (2010) 239 CLR 531, the High Court invalidated a provision which purported to remove from the Supreme Court of New South Wales the power to grant administrative relief against decisions by lower courts and tribunals, including where decisions had been challenged on grounds of lack of jurisdiction. The High Court held that Chapter III prohibits State Parliaments from legislating so as to alter their Supreme Courts in such a way that those courts no longer meet the description of a ‘Supreme Court’ as that term is understood in the Commonwealth Constitution. Because a defining characteristic of State Supreme Courts is their capacity to review the decisions of inferior courts and tribunals on grounds of jurisdictional error, legislation removing the power to review on that ground would deprive a State Supreme Court of one of its essential elements. The court noted that if such a privative clause were allowed, it would leave the power of the executive and of non-judicial tribunals unrestrained. South Australia v Totani (2010) 242 CLR 1, like Gypsy Jokers, was one of a line of cases in which challenges were launched against State laws enacted to counter the activities of bikie gangs. In Totani, the High Court invalidated provisions of the Serious Organised Crime (Control) Act 2008 (SA), which empowered the Attorney-General to declare an organisation to be one whose members associated for the purpose of serious criminal activity. The Act then required the Magistrates Court to make a control order against a person on application by the Commissioner of Police if the court was satisfied that the person was a member of that prescribed organisation. A control order had the effect of prohibiting a person from associating with other members of the organisation. This case is notable in that it related to Magistrates Courts which, unlike Supreme Courts, are not mentioned in the Commonwealth Constitution. Nevertheless, the High Court invalidated the provision on the ground that Chapter III requires institutional integrity and independence of all State courts; in this case curial independence was undermined because the Magistrates Court was effectively being required to act as a rubber stamp and interfere with a person’s

CHAPTER 5: The Judicial Branch and ­Separation of Powers

freedom at the behest of the executive simply because that person belonged to an organisation, rather than because they were proved to have engaged in wrongdoing as individuals. Similarly, in Wainohu v New South Wales (2011) 243 CLR 181 the High Court invalidated a control order provision contained in the Crimes (Criminal Organisations Control) Act 2009 NSW, which provided that a State Supreme Court judge (acting as a persona designata) could grant a declaration on application by the Commissioner of Police that an organisation was criminal in nature. The consequence was that the assets of the declared organisation could be controlled and its members prohibited from associating with each other. In addition, the Act provided that a judge giving such an order was not bound to give reasons for the decision. The High Court held that the bounds of the persona designata doctrine had been exceeded. The function conferred on the judge was incompatible with the institutional integrity of the Supreme Court, as it involved giving orders curtailing individual liberty simply on the basis of allegations made by the executive; and in the absence of reasons, there was no way in which a person subject to an order could challenge it. The High Court emphasised that the foundation of the Kable principle was that the Commonwealth Constitution does not permit differing grades of justice at federal and State levels, which is why federal or State legislation which undermines the institutional integrity of courts will be held invalid. By contrast, in Assistant Commissioner Condon v Pompano Pty Ltd (2013) 295 ALR 638, the High Court upheld the Criminal Organisation Act 2009 (Qld). Under this Act the Commissioner of the Queensland Police Service could apply to the Supreme Court to have an organisation declared a ‘criminal organisation’. The basis of the challenge was that the Act allowed the Commissioner to seek an order from the court that certain of the information upon which the application was based was ‘criminal intelligence’, which ought not to be disclosed to the organisation against which the application was being sought. That information would also not be able to be disclosed in any subsequent proceedings, such as a criminal prosecution. The court would grant such an application if it was satisfied on reasonable grounds that disclosure would prejudice a criminal investigation, reveal the identity of a source, or endanger a person’s life or physical safety—considerations which it was required to balance against fairness to the respondent. The High Court first emphasised that the Kable principle did not mean that the entire separation of powers doctrine as it applied to Commonwealth courts applied to State courts. It then held that, despite the fact that the Act infringed upon procedural fairness and the principle of open justice, it was not invalid under the Kable principle. It reached this conclusion because the Act allowed the Supreme Court to take fairness to the organisation into account when determining an application by the Commissioner, and because it also provided that if subsequent proceedings relying on the criminal intelligence

93

94

Part one: Constitutional Fundamentals

information were launched, the court hearing those proceedings would, under the law of evidence, be able to take into account the fact that the accused had not been able to contest the information. The outcomes of challenges relying on the Kable principle are difficult to predict. The High Court decisions establish that independence, impartiality, procedural fairness and open justice are key factors it will take into account in determining whether legislation has undermined the integrity of a State court. Whether that will lead to the legislation being invalidated appears to depend on the Court’s evaluation of the extent to which the legislation has impaired these essential characteristics.

95

CHAPTER 6

Characterisation and Interpretation Covered in this chapter After reading this chapter you will understand: • how characterisation is used to determine whether a Commonwealth law is intra vires the Constitution • the way in which each enumerated power is supplemented by an incidental ­element • the circumstances in which the courts will use proportionality to determine whether a law is valid • doctrines used by the courts in interpreting the Constitution • how divisible and distributive severance are used when parts of legislation are found to be unconstitutional.

Cases to remember Grain Pool of WA v Commonwealth (2000) 202 CLR 479 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129 Fairfax v Commissioner of Taxation (1965) 114 CLR 1 Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 Stenhouse v Coleman (1944) 69 CLR 457 Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55

Interpretation as a technique The rules, presumptions and techniques that judges use to interpret legislation provide a set of tools that assist them in deciding the meaning of words that are ambiguous or obscure. Although the rules of statutory interpretation appear to be directive, the truth is that judges often use the rules selectively in order to justify the interpretation that they prefer. Judges use the same rules to interpret both Constitutions and ordinary legislation, but some specific rules and techniques have been developed in relation to constitutional interpretation.

96

Part one: Constitutional Fundamentals

Characterisation Characterisation is the process used by the courts to determine whether a law falls within the legislative power of the Commonwealth. All the enumerated powers in s 51 are governed by the first sentence of the section, which reads: The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to: …

Accordingly, when deciding whether a law enacted by the Commonwealth falls within the powers of Parliament, a court must ask itself: ‘Is this a law that can be characterised as being “with respect to” one of the enumerated powers?’ This question could also be phrased in less formal language as: ‘Is this law one that could be classified, or categorised, as being “to do with” one of the enumerated powers?’ This process of characterisation is also used by the courts when deciding whether laws fall within the other legislative powers, found in ss 52, 90 and 122.

A case to remember In Grain Pool of WA v Commonwealth (2000) 202 CLR 479 at 492, six justices of the High Court summarised the principles to be applied in characterising laws as follows. The general principles which are to be applied to determine whether a law is with respect to a head of legislative power … are well settled. They include the following. First, the constitutional text is to be construed ‘with all the generality which the words used admit’ … Secondly, the character of the law in question must be determined by reference to the rights, powers, liabilities, duties and privileges which it creates. Thirdly, the practical as well as the legal operation of the law must be examined to determine if there is a sufficient connection between the law and the head of power. Fourthly, as Mason and Deane JJ explained in Re F; Ex parte F (1986) 161 CLR 376 at 388: In a case where a law fairly answers the description of being a law with respect to two subject-matters, one of which is and the other of which is not a subject-matter appearing in s 51, it will be valid notwithstanding that there is no independent connexion between the two subject-matters. Finally, if a sufficient connection with the head of power does exist, the justice and wisdom of the law, and the degree to which the means it adopts are necessary or desirable, are matters of legislative choice.

These principles are now considered separately.

Powers are interpreted generously During the first two decades of Federation, the courts adhered to what was called the ‘reserve powers’ doctrine of constitutional interpretation. This meant that the

CHAPTER 6: Characterisation and Interpretation

courts would proceed from the assumption that, because the Constitution had specified the powers of the Commonwealth Parliament, it had intended these to be limited in scope and for the residue of powers to be ‘reserved’ to the States. However all this changed in 1920 when the High Court gave its famous decision in the Engineers Case.

A case to remember In Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129 the High Court abandoned the reserve powers doctrine. Instead the court held that full effect should be given to the Commonwealth’s legislative powers, and that in order to do this, these legislative powers should be interpreted according to their ordinary and natural meaning and, more importantly, they should be given a ‘broad and generous interpretation’. The decision in Engineers marked a sea change in constitutional interpretation in Australia and the start of a trend towards ever more expansive interpretation of Commonwealth legislative powers, which are now interpreted so as to cover everything their wording might extend to. The inevitable result has been a corresponding diminution in the legislative powers of the States, as more and more matters are found to lie within the legislative capacity of the Commonwealth and thus to override inconsistent State legislation by virtue of s 109.

The courts consider direct legal effect In determining whether a law is sufficiently connected to an enumerated power, a court will consider its direct legal effect or, as was stated in Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1 at 187, how the law operates in ‘creating, changing, regulating or abolishing rights, duties, powers or privileges’ on the face of it, consequential or secondary effects being irrelevant. Thus, so long as a direct legal consequence of the law is to affect matters falling within a legislative power, then it will be valid, even if it has other consequences affecting matters unrelated to that power.

Sufficient connection with a power is a matter of degree Whether the subject of a law is ‘with respect to’ a legislative power is a matter of degree. A law enacted by Parliament may relate to a legislative power to a greater or lesser extent, and ultimately it is up to the courts to determine whether the law is sufficiently related to the power to be constitutionally valid. Note also that just part of a law (a section, a phrase or even only a word) may be challenged, and a court may find that only that part is invalid. In that event the principles of severance (see ‘Invalidity and severance’, below) will become relevant.

97

98

Part one: Constitutional Fundamentals

A case to remember In Fairfax v Commissioner of Taxation (1965) 114 CLR 1 at 7, Kitto J said: the question is always one of subject matter, to be determined by reference solely to the operation which the enactment has if it be valid, that is to say by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes; it is a question as to the true nature and character of the legislation: is it in its real substance a law upon, ‘with respect to’, one or more of the enumerated subjects, or is there no more in it in relation to any of those subjects than an interference so incidental as not in truth to affect its character?

A law may be characterised in multiple ways The courts have recognised that a law may be said to deal with more than one subject matter, and that as long as one of the subjects relates to a legislative power, even if it is not the main subject of the law, the law will be valid.

A case to remember In Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 the High Court considered the validity of a law that required a licence for the export of zircon ore, and imposed environmental conditions on the mining of the ore as a condition to getting a licence. The law could be said to be related to export (over which the Commonwealth had legislative power under the s 51(i) interstate and overseas trade and commerce power) or to environmental matters (over which the Commonwealth did not have legislative power). However this dual characterisation did not affect the validity of the law—the fact that a subject to which it related fell within an enumerated power meant that the law was valid. Furthermore, it was not relevant that the main subject of the law was environmental regulation and that the Commonwealth was using the s 51(i) power simply as a tool to legislate on that subject.

The result of this approach is that the Commonwealth can enact laws affecting topic A, in relation to which it does not have legislative power, by attaching conditions relating to topic A to a law on topic B, in relation to which it does have legislative power. It is of no consequence that the law can be characterised as being related to topic A: provided that it is related to topic B, it will be valid. It can also be the case that a law will be supported by more than one legislative power. For example, in Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1, the court found that the Commonwealth law prohibiting the Tasmanian Hydroelectric Power Corporation from constructing the Franklin River dam was supported by both the s 51(xx) corporations power (because the law applied to

CHAPTER 6: Characterisation and Interpretation

trading or financial corporations, which the Corporation was) and by the s 51(xxix) external affairs power (because the law implemented an international treaty that the Commonwealth had signed).

The non-purposive approach A corollary of the direct legal effect approach and of the irrelevance of a law’s possible connection to multiple subjects is that the courts are not concerned with the legislative purpose for which a law was enacted—as long as the direct effect of the law is to affect legal rights relating to a subject covered by an enumerated power, it is of no consequence that the real reason the law was enacted was the effect it would have on another subject, which does not fall within the legislative powers of the Commonwealth. The purpose for which a law is enacted does not affect its validity. This principle also means that the courts do not concern themselves with the wisdom or justice of a law—that is a matter for Parliament. Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 is an example of the non-purposive approach in operation. The real purpose of Parliament in enacting legislation under s 51(i) on export licences was to ensure mining companies complied with environmental standards. This purpose did not invalidate the exercise of legislative power. Another example is Fairfax v Commissioner of Taxation (1965) 114 CLR 1, in which the High Court upheld the validity of a law that imposed a general tax on superannuation funds, but exempted those which invested in government stock. The fact that the purpose of the law was to encourage investment in government stock rather than revenue-raising was irrelevant—on the face of it, the law related to taxation and was thus supported by s 51(ii).

The exception—purposive powers There are two important exceptions to the non-purposive approach, relating to the s 51(vi) defence power, and the treaty-enactment dimension of the s 51(xxix) external affairs power.

A case to remember In Stenhouse v Coleman (1944) 69 CLR 457 the High Court stated that the s 51(vi) defence power was a purposive power—that is, it should be interpreted as requiring that a law enacted under it be directed towards the specific purpose of defence. Thus, in arguing that a law is supported by this power, the Commonwealth must show that the law serves a defence-related purpose, not just that it has to do with defence matters. For example, a law empowering army officers to detain people would, on the face of it, be defencerelated; however, it would be ultra vires s 51(vi) unless the Commonwealth could show how the defence of the Commonwealth was served by the law.

99

100

Part one: Constitutional Fundamentals

Similarly, in Australian Communist Party v Commonwealth (1951) 83 CLR 1 the court held that legislation dissolving the Communist Party was ultra vires s 51(vi) because the Commonwealth had failed to show why the dissolution of the party was a proportionate response to the security situation in which Australia found itself. The second exception is when the Commonwealth uses the s 51(xxix) external affairs power to enact a treaty into domestic law. As was held in Airlines of New South Wales v New South Wales (No 2) (1965) 113 CLR 54, the law must be ‘appropriate and adapted to’ the objective of implementing the treaty. In other words, the Commonwealth must show that the law has the purpose of implementing the treaty.

Powers are not mutually limiting The legislative powers of the Commonwealth are not mutually limiting. This means that the fact that one enumerated power is not broad enough to permit the Commonwealth to legislate on an activity does not preclude the Commonwealth from using another power to regulate that activity.

A case to remember In Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468, the court held that: • the Commonwealth could use its s 51(xx) corporations power to prohibit restrictive trade practice agreements entered into by corporations, and • the law was valid in relation to all corporations, including corporations operating wholly within the confines of one State, even though agreements by such corporations could not have been regulated by a law enacted under the s 51(i) trade and commerce power (which is limited to overseas and interstate trade).

Thus the Commonwealth can circumvent a deficiency in one power by using another.

Similarly in New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1 the High Court held that it was open to Parliament to use the s 51(xx) corporations power to regulate the employment conditions of people employed by corporations. The fact that the s 51(xxxv) conciliation and arbitration power extended to only interstate industrial disputes did not mean that the drafters of the Constitution intended to exclude the ability of the Commonwealth to use other powers to legislate on industrial relations falling outside this narrow area. The situation is, however, different where one power expressly excludes legislation on a particular topic—in this case, another power cannot be used to circumvent the exclusion. Thus, in Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1, it was held that the power to legislate on ‘financial

CHAPTER 6: Characterisation and Interpretation

corporations’ in s 51(xx) could not be used by the Commonwealth to legislate on State banking, because s 51(xiii) expressly denied the Commonwealth the power to legislate on State banking.

Alert Problem questions appear at the end of each chapter of this book from Chapters 7 to 17. Although the problems relate to the substantive law contained in those chapters, any problem containing a Commonwealth law is also a characterisation problem, because the first step in determining the validity of a Commonwealth law is to determine whether it is intra vires the powers of the Commonwealth Parliament.

Incidental powers In addition to its ‘core’, each power carries with it an incidental aspect, enabling legislation on matters that assist in giving effect to the core. This incidental power has two sources: • Section 51(xxxix) confers on Parliament an express power to legislate on ‘matters incidental to the execution of any power vested by this Constitution in the Parliament …’. • Numerous court decisions have interpreted the enumerated powers as carrying with them an implied incidental power to legislate on matters necessary to give effect to the powers themselves.

A case to remember In Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 (at 77) it was held that: Every legislative power carries with it authority to legislate in relation to acts, matters and things the control of which is found necessary to effectuate its main purpose, and thus carries with it power to make laws, governing or affecting many matters that are incidental or ancillary to the main subject matter.

Given the existence of the express incidental power in s 51(xxxix), it could well be argued that it was not necessary for the courts to recognise an implied incidental aspect. Nevertheless the implied incidental aspect is firmly embedded in constitutional interpretation. Although the court in Grannall defined incidental powers as those ‘necessary’ to give effect to the core powers, the implied aspect of a power is not confined

101

102

Part one: Constitutional Fundamentals

only to those matters that are ‘necessary’, in the sense that the core power will be inoperable without them. In Burton v Honan (1952) 86 CLR 169 it was held that the incidental aspect to a power extends to anything ‘reasonably incidental’ to the fulfilment of the core of the power. This was expanded upon in Nationwide News Pty Ltd v Wills (1992) 177 CLR 1, in which it was held that a matter will fall within the incidental aspect of a power if it is ‘reasonably and appropriately adapted’ to the fulfilment of the power; ‘reasonably proportionate’ to the exercise of the power; or ‘reasonably necessary or conceivably desirable’ for the fulfilment of the power.

Proportionality Usually, when the court is determining the validity of a law it will give a ‘yes’ or ‘no’ answer, because it will find that the law either does or does not fall within the Commonwealth’s legislative power. However in some contexts, the proportionality test can be used where the extent to which a law operates determines its validity—in other words, how far Parliament has gone in exercising its power. It must however be emphasised that the general principle is that the wisdom of the policy underlying legislation, and the extent to which Parliament has used its legislative powers, are matters for Parliament, not the courts. So it would be completely incorrect to say, as a general proposition (at least in regard to nonpurposive powers), that Parliament cannot use its legislative powers ‘unreasonably’, and that, for example, a law imposing a 90 per cent income tax would be invalid on grounds of unreasonableness. Such a law would in fact be valid simply because it fell within the s 51(ii) taxation power. There are only three circumstances in which proportionality is used, and these are discussed below. Note that the proportionality test is expressed in different ways—some judges ask whether the law is ‘appropriate and adapted’, while others ask whether it is ‘reasonably proportionate’—however the nature of the inquiry is the same. • In cases such as Burton v Honan (1952) 86 CLR 169 and Nationwide News Pty Ltd v Wills (1992) 177 CLR 1, discussed above, the courts have used the proportionality test when investigating whether or not a law falls within the incidental aspect of a legislative power, asking whether the law constitutes a reasonably appropriate method of furthering the subject matter contained in the core of the power. Note that, as stated in Leask v Commonwealth (1996) 187 CLR 579, where the concept of ‘proportionality’ is used in this context, Parliament is not confined to legislating only so far as is necessary to achieve any particular purpose. Indeed, since most powers are non-purposive in nature, it could not mean that. Therefore, when the courts talk of the incidental aspect of a power supporting such laws as are ‘appropriate and adapted’ or ‘reasonably proportionate’ to the incidental

CHAPTER 6: Characterisation and Interpretation

•

•

aspect of a power, they are speaking permissively, with the effect that laws will be valid as long as they bear some rational connection to the power. The proportionality test is used in determining the validity of laws enacted using the purposive power relating to defence (s 51(vi)) and where the Commonwealth uses the s 51(xxix) external affairs power to enact a treaty into domestic law. As was held in Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1, a law will be held to give effect to the treaty (and thus to be intra vires s 51(xxix)) if it is ‘appropriate and adapted’ to the implementation of the treaty—in other words, if the means (the law) can be said to be reasonably related to the end (the implementation of the treaty). The proportionality test is of particular importance in determining whether prohibitions or the express or implied freedoms protected by the Constitution have been infringed, because none of these rights is absolute. For example, s 92 protects freedom of interstate trade and commerce, which means that it prohibits protectionist laws that shield intrastate trade and commerce from competition from out of State. However, not all laws that limit the freedom will be invalid. In Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 it was held that a law with a protectionist effect would be valid if it had been enacted for a non-protectionist purpose, and the degree of the protectionism caused was proportionate to the non-protectionist objective.

The current formulation of the proportionality test was established in Coleman v Power (2004) 220 CLR 1, in which the High Court held that when determining whether a limitation on the implied freedom of political communication was constitutional, the test to be applied was whether the limitation was ‘reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative government’. This is usually referred to as the ‘proportionality test’. In similar vein, in Betfair Pty Ltd v Western Australia (2008) 234 CLR 418, a case on the s 92 freedom of interstate trade and commerce, the court held that a limit on interstate trade would fail the proportionality test if it went beyond what was reasonably necessary to achieve a legitimate object. Both the legitimate end and the manner of its achievement must be compatible with representative government. The proportionality test obviously involves a consideration of how invasive a limit imposed by a law is on a constitutionally-protected freedom. In Unions NSW v New South Wales [2013] HCA 58, a majority of the court held (at [44]) that in determining whether a law disproportionately limits the implied freedom of political communication, a court will consider whether there are less restrictive means of achieving the law’s objective. This was expanded upon in Tajjour v New South Wales [2014] HCA 35, in which a majority held that whether a law disproportionately

103

104

Part one: Constitutional Fundamentals

limits the implied freedom of political communication depends on whether there are means available that are less invasive of the freedom but which are also equally effective in achieving the legitimate object. In Tajjour the court considered the validity of s 93X of the Crimes Act 1900 (NSW), which made it an offence for a person habitually to consort with two or more convicted offenders. The object of the legislation was to inhibit communication between members of organised crime gangs. The appellants argued that because the legislation could have the effect of impeding convicted persons from communicating about political matters, it was inconsistent with the implied freedom. A majority of the court dismissed the challenge, holding that a defence which allowed consorting for the purposes of political communication would have been easy to claim and very difficult to challenge, and would therefore have made the section far less effective in achieving its legitimate end. In developing the proportionality test, the courts in Australia have unfortunately not gone so far as to say that the means chosen to achieve the legitimate end must be the least invasive of the freedom. Indeed, that proposition was expressly rejected in Roach v Electoral Commissioner (2007) 233 CLR 162. This can be contrasted with the test in Canada where the test established in R v Oakes (1986) 26 DLR (4 th) 200 requires that laws limiting the rights contained in the Canadian Charter of Rights and Freedoms will be valid only if they restrict rights to the least extent required to achieve a legitimate objective.

Constitutional prohibitions—the ‘practical effect’ test The courts adopt a strict approach in giving effect to prohibitions contained in the Constitution, looking not only at what laws say on their face, but also at their practical effect. In Cole v Whitfield (1988) 165 CLR 360, the leading case on the s 92 prohibition against burdening interstate trade, it was held that a law would breach s 92 if—either on the face of it or in its practical effect—it discriminated against interstate trade in such a way as to be protectionist. Similarly, in Street v Queensland Bar Association (1989) 168 CLR 461, the High Court considered what the practical effect on an out-of-State resident would be of a Queensland statute that, on the face of it, applied equally to all applicants for admission to the Bar, whether from Queensland or elsewhere. Because the residence requirements would, as a matter of practice, be more difficult for out-of-State practitioners to meet, the court held that the statute breached the s 117 prohibition against discrimination on grounds of residence in another State.

CHAPTER 6: Characterisation and Interpretation

Contemporary meaning Do the courts interpret words in the Constitution as they were understood when the document was drafted, or as they are understood in the light of contemporary circumstances? Although there were cases decided to the contrary in the past, the contemporary approach, as stated in Grain Pool of WA v Commonwealth (2000) 202 CLR 479, is that words are given their contemporary meaning, which is often referred to as the ‘ambulatory’ approach. An example of this is provided by R v Brislan; Ex parte Williams (1935) 54 CLR 262, when addressing the question of whether radio broadcasts were covered by the s 51(v) power relating to ‘postal, telegraphic, telephonic and other like services’, the court held that the phrase ‘other like services’ should be given a contemporary meaning so as to include methods of communication not known to the drafters of the Constitution. On this basis, the court said that the power extended to the enactment of laws regulating radio. In Street v Queensland Bar Association (1989) 168 CLR 461, the court adopted an ambulatory interpretation of the concept of discrimination—that is, an interpretation in which the meaning of words changes over time—and said discrimination should be interpreted as including the concept of indirect discrimination, a meaning that it would not have borne in 1900. Finally, in Commonwealth v Australian Capital Territory [2013] HCA 55, the High Court held that the word ‘marriage’ in s 51(xxi) should be interpreted in accordance with societal changes and as including the power to enact laws permitting same-sex marriages, should the Commonwealth Parliament ever wish to do so.

Invalidity and severance What happens if a legislative provision is found to be invalid? As stated in South Australia v Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373, if a law is shown to be unconstitutional, it will be held by the court to be void ab initio and never to have had any effect. It is more difficult to deal with laws only parts of which are invalid. Where possible, a court must sever invalid parts of a law from the valid, so as to leave the rest of the law in operation.

The availability of severance Section 15A of the Acts Interpretation Act 1901 (Cth) requires that, where an Act is found to be constitutionally invalid, it should be upheld to the extent that it is constitutionally valid—in other words, the invalid parts should be severed and the valid parts continue to have effect. Section 46 of the Act states the same in regard to subordinate legislation. It is however important to recognise that general principles of statutory interpretation indicate that severance may not always be possible. This may be

105

106

Part one: Constitutional Fundamentals

because after severance the legislation is unintelligible; or because severance changes the meaning of the legislation so that it is radically different from before (for example, if the word ‘not’ was deleted from a statute, the statute would mean quite the opposite from how it had been drafted); or if severance would lead to the statute being inconsistent with the intention of the legislature that enacted it. In such circumstances, the whole provision will have to be invalidated.

Divisible severance There are two types of severance—divisible and distributive. Divisible severance occurs where distinct parts of the statute are invalid and are ‘cut out’, leaving the valid parts in force. The part that is cut out may be a word, a phrase, a section or a whole part of the Act. How radical the severance is does not really matter, subject to the understanding that severance may not be possible in the circumstances discussed above. The operation of divisible severance is illustrated by Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29, where it was held that certain sections of legislation, under which an airline operated by the Commonwealth was established, were valid under the s 51(i) interstate trade and commerce power, while those provisions purporting to give it a monopoly were invalid because they infringed the s 92 prohibition against interference with interstate trade.

Distributive severance or ‘reading down’ Distributive severance occurs where the statute applies to a number of persons or circumstances, only some of which may validly be subject to the law. The question then becomes: can the statute be ‘read down’ so as to apply only to the more limited class? In such cases, the law is valid in respect of some persons or circumstances, but invalid in respect of others. The difference between divisible and distributive severance is illustrated by the following diagrams. Figure 6.1 Divisible severance Statute Section 1

Valid

Section 2

Valid

Section 3

Invalid

CHAPTER 6: Characterisation and Interpretation

Figure 6.2 Distributive severance Statute

Circumstances:

Section 1

A

Valid

Section 2

B

Valid

Section 3

C

Invalid

An example of distributive severance is provided by Worthing v Rowell & Muston Pty Ltd (1970) 123 CLR 89, in which the High Court held that a State law governing workers’ compensation did not apply at an airbase, as that was a place over which the Commonwealth had exclusive jurisdiction under s 52(i), but that the law would continue to apply to other workplaces within the State. Similarly, in Pochi v MacPhee (1982) 151 CLR 101, the court was faced with an application by an alien who argued that provisions of the Migration Act 1958 (Cth) were invalid because they covered a wide class of persons, both alien and non-alien, and were thus ultra vires s 51(xix) (the naturalisation and aliens power) because that power extended only to aliens. It was held that the section did not cover non-aliens, but that even if it had, it would have been read distributively to cover only aliens and would, to that extent, have therefore remained intra vires the power. Two cases illustrate circumstances in which the courts found that, while technically possible, distributive severance was unavailable because to use it would have been inconsistent with the intention of the legislature. In Pidoto v Victoria (1943) 68 CLR 87, it was held that divisible severance is not possible in circumstances where the purpose of the legislature in enacting a law was to treat a number of classes uniformly. Thus if the legislation provided a uniform outcome for classes A, B and C, but was constitutionally invalid in its application to classes B and C, then applying it to A would be inconsistent with the policy of uniformity underlying the Act. The second case is Re F; Ex parte F (1986) 161 CLR 376, where the High Court held that a provision of the Family Law Act 1975 (Cth) giving rights of action to persons other than parents was ultra vires the s 51(xxi) and (xxii) powers relating to marriage and matrimonial actions. The question was whether the provision could be read down so as to restrict its operation to actions brought by parties who could be given a right of action under the Constitution. The court held that it could not, because the clear intention of Parliament was that the right of action granted to persons other than parents was integral to its operation; thus, the section had to be struck down in its entirety.

107

108

Part one: Constitutional Fundamentals

Alert When you are answering the problem questions contained in this book (Chapters 7 to 17), do not forget to address the issue of severance, which you will need to do whenever you have found a statute to be invalid. In those circumstances you should ask yourself whether severance is possible. Sometimes it will not be, because what would remain after severance would make no sense. If severance is possible, you will need to decide what type of severance—divisible or distributive—should be used.

109

CHAPTER 7

State and Territory Constitutional Law Covered in this chapter After reading this chapter you will understand: • the basic structure of State Constitutions • the doctrine of legislative supremacy • the use of entrenchment as a device for limiting the competence of State ­Parliaments • the extraterritorial legislative capacity of the States • the constitutional status of the Territories.

Cases to remember Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 Attorney-General (NSW) v Trethowan (1931) 44 CLR 395 Commonwealth Aluminium Corp Pty Ltd v Attorney-General (Qld) (COMALCO Case) [1976] Qd R 231 West Lakes Ltd v South Australia (1980) 25 SASR 389

State Constitutions Section 106 of the Commonwealth Constitution states as follows: The Constitution of each State of the Commonwealth shall, subject to this Constitution, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be, until amended in accordance with the Constitution of the State.

The ‘subject to’ clause envisages that amendments to the Commonwealth Constitution could have the effect of altering State Constitutions to the detriment of the States. However the requirement contained in s 128, that amendments to the Commonwealth Constitution require majorities in a majority of States, makes such an eventuality a virtual impossibility. The States and Territories all operate under systems of responsible government, and the State Constitutions have similar frameworks, with the following major features.

110

Part one: Constitutional Fundamentals

•

•

•

•

•

•

•

The Constitution Act of each of the States is flexible—virtually all of the provisions can be changed by an ordinary Act of the State’s Parliament. However, some States’ Constitutions contain entrenched provisions (discussed later in this chapter) which require a special procedure to be followed for amendment. In some States the original Constitution Act, passed by the United Kingdom Parliament, remains in force (albeit with amendments)—for example, Queensland’s Constitution Act 1867 (UK), while others have repealed their original Constitutions and enacted new ones—for example, the Constitution Act 1975 (Vic). Section 7 of the Australia Act 1986 (UK and Cth) provides that the Queen is represented in each State by a Governor who exercises power on her behalf, except for the power to appoint or dismiss a Governor, in relation to which the Queen acts on the advice of the State Premier (s 7(2)). Executive government in the States (and Territories) operates in accordance with the conventions of responsible government, which means that, as in the case of the Commonwealth, effective executive power rests with the Executive Council (FAI Insurances Ltd v Winneke (1982)151 CLR 342), the membership of which (barring the Governor) generally coincides with that of the Cabinet, headed by the State Premier. The States have bicameral legislatures, except for Queensland, which abolished its upper house in 1922. The lower houses, to which the State Governments are responsible, have terms varying from three to four years, but can be dissolved at any time in accordance with the rules and conventions of responsible government. State upper houses have fixed terms, with a proportion of their members facing re-election in rotation. All of the upper houses have the power to block legislation enacted by the lower house. Different provisions apply among the States in cases of deadlock between the houses. In New South Wales, Appropriation Bills can be passed by the lower house on its own after rejection by the upper house, while in the case of all other Bills a referendum is required to overcome an upper house veto. In all other States, the only possible solution to a deadlock is a political one, effected by the dissolution of one or both houses (either mandated by the Constitution or required as a matter of practicality). Each State has a superior court, called the Supreme Court. All States protect the independence of the judiciary through provisions governing security of tenure and non-reduction of salary, which are found in the Constitution (entrenched in some States) or in another enactment. However, such provisions may be amended, and it has frequently been held that the doctrine of separation of powers does not operate at State level (Clyne v East (1967) 68 SR (NSW) 385; Gilbertson v South Australia [1978] AC 772; Mabo v Queensland (No 1) (1988) 166 CLR 186). Therefore, judicial power may be conferred upon non-judicial bodies, and courts

CHAPTER 7: State and Territory Constitutional Law

•

may exercise non-judicial power. This is so even where a State Constitution contains entrenched provisions specifically relating to the courts: see for example City of Collingwood v Victoria (No 2) [1994] 1 VR 652. However, since the existence of State Supreme Courts is presupposed by the Commonwealth Constitution, the States cannot abolish them: see Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. Furthermore, as was held in Kable and in Fardon v Attorney-General (Qld) (2004) 223 CLR 575, because State courts may exercise the judicial power of the Commonwealth, the doctrine of separation of powers as it exists under the Commonwealth Constitution prohibits the State Parliaments from conferring on State courts functions that would undermine the independence and integrity of those courts as components of the federal judicial system.

State legislative competence Unlike the Commonwealth Parliament, State Parliaments enjoy plenary legislative power—the power to enact laws on any subject matter: see McCawley v The King (1920) 28 CLR 106. The Commonwealth Parliament on the other hand is restricted to legislating on those matters in relation to which the Constitution gives it legislative authority. The grant of plenary power on the States is signalled by the inclusion in their Constitutions of provisions giving State Parliaments the power to enact laws for their ‘peace, welfare and good government’ (or similar phraseology). A long line of cases from Australia (and from other former United Kingdom colonies) has interpreted such formulations as meaning these Parliaments have unrestricted legislative power.

A case to remember In Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1, the High Court unanimously rejected the argument that the ‘peace, welfare, and good government’ formula imposed any restraint on State Parliaments as to the content of their legislation. In other words, the formula does not restrict State Parliaments to enacting laws which, on some objective basis, are deemed to be beneficial for the State. Rather the formula is facultative and leaves it to the State Parliament to decide what is in the State’s best interests. In the case of the Commonwealth Constitution, although there is no grant of plenary legislative authority, the list of topics in s 51 upon which the Commonwealth may legislate is prefaced by the same ‘peace, order and good government’ formula, which means that, subject to the rest of the Constitution, the Commonwealth Parliament has the power to legislate as it pleases on those topics.

111

112

Part one: Constitutional Fundamentals

The decision in Union Steamship is an example of the application of the common law doctrine of legislative supremacy (sometimes also called ‘parliamentary sovereignty’), which has two fundamental aspects: • Parliament can legislate on any subject matter it pleases, and • Parliament is supreme—no other institution constitutes a source of law superior to Parliament. This doctrine is best understood by examining the fundamental principles laid down in case law from the United Kingdom, where the doctrine was first developed. In Cheyney v Conn [1968] 1 All ER 779, the court rejected a challenge to income tax legislation, brought by a plaintiff who alleged that, because the United Kingdom had entered into international nuclear non-proliferation treaties, it was unlawful for Parliament to raise and spend money for this purpose. The court emphatically declared that under the doctrine of legislative supremacy, an Act cannot be invalidated on substantive grounds, for example on the ground that its provisions were unjust or contrary to international law. A further aspect of legislative supremacy is that the courts cannot inquire into Parliament’s internal proceedings, and so, once an Act has been properly enacted, its validity cannot be questioned. This so-called ‘enrolled Bill rule’ was affirmed in Edinburgh & Dalkeith Railway Co v Wauchope (1842) 8 Cl & F 710; 8 ER 279 and Pickin v British Railways Board [1974] AC 765, cases in which the litigants alleged that Acts were invalid because, contrary to Parliament’s own Standing Orders, the litigants had not been given an opportunity to make representations to Parliament. In each case the court held that it was obliged to accept an enactment as being valid if it appeared to have been passed by Parliament. Thus under this reasoning, and to take an extreme example, even if all of the MPs were drunk when a piece of legislation was passed, it would still be valid, because the courts cannot enquire into internal parliamentary proceedings. This can also be seen as an application of the rule of parliamentary privilege contained in Article 9 of the Bill of Rights 1689 (UK), which prohibits the courts from inquiring into internal proceedings of Parliament (discussed in Chapter 3). The doctrine of legislative supremacy does, however, contain an inherent paradox: Parliament is omnicompetent, but lacks the power to limit itself—sovereignty resides in Parliament as a continuing institution, and an earlier Parliament cannot prohibit a later Parliament from legislating inconsistently with legislation. Any attempt to do so would be ineffectual, because such an action would deprive a future Parliament of its omnicompetence. In such circumstances, the earlier legislation will be held to have been overridden by inconsistent later legislation under the doctrine of implied repeal. This doctrine is illustrated by Ellen Street Estates v Minister of Health [1934] 1 KB 590, concerning a 1919 Act that prescribed a certain price that had to be paid if land was compulsorily purchased and prohibited any future variation of the price.

CHAPTER 7: State and Territory Constitutional Law

The court held that legislation passed in 1925 prescribing a different price had impliedly repealed inconsistent provisions in the 1919 Act. The most important implication of the doctrine is that, if a legislature wished to prohibit future Parliaments from legislating on a particular topic—for example, from legislating inconsistently with a Bill of Rights—it would not be able to do so, because that would amount to an attempt to impose a substantive limit on the legislature, that is, a limit on the content of legislation. So far as the Commonwealth Parliament is concerned, the doctrine of legislative supremacy applies only in part, because that legislature’s capacity is limited, in that it has power to legislate only on specific enumerated topics. However, assuming that legislation falls within one of those topics and does not fall foul of any constitutional prohibitions, it is true to say that its validity cannot be challenged on substantive grounds. The doctrine is of greatest importance when it comes to State constitutional law, because State Parliaments have truly plenary competence, and so most cases on the nature of plenary legislative powers have arisen under State law. This is therefore the focus of this chapter.

Procedural restraints The doctrine of legislative supremacy prevents State Parliaments from imposing substantive restraints on themselves, but is there an avenue whereby a State Parliament could impose a procedural restraint on itself without actually wholly divesting itself of the power to enact legislation on a topic? It is a truism to say that the validity of an Act depends upon it according with the definition of ‘an Act’. According to longstanding common law authority (The Prince’s Case (1606) 8 Co Rep 1a; 77 ER 481), if an Act discloses an error on its face—for example, it does not state in its words of enactment that it has been passed by the legislative chamber(s) and had been given the royal assent, in accordance with procedures mandated by the Constitution—it will not be a valid Act and could be declared invalid by the courts. Furthermore, the same is true even if, on the face of it, the Act appears valid, but evidence indicates that legislative procedures mandated by the Constitution (as distinct from Parliament’s internal Standing Orders) were not complied with. In Cormack v Cope (1974) 131 CLR 432 (discussed in Chapter 3), the High Court affirmed that the doctrine of parliamentary privilege did not prevent a court from hearing evidence as to whether s 57 of the Commonwealth Constitution had been complied with. Does this mean that, although a legislature cannot bind its successors as to subject matter, it can bind them as to procedure, and the courts will invalidate Acts that have been incorrectly passed? Even if it is agreed that Parliament cannot disable

113

114

Part one: Constitutional Fundamentals

itself from legislating on a particular topic, can Parliament at least make it more difficult to legislate on that topic by imposing some special procedure on itself? Or, to look at it another way, can Parliament redefine what being ‘enacted by Parliament’ means in specific situations—for example, by requiring that the amendment or repeal of an Act requires a special procedure (say, a two-thirds majority of Parliament and/or approval by voters in a referendum)?

Entrenchment The answer to the questions posed in the previous paragraph is ‘yes’. The device by which a Parliament can impose a procedural restraint on itself is called ‘entrenchment’. There are two types of entrenchment: single and double.

Example An example of single entrenchment is as follows: 4 Amendment or repeal No Act amending or repealing sections 5, 6 or 7 of this Act shall be valid unless assented to by voters in a referendum.

An example of double entrenchment is as follows: 4 Amendment or repeal No Act amending or repealing this section or sections 5, 6 or 7 of this Act shall be valid unless assented to by voters in a referendum.

The first example provides no real obstacle to repeal or amendment of ss 5, 6 or 7 by a subsequent Parliament, as it could circumvent the obstacle of entrenchment simply by repealing s 4 itself. The inclusion of the words ‘this section or’ in the second example prevents this from happening, and is an example of double entrenchment, where the entrenching provision is itself protected by the special procedure that it requires for amendment or repeal of those sections it seeks to protect. This is the only effective type of entrenchment. When the term ‘entrenchment’ is used in this chapter, it refers to double entrenchment. Several State Constitutions contain entrenched provisions. For example, s 3 of the Constitution Act Amendment Act 1934 (Qld) requires approval in a referendum for the re-establishment of an upper house. What has been the approach of the courts in the various jurisdictions to procedural restraints? Have they accepted that a Parliament can validly restrain future Parliaments from legislating on a topic unless a special procedure is complied with? The first set of cases involve legislatures that were subject to pre-existing restraints contained in their Constitutions when they first came into existence (by virtue of United Kingdom legislation).

CHAPTER 7: State and Territory Constitutional Law

In Harris v Minister of the Interior 1952 (2) SA 428 (A), the South African Appellate Division held that entrenched provisions in the Constitution, which required a two-thirds majority in each house of Parliament for legislation seeking to amend franchise rights, were effective in restricting the competence of the legislature, and that legislation enacted without complying with the entrenched provisions was invalid. • In Bribery Commissioner v Ranasinghe [1965] AC 172, the Privy Council invalidated legislation purporting to appoint judicial officers without complying with entrenched provisions of the Sri Lankan Constitution that required a twothirds majority of all members of Parliament in respect of legislation governing the appointment of such officers. • The first Australian case in which the issue was considered was McCawley v The King [1920] AC 691, where the Privy Council, in holding that the Queensland Parliament could legislate to change its Constitution by means of an ordinary Act, noted obiter that the same would not be true of the then s 9, which required a two-thirds majority of each House for constitutional amendments relating to the composition of the Legislative Council (the then-existing upper house of the Queensland Parliament, which was subsequently abolished using the special procedure). The second set of cases involve the question of whether self-imposed restraints would also be effective in limiting the power of a legislature. •

A case to remember In Attorney-General (NSW) v Trethowan (1931) 44 CLR 395 the court considered the effect of the insertion of s 7A into the Constitution Act 1902 (NSW). Section 7A was entrenched and required that any law abolishing or altering the composition of the Legislative Council (the New South Wales upper house) be approved in a referendum, in addition to being passed by Parliament. The New South Wales Government passed legislation to abolish the Legislative Council through both houses, but announced that it would submit the legislation to the Governor for assent without a referendum. The High Court held that the entrenched section was binding, and that Parliament had redefined itself (or, to put it another way, had redefined what an ‘Act of Parliament’ meant) for the purposes of s 7A. Accordingly, if the legislation was not passed by Parliament as thus redefined, it was invalid. The importance of Trethowan lies in the fact that it showed that the doctrine of legislative supremacy allowed a legislature to impose procedural restraints upon itself and its successors. This decision was confirmed on appeal to the Privy Council in AttorneyGeneral (NSW) v Trethowan [1932] AC 526.

The effectiveness of self-imposed procedural restraints was affirmed in Broken Hill Proprietary Co Ltd v Dagi [1996] 2 VR 106. In that case the Victorian Court of Appeal stated that, if the Parliament of Victoria sought to enact a law altering the jurisdiction

115

116

Part one: Constitutional Fundamentals

of the Supreme Court, it had to comply with s 85 of the State’s Constitution, which requires that such legislation contain an express statement that it intended to have that effect. Similarly, in Attorney-General (WA) v Marquet (2003) 217 CLR 545 the High Court held that, where s 13 of the Electoral Distribution Act 1947 (WA) required that any Bill to ‘amend’ that Act had to receive an absolute majority of both Houses of the Parliament of Western Australia, that section applied to invalidate an Act purporting to repeal the entirety of the 1947 Act without obtaining the requisite majorities. The case law discussed on entrenchment has so far involved questions arising under State law. What is the position under Commonwealth law? If the Commonwealth Parliament wished to impose a restriction on itself (for example, by enacting a Bill of Rights, in accordance with which subsequent Parliaments were bound to legislate unless a special majority was obtained), it could not do so without amending the Commonwealth Constitution, as limiting the capacity of the Commonwealth Parliament would be contrary to ss 1, 23, 40 and 58. Although there are pieces of Commonwealth legislation that purport to restrict the capacity of the Commonwealth Parliament, the restraints they impose are ineffective. To take some examples, s 5(2) of the Flags Act 1953 (Cth) requires a referendum before the national flag is altered; however there is nothing to prevent the Commonwealth Parliament from repealing s 5(2). Similarly, s 10(1) of the Racial Discrimination Act 1975 (Cth) states that persons will continue to enjoy equal rights, notwithstanding the fact that laws (including Commonwealth laws) discriminate on the basis of race; however the Commonwealth could circumvent s 10(1) simply by repealing it or inserting a provision in racially discriminatory legislation that states that s 10(1) does not apply to it.

Source of the power to impose restrictions What is the source of a Parliament’s power to impose procedural restraints on itself? This question is not yet settled.

A case to remember As already discussed, the High Court in Attorney-General (NSW) v Trethowan (1931) 44 CLR 395 held that the Parliament of New South Wales was bound by a self-imposed procedural restraint. The court referred to s 5 of the Colonial Laws Validity Act 1865 (UK), which declared in relation to the power of colonial legislatures that they shall: be deemed at all Times to have had, full Power to make Laws respecting the Constitution, Power, and Procedure of such Legislature, provided that such Laws shall have been passed in such Manner and Form as may from Time to Time be required …

CHAPTER 7: State and Territory Constitutional Law

The court held that this provision conferred upon the New South Wales Parliament the authority to impose procedural restraints upon itself, and that because the provision in question (s 7A of the Constitution Act 1902 (NSW), which imposed a special procedure for the abolition of the Legislative Council) related to the ‘constitution, power and procedures’ of the legislature, it fell within the class of legislation referred to in s 5 of the Colonial Laws Validity Act and was therefore an effective restraint on the legislature.

The problem with the analysis in Trethowan is that it has been taken to mean that only laws affecting the ‘constitution, power and procedures’ of State legislatures can be entrenched. Yet this is to ignore the fact that the Colonial Laws Validity Act was declaratory and permissive, enacted in order to address confusion that had arisen in the mid-nineteenth century relating to the power of colonial legislatures. Section 5 was inserted in order to make it clear that colonial legislatures had the power to entrench legislation affecting the constitution (that is, composition), power and procedures of their legislatures, over which there had been some doubt. However, there was nothing to suggest that the Act sought impliedly to prohibit the entrenchment of legislation dealing with other subject matter (that is, the entrenchment of ordinary, non-constitutional legislation), which colonial legislatures could use their plenary power to enact. Unfortunately, the analysis in Trethowan was adopted in South-Eastern Drainage Board v Savings Bank of South Australia (1939) 62 CLR 603, where the High Court held that the South Australian Parliament was not bound to comply with a section in the Real Property Act 1886 (SA) that required a specific form of words to be used if Parliament subsequently sought to amend the Act (which related to land law), because that legislation was not ‘constitutional’ legislation. Section 5 of the Colonial Laws Validity Act was substantially re-enacted by s 6 of the Australia Act 1986 (UK and Cth), which states that a law made by a Parliament of a State: respecting the constitution, powers or procedure of the Parliament of the State shall be of no force or effect unless it is made in such manner and form as may from time to time be required by a law made by that Parliament …

In Attorney-General (WA) v Marquet (2003) 217 CLR 545, the High Court considered whether the Parliament of Western Australia was bound by an entrenched provision contained in the Electoral Distribution Act 1947 (WA). The court decided the case on the basis that an electoral law was a law affecting the ‘constitution’ of the Parliament of Western Australia (because it determined how members were to be elected), and thus could be entrenched under the terms of s 6 of the Australia Act. Two arguments can be made against the reasoning in Trethowan: • First, even if one was to accept that s 5 of the Colonial Laws Validity Act/s 6 of the Australia Act is the source of the power to entrench legislation, surely one

117

118

Part one: Constitutional Fundamentals

can argue that when any legislation (even legislation which does not relate to constitutional matters) is entrenched, the entrenchment affects the ‘constitution, power or procedures of the Parliament’, simply because any entrenching section (on whatever topic) mandates that the legislature adopt a special procedure? • Second, and more fundamentally, it can be argued that the power of State legislatures to entrench legislation derives simply from the grant to them of plenary legislative power, which must logically include the power to impose procedural restraints on themselves (otherwise it would not be plenary). This was the position adopted by the High Court in Clayton v Heffron (1960) 105 CLR 214, where a majority of the court, in considering the validity of an entrenched section inserted into the Constitution Act 1902 (NSW), held that the Constitution’s grant of plenary power to the legislature provided a power to entrench legislation additional to that conferred by the Colonial Laws Validity Act. A similar statement was made by Gibbs J in Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81. On this argument, any legislation, not just legislation affecting the ‘constitution, powers and procedures’ of State Parliaments, may be entrenched. Unfortunately, the High Court’s most recent pronouncement on entrenchment (in Attorney-General (WA) v Marquet (2003) 217 CLR 545) did not address the plenary power argument, as the parties based their arguments on the effect of s 6 of the Australia Act. For this reason the questions of from where State legislatures get their authority to entrench legislation, and what subject matter can be entrenched, remain open.

Distinguishing between procedural and substantive restraints A number of cases have addressed the issue of how to distinguish between substantive and procedural restraints (the impermissibility of substantive restraints on legislative competence has already been noted).

Cases to remember In 1957, the Queensland Parliament enacted legislation stating that an agreement between the State Government and the Commonwealth Aluminium Corporation (COMALCO) had the force of law and could not be altered, except with the agreement of both parties. In 1974, Parliament passed an Act giving the Governor a discretion to alter the amount of royalties that would be paid under the agreement. COMALCO argued that Parliament was bound to obtain its assent before varying the 1957 Act. In Commonwealth Aluminium Corp Pty Ltd v Attorney-General (Qld) (COMALCO Case) [1976] Qd R 231, the Queensland Supreme Court held that the 1957 Act did not lay down a procedure for legislation—rather it purported to both remove the right of future Parliaments to legislate and give that right to

CHAPTER 7: State and Territory Constitutional Law

an outside body; as such, it was inconsistent with the doctrine of implied repeal. The 1974 Act was thus held to override the 1957 Act. Although, in purely logical terms, it could be argued that the 1957 Act only imposed a procedural restraint, in that it did not actually make legislation by a future Parliament impossible—it was only subject to a condition—it seems that COMALCO has established the proposition that ‘procedural restraints’ mean only those restraints that occur as part of the law-making process, and that when a Parliament purports to confer on some outside body or person the power to authorise legislation, it crosses the boundary into the area of substantive restraints. This issue was addressed more fully in West Lakes Ltd v South Australia (1980) 25 SASR 389, where a 1969 Act provided that the South Australian Government could make regulations governing a land development only with the agreement of the company with whom the agreement had been formed. In 1980 a Bill was introduced to amend the 1969 Act and allow the government to make regulations without the company’s agreement. In deciding the case, King CJ held that one factor distinguishing procedural from substantive restraints concerned whose consent the restraint required for the variation of protected legislation. He further stated that, where the restrictive condition was one that required the concurrence of an individual or group lying outside the legislative process—for example, a political party, business group, member of the armed forces or other office holder, or any individual or body that ‘does not form part of the representative legislative structure’—the restraint should be considered as substantive, that is, as barring legislation rather than subjecting it to a condition. On this basis, the court held that the restraint was substantive and could, thus, be overridden by the 1980 Act. Importantly, King CJ held that a restraint that took the form of requiring legislation to be subject to a referendum would be considered to be procedural, because in his view voters lie at the base of the legislative structure, and are thus part of it.

The timing of judicial review When is the appropriate time for judicial review to take place? Can the courts intervene to enforce procedural restraints, either in anticipation of their breach (as where a government announces that it does not intend to comply with a restraint) or after such a breach has occurred but before the legislation has received the royal assent? Or must litigants wait until the legislation they wish to challenge has completed all its stages? The prevailing view now is that such intervention is premature, notwithstanding the decision in Trethowan v Peden (1930) 31 SR (NSW) 183 (which was appealed to the High Court as Attorney-General (NSW) v Trethowan (1931) 44 CLR 395), where the New South Wales Supreme Court granted an injunction prohibiting the submission of legislation to the Governor in light of evidence that the government was not going to comply with the entrenched procedure requiring approval in a referendum. In Cormack v Cope (1974) 131 CLR 432, in interpreting the procedures required by s 57 of the Commonwealth Constitution, the High Court held that the courts should entertain challenges to the validity of legislation only once it has passed

119

120

Part one: Constitutional Fundamentals

through all its legislative stages, including royal assent, because only then is there a law whose validity can be challenged. The court held that the mere introduction of a law did not affect anyone’s rights. This finding accords with the principle, discussed in Chapter 5, that the courts do not have the jurisdiction to decide hypothetical cases and can become involved in a dispute only when it amounts to a ‘matter’ affecting people’s rights. This view was affirmed by the New South Wales Supreme Court in Eastgate v Rozzoli (1990) 20 NSWLR 188, where it was held that, in general, a challenge to the validity of legislation should await the enactment of the suspect legislation, rather than be invoked before the legislative process is complete. Members of the court did, however, acknowledge that there might be an important exception to this rule. If the enactment which is to be challenged contains a provision purporting to oust the jurisdiction of the courts to enquire as to its validity, the courts might intervene prior to enactment, as otherwise there would never be an opportunity to challenge the enactment. On the other hand, it could be argued that an ouster (or ‘privative’) clause would itself not be effective in such circumstances, because if it purported to prohibit a court from enquiring into the validity of ‘an Act’, the courts would have to determine whether what was before them was an ‘Act’ in order to know whether they could enquire into its validity. If it transpired that no valid Act had been produced (because a procedural restraint had not been complied with), then the whole Act, including the ouster clause, would be of no effect. Finally, however, one should note that sometimes the entrenching provision itself may indicate that intervention by the courts could take place prior to the legislative process being completed. An example of this is provided by the legislation considered by the court in Attorney-General (WA) v Marquet (2003) 217 CLR 545, where it was held that because the entrenching provision stated ‘It shall not be lawful to present to the Governor for Her Majesty’s assent any Bill [which had not complied with the procedural requirements]’, the court had jurisdiction to hear the case after enactment by Parliament, but before submission to the Governor.

Alert To help you deal with problem questions about entrenchment, here are the steps you should go through when determining whether a provision imposing a restraint upon future Parliaments is effective—and thus whether legislation enacted in contravention of that provision is invalid. 1 Does the entrenched procedure apply to laws relating to the ‘constitution, powers or procedures’ of Parliament? (a) If so, and if the legislation in question was enacted in contravention of the entrenched procedure, then the legislation is invalid, because it is clear from s 6 of the Australia Act 1986 (UK and Cth) and Attorney-General (NSW)

CHAPTER 7: State and Territory Constitutional Law

v Trethowan (1931) 44 CLR 395 that entrenchment can be used in relation to legislation of that type. (b) If not, then whether the entrenchment is effective, and thus whether the law enacted in contravention of it is invalid, depends upon your arguing either that all entrenched procedures by definition affect the power of Parliament and/or that Clayton v Heffron (1960) 105 CLR 214 and Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81 are authority for the proposition that the plenary power of State Parliaments enables them to entrench any legislation, not just that relating to the ‘constitution, powers or procedures’ of their Parliaments. 2 Is the restraint imposed by the entrenching provision procedural or substantive, applying the tests in Commonwealth Aluminium Corp Pty Ltd v Attorney-General (Qld) (COMALCO Case) [1976] Qd R 231 and West Lakes Ltd v South Australia (1980) 25 SASR 389? If the entrenching provision is procedural, it will be effective in restraining future Parliaments and legislation enacted in contravention of it will be invalid. However if the entrenching provision is substantive in nature, it will not be effective and a later Parliament can ignore it. 3 Is the timing right for judicial review? This will depend upon the terms of the entrenching provision. If the provision stipulates an event during the legislative process that may not take place unless the entrenched procedure has been complied with (as in Attorney-General (WA) v Marquet (2003) 217 CLR 545), then relief can be sought from the courts before that event takes place. However if the entrenched procedure simply imposes a condition on the validity of legislation, then in accordance with the decision in Cormack v Cope (1974) 131 CLR 432, the courts will entertain a challenge to the legislation only once it has passed through all its legislative stages.

Extraterritorial legislation by the States The colonies that united to form Australia had lacked extraterritorial legislative capacity: this common law restriction was an incident of their colonial status, which persisted when they became States and was formally lifted only by the passage of the Australia Act 1986 (UK and Cth), s 2(1) of which conferred extraterritorial legislative competence on them. However, even before 1986, several court decisions had eroded the common law prohibition on extraterritorial legislation. In Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337, the High Court found that the grant of plenary power to legislate ‘for the peace, welfare and good government of New South Wales’ contained in the Constitution Act 1902 (NSW) gave the Parliament of New South Wales the capacity to legislate with extraterritorial effect, provided there existed a demonstrable connection between the subject matter and the State of sufficient degree for it to be said that the legislation was ‘for’ the peace, welfare and good government of State. Similarly, in Pearce v Florenca (1976) 135 CLR 507, the High Court upheld the validity of the Fisheries Act 1905 (WA), which prohibited the possession of undersized

121

122

Part one: Constitutional Fundamentals

fish within three nautical miles of the Western Australian coast, whether caught within Western Australian waters (defined as the sea from the high-water mark to three nautical miles out from the low-water mark) or elsewhere. The court held that the fact that the waters were the offshore waters of the State provided sufficient connection to validate the Fisheries Act. In the wake of the enactment of the Australia Act 1986 (UK and Cth) the High Court in Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 upheld the validity of provisions contained in the Workers’ Compensation Act 1926 (NSW), which covered workers registered in New South Wales who were injured on vessels outside the State. The court affirmed that the States had been formally granted extraterritorial competence in 1986, but noted the trend in pre-1986 case law which had had the effect of conferring extraterritorial legislative capacity on the States as part of their plenary legislative powers, so long as there was a sufficient connection between the legislation and the interests of the State. The court held that the Australia Act did not remove the necessity of showing such a connection. The Australia Act may, therefore, not have changed the law; rather it may have affirmed the position that the courts had already reached in the earlier case law. The criterion of sufficient connection was applied in Port Macdonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340, in which the court upheld the validity of an agreement that South Australia had made with the Commonwealth under s 13 of the Fisheries Act 1982 (SA), which regulated lobster fishing within 200 nautical miles of the South Australian coast. The court held that, in applying the test, the distance beyond the State over which the law applied was not determinative of whether the law fell within the State’s legislative competence: it was the nature of the connection—in this case, the interest that the residents of South Australia had in the exploitation of a finite natural resource—which was of economic importance to their State. On this basis the Act was held to be valid. Finally, remember that extraterritorial legislation enacted by the States is vulnerable to legislative override by the Commonwealth exercising its s 51(xxix) external affairs power. In New South Wales v Commonwealth (Seas and Submerged Lands Act Case) (1975) 135 CLR 337, the High Court held that the Commonwealth had overridden inconsistent extraterritorial State legislation when it enacted the Seas and Submerged Lands Act 1973 (Cth). The Commonwealth and the States subsequently entered into an agreement, in terms of which the Commonwealth gave up some of the power it had asserted in the Seas and Submerged Lands Act, resulting in the Coastal Waters (State Title) Act 1980 (Cth), which conferred sovereignty on the States over their territorial sea, seabed and airspace—that is, over an area within three nautical miles of the coast—and the Coastal Waters (State Powers) Act 1980 (Cth), which extended State legislative power beyond this limit in respect of certain defined categories, such as mining, dredging and fishing.

CHAPTER 7: State and Territory Constitutional Law

The constitutional position of the Territories Apart from the States, Australia consists of a number of Territories: internal Territories—the Northern Territory and the Australian Capital Territory (the latter including the Jervis Bay Territory), and several external Territories (such as Norfolk Island). The ACT and the NT were ceded to the Commonwealth in 1911 by New South Wales and South Australia respectively. Unlike the States, the Territories are wholly subject to the legislative power of the Commonwealth.

The s 122 Territories power The Commonwealth has the power to legislate for the Territories under s 122 of the Constitution. Importantly, this power is interpreted as being plenary—in other words, as was held in Spratt v Hermes (1965) 114 CLR 226, the Commonwealth may legislate on any subject matter in respect of the Territories, and is not, as is otherwise the case, restricted to the topics listed in s 51. The plenary nature of the power means that (subject to constitutional prohibitions, discussed below) if a law is, to quote s 122, ‘for the government of any territory’, it will be prima facie valid. This is illustrated by the case of Bennett v Commonwealth (2007) 231 CLR 91, in which the High Court upheld a law restricting the right to vote in elections for the Legislative Council of the Norfolk Island Territory to people who were Australian citizens. The court emphasised that the alleged unwisdom or injustice of the law was not relevant to its validity. The fact that it concerned a Territory meant that it was valid. The implications of this for the status of the Territories is significant. Unlike the States, whose laws are subject to Commonwealth override only if the Commonwealth legislates intra vires its enumerated powers, Territory laws on any topic can be overridden by the Commonwealth, simply by the latter’s use of s 122.

Example When the NT Legislative Assembly introduced legislation permitting euthanasia, the Commonwealth was able to override it by passing the Euthanasia Laws Act 1997 (Cth). Had a State enacted such a law, an override would prima facie not have been possible, as there is no enumerated power permitting the Commonwealth to legislate on this topic.

An interpretative question that has not yet been resolved is whether the Commonwealth, when it exercises its plenary power under s 122, is subject to the prohibitions found in the Constitution. One approach, exemplified by Dixon J in Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 at 85, is that s 122 is ‘disjoined from the rest of the Constitution’, and can be used by

123

124

Part one: Constitutional Fundamentals

the Commonwealth without restraint. The better approach, more consistent with the normal rules of statutory interpretation, is the ‘integrationist’ approach, which requires that the Constitution be read as a whole, with the s 122 power subject to constitutional prohibitions just as are those in s 51. Unfortunately, the response given by the High Court on this question has been inconsistent. • In R v Bernasconi (1915) 19 CLR 629, it was held that the phrase ‘law of the Commonwealth’ in s 80, which confers a right to jury trial for indictable offences against the law of the Commonwealth, should be interpreted as differentiating between Commonwealth (that is, nationwide) law and the laws of the States, and that, since the former category did not embrace laws made for the Territories, trials for offences created by s 122 were not protected by the s 80 guarantee. • By contrast, in Kruger v Commonwealth (1997) 190 CLR 1, without overruling the decision in R v Bernasconi, a majority of judges stated or assumed that when the Commonwealth exercises its s 122 power, it is subject to the restrictions contained in s 116 protecting freedom of religion. • Similarly, in Wurridjal v Commonwealth (2009) 237 CLR 309 (also discussed in Chapter 8) the court held that the Commonwealth is bound by the s 51(xxxi) obligation to provide compensation on just terms when it acquires property in a Territory. Unfortunately this question will remain uncertain unless and until the Bernasconi decision is formally overruled.

Government of the Territories The NT and the ACT were granted self-government under the Northern Territory Self-Government Act 1978 (Cth) and the Australian Capital Territory Self-Government Act 1988 (Cth) respectively. These Acts contain the Territory equivalents of State Constitutions. Their major features are discussed in this section. Each of these Territories has a unicameral legislature, which has competence to pass laws for the ‘peace, order, and good government’ of the Territory, except in relation to a list of matters over which direct legislative authority is retained by the Commonwealth. Although the Territories obtain their legislative power from the Commonwealth, this does not mean that they exercise the power of the Commonwealth Parliament as its delegates. Rather, they are vested with their own limited legislative capacity as Territories. Because they do not exercise Commonwealth legislative power, they are subject to the s 90 prohibition against levying excise duties (Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248). The executive of the NT is headed by an Administrator, who is appointed by the Federal Government and who discharges the same function as a State Governor. The executive operates in accordance with the rules and conventions of responsible

CHAPTER 7: State and Territory Constitutional Law

government, with an Executive Council advising the Administrator and a Cabinet headed by a Chief Minister. The Administrator may reserve Territory enactments for assent or rejection by the Governor-General, and the latter may also disallow Territory legislation within six months of its assent by the Administrator. In the case of the ACT, there is no Administrator—the Australian Capital Territory (Self-Government) Act 1988 (Cth) regulates matters such as dissolution of the legislature (required by s 48 of the Act when the Chief Minister loses the confidence of the Assembly and no other person commands a majority), which are usually left to the rules and conventions of responsible government. Territory legislation can, however, be disallowed by the Governor-General within six months of enactment, and the Governor-General can dissolve the legislature. Each Territory has a Supreme Court. The doctrine of separation of powers does not operate with respect to them, as these courts are created under s 122 rather than Chapter III of the Constitution. Thus, in Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 it was held that, when the Commonwealth legislates in respect of Territory courts, it is not bound by the separation of powers doctrine in Chapter III, because Territory courts are not ‘federal courts’ as that term is used in s 71.

125

126

Part one: Constitutional Fundamentals

Assessment preparation Problem question In 2014 the incumbent South Australian Government, fearing defeat at upcoming elections and anxious to preserve public sector cutbacks, passes the Public Sector Efficiency Act 2014 (SA). The Act provides in part as follows: 35 Public Sector Efficiency Commissioner There is hereby established the office of Public Sector Efficiency ­Commissioner, who shall discharge such functions as are conferred upon him by this Act. 36 Limitations on size of public service The total number of public servants employed by the State of South Australia shall not exceed 35,000. 37 Amendment and repeal A Bill either expressly or impliedly amending or repealing sections 35, 36 or this section of this Act must, after passage of such amendment or repeal by both houses of Parliament, be approved of by

(a) a majority of registered voters voting in a referendum and (b) the Public Sector Efficiency Commissioner. In 2015 a new government is elected. Using its majority in both houses, it seeks to enact the Public Sector Efficiency (Amendment) Bill, which authorises the recruitment of 5000 additional State public servants. The government announces that it does not intend to submit the Bill to a referendum or to seek the approval of the Public Sector Efficiency Commissioner. Prior to the Bill being sent to the Governor for assent, Jane Thatcher, an opposition member of the Legislative Assembly, decides to apply to the Supreme Court for an injunction prohibiting the Governor from assenting to the Bill. Advise her fully as to the constitutional issues presented by these facts. For extra guidance and suggested answers to these questions, please refer to .

127

CHAPTER 8

Express and Implied Rights Covered in this chapter After reading this chapter you will understand: • the vulnerability of common law rights to legislative override • the limited range of protection expressly afforded to rights under the ­Commonwealth Constitution, and the absence of rights protection under State Constitutions • the right to freedom of religion under s 116 • the prohibition against discrimination on grounds of residence in a State under s 117 • the requirement that when the Commonwealth acquires property, s 51(xxxi) ­confers a right to just terms compensation • the definition of ‘property’ in s 51(xxxi) and the recognised exceptions to the right to compensation • the nature and scope of the implied freedom of political communication • the protection against arbitrary detention afforded by Chapter III • the implied right to vote.

Cases to remember Dr Bonham’s Case (1610) 8 Co Rep 113; 77 ER 647 Attorney-General (Vic); Ex relator Black v Commonwealth (DOGS Case) (1981) 146 CLR 559 Adelaide Company of Jehovah’s Witnesses v Commonwealth (1943) 67 CLR 116 Street v Queensland Bar Association (1989) 168 CLR 461 Minister of State for the Army v Dalziel (1944) 68 CLR 261 Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1 Mutual Pools and Staff Ltd v Commonwealth (1994) 179 CLR 155 Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106 Coleman v Power (2004) 220 CLR 1 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 Roach v Electoral Commissioner (2007) 233 CLR 162

128

Part one: Constitutional Fundamentals

Rights and the law In many countries, freedoms are protected by a Bill of Rights, the essential features of which are that it: • lists fundamental human rights and freedoms • can be part of the Constitution or a separate law, but in either event cannot be amended without a special procedure • controls both the legislature and the executive in that—subject to any provision in the Bill of Rights itself permitting limitations of rights—legislation or executive action inconsistent with the Bill of Rights is invalid, and • is justiciable—that is, is enforceable by remedies obtained from the courts. Australia does not have a Bill of Rights. Limited protection for human rights in Australia is afforded by the common law and by express and implied freedoms in the Commonwealth Constitution; but for the most part the rights of Australians are at the mercy of the Commonwealth and State legislatures.

Common law protections Some conduct that would amount to a breach of fundamental rights is actionable under the common law. Thus, to take freedom of the person as an example, if a person is unlawfully detained they can bring a habeas corpus application to obtain release, as well as an action in tort to recover damages. However, the common law does not protect the full range of rights that one would expect to see mentioned in a Bill of Rights—for example, as was held in Grace Bible Church v Reedman (1984) 36 SASR 376, the common law does not protect freedom of religion. A more fundamental defect of the common law is that it, and thus the rights it protects, is subject to legislative override. In cases such as Building Construction Employees and Builders Labourers’ Federation of NSW v Minister of Industrial Relations (1986) 7 NSWLR 372 and Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1, the courts have held that State legislatures, in the exercise of the plenary powers conferred on them by the ‘peace, order and good government’ formula, are not restricted in the type of legislation they enact, which means that they are free to legislate as they please, even if such legislation is inconsistent with human rights. The same applies to the Commonwealth in so far as it can legislate for the ‘peace, order and good government’ of the Commonwealth with respect to the legislative powers given to it by the Constitution. As a counter to this, some theorists have advanced an argument (based on natural law) that the courts could use their inherent power to declare the common law to be that legislatures may not legislate contrary to fundamental freedoms, even if the Constitutions under which they operate confer plenary power on them. This argument requires an acceptance of the proposition that powers of the legislative

CHAPTER 8: Express and Implied Rights

branch are subject to an overarching rule of the common law enforced by the courts, which inverts the current relationship between common law and statute law, and between the legislature and the judiciary.

A case to remember It appears that this was once the position in England, because in Dr Bonham’s Case (1610) 8 Co Rep 113; 77 ER 647 Coke CJ held that a law contrary to ‘right reason’ was not a valid law. However, after Parliament emerged victorious from its struggles with the Crown during the seventeenth century, the courts departed from this interpretation of the common law, and by the early eighteenth century had come to accept the doctrine of legislative supremacy. Nevertheless, arguments based on Dr Bonham’s Case continue to be made in modern times, most famously by Chief Justice Cooke of New Zealand who, in extra-judicial writings, hypothesised that courts might declare invalid laws that were antithetical to fundamental values—the example he gave being a law permitting torture.

This argument was considered by the High Court in Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399. While leaving open the issue of whether there might be some common law rights that lie so deep they may not be overridden by the legislature, a majority of the court rejected the specific claim that a right to compensation existed when property was expropriated by a State Government. The fundamental problem standing in the way of the courts adopting the theory in Dr Bonham’s Case is that such a step would be seen as a constitutional revolution and as a usurpation by the courts of the policy-making role of the legislature. Furthermore, the creation of a ‘judge-made’ Bill of Rights would be extremely difficult, as the judiciary would have to determine what rights were ‘fundamental’ and how far legislation could limit them before that legislation was declared invalid.

Statutory protections Some protection is given to rights by statute law at both Commonwealth and State level. The Racial Discrimination Act 1975 (Cth), Sex Discrimination Act 1984 (Cth) and Disability Discrimination Act 1992 (Cth) prohibit discrimination on stated grounds and offer a remedy where such discrimination occurs. Similarly, State anti-discrimination legislation prohibits discrimination (and does so on a wider range of grounds than the Commonwealth legislation), and also offers remedies to complainants. However the protection offered by these statutes is limited. They protect only one right—that of equality—and, furthermore, they can be amended or repealed by inconsistent legislation. Broader human rights statutes have however been enacted by the ACT and Victoria. The Human Rights Act 2004 (ACT) lists a range of human rights, similar

129

130

Part one: Constitutional Fundamentals

to those found in Bills of Rights in Canada and South Africa. Section 30 of the Act requires the courts to interpret legislation in such a way as to avoid inconsistency between the legislation and the Human Rights Act, where such an interpretation is possible. However, if an interpretation consistent with human rights is not possible, then s 32 of the Act limits the courts only to making a declaration to that effect, and expressly states that the validity of the legislation is not affected by the incompatibility. Section 40B of the Act requires public authorities to act consistently with the Act (except where the legislation under which they are acting cannot be interpreted in a way that is consistent with the Act), and s 40C empowers the courts to grant remedies, other than damages, for breaches of rights by public authorities. The Charter of Human Rights and Responsibilities Act 2006 (Vic) is similar to the ACT legislation. Section 32 of the Charter requires the courts to interpret legislation consistently with the Charter where possible, but states that incompatibility does not affect the validity of the legislation. Section 38 requires public authorities to act consistently with the Charter (subject to legislation requiring them to act differently), and s 39 empowers the courts to give remedies, other than damages, for breaches of s 38. The ACT and Victorian statutes represent progress along the road towards the recognition of human rights, and have promoted a culture of awareness of human rights, particularly within the bureaucracy. However, their provisions can be overridden by the legislature. Furthermore, because they do not allow the courts to invalidate legislation that infringes their provisions, they cannot be considered to be fully fledged Bills of Rights. More important than the common law or ad hoc legislation, however, are the rights expressly protected in the Commonwealth Constitution. Although these rights are few in number and limited in scope, they are, nonetheless, significant. The High Court has also accepted that certain rights may be implicit in the Constitution.

Jury trial The availability of the right to trial by jury depends upon how crimes are classified by Parliament. Section 80 of the Commonwealth Constitution states that an offence against the law of the Commonwealth which is triable on indictment must be by jury. Although this appears to guarantee a right to trial by jury, practically speaking, the way s 80 is phrased allows the Commonwealth to determine when the right applies, because the phrase ‘trial on indictment’ means a trial that is statutorily defined as requiring a jury. Thus the right in s 80 is phrased in a way which is essentially circular. The key features of the right are as follows: • It applies only to trials in respect of Commonwealth law, not that of the States. • The right does not apply in respect of infringements of laws enacted by the Commonwealth for the Territories—in R v Bernasconi (1915) 19 CLR 629, it was

CHAPTER 8: Express and Implied Rights

held that the phrase ‘law of the Commonwealth’ in s 80 should be interpreted as differentiating between Commonwealth (that is, nationwide) law and the laws of the States, and that, since laws made for the Territories are not nationwide laws, they are not covered by s 80. • The scope of the right is effectively determined by the Commonwealth Parliament, given that Parliament can determine which offences are prosecuted by indictment and which by summons, as held in R v Archdall (1928) 41 CLR 128 and Kingswall v The Queen (1985) 159 CLR 264. However limited the scope of s 80 may be, the High Court has interpreted its requirements strictly. • In Brown v The Queen (1986) 160 CLR 171, it was held that an accused could not waive the right to trial by jury where a State statute gave the defendant the option of trial by judge alone for offences against Commonwealth laws. The court held that if the offence is one that has been designated as triable by indictment, a jury must be used irrespective of the wishes of the accused. • A law that permitted jury verdicts by majority was declared invalid in Cheatle v The Queen (1993) 177 CLR 541 on the ground that ‘trial by jury’ means ‘trial by unanimous verdict of a jury’, because that is how the concept was understood by the drafters of the Constitution.

Freedom of religion Section 116 of the Constitution provides that: The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth.

Note that the freedom has four elements, as it prohibits: • the establishment of any religion (in other words, the creation of an official religion) • the imposition of any requirement to engage in religious observances • any law prohibiting the free exercise of religion, and • the imposition of religious qualifications for public office. One should also note that: • the freedom binds only the Commonwealth—it does not prohibit State Governments from enacting laws restricting religious freedom • in Kruger v Commonwealth (1997) 190 CLR 1, a majority of judges stated or assumed that s 116 applies when the Commonwealth exercises its s 122 Territories power. The purpose of s 116 was to ensure that the Commonwealth would not have an established religion and that those who believed in different religions (or indeed none)

131

132

Part one: Constitutional Fundamentals

would not be discriminated against. However, s 116 does not mandate complete separation between church and State.

A case to remember In Attorney-General (Vic); Ex relator Black v Commonwealth (DOGS Case) (1981) 146 CLR 559, a group of activists operating under the name of Defence of Government Schools (DOGS) challenged the validity of Commonwealth grants given to the States on condition that they be used to support religious schools (which received only limited support from State Governments). The High Court held that the non-establishment clause of s 116 did not prohibit laws that assisted the practice of religion or the giving of financial support to religious schools, provided this was done on a non-discriminatory basis. The court held that in order to fall foul of s 116, the Commonwealth would have to go so far as to establish an official religion or to favour one religion over others. The court was at pains to distinguish the theory underpinning s 116 from that forming the basis of anti-establishment law arising under the First Amendment to the United States Constitution, in terms of which any governmental assistance to religious groups is unconstitutional.

An obvious question arises where a Constitution protects the free exercise of religion. What happens where compliance with religious beliefs involves breaching a law, either because the law requires something that a person’s religious beliefs prohibit, or because the law prohibits conduct required by religious beliefs? Does the fact that the unlawful act has religious motivations exempt the actor from the legal consequences?

A case to remember The leading case on the interaction between religious conduct and the mandates of the law is Adelaide Company of Jehovah’s Witnesses v Commonwealth (1943) 67 CLR 116, which involved a challenge to a law entitling the Governor-General to declare associations prejudicial to the defence of Commonwealth, to dissolve them and to confiscate their property. The law had been applied against Jehovah’s Witnesses, who advocated nonparticipation in World War II on the basis of their belief that all governments were evil. Latham J held that s 116 protected people not only in their holding of religious beliefs, but also in their engagement in such conduct as was required by those beliefs. The issue was, therefore, whether the preaching of non-participation in war was to be characterised as a religious act, which the court, by implication, answered in the affirmative. Accepting that conduct had a religious character, the next question was whether that fact alone should immunise it from the operation of the law. Latham J answered this in the negative, finding that the freedom contained in s 116 is not absolute—rather,

CHAPTER 8: Express and Implied Rights

it prohibits only ‘undue’ interference in the practice of religion or, in the words of Starke J at 155, permits such limitations as are ‘reasonably necessary for the protection of the community and in the interests of social order’. These dicta are important as they are the first references by the court to a test involving the proportionate balancing of constitutional freedoms against other societal values. On this basis, it was held that, in principle, conduct found to be inimical to the security of the Commonwealth—including the Jehovah’s Witnesses preaching against the war effort—could be proscribed, even if that conduct was motivated by religion. However the court also found that, since the Commonwealth purported to base the law on the s 51(vi) defence power, it had to show that the law served the purpose of defending the Commonwealth. As it stood, the law simply conferred a broad, subjective discretion to ban associations, without any objective requirement that the association in fact be undermining the security of the Commonwealth. On this basis, the law was found to be ultra vires s 51(vi).

The operation of s 116 is predicated upon the identification of ‘religion’ as an identifiable sphere of human activity, yet defining ‘religion’ poses a difficult problem. In Church of the New Faith v Commissioner of Pay Roll Tax (Vic) (1983) 154 CLR 120, the High Court was asked to determine whether the Church of Scientology was entitled to claim exemption from payroll tax on salaries paid by it. The court followed the Jehovah’s Witnesses case, holding that s 116 does not exempt subjects from obedience to ordinary laws, so long as such laws do not discriminate against, or unduly burden the free exercise of, religion or conduct of a kind which is characteristic only of religion. But what distinguishes religious activity from other activities? It was held that, while religion does not require belief in a supreme being (as this would exclude Buddhism, for example), it must evince some belief in a supernatural being, thing or principle. There must also be canons of conduct that give effect to these beliefs—the religion must have some practical effect on the lives of its devotees. Finally (and consistently with the requirement of belief in the supernatural), it was held that religion need not be reasonable. Since, in this case, the court found that the Church of Scientology propounded a doctrine that included a belief in the supernatural, it was a ‘religion’ for legal purposes.

Equal treatment as between residents of States Section 117 protects residents of one State from being subject to any disability or discrimination which would not be equally applicable to them if they were residents of another. This provision was designed to ensure that, once the Commonwealth was formed, States would not discriminate against each other’s residents.

133

134

Part one: Constitutional Fundamentals

A case to remember In Street v Queensland Bar Association (1989) 168 CLR 461, a legal practitioner from New South Wales challenged a Queensland statute which required that those seeking admission to the Queensland Bar must be resident in Queensland and not practise in any other State. The court established the following principles: • Whether a law is discriminatory on the ground of residence must be tested according to its practical impact on the out-of-State resident. In Street, this meant that, although all applicants for admission to legal practice (residents and non-residents alike) were subject to the same law, the impact on out-of-State practitioners was obviously different, and so the law was invalid. The court recognised that a law could discriminate directly (by targeting a specific characteristic) or indirectly (by applying equally to all, on the face of it, yet in reality having a disparate effect on a particular class of people). • The court emphasised that discriminatory effect and not just discriminatory intent was prohibited—in other words, a law does not have to explicitly make out-of-State residence a criterion of classification. If its practical effect is to disadvantage out-of-State residents, it contravenes s 117. The test is whether being resident in a State would have the practical effect of removing the discrimination or substantially mitigating it, which it clearly did in this case. • The court acknowledged that there are limits to s 117. Because States have rights as autonomous entities, they can probably impose residential requirements in respect of voting, appointment to office or entitlement to welfare benefits. Everything depends upon a balance between the principle of national unity on the one hand, and the needs of the State in protecting its autonomy or the interests of its citizens on the other.

These principles were applied in Goryl v Greyhound Australia Pty Ltd (1994) 179 CLR 463, in which a challenge was launched against a Queensland law which limited the amount of money recoverable by road accident victims who were injured in Queensland but resident in another State. The limit was set at the same amount that the accident victim could have recovered if they had been injured in their State of residence, and was designed to ensure that victims whose claims would have been limited by a statutory ceiling in their home State could not recover a greater amount in Queensland, where such ceilings did not apply. The court held that under the law, residents of other States were treated less favourably than residents of Queensland, and so it was invalid under s 117.

Acquisition of property on just terms compensation Section 51(xxxi) confers upon the Commonwealth the power to legislate with respect to: the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws.

CHAPTER 8: Express and Implied Rights

Although s 51(xxxi) confers a legislative power on the Commonwealth to acquire property, most cases arising under this section have involved interpreting the limitation that such acquisition can occur only on ‘just terms’—that is, upon payment of compensation. Note that the just terms requirement binds only the Commonwealth—the States are free to confiscate property without compensation, although in fact they do pay compensation when acquiring property. In Wurridjal v Commonwealth (2009) 237 CLR 309, the High Court held that the Commonwealth is obliged to pay just terms compensation when it acquires property in a Territory. The case arose from a legislative package known as the ‘Northern Territory Intervention’, under which the Commonwealth had, inter alia, acquired leases over Aboriginal land in the Northern Territory. The court held that, notwithstanding the plenary nature of the power given to the Commonwealth by s 122, it was bound by the requirement contained in s 51(xxxi) (a requirement which it had satisfied by providing for compensation in the legislation). The court adopted the ‘integrationist’ approach to the interpretation of s 122, rejecting the contrary approach, in terms of which the Commonwealth’s power under s 122 is seen as ‘separate and disjoined’ from the rest of the Constitution, and as not being restrained by the prohibitions and restrictions it contains.

When is property acquired? The right to just terms compensation arises only if property is acquired by someone as the result of a Commonwealth law, which is governed by s 51(xxxi). Two issues arise here: what is ‘property’, and when does ‘acquisition’ occur?

Property It is clear from the case law that ‘property’, as referred to in s 51(xxxi), includes not just tangible property, such as land, vehicles and animals etc, but also intangible interests in property.

A case to remember In Minister of State for the Army v Dalziel (1944) 68 CLR 261, the High Court considered a case where the leaseholder of a parking lot that had been taken for use by the army during wartime claimed compensation in the amount of the profit he had lost while not able to operate the lot. The court held that any interference with property rights, be they those of owner or, as in this case, the leaseholder, had to be compensated, and that vesting the minister with discretion to limit that compensation was contrary to the guarantee. Thus, the right of use by a leaseholder, and the profit made from such use, was included within the concept of ‘property’.

135

136

Part one: Constitutional Fundamentals

Starke J held (at 290) that ‘property’ includes: every species of valuable right and interest, including real and personal ­property, incorporeal hereditaments, such as rents and services, rights of way, rights of profit or use in the land of another and choses in action.

This broad definition of property is also illustrated by Georgiadis v Australian & Overseas Telecommunications Commission (1994) 179 CLR 297, where the court considered a case in which a worker—who had been injured and was about to sue the respondent under personal injury legislation—was deprived of his right to sue when the applicable legislation was amended. The court held that a right of action (often referred to as a ‘chose in action’) was a species of intangible property, and that by extinguishing the liability the respondent potentially faced, the law had enabled the respondent to acquire a benefit that in turn amounted to an acquisition of property from the appellant. Note that there would be nothing wrong with removing a right of action prospectively—in other words, in respect of causes of action that had not yet arisen (and that would, therefore, not yet have vested as a chose in action).

Acquisition ‘Acquisition’ within the meaning of s 51(xxxi) occurs only when there is compulsory acquisition. Where the Commonwealth acquires property as the result of an agreement, it is presumed that the agreement was entered into voluntarily and that the other party received fair value for their property, as was held in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397. The right to just terms compensation arises whenever property is acquired because of the operation of a Commonwealth law. The Commonwealth itself does not have to acquire the property—the right to just terms compensation would arise even if the Commonwealth law permitted the acquisition of property by another party, as was held in PJ Magennis Pty Ltd v Commonwealth (1959) 80 CLR 382. The broadest interpretation of acquisition was that adopted by the court in the following case, in which the post-World War II Labor Government sought to nationalise the banking industry.

A case to remember In Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1 the appellants challenged the validity of the bank nationalisation scheme. The first step in the scheme involved the transfer of control over the operations of private banks to the government-owned Commonwealth Bank, which had the power to compulsorily acquire the shares held by shareholders in private banks. It was held that,

CHAPTER 8: Express and Implied Rights

even though ownership of the assets and entitlement to profits (should the Commonwealth Bank-appointed directors declare any) still vested in the shareholders pending compulsory acquisition by the Commonwealth Bank, the very fact that they no longer had control of their banks amounted to a compulsory acquisition of an interest in property (namely, the intangible interest of control), because the Commonwealth Bank might simply retain control of the private banks ad infinitum, without buying them. It was also held that the right to compensation on just terms was undermined by the fact that the interests of the private banks in negotiating compensation would be represented by the nominee directors appointed by the Commonwealth Bank, which would be paying the compensation.

What are ‘just terms’? The concept of acquisition on ‘just terms’ generally imports an obligation to pay compensation in an amount equivalent to the full market value of the property. This was affirmed in Georgiadis v Australian & Overseas Telecommunications Commission (1994) 179 CLR 297, where Brennan J rejected the argument that determining what amounted to ‘just’ compensation required taking the public interest into account. Brennan J held that, since all acquisition by the Commonwealth is supposedly for the public interest, consideration of the public interest in ascertaining the competing rights of the property holder would always lead to a reduction in the amount of compensation payable. He therefore held that just terms should be equated with full compensation at market value. A key procedural aspect of the right to just terms compensation is that any tribunal vested with the power to determine compensation must be impartial (Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495), and there must be provision for judicial review of its decisions (Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77).

Limitations on the scope of the obligation Acquisition of property may occur without giving rise to just terms compensation in certain circumstances. The effect of the cases discussed below has been to reduce the scope of s 51(xxxi) significantly.

Where mere regulation rather than acquisition occurs In Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397, the High Court considered whether a provision of the Trade Practices Act 1974 (Cth), which forbade corporations from conducting exclusive dealing, amounted to acquisition of property. In this case, a brewing company was prohibited from enforcing an agreement whereby it leased hotels to tenants on the condition that they did not buy beverages from competitors. The company argued that the legislation had deprived it of a commercially valuable exclusivity clause. The majority held that regulation of property should be distinguished from confiscation, even though the distinction was

137

138

Part one: Constitutional Fundamentals

a matter of degree, and concluded that the legislation amounted to regulation of the activities of the corporation rather than a taking of its property. Similarly, in Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1, three of the four judges who considered the issue said that the declaration of a World Heritage Site and the consequent prohibition of construction of a dam in Tasmania did not amount to an acquisition of land from the Tasmanian Government—restrictions were placed on the use of the land, but no proprietary interest was transferred to the Commonwealth. Most recently, in JT International SA v Commonwealth [2012] HCA 43, a tobacco company challenged the Commonwealth’s plain packaging legislation, which prohibited the use of brand packaging and required that tobacco products be sold in uniform green packaging with only the name of the brand to distinguish it from other brands. The challenge was based on the argument that by prohibiting the use of brand designs, the Commonwealth had acquired the company’s intellectual property. The High Court rejected this argument, holding that all the law did was regulate the circumstances in which intellectual property could be used, and that in any event the Commonwealth had not itself acquired that property. There is a fine line between regulation and acquisition. As we saw, in Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1, control falling short of transfer of ownership may be so complete as to amount to acquisition within the meaning of s 51(xxxi), whereas in Tooth, Tasmanian Dams and JT International the degree of regulation was insufficient to amount to acquisition. However, this exception to the concept of acquisition is necessary, as many exercises of legislative power can have the effect of depriving people of financial benefits, and this alone should not suffice to give rise to a right to compensation.

The legislation is incidental to acquisition under another power The High Court has held that, where the Commonwealth acquires property as an incidental (or secondary) consequence of using some enumerated power other than s 51(xxxi), no obligation to pay just terms compensation arises.

A case to remember In Mutual Pools and Staff Ltd v Commonwealth (1994) 179 CLR 155, it was held that many enumerated powers inevitably involve the acquisition of property by the Commonwealth— for example, taxation (s 51(ii)), seizure of enemy property during war (s 51(vi)) and forfeiture of illegally imported goods (s 51(i)). When the acquisition of property is merely incidental to the use of one of these powers, s 51(xxxi) is not engaged, because the law is properly characterised as being ‘with respect to’ something other than the acquisition of property, namely, in the words of Mason CJ at 171, to the ‘adjusting of competing claims, obligations or proprietary rights of individuals as an incident of the regulation of their relationship’.

CHAPTER 8: Express and Implied Rights

This reasoning was applied in Re DPP; Ex parte Lawler (1994) 179 CLR 270, it was held that a Commonwealth law could require the confiscation of a vessel used by a person found guilty of illegal fishing (under s 51(x)), even if the owner of the vessel had not been the person using it for that purpose, and that that provision did not amount to acquisition of property requiring compensation under s 51(xxxi). In Nintendo v Centronic (1994) 181 CLR 134, the court considered a challenge to the Circuit Layouts Act 1989 (Cth), which vested intellectual property rights pertaining to the design of electronic circuits in the designer of the circuits. Prior to the Act coming into force, Centronic had copied circuits designed by Nintendo. After the Act come into force it had to pay Nintendo for the right to use the circuits. Centronic argued that the law had led to an acquisition of property by Nintendo. The court rejected the argument on the ground that the law was enacted under the copyrights, patents and designs power (s 51(xviii)), which contemplated that parties might acquire property rights as an incident of laws regulating intellectual property.

The rights acquired are inherently susceptible to variation Another reason why s 51(xxxi) may be found not to apply is that the rights acquired were inherently susceptible to variation because they originated in statute: rights which Parliament confers it can also remove. This principle was enunciated in Health Insurance Commission v Peverill (1994) 179 CLR 226, where retrospective amendments to welfare laws, made under s 51(xxiiiA), reduced the amount claimable by medical practitioners for services they had already provided but had not claimed for. The court held that this did not amount to an acquisition under s 51(xxxi), stating that even though the rights to payment had vested, they were inherently susceptible to variation because they were statutory in nature and would not have existed but for the Commonwealth creating them. Furthermore, as statutory rights, their existence was contingent upon changing government policies and resource allocation priorities. In other words, where the government confers a statutory right to property (which would not have existed had the government not created it), the government cannot be hindered if, for policy reasons, it later finds that it must extinguish the right. In cases of this type, everything turns on whether the rights that have been acquired existed previously or were created by statute. • In Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513, the plaintiff challenged legislation which had altered the rights attaching to its mining tenements (essentially the equivalent of leases) by prohibiting mining within certain areas. The purpose of the legislation was to enable the Commonwealth to establish the Kakadu National Park. The High Court held that the tenements were an aspect of common law rights in the land which had been purchased by Newcrest, and were not mere statutory licences. It therefore held that the

139

140

Part one: Constitutional Fundamentals

legislation extinguishing those rights without compensation was a breach of s 51(xxxi). • By contrast, in Commonwealth v WMC Resources Ltd (1998) 194 CLR 1, the High Court held that legislative extinguishment of the plaintiff’s licence to drill for oil on the Timor Gap continental shelf did not amount to an acquisition of property. The plaintiff had had no pre-existing right to drill in the area—its rights stemmed solely from the licence bestowed by the Commonwealth which, as a statutory creation, was inherently susceptible to variation. • The same reasoning was applied in Telstra Corporation Limited v Commonwealth (2008) 234 CLR 210, where Telstra argued that legislation requiring it to give competitors access to its network amounted to acquisition. The High Court rejected the challenge, stating that Telstra’s operation of a telecommunications service had always been subject to conditions imposed from time to time under a statutory regime. • Similarly, in ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140, the High Court rejected a challenge to a national water scheme which had had the effect of substituting the plaintiff’s water licences for ones which carried a lesser entitlement. The court held that water rights had always vested in the Crown, to be allocated and removed as the Crown saw fit; therefore no acquisition had occurred. The reasoning in these cases has the potential severely to undermine the protection afforded by s 51(xxxi), as they suggest that, so long as a law can be presented as falling within an enumerated power other than s 51(xxxi), and as having acquisition of property as merely its secondary (rather than primary) characteristic, the obligation to pay just terms compensation can be evaded. More fundamentally, given that s 51(xxxi) appears not to be a free-standing power, but rather one that entitles the Commonwealth to acquire property in furtherance of ‘any purpose in respect of which Parliament has power to make laws’ (found in the other enumerated powers), it could be argued that s 51(xxxi) is always used in support of another power. On the reasoning of the above cases, compensation would never be payable.

A case to remember Some guidance as to how to solve the conundrum presented by s 51(xxxi) is provided by Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133, in which a challenge was launched to provisions of the Civil Aviation Act 1988 (Cth) that entitled the Civil Aviation Authority to take liens over aircraft in respect of unpaid fees for airport, air traffic control and meteorological services provided by the Authority.

CHAPTER 8: Express and Implied Rights

The liens had been incurred by companies that had leased the aircraft from overseas owners, and the owners argued that subjecting their property to liens in respect of conduct which they had had nothing to do with amounted to acquisition by the Commonwealth. A majority of the High Court held that s 51(xxxi) did not apply—the imposition of the liens was merely incidental to the Commonwealth’s exercise of its s 51(i) interstate and overseas trade and commerce power, and its s 51(xxix) external affairs power. Several judges used a test of proportionality to reach this conclusion, saying that the liens were an ‘appropriate and adapted’ means of regulating interstate and overseas trade and commerce. This suggests that in distinguishing between those acquisitions of property which are seen as merely incidental to the exercise of another power (such as the s 51(ii) taxation power) and those which give rise to compensation under s 51(xxxi), the courts will examine whether the legislation can be seen as a proportionate means of achieving an end other than the acquisition of property per se, in which case any acquisition that does occur will be held to be merely incidental to the exercise of the other legislative power. If, however, the law is one directly for the acquisition of property, or leads to acquisition as a disproportionate consequence of the exercise of the other power, the acquisition will be held to have occurred under s 51(xxxi) and compensation will be payable. This reasoning was applied in the case of Theophanous v Commonwealth (2006) 225 CLR 101, in which the High Court upheld the validity of the Crimes (Superannuation Benefits) Act 1989 (Cth), in terms of which the appellant’s parliamentary superannuation benefits had been forfeited following his conviction for various offences. The court held that the forfeiture did not amount to an acquisition of property, but was rather an incidental consequence of Parliament’s exercise of its power to define superannuation benefits, and that the denial of such benefits as a penalty for criminal offences was a reasonably proportionate exercise of that power.

The implied freedom of political communication Reading implications into the Commonwealth Constitution is not new: in Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31, the High Court found certain rules implicit in the Constitution because of the federal nature of Australia. Subsequently the court found an implied freedom in the Constitution protecting political communication. The implied freedom of political communication does not, however, protect a general right to freedom of expression.

The requirements of representative government On the same day as this decision, the High Court in Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 invalidated part of the Industrial Relations Act 1988 (Cth), which

141

142

Part one: Constitutional Fundamentals

punished conduct bringing the Industrial Relations Commission or its members into disrepute. It was held that, whereas the law could prohibit criticism where it was not ‘fair and reasonable’ or was contrary to laws on sedition, defamation etc, the provision in question effectively criminalised the act of criticising governmental institutions and those running them, without allowing any defences (such as those of reasonableness or fair comment), and so constituted a disproportionate limitation of freedom of political communication.

A case to remember In Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106, a challenge was launched against provisions of Commonwealth legislation prohibiting the broadcast of political advertisements during Commonwealth, State and local government elections, except on behalf of political parties for whom broadcasters had to provide free airtime (90 per cent of the time available for political advertising being devoted to those already represented). A majority of the High Court struck down a Commonwealth statute, holding as follows. Although the Commonwealth Constitution is an imperial statute, ultimate political sovereignty resides in the Australian people, in view of the conferral on them of the power to amend the Constitution through s 128 and the termination of United Kingdom power by the Australia Act 1986 (UK and Cth). Representative government is, therefore, implicit in the Australian constitutional order. Representative government is also implicit in the sections of the Constitution ­(specifically, ss 7 and 24) which state that members of the Senate and House of ­Representatives are to be ‘directly chosen by the people’. Freedom of communication, at least in relation to the discussion of public affairs and political matters, is indispensable to representative government and is, therefore, implicit in the Constitution. Furthermore, freedom of communication in respect of Commonwealth affairs cannot be separated from discussion regarding State and local politics. The implied freedom of political discussion is not absolute. Where a limit on the freedom relates to the viewpoint adopted by the speaker, only a compelling public interest will justify restrictions. In cases where the limitation relates to the mode of ­communication, the validity of the restrictions on political communication would depend upon a ­balancing of the public interest served by the legislation and the degree of limitation of the freedom. The balancing process used to determine whether restrictions on political c ­ ommunication are unconstitutional involves the application of a proportionality test—the restriction must be proportionate to the interest served by the legislation. On the facts of the Australian Capital Television case, the court found that, relative to the objective (of ensuring a level playing field between electoral candidates), the burden placed on political communication was excessive, and accordingly held the provision to be invalid. (The current formulation of the proportionality test in Coleman v Power (2004) 220 CLR 1 is discussed below.)

CHAPTER 8: Express and Implied Rights

•

•

•

•

In subsequent cases, a number of principles were established by the courts. In Theophanous v Herald and Weekly Times (1994) 182 CLR 104 the court held that the implied freedom would render inoperative any rule of law—be it State or Commonwealth law, statute or common law—that imposed disproportionate limitations on communications relating to Commonwealth politics. In this case too a majority of the court defined ‘political discussion’ in the broadest terms. In Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211, a majority of the court held that discussions of State and local politics were also protected by the implied freedom (a finding that was also reached by the court in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 and in Unions NSW v New South Wales [2013] HCA 58). Members of the majority came to this conclusion for varying reasons: • because, as a matter of practicality, one cannot disentangle Commonwealth and State politics • because the State Constitutions derived their authority from s 106 of the Commonwealth Constitution and are thus subject to the implied freedom, or • because the State Constitutions themselves are based on the concept of representative government and must therefore protect political communication, just as the Commonwealth Constitution does. The word ‘freedom’ leads one to think of the law creating a right to do something. However, the court in Mulholland v Australian Electoral Commission (2004) 220 CLR 181 emphasised that the implied freedom of political communication creates an immunity from interference with existing rights. The implied freedom does not create a right, and the onus rests on the person alleging that the implied freedom has been breached to show that they have a right to engage in the communication concerned. Essentially this means that they must show that the communication they want protected is a communication to or among the people concerning Commonwealth, State or local politics. In APLA Limited v Legal Services Commission of New South Wales (2005) 224 CLR 322, the High Court held that because the implied freedom arises from the need to protect representative and responsible government, it is limited to protecting discussion of ‘political or government matters’. This means that its operation relates to matters involving, expressly or inferentially, the acts or omissions of the executive and legislative branches of government, not those of the judiciary. So although the freedom would apply to aspects of the administration of justice such as the appointment or removal of judges, prosecutorial decisions and the funding of courts, it would not apply to discussions of the results of cases or the conduct of judges.

143

144

Part one: Constitutional Fundamentals

The proportionality test The proportionality test is used to determine whether a limit on the implied freedom of political communication is constitutional.

A case to remember In Coleman v Power (2004) 220 CLR 1 the High Court considered a case in which a protester was arrested under a Queensland statute prohibiting the use of insulting words in public, after displaying a poster and distributing pamphlets alleging corruption on the part of a named police officer. This case is important because it contains the court’s current formulation of the test (originally framed in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520), which is applied in determining whether a law is invalid because it breaches the implied freedom. Once a person discharges the onus of showing that a law limits discussion of Commonwealth, State or local political affairs, the law will be invalid unless the limitation is shown to be proportionate. The court held (at 50-1) that a limitation will be proportionate if the law is: reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government and the procedure prescribed by s 128 for submitting a proposed amendment of the Constitution to the informed decision of the people.

The test involves a two-stage inquiry. First, it has to be shown that the law is directed towards a legitimate end—that is, and end which is sufficiently important to warrant interference with political communication in a system of representative government. Assuming that the end is legitimate, one then embarks upon the second part of the inquiry, which relates to the manner in which the end is achieved. If the manner chosen to achieve the end limits the implied freedom to an extent that is not compatible with representative government—that is, imposes a disproportionate limit on the freedom in light of the end sought to be achieved—then that law will be invalid. Note that both the legitimate end and the manner of its achievement must be compatible with representative government. Most of the cases on the implied freedom have turned upon the issue of proportionality. In Unions NSW v New South Wales [2013] HCA 58, a majority of the court held (at [44]) that in determining whether a law disproportionately limited the freedom, a court will consider whether there were less-restrictive means of achieving the law’s objective. This was expanded upon in Tajjour v New South Wales [2014] HCA 35, in which a majority of the justices held that whether a law disproportionately limited the freedom depended upon whether there were means that were less invasive of the freedom but which were also equally effective in achieving the legitimate object. In Tajjour the court considered the validity of s 93X of the Crimes Act 1900 (NSW), which made it an offence for a person habitually to consort with two or more convicted offenders. The object of the legislation was to inhibit communication between members of organised crime gangs. The appellants argued that because the legislation could have the effect of impeding convicted

CHAPTER 8: Express and Implied Rights

persons from communicating about political matters, it was inconsistent with the implied freedom. A majority of the court dismissed the challenge, holding that a defence which allowed consorting for the purposes of political communication would have been easy to claim and very difficult to challenge, and would therefore have made the section far less effective in achieving its legitimate end.

A number of cases illustrate the application of the proportionality test. In Levy v Victoria (1997) 189 CLR 579, where a State law prohibiting entry into areas used for duck hunting had been challenged by an activist who wished to protest against the activity, it was held that while political expression could take the form of actions as well as words, a prohibition on demonstrators entering duck-hunting areas was justifiable because it served the purpose of protecting people’s safety in such areas and was a proportionate measure to take in fulfilment of that objective. • In Brown v Members of Classification Review Board (1998) 154 ALR 676, the Federal Court refused to accept the appellant’s argument that an article in a student magazine, instructing readers on how to shoplift, was protected by the implied freedom because it had been motivated by redistributive economic theory. It was held that, even if it was accepted that the article had a political motivation, the prohibition of publication of material designed to facilitate criminal activity was a reasonable limitation on the freedom of political communication. • In Hogan v Hinch (2011) 243 CLR 506, the High Court upheld the validity of a Victorian statute which empowered the courts to impose orders suppressing the publication of information about sex offenders. The legislation had been challenged by radio personality Derryn Hinch in the course of defending charges brought against him for contravening suppression orders. The court held that the Act imposed a proportionate limit on freedom of communication in light of the interest of not having the identity of sex offenders made public—something that could hamper those monitoring them after their release and also lead to identification of victims. •

Political communication and defamation The implied freedom does not apply to common law defamation actions between individuals, but it has led to the creation of a new common law privilege in this area. First it is necessary to understand the elements of, and defences to, a common law defamation action. The law of defamation is a separate field of study in itself. Here we can note only its most basic rules.

145

146

Part one: Constitutional Fundamentals

Definition Under the common law, defamation occurs when: • there is publication to a third party • of a statement about a person • which is defamatory—that is, which reduces the reputation of the person to whom the statement relates. A defendant to an action for defamation can escape liability if they can prove a defence, including that: • the statement was true • the statement amounted to fair comment in relation to facts that were true, or • the statement was made in circumstances that were covered by privilege, either ­complete (for example, statements made as part of parliamentary proceedings) or ­qualified (generally where the statement is made to a defined audience who has a ­recognised interest in receiving it, for example, in a job reference).

Clearly, the threat of a defamation action can impact upon political debate. Newspapers that have unfavourable information about politicians which they cannot prove is true would hesitate to publish it for fear of being sued in defamation, and because of this, the public would lose the opportunity to evaluate the information themselves. It is for this reason that the constitutionally protected implied freedom of political communication has affected the law of defamation.

A case to remember In Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, former New Zealand Prime Minister David Lange sued the ABC for a television broadcast that he alleged had defamed him in relation to his conduct of foreign policy and his dealings with the United Nations. The respondents argued that their publication was protected by the implied freedom of political communication. A unanimous High Court agreed that, as a matter of principle, ‘political discussion’ in Australia was broad enough to include matters pertaining to international politics, stating with regard to the interaction between the implied constitutional freedom and the law of defamation as follows: • The Constitution, and thus the implied freedom of political communication arising from it, avails only between the organs of government and the individual (that is, ­vertically), and not between individuals engaging in private common law relations (that is, ­horizontally). The implied constitutional freedom of communication serves to ­invalidate State and Commonwealth legislation or executive action that restrict freedom of communication, unless that law or action satisfies the proportionality test. However it is irrelevant to common law actions between individuals. • In the case of common law defamation actions between individuals, a defendant who publishes defamatory material relating to Commonwealth, State or local government

CHAPTER 8: Express and Implied Rights

political matters will escape liability if they can bring themselves within the scope of an existing common law privilege. However, no common law privilege exists to cover mass publication—privilege covers only those situations where publication is made to an individual or a defined group where there is a public interest in communicating the defamatory information to them. • In the absence of an existing privilege, a defendant may nevertheless be able to avail of a new common law qualified privilege, created by the court in Lange. The rules are as follows: • A defendant seeking to avail of the new qualified privilege bears the burden of showing that the defamatory matter relates to the discussion of Commonwealth, State or local political matters. • The defendant must then show that they acted reasonably in publishing the ­defamatory material. In practical terms, this means showing that they did not publish the material knowing it to be false, or recklessly as to its truth or falsity, and that they took such other steps as were reasonably necessary to verify the truth of the material, such as checking sources. Reasonable steps might, depending on the ­circumstances, include giving the plaintiff an opportunity to respond to the ­defamatory material prior to publication. • The defence can be rebutted by proof of malice, but being motivated by political animosity will not in itself amount to malice. • Common law rules of defamation which are inconsistent with the new qualified privilege will be invalid. • Commonwealth or State statutes relating to defamation which are inconsistent above rules will also be invalid. However, this is not because of the existence of the common law defence (after all, common law does not override statute law), but rather because statute law must not disproportionately limit the implied constitutional freedom, and it will be found to do so if it is inconsistent with the new defence.

The ruling in Lange was complicated by the fact that the court was determined to keep constitutional law and the common law rules of defamation separate. The reason for this was not explained in Lange itself, but is consistent with the court’s analysis several years later, in Mulholland v Australian Electoral Commission (2004) 220 CLR 181, that the constitutional implied freedom is really an immunity from government action, rather than a personal right. The way to understand Lange is to see it as creating a set of rules outlining the circumstances in which a defendant in a defamation action relating to political matters will be able to escape liability, and that set of rules applies to two distinct bodies of law: • If a statute relating to defamation is inconsistent with the defence created in Lange, it will be invalid for breaching the constitutionally implied freedom. • If a rule of the common law of defamation is inconsistent with the new qualified privilege, it will be invalid because the High Court has changed the common law of defamation to include the new defence.

147

148

Part one: Constitutional Fundamentals

In 2005 the States and Territories each enacted a uniform Defamation Act to standardise defamation law in Australia. This means that most defamation law is now statutory, and thus subject to the implied constitutional freedom. However, the Acts override only those rules of common law which are inconsistent with their terms and any surviving common law which is inconsistent with the rules in Lange will be overridden by Lange. From a practical point of view, the outcome of a defamation action relating to political matters will be the same irrespective of whether it is brought under a Defamation Act or the common law—the defence will be available in either instance. However, as a matter of pleading, arguments relating to the validity of statute law must refer to the constitutionally implied freedom, whereas arguments relating to the common law must refer to the new qualified privilege.

The implied freedom from arbitrary detention Freedom not to be subject to arbitrary detention by the executive can be implied from the separation of powers doctrine contained in Chapter III of the Constitution.

A case to remember In Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1, the High Court held that the adjudication and punishment of criminal guilt was punitive in nature, and thus exclusively judicial in character. For this reason, the executive has no common law power to detain citizens, unless as part of a process in which the ultimate decision as to the validity of detention is determined by the courts by way of habeas corpus. Similarly, if the executive is given a statutory power of detention, that too will be subject to judicial oversight. The court did however recognise that the executive could order detention that was non-punitive in nature in exceptional circumstances, for example in the case of persons who were mentally ill or the carriers of communicable diseases.

So far as non-citizens were concerned, the court in Chu Kheng Lim held that it lies within the capacity of Parliament to confer upon the executive the power to detain persons such as unlawful immigrants, as such a power is non-punitive in nature. However the court also stated that it was an impermissible usurpation of judicial power for Parliament to confer on the executive the power to make a conclusive determination of whether a person fitted the statutory definition of those who were liable to be detained. Such a provision would effectively vest judicial power in the executive, and would therefore be incompatible with the doctrine of separation of powers. Thus the court acknowledged that the executive has the power to detain unlawful migrants pending a determination of their status but, in common with

CHAPTER 8: Express and Implied Rights

all statutory powers, detention decisions are subject to review under s 75(v) of the Constitution. However, the rights of migration detainees go no further, and in Al-Kateb v Godwin (2004) 219 CLR 562 the court held that, even where detention was potentially lifelong (where, as in this case, no country could be found to take the detainee) it was a valid exercise of statutory power.

The implied right to vote The Commonwealth Constitution has been held to protect an implied right to vote by virtue of the fact that the Constitution embodies representative government.

A case to remember In Roach v Electoral Commissioner (2007) 233 CLR 162 the High Court held that the requirement contained in the Constitution that members of the House of Representatives (s 24) and of the Senate (s 7) be ‘directly chosen’ by the people meant that the Constitution conferred a right to vote in Commonwealth elections. Furthermore, although ss 8 and 30 of the Constitution confer on Parliament the power to prescribe qualifications for voting, the fact that the Constitution is founded upon a system of representative democracy means that this power is not unconstrained. Only limitations on voting that have some rational basis and survive the proportionality test would be constitutionally valid. The doctrine in Roach was applied in Rowe v Electoral Commissioner (2010) 243 CLR 1, where the High Court invalidated amendments to the Commonwealth Electoral Act 1918 (Cth) which removed the opportunity unregistered voters had previously had to register (seven days after an election was called) and reduced the time registered voters had to change their enrolment details. The Court held that these amendments imposed a disproportionate limitation on the right to vote.

Note that the reasoning in Roach relating to the Commonwealth Constitution would also apply to State Constitutions, since they too embody representative government.

149

150

Part one: Constitutional Fundamentals

Assessment preparation Problem questions Because the topic of express and implied rights is so broad, there are two problems at the end of this chapter. Be careful—you should also look at Chapter 5 when answering problem 1, and at Chapter 3 when answering problem 2! Problem 1 In a bid to regulate the broadcasting industry more tightly, Parliament enacts the Broadcasting Regulation Act 2015 (Cth), relevant sections of which state as follows. 1 Broadcasting Control Commissioner The Governor-General shall appoint a Broadcasting Control Commissioner to discharge such functions as are conferred the Commissioner by this Act. 2 Declaration of designated broadcasters The Broadcasting Control Commissioner may declare any broadcaster to be a designated broadcaster under this Act if he forms the subjective opinion that it is in the public interest for such a declaration to be made. 3 Control of broadcasting The Broadcasting Control Commissioner may, in respect of any broadcaster declared to be a designated broadcaster under this Act, give directions to such a broadcaster in respect of all matters pertaining to its operations including, but not limited to, the following:

(i) hours of broadcasting (ii) program content (iii) advertising (iv) salaries and other conditions of employment of employees (v) financial matters, including the taking of loans and the investment of assets (vi) the acquisition, disposal, lease and hire of assets and (vii) purchases and sales of programs and broadcasting rights. 4 Review of decisions by the Commissioner (1) Any person who is dissatisfied with a decision by the Commissioner may seek review by the Broadcasting Appeal Panel. (2) The Broadcasting Appeal Panel shall consist of three persons appointed by the Minister for Telecommunications, who shall serve three-year terms. (3) A decision by the Panel shall be registered with the Federal Court of Australia and shall have effect as if it were an order of the Federal Court of Australia unless a party to the appeal lodges an application for review of the Panel’s decision within 21 days.

Linda Himmler, leader of the National Socialist Party of Australia (NSAPA), owns a local television station in Sydney. She broadcasts material asserting that members of ­various ethnic groups are inferior to others and ought not to be allowed the right to vote. The Broadcasting Control Commissioner exercises his powers under s 2 of the Act and declares her television station to be a designated broadcaster. He makes a range of orders

CHAPTER 8: Express and Implied Rights

under s 3, including an order limiting the station’s broadcasting hours to 11pm–5am, prohibiting it from selling advertising time, capping employees’ salaries and prohibiting it from selling assets or borrowing money. He also makes an order under s 3(ii) ordering the station ‘not to broadcast racially discriminatory views or any other material which is harmful to relations between ethnic, religious or racial groups in Australia’. Himmler sought review of the Commissioner’s decision under s 3 of the Act. Two months ago the Panel gave its decision, upholding the Commissioner’s exercise of his ­various powers. Linda did not have the money to lodge an appeal with the Federal Court and now approaches you for advice. Problem 2 Bernstein Woodward is a journalist with the National Inquirer and has built up a ­reputation as a fearless investigative journalist. Much of the success of the Inquirer derives from the fact that it manages to print newsworthy items before anyone else, and journalists are under constant pressure to get their stories out first. Over a period of years, Woodward has written several articles critical of Greg ­Falwell, an MP. Falwell has recently been appointed Minister of Family Affairs. At 3pm one Thursday, Woodward receives an anonymous call from someone who says: ‘You know that sanctimonious jerk Falwell? Well I’ve just seen him come out of the Alley Katz Escort Agency with a grin on his face.’ Woodward realises that this news is political dynamite and, anxious to meet the 5pm deadline for stories to be printed, he writes a piece headlined, ‘Falwell Purrs after Alley Katz Rendezvous—Engaging in a Family Affair?’ and stating that Falwell was seen coming out of the escort agency and questioning whether someone holding the post of Minister for Family Affairs was a fit person to hold office in light of such behaviour. The next morning, Woodward is contacted by Madame Sinn, owner of Alley Katz. She complains that business is being driven away by the horde of journalists camped outside her door, and asking why Woodward did not simply telephone her when he got the story, as she could have told him that Falwell had never visited the establishment. Falwell sues Woodward, alleging that he was defamed in the National Inquirer article. A few weeks later, Falwell makes a speech in Parliament in which he says: ‘One reporter, who I will not name, takes bribes from the Opposition, and is a corrupt, lying little rat with no principles.’ A few weeks after that, Falwell is interviewed on the Nationwide television program at its studios in Sydney and, in response to a question as to who he had referred to in his speech in Parliament said: ‘It was Bernstein Woodward.’ Woodward sues Falwell for defamation. Assume you are Woodward’s solicitor. Prepare an opinion advising him as to the legal position arising out of both legal actions. For extra guidance and suggested answers to these questions, please refer to .

151

Part two

Enumerated Powers

155

CHAPTER 9

Trade and Commerce Covered in this chapter After reading this chapter you will understand: • the scope of the s 51(i) trade and commerce power • the importance of the implied incidental aspect of the power • the geographical limitations of the power • the circumstances in which the power can be used to regulate production.

Cases to remember Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492 Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965)113 CLR 54 HC Sleigh Ltd v South Australia (1977) 136 CLR 475 O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565

Interstate and overseas trade and commerce Section 51(i) of the Constitution confers on the Commonwealth Parliament the power to legislate with respect to ‘trade and commerce with other countries and among the States’. The power is commonly referred to as the ‘interstate and overseas trade and commerce power’.

The meaning of ‘trade and commerce’ In W & A McArthur Ltd v Queensland (1920) 28 CLR 530, the High Court gave a very broad interpretation to this phrase, saying that any business relationship amounts to trade and commerce. The s 51(i) power has been relied upon to regulate a variety of aspects of business, including the export and import of goods. Thus, for example, the power was relied upon to enact the Customs Act 1901 (Cth), as well as aspects of the Criminal Code 1995 (Cth) that prohibit the importation of narcotics.

156

Part two: Enumerated Powers

The incidental aspect of the power As with all the other enumerated powers, the trade and commerce power: • is a power to legislate not merely on trade and commerce, but also with respect to (that is, on matters relating to) trade and commerce, which thus covers a broader range of activity than trade and commerce itself • carries with it the express incidental power in s 51(xxxix), and • carries with it an implied incidental power to legislate on matters ancillary to trade and commerce. The importance of the incidental aspect of the enumerated powers was discussed in Chapter 6. The implied incidental power has been important in a number of cases relating to s 51(i).

A case to remember In Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492, the High Court held that the Commonwealth could rely on s 51(i) to enact industrial relations legislation (not falling within the scope of the s 51(xxxv) conciliation and arbitration power) regulating the working conditions of stevedores loading and offloading ships engaged in interstate and overseas trade and commerce. Although the legislation did not regulate trade and commerce itself, it was on a matter connected with interstate and overseas trade and commerce and was, thus, intra vires s 51(i).

In Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54, it was held that the implied incidental power enabled the Commonwealth to regulate intrastate air navigation. This was because interstate and intrastate air traffic were physically integrated in the same airspace, and chaos would ensue if the control of each type of air traffic were divided between two authorities. Thus, the court held, the core power to regulate interstate air traffic must carry with it the implied power to regulate intrastate air traffic. The trade and commerce power enables the Commonwealth not only to regulate commercial activity, but also to engage in such activity itself, as was held in Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29, where the court upheld the establishment of a national airline by the Commonwealth. Although an activity that does not fall within the core of the power may be covered by s 51(i) if it falls within the implied incidental aspect of the power, the High Court has required that some physical connection between the activity and s 51(i) must be demonstrated; a mere economic connection being insufficient to establish the argument that the activity is linked to the core of the power.

CHAPTER 9: Trade and Commerce

A case to remember As explained above, in Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 the High Court accepted that the implied incidental power covered the regulation of intrastate air transport. However, the court unanimously invalidated part of the Commonwealth legislation that purported to override State legislation regarding the licensing of air services. The Commonwealth had argued that it could regulate this area because the statutory provision concerned was directed towards promoting competition, and that interstate and intrastate air services formed one market. The court refused to accept that the economic integration of interstate and intrastate air transport permitted Commonwealth regulation of both. Commonwealth regulation was permitted only where it could be justified by physical integration.

The argument relating to purely economic connections was also applied in Attorney-General (WA); Ex relator Ansett Transport Industries (Operations) Pty Ltd v Australian National Airlines Commission (1976) 138 CLR 492, in which the High Court had to consider whether the Commonwealth could use s 51(i) to allow the government-owned Australian National Airlines to fly a route from Perth to Port Headland and then on to Darwin. A flight from Perth direct to Darwin, or from Port Headland to Darwin, would be supported by s 51(i) because the court considered that commercial activity between a State and a Territory would be covered by the interstate element of the power. The question was whether the Perth to Port Headland sector was supported by s 51(i). The Commonwealth argued that, because the service from Perth to Darwin would be economic only if broken in Port Headland, the intra-Western Australia leg of the service could be operated by the Commonwealth using s 51(i). The court rejected this argument, holding that the implied incidental element of s 51(i) could not provide a foundation for the leg within Western Australia because there was only an economic connection between that leg and the leg into the NT. However, the majority found an alternative avenue by which the Commonwealth could validly operate the entire route, stating that s 122 (the Territories power) supported even the intrastate leg, holding that the fact that the air services to the NT would be economic only if they incorporated an intrastate leg meant that the law was sufficiently connected to s 122. No explanation was advanced as to why economic integration sufficed to make a law intra vires s 122 but not intra vires s 51(i)—probably the only way of understanding the case is on the basis that because the s 122 power is plenary, the courts have traditionally interpreted it far more broadly than they do the other legislative powers.

157

158

Part two: Enumerated Powers

The geographical requirement The courts have rigorously enforced the requirement that legislation relying on s 51(i) must involve trade or commerce across State boundaries or overseas. The movement across a boundary may be of people (via air transport), goods (via trucking) or money (via bank transfers). Note, however, that the mere fact of agreement between parties on either side of a boundary will not constitute interstate or overseas trade and commerce in the absence of actual movement across the boundary.

A case to remember In HC Sleigh Ltd v South Australia (1977) 136 CLR 475, the court held that an agreement between two oil companies in two different States to provide products to each within the other’s State did not involve interstate trade, as there was no movement of products or money across State boundaries.

The geographical requirement attached to s 51(i) means that the power is of limited use because it cannot be used to regulate economic activity conducted wholly within the confines of a State. For this reason, as will be discussed in Chapter 10, the s 51(xx) corporations power—which is not subject to geographical limitation—is far more useful for regulating economic activity.

The regulation of production Given that the trade and commerce power relates to the distributive aspect of business (buying, selling and transporting interstate or overseas), prima facie it cannot be used to regulate the mere production of goods occurring within one State. However, there have been some cases in which production has been held to fall within the ambit of the power.

A case to remember In O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565, the High Court dealt with a case in which an abattoir operator in South Australia had a permit issued under Commonwealth legislation requiring that meat destined for export be produced only in premises licensed by the Commonwealth. The operator did not have a permit under South Australian legislation, and argued that the State legislation had been overridden by inconsistent Commonwealth legislation. The court held the Commonwealth legislation to be valid on the grounds that, although the slaughtering took place wholly within the State, it was covered by the implied incidental power to s 51(i), because special requirements relating to methods of handling and packaging meant that ‘slaughtering for export’ was a separately identifiable process

CHAPTER 9: Trade and Commerce

from other types of slaughtering, and that, in order to regulate the export trade, the Commonwealth also had to regulate methods of production. Thus, in certain circumstances, actual production (and not just distribution) may be regulable under s 51(i), provided that the nexus with interstate or overseas trade can be shown.

However, the mere fact that goods happen to be intended for out-of-State or overseas markets will not suffice to make their production part of interstate trade, as was held in Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283, where a margarine producer unsuccessfully argued that produce destined for other States, which was kept wholly separate from its other production lines, was subject to Commonwealth and not State law. Subjective intent as to the destination of the margarine did not, in itself, make its production subject to s 51(i), and, since there were no objectively different facts relating to its method of production to distinguish it from margarine destined for intrastate markets, its production could not be governed by s 51(i) legislation. What if the production of goods destined for out-of-State markets is physically inseparable from production for intrastate markets? Can the entire production operation be subject to Commonwealth regulation? Although the issue has yet to be decided, obiter statements in Swift Australian Co Pty Ltd v Boyd-Parkinson (1962) 108 CLR 189—where a poultry plant processed carcasses for both intrastate and interstate consumption—indicated that the Commonwealth could use s 51(i) to regulate all production at the plant, because the carcasses destined for intrastate consumption were indistinguishable from those destined for interstate consumption, and it would be impossible to regulate the latter category without regulating the former.

159

160

Part two: Enumerated Powers

Assessment preparation Problem question Susan Sweet owns a sugar cane farm in North Queensland. She has a ­longstanding agreement with the North Queensland Sugar Co-operative, under the terms of which she sells her entire crop to the Co-op, trucking it from her farm near Tully to the ­Co-op’s ­terminal at Rockhampton. Approximately 25 per cent of the Co-op’s sugar is exported, and the rest is sold to wholesalers in Queensland. A vocal lobby group, Students Against Pesticides (SAP), successfully lobbies the Commonwealth Government to enact the Pesticides Control Act, s 5 of which provides as follows: 5 Licences (1) It shall be an offence to export sugar to which pyrethrum-based pesticides have been applied. (2) It shall be an offence to apply pyrethrum-based pesticides to sugar cane ­produced in Australia. Sweet uses a pyrethrum-based pesticide on her crop, some of which is exported. She has been prosecuted under s 5 of the Act. Advise her as to her legal position. For extra guidance and suggested answers to these questions, please refer to .

161

CHAPTER 10

Corporations Covered in this chapter After reading this chapter you will understand: • the definition of a ‘constitutional corporation’ • the scope of the corporations power • why the s 51(xx) corporations power is more useful to the Commonwealth in regulating the economy than the s 51(i) trade and commerce power.

Cases to remember R v Federal Court of Australia; Ex parte Western Australian National Football League Inc (Adamson’s Case) (1979) 143 CLR 190 New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1 Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 Re Dingjan; Ex parte Wagner (1995) 183 CLR 323

The corporations power Section 51(xx) of the Constitution gives the Commonwealth Parliament the power to legislate with respect to ‘foreign corporations and trading or financial corporations formed within the Commonwealth’.

Defining ‘constitutional corporations’ Whether an entity is subject to a law enacted under s 51(xx) depends on whether it is a corporation within the meaning of the power—a ‘constitutional corporation’, as it is often referred to: • Any foreign corporation—that is, a body corporate registered overseas—is a ­corporation for the purposes of s 51(xx). • Whether an Australian corporation is subject to a law enacted under s 51(xx) depends on whether it is a ‘trading or financial’ corporation—as distinct, for ­example, from a corporation that is charitable in nature. Two tests have been used by the courts to determine whether a corporation is a trading or financial corporation: the purpose test and the activities test.

162

Part two: Enumerated Powers

The purpose test The purpose test involves looking at the purpose for which a corporation was formed. In R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533, the High Court had to determine whether the Council, a body corporate established under the Local Government Act 1919 (NSW), was subject to the Restrictive Trade Practices Act 1971 (Cth). As part of its local government functions, the Council sold electricity to consumers. Despite the fact that it clearly engaged in trading activity, the court applied a purpose test and said that the corporation had been formed for the purpose of administering local government rather than trading; accordingly it was not a trading or financial corporation for the purposes of s 51(xx). The purpose test was clearly flawed, in that it enabled corporations that were in fact in trading or financial activities to avoid regulation under laws enacted under s 51(xx) simply by stating that they had a non-trading purpose.

The activities test The activities test involves looking at what a corporation actually does. The shortcomings of the purpose test led to a reconsideration of what constituted a trading or financial corporation in R v Federal Court of Australia; Ex parte Western Australian National Football League Inc (Adamson’s Case) (1979) 143 CLR 190.

A case to remember In Adamson’s Case, the High Court considered an argument by an AFL player that a term of his contract, preventing him from moving from one club to another, contravened provisions of the Trade Practices Act 1974 (Cth) that prohibited restrictive contracts. This argument depended on a finding that the AFL and its clubs were trading or financial corporations. The court rejected the approach in St George, holding instead that it was the activities a corporation actually engaged in—rather than the purpose for which it was formed—that would determine whether it was a trading or financial corporation. The AFL and its clubs were trading corporations within the meaning of s 51(xx) because they engaged in significant trading activities such as the selling of television broadcast rights. The court held that it was irrelevant that the AFL and its clubs were incorporated under legislation specifically designed for corporations formed for a non-trading purpose, and that they were non-profit organisations that put any surplus income back into the sports they administered. The fact that they derived significant income from trading activities sufficed to define them as trading corporations. Thus, contrary to what was said in the St George case, the subjective purpose for which a corporation is formed cannot take it out of the category of trading corporations for s 51(xx) purposes if, in fact, it engages in trading activity.

CHAPTER 10: Corporations

In similar vein, a ‘financial corporation’ is one that engages in financial activities, defined in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 as the borrowing, lending or investment of money. How much of a corporation’s activities have to be trading or financial activities for it to be subject to a s 51(xx) law? • In Adamson’s Case it was held at 233 that a corporation would be a trading or financial corporation if trading activity formed ‘a sufficiently significant proportion’ of its activities. • In Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1 it was held (at 32) that a corporation would be a trading corporation if trading was a ‘substantial’ aspect of its activities, ‘substantial’ being defined as ‘not insubstantial, tenuous or distant’—clearly these terms are matters of degree. • Finally, and very importantly, in the Tasmanian Dams Case—which involved the question of whether the Tasmanian Hydroelectric Commission, which engaged in a variety of activities, including the sale of electricity to consumers, was a trading corporation—the court made it clear that a corporation would be considered a trading corporation even if trading was not its primary or dominant activity. In other words, the terms ‘substantial’ and ‘significant’ include activities that amount to less than half of a corporation’s activities; although precisely how small a proportion of a corporation’s activities could be trading without it being found to be a trading corporation has not been stated.

Example One does not usually think of universities as trading corporations, but they are. All universities are bodies corporate (that is, they exist as legal persons, created by means of a statute), and in Quickenden v O’Connor (2001) 184 ALR 260 it was held that the University of Western Australia—although obviously primarily engaged in providing education, using mostly public funds—was a trading corporation because it had a substantial property and share portfolio which it traded in order to enhance the value of its assets.

The purposes test and shelf companies Although the activities test has largely supplanted the purposes test, the purposes test still has application in some situations where the activities test has no operation. A good example of this is in relation to shelf companies. Shelf companies are frequently formed by lawyers for the purpose of selling them to clients, who want to incorporate their business quickly without having to go through the process of registering the company themselves. In Fencott v Muller (1983) 152 CLR 270, the court considered whether a shelf company, which had not yet engaged in any activities, was subject to a law enacted under s 51(xx). The purpose for which the

163

164

Part two: Enumerated Powers

company had been formed, as expressed in its constitution, indicated that once it became active it would engage in trading activities. The court held that the purpose sufficed to make it a trading corporation. Thus, it seems that a corporation will be covered by a law enacted under s 51(xx) if it satisfies either the activities test or the purpose test. The two should, therefore, be seen as alternative routes by which one can reach the conclusion that a corporation is a ‘constitutional corporation’.

The scope of the corporations power What aspects of a trading or financial corporation’s activities can be regulated using s 51(xx)?

Matters other than the process of incorporation Surprisingly, the corporations power cannot be used to make laws for the actual process of incorporation—that is, to make laws specifying how corporations are created. This issue arose in the case of New South Wales v Commonwealth (Incorporation Case) (1990) 169 CLR 482, in which the High Court held at 498 that s 51(xx) does not include power to regulate the incorporation of corporations, stating that the power applies only to existing corporations ‘formed [past tense] within the limits of the Commonwealth’. This meant that it was the States, rather than the Commonwealth, that could enact laws regulating the registration of corporations. In order to avoid the situation where a corporation would have to be registered in each State in which it conducted business (which might involve different registration requirements in each State), the Commonwealth and the States agreed that the States would use the procedure available under s 51(xxxvii), which enables the State Parliaments to refer to the Commonwealth Parliament the power to legislate on topics not contained within the other enumerated powers. All the States did this, thereby enabling the Commonwealth Parliament to enact the Corporations Act 2001 (Cth), which governs all matters relating to corporations, including the process of incorporation. The States referred this power to the Commonwealth for five years, but all renewed their referrals in 2006.

All activities done by or to corporations The courts have given an increasingly broad interpretation to the corporations power: all activities that a corporation engages in, and anything done to a corporation by someone else, can be regulated using s 51(xx).

Trading and financial activities of corporations As originally interpreted, s 51(xx) was held to support only legislation that regulated the trading and financial activities of corporations. This view changed radically in 1971.

CHAPTER 10: Corporations

A case to remember The key case in which the corporations power was first given the broad scope of operation that it has today was Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468. In that case the High Court upheld the validity of the Trade Practices Act 1965 (Cth), stating that all trading activities of a trading corporation could be regulated using s 51(xx). The court held that the enumerated powers are not mutually limiting, and that therefore the fact that the Commonwealth could not use the s 51(i) interstate and overseas trade and commerce power to regulate the activities of the appellant (which took place solely in Queensland) was irrelevant to the validity of a law enacted under s 51(xx).

The decision in Strickland opened the way for the Commonwealth to use the corporations power as its major tool for regulating the economy, because by regulating the business activities of corporations, it was able to regulate almost all economic activity in Australia.

Activities preparatory to trading and financial activities In Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1, the court held that it was not only the trading or financial activities of a trading or financial corporation that could be regulated using s 51(xx), but also activities that were only preparatory to trading or financial activities (in this case, the construction of a dam that would subsequently be used to sell electricity).

Activities of human agents of corporations In R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235, it was held that the implied incidental power to s 51 (xx) included the power to regulate the conduct of human agents of corporations (such as directors), and therefore that the Commonwealth could validly insert provisions in the Crimes Act 1914 (Cth) imposing liability on directors for being involved in offences by corporations. This implied incidental power also forms the foundation for legislation governing the trading of corporate securities, such as laws regulating stock exchanges and stockbrokers.

Actions done by others which affect corporations Section 51(xx) has been held to support not only laws regulating the activities of corporations, but also laws regulating what third parties do to corporations.

A case to remember In Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 the High Court held that s 51(xx) could be used to restrict secondary picketing that caused harm to a corporation. In this case, the appellant union had imposed a boycott on the respondent, Fontana, instructing theatrical agencies, with which Fontana had contracts for

165

166

Part two: Enumerated Powers

the supply of actors, not to provide actors to Fontana. This amounted to an interference with the supply of services to a corporation, which was prohibited by the Trade Practices Act 1974 (Cth). The court held that the relevant provision of the Act was supported by s 51(xx), on the basis that the activities done to a corporation by other parties is something which is ‘with respect to’ corporations. The boycott amounted to an interference with a contractual relationship of the corporation, and was thus something done to the corporation. Figure 10.1 Actors and Announcers Equity case Corporation

Contract

Contracting party

Boycott order Union

There is however a limit to how far the courts are willing to go in recognising that conduct engaged in by someone other than a corporation is a law ‘with respect to’ a corporation.

A case to remember In Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 the court considered the validity of a provision of the Industrial Relations Act 1988 (Cth). This provision was purportedly based on the corporations power, and a union had used the provision to apply for review of a subcontract between its members and parties who had a contract with a corporation. The court held that where a corporation has a contract with A, and A has a contract with B (neither A nor B being corporations), the corporations power does not extend to regulating the relationship between A and B, which is one step removed from the corporation itself, even if that relationship has an economic effect on the corporation. Section 51(xx) did not enable the Act to be used to review the subcontract in question as that relationship was not a matter which was ‘with respect to’ the corporation. Figure 10.2 Re Dingjan case Corporation

Contract

A

Contract

B

Application for review Union

CHAPTER 10: Corporations

In Dingjan, McHugh J held that a law will be intra vires s 51(xx) if it ‘has significance for the activities, functions, relationships or business’ of a corporation. Other members of the court held that a law will fall within s 51(xx) if it has a ‘sufficient’ (at 353), ‘substantial’ or ‘significant’ (at 335) connection with a corporations: criteria that clearly involve questions of degree.

Relationships that corporations have with others and broader aspects In light of the decision in Actors and Announcers Equity and the broad tests enunciated by members of the court in Dingjan, the decision of the High Court to uphold the validity of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) came as little surprise.

A case to remember In New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1, the High Court considered a challenge to the Work Choices legislation, which set basic working conditions for employees of corporations. This legislation enabled the Commonwealth to control working conditions for the vast majority of employees in Australia. A majority of the court took a broad approach to s 51(xx), stating that it allowed the Commonwealth to make laws relating to the activities, functions, relationships and business of a corporation; the rights, privileges and obligations of a corporation; the conduct of a corporation’s agents, employees and shareholders; and, also, the regulation of those whose conduct is (or is capable of) affecting the activities, functions, relationships or business of a corporation.

Given the broad formulation adopted by the court in the Work Choices Case, it is true to say that the Commonwealth can use s 51(xx) to regulate any aspect of corporate activity, any relationship that a corporation has with others, and any conduct of others that affects corporations.

No regulation of State banking or insurance One must however note a restriction on the corporations power which arises from the text of the Constitution: in Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1, it was held that the Commonwealth could not rely on the financial corporations aspect of s 51(xx) in seeking to nationalise banks owned by State Governments. This is because the s 51(xiii) banking power, which confers upon the Commonwealth Parliament the power to legislate on banking, contains an express denial of the power to legislate on State banking (that is, banks owned by State Governments). Thus, even though banks are clearly financial corporations, State banks cannot be subject to Commonwealth legislation. The same restriction applies in respect of State insurance corporations in s 51(xiv).

167

168

Part two: Enumerated Powers

This restriction is however of little practical importance today, given that the States have privatised the banks and insurance corporations they once owned.

The trade and commerce power compared with the corporations power The corporations power is far more useful in regulating the economy than is the trade and commerce power. The interstate and overseas trade and commerce power was used extensively to regulate commercial activity until the 1970s. However, after the decision in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468—in which the High Court interpreted the corporations power as allowing the Commonwealth to legislate on any activity conducted by corporations—the trade and commerce power became less important as a vehicle for economic regulation. This is because although the trade and commerce power can be used to regulate commercial activity conducted both through corporations and by individuals, the power is limited in that it is restricted to interstate and overseas trade and commerce, whereas the corporations power can be used to regulate activities conducted by corporations, even if they operate wholly within a State. Since more than 97 per cent of business in Australia as measured by turnover is conducted by corporations, and the corporations power is not constrained by geographical limitations, little activity escapes a law enacted using the corporations power, and that is why it is the preferred method for regulating economic activity. The only areas of commercial activity for which the trade and commerce power is currently needed are the regulation of those sole traders and partnerships that trade interstate or overseas, which accounts for a very small component of commercial activity. Note that in combination, the s 51(i) trade and commerce power and the s 51(xx) corporations power enable the Commonwealth to regulate: • all activity conducted by trading and financial corporations, and • trade and commerce conducted by sole traders and partners interstate or ­overseas. The only areas out of reach of the Commonwealth are activities by sole traders and partners conducted wholly within the confines of a State, which amounts to a negligible proportion of economic activity.

CHAPTER 10: Corporations

Assessment preparation Problem question In 2014 the New South Wales Parliament enacts the Engineers’ Board Act 2014 (NSW). The Act incorporates a statutory body called the Engineers’ Board of New South Wales. The Act requires that all engineers practising in New South Wales register with the Board, which levies a $500 per annum subscription fee on engineers (approximately 500 in number) practising within the State, and also receives a further $500,000 grant from the State Government. The Board is governed by a Charter which states that it is a non-profit body, the purpose of which is to keep a register of engineers practising in the State, to make representations and comment on behalf of the engineering profession on matters of public interest, to promote the profession as a career among university graduates, and to provide to engineers opportunities for skills development. The Board holds an annual New South Wales Engineers Conference, which members may attend free of charge and at which local and overseas delegates deliver papers on the latest advances in engineering and on the management of engineering practices. A series of specialist workshops on engineering techniques is usually held a few days before the conference. Attendance at these workshops costs $200 per day, and from them the board earns in the region of $50,000 per annum, which it uses to defray the costs of the Conference. The board also produces a series of booklets on professional skills development, which it distributes free of charge to its members and sends on request to university students who are contemplating engineering as a career. Assume that the Commonwealth enacts the Workplace Practices Act 2015 (Cth), s 4 of which states as follows: 4 Application This Act applies to corporations which are foreign corporations, trading corporations, financial ­corporations, corporations incorporated in a Territory or holding companies of such corporations, and (ii) to any person trading with a corporation as defined in paragraph (i). (i)

Section 120 of the Act states as follows. 120 Clerical employees Any person employed by a corporation or a person to whom this Act applies shall be entitled to the benefits specified in Schedule I of this Act.

Schedule I lists certain benefits relating to maternity leave, superannuation and medical insurance benefits. Mary owns a printing works which has contracts with the Engineers’ Board. Her business is not incorporated. She employs her niece, Jane, as a typesetter. Jane claims the right to the benefits mentioned in Schedule I of the Act. Compliance with the Act would be financially ruinous for Mary. Advise her as to her legal position. For extra guidance and suggested answers to these questions, please refer to .

169

170

CHAPTER 11

External Affairs Covered in this chapter After reading this chapter you will understand: • how the s 51(xxix) external affairs power is used to enact treaties into ­domestic law • how the power is used to regulate matters occurring outside Australia • the relationship between international law and domestic law • the limitations on the role of the States in the international arena.

Cases to remember R v Burgess; Ex parte Henry (1936) 55 CLR 608 R v Poole; Ex parte Henry (No 2) (1939) 61 CLR 634 Koowarta v Bjelke-Petersen (1982) 153 CLR 168 Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1 Victoria v Commonwealth (Industrial Relations Case) 187 CLR 416 New South Wales v Commonwealth (Seas and Submerged Lands Act Case) (1975) 135 CLR 337 Polyukhovich v Commonwealth (1991) 172 CLR 501 Horta v Commonwealth (1994) 181 CLR 183

The external affairs power Section 51(xxix) of the Constitution gives the Commonwealth Parliament the power to legislate with respect to ‘external affairs’. The brevity of this phrase conceals a very broad head of legislative power, because s 51(xxix) has been interpreted as enabling the Commonwealth Parliament to enact laws into domestic law giving effect to any treaty, irrespective of the topic of the treaty, and to allow Parliament to regulate any activity occurring outside Australia.

Treaty implementation As was stated in Chapter 4, in the Case of Proclamations (1611) 12 Co Rep 74; 77 ER 1352 Coke CJ held that the common law powers of the executive do not include the power to make law. From this it follows that merely because the executive signs a treaty with another country does not make the terms of the treaty part of domestic law. The s 51(xxix) external affairs power is interpreted as including the power to

CHAPTER 11: External Affairs

enact treaties into domestic law, because otherwise there would be no mechanism for doing so.

The law must be sufficiently related to the treaty The Commonwealth has found the treaty implementation aspect of the external affairs power very useful, as it has entered into treaties on a wide range of matters, many of which relate to topics not otherwise covered by the enumerated powers. A key requirement for a law enacted in reliance on this aspect of the external affairs power is that the law must be in conformity with the treaty it purports to enact into domestic law and must not deal with matters unrelated to the treaty. This is sometimes referred to as the ‘conformity principle’.

A case to remember In R v Burgess; Ex parte Henry (1936) 55 CLR 608 the High Court considered the validity of s 4 of the Air Navigation Act 1920 (Cth). This empowered the Governor-General to make regulations giving effect to the Paris Convention on International Air Transport, which Australia had ratified. The court agreed that the Commonwealth had the power to enact treaties into domestic law under s 51(xxix), subject to the prohibitions contained in the Constitution— for example, the Commonwealth could not legislate so as to give effect to a treaty whose signatories had agreed to establish a particular religion within their jurisdictions, as this would contravene the prohibition contained in s 116. The court also said that, in order to be intra vires s 51(xxix), domestic legislation that was purportedly based on a treaty had to be either in conformity with, or ‘reasonably incidental’ to, the terms of the treaty. In the case before the court, although the regulation-making power in s 4 was valid, the regulations that had been made under it went beyond what was covered by the treaty and were, therefore, invalid. Evatt and McTiernan JJ also stated obiter that international recommendations and draft agreements that fell short of actual treaties could form the basis of s 51 (xxix) legislation.

The requirement that the law must be directed towards the purpose of implementing the treaty means that this aspect of the s 51(xxix) power is one of the rare cases discussed in Chapter 6 where the purpose of the legislation is relevant to its validity (the other being laws enacted under the s 51(vi) defence power). Thus it is said that the treaty-enactment dimension of s 51(xxix) is a ‘purposive’ power. Following the decision in Burgess, the Commonwealth redrafted the regulations.

A case to remember In R v Poole; Ex parte Henry (No 2) (1939) 61 CLR 634, the High Court considered a challenge to the redrafted regulations.

171

172

Part two: Enumerated Powers

The text of the Paris Convention imposed certain air traffic rules at altitudes below 700 metres over landing strips. The regulations enacted under the Commonwealth legislation covered flights below 700 metres, both over landing strips and over a defined area surrounding them. The High Court held that the regulations were in conformity with the treaty on the grounds that legislation under s 51(xxix) was not restricted to a verbatim reproduction of the international treaty it sought to implement, and that it was sufficient if, as here, the legislation was an ‘appropriate and effective means’ of carrying out treaty obligations. An alternative way of analysing the case is to say that regulation of airspace around landing strips fell within the implied incidental aspect of s 51(xxix). This is because whereas the core of the power supported the regulation of airspace directly above landing strips (as that was mandated by the Paris Convention), practically speaking, one could not regulate that airspace without regulating the airspace over the approaches to landing strips.

The current formula used by the courts in determining whether legislation purportedly based on a treaty is sufficiently connected with the treaty was enunciated in Airlines of New South Wales v New South Wales (No 2) (1965) 113 CLR 54, which raised the question of whether the Commonwealth had the power to require airlines to obtain a licence in conformity with criteria laid down by the 1944 Chicago Convention. The court upheld the legislation as being supported by the external affairs power (as well as by the incidental aspect of the interstate trade and commerce power—see Chapter 9), but cautioned that domestic law which is purportedly justified by an international treaty must be ‘appropriate and adapted to’ the objective of implementing the treaty. In other words, the Commonwealth cannot legislate beyond what is required to give effect to the treaty upon which it is relying.

The treaty and the law can relate to domestic affairs Most treaties concern international affairs. However, the treaty implementation dimension of the external affairs power is not limited to treaties relating to international affairs. Any treaty, even if it relates to matters taking place within the signatories’ borders, can be legislated into law in Australia using the external affairs power.

A case to remember In 1975 the Commonwealth enacted the Racial Discrimination Act 1975 (Cth), in compliance with the International Covenant on Elimination of Racial Discrimination, which required signatories to take steps to ensure racial equality within their jurisdictions. The Queensland Government said that the Act was ultra vires the legislative power of the Commonwealth because it did not deal with international affairs—that is, matters governing relations between countries.

CHAPTER 11: External Affairs

In Koowarta v Bjelke-Petersen (1982) 153 CLR 168 the High Court rejected this argument, holding that as long as a treaty was entered into with other countries, the fact that it related to matters of purely domestic concern did not affect the ability of the Commonwealth to enact it into law. The majority explicitly rejected the notion that the Commonwealth could only enact into law treaties that dealt with matters of ‘international concern’. The majority recognised that the matters over which the Commonwealth had legislative competence might be substantially increased at the expense of the States by means of entry into treaties that required legislation on domestic matters, but were prepared to countenance this. The only qualifications mentioned in majority judgments were that s 51(xxix) could not be used to circumvent express or implied limits on Commonwealth legislative powers, and that treaties must be ‘genuine’ and not ‘colourable [and] … entered [into] solely for the purpose of attracting to the Commonwealth’ legislative power which it otherwise would lack (at 231). However, no means was suggested for testing the motives or bona fides of the Commonwealth when it entered into treaties.

Perhaps the most celebrated example of the Commonwealth using s 51(xxix) to gain legislative control over a topic not mentioned in the enumerated powers was the Tasmanian Dams Case.

A case to remember The Government of Tasmania had enacted legislation to build a dam on the Franklin River. In 1983, the Commonwealth enacted the World Heritage Properties Conservation Act 1983 to implement the UNESCO Convention for the Protection of World Cultural and Natural Heritage, which mandated signatory nations to identify and protect World Heritage Sites within their boundaries. Three national parks in Tasmania were identified as World Heritage Sites under the Act. Subsequently, when the Tasmanian Government began construction of the Franklin Dam within one of the sites, regulations were issued under the Commonwealth Act prohibiting the construction. In Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1, the High Court upheld the legislation on the same reasoning as had been adopted in Koowarta. The court stated that entry by Australia into a treaty relating to World Heritage Sites was enough to justify legislation under the ‘external affairs’ power that gave effect to the obligations imposed by the treaty, even though the obligations related to domestic conduct. In other words, simply because a topic was the subject of a treaty, that subject lay within the scope of s 51(xxix)—it was not necessary that the treaty relate to a matter of ‘international concern’. Some members of the court added an element of proportionality to the ‘appropriate and adapted’ test, holding that a domestic law would be justified in implementing an international obligation only if there was ‘reasonable proportionality’ between the means adopted by the Commonwealth in the legislation and what was specified in the international convention; or, to phrase it differently, the means had to be reasonably appropriate and adapted towards the satisfaction of international obligations.

173

174

Part two: Enumerated Powers

Subsequently in Richardson v Forestry Commission (Lemonthyme & Southern Forests Case) (1988) 164 CLR 261, the High Court upheld the validity of Commonwealth legislation that imposed a freeze on the development of other areas in Tasmania while the Commonwealth awaited the results of an inquiry on the question of whether these areas should be declared World Heritage Sites under the Convention. The legislation was held to be ‘reasonably appropriate and adapted’ towards the identification of what areas might be classified as World Heritage Sites. There was prima facie evidence that the areas were potentially ones that should be protected— in other words, there were reasonable grounds upon which the Commonwealth could justify holding the inquiry. It was stated that, if there had not been reasonable grounds, the court would not have hesitated in declaring the legislation invalid. The Commonwealth’s declaration that legislation was supported by the power was not in itself conclusive—the court had to be satisfied that the legislation was, objectively speaking, directed towards implementation of the treaty in question.

The treaty must impose specific obligations Although the Commonwealth is free to sign a treaty on any topic it chooses, the High Court has held that for the Commonwealth to be able to use the treaty implementation aspect of s 51(xxix), the document it signs must impose an obligation.

A case to remember In Victoria v Commonwealth (Industrial Relations Case) 187 CLR 416, the High Court upheld the Commonwealth’s use of s 51(xxix) to enact an industrial relations law giving effect to aspects of various International Labour Organization conventions and recommendations. The majority made the following points: • The treaty implementation aspect of the power can be used only when the treaty upon which the law is based imposes an obligation—that is, the document must not be merely aspirational and must require that countries do something to achieve the treaty’s objectives. • The obligations must meet a test of specificity. Although this is clearly a matter of degree, a treaty which, for example, said that signatories undertake to implement policies ‘designed to achieve full employment’ would not be sufficiently specific, as that objective could conceivably involve legislation on a very broad range of topics. The treaty must prescribe at least some concrete steps that signatories are obliged to take. • The Commonwealth does not have to enact all aspects of a treaty. Partial enactment is intra vires s 51(xxix), as long as the law satisfies the conformity principle. • International documents which are mere recommendations (as distinct from being treaties) and which impose obligations can form the basis of legislation under s 51(xxix). This finding appears to be at odds with the requirement that only documents imposing an obligation can enliven the treaty-enactment aspect of s 51(xxix). The question of whether recommendations can enliven s 51(xxix) must therefore be regarded as not finally settled.

CHAPTER 11: External Affairs

Events outside Australia The second aspect of s 51(xxix) is the power to legislate with respect to things or events occurring outside Australia—the ‘geographic externality dimension’, as it is sometimes referred to. The capacity to legislate with extraterritorial effect is an attribute of statehood at international law. Strictly speaking, the Commonwealth lacked this capacity until the Statute of Westminster Adoption Act 1942 (Cth) brought into effect the Statute of Westminster 1931 (UK), s 3 of which provided that Dominions could legislate with extraterritorial effect. Nevertheless it is clear that s 51(xxix) confers on the Commonwealth Parliament the power to legislate in relation to matters occurring outside Australia’s boundaries.

Example Why might a country need to legislate for matters occurring outside its territory? There are in fact a multitude of circumstances and activities that might necessitate such laws, including shipping, air transport, offshore mining and criminal law provisions that enable Australian authorities to prosecute persons accused of crimes that occur overseas, such as war crimes, piracy and the sexual exploitation of children.

The leading case on this aspect of the s 51(xxix) power involved a dispute between the Commonwealth and the States over the right to legislate in respect of activities taking place in the coastal waters off Australia.

A case to remember New South Wales v Commonwealth (Seas and Submerged Lands Act Case) (1975) 135 CLR 337 involved a challenge to the validity of the Seas and Submerged Lands Act 1973 (Cth), in terms of which the Commonwealth had asserted its right to enact laws governing undersea wrecks, dredging and mining off the shores of Australia. The States argued that the legislation was ultra vires the external affairs power. The court held that s 51(xxix) conferred on the Commonwealth the power to legislate on ‘matters or things geographically external to Australia’—the low-water mark of the tide being the point at which geographical externality to Australia begins. Following this case, the States and the Commonwealth came to a political agreement whereby the Commonwealth enacted the Coastal Waters (State Powers) Act 1980 (Cth), which gave the States the power to enact laws relating to certain matters in the area from the low-water mark to 3 nautical miles offshore; but the principle had been established that the Commonwealth could enact laws relating to anything occurring outside Australia.

175

176

Part two: Enumerated Powers

The decision in the Seas and Submerged Lands Act Case was reaffirmed by the High Court in an unusual case which involved both externality and retrospectivity.

A case to remember In Polyukhovich v Commonwealth (1991) 172 CLR 501 the High Court held that the Commonwealth could criminalise extraterritorial conduct, simply because such conduct was an event occurring outside Australia. The court upheld the validity of the War Crimes Amendment Act 1988 (Cth), which—with retrospective effect to 1939—made war crimes committed in Europe during World War II an offence under Australian law. It was held (at 632) that s 51(xxix) enabled the Commonwealth to legislate in relation to any ‘places, persons, matters or things physically external to Australia’, a formulation which effectively makes the geographical externality aspect of the power plenary.

The geographical externality dimension of s 51(xxix) has enabled the Commonwealth to enact laws governing relations with other countries. In R v Sharkey (1949) 79 CLR 121, for example, the High Court upheld the validity of a statute making it an offence to engage in sedition against the United Kingdom Government, holding that the law pertained to Australia’s relations with another government and thus fell within s 51(xxix). This aspect of the power is also used by the Commonwealth when it legislates on such matters as extradition and the recognition of foreign judgments. In XYZ v Commonwealth (2006) 227 CLR 532 the High Court upheld the validity of Commonwealth legislation making it an offence for persons to engage in sexual activity with children in overseas jurisdictions.

International law and domestic law Although the Commonwealth is able to incorporate international law into domestic law by using s 51(xxix), should it find it expedient to do so, it is important to remember that: • international law and domestic law are separate, and • the rules of international law are not automatically part of domestic law and are therefore not automatically enforceable in domestic courts. Thus the Commonwealth is not obliged, in its making of domestic law, to adhere to rules contained in general principles of international law (‘customary international law’) or in treaties. The Commonwealth is free to disregard, or even legislate in contravention of, international law. The cynic may, therefore, say that the principles of international law can only be of benefit to the Commonwealth—they can be

CHAPTER 11: External Affairs

used as a platform for domestic legislation, but no domestic legislation will be invalid for inconsistency with international law, and there is no compulsion on the Commonwealth to make sure that domestic law conforms to international law.

A case to remember In Horta v Commonwealth (1994) 181 CLR 183, a challenge was launched against the validity of the Commonwealth’s ratification of the Timor Gap treaty with Indonesia, which governed the exploitation of oilfields lying off East Timor at a time when Indonesia occupied East Timor. The plaintiff argued that the agreement was illegal at international law because Indonesia’s conquest of East Timor was an illegal act which was not recognised by the international community. The High Court rejected this argument, holding unanimously that Australia had the capacity to enter into the agreement and that the Commonwealth is not restricted by international law in the exercise of its powers.

The States as international actors Although, in theory, a State Parliament can legislate on external affairs (since s 51 (xxix) is not an exclusive power of the Commonwealth), in New South Wales v Commonwealth (Seas and Submerged Lands Act Case) (1975) 135 CLR 337, Barwick CJ rejected the idea that States could enter into international treaties, stating that upon Federation, the individual colonies had lost whatever personality they had at international law (if, indeed, they had any, given their subjection to the Colonial Laws Validity Act 1865 (UK)). The fact that the States lack personality at international law means that any attempt by them to conduct international relations would not be recognised by the international community. This effectively makes redundant whatever legislative powers the States might, in theory, have in respect of international affairs as part of their plenary legislative capacity, and vests the power to conduct international affairs in the Crown in right of the Commonwealth. Any international agreements signed by State Governments thus only have the status of private law contracts.

177

178

Part two: Enumerated Powers

Assessment preparation Problem question The International Conference on Environmental Protection is held at New York under the auspices of the United Nations. Papers presented by experts indicate that the problem of global warming has become far more grave than was originally thought. Despite this, participating countries are unable to agree on a timetable for reduction in carbon dioxide emissions. As a compromise, the Conference agrees to a set of recommendations drafted by a panel of scientists, setting targets for those countries willing to take steps to reduce emissions. The recommendations set an emissions target for industry of a maximum of 30 parts per 1000 of carbon dioxide. On his return from the conference, the Minister for Foreign Affairs, Mr Upper, indicates that the Commonwealth Government will introduce legislation to deal with what, from Australia’s perspective, is a serious problem. As a consequence, Parliament enacts the Greenhouse Gases Emission Act 2015 (Cth), the key provision of which states as follows: 4 Prohibition of pollution (1) It shall be an offence to operate any industrial plant which produces more than 15 parts per 1000 of carbon dioxide. (2) The operator of industrial plant that produces more than 15 but less than 30 parts per 1000 of carbon dioxide will, on conviction, be subject to a penalty of 1000 penalty units. (3) The operator of industrial plant that produces more than 30 parts per 1000 of carbon dioxide will, on conviction, be subject to a penalty of 2000 penalty units. You are approached for legal advice by Tom and Ruth, partners in Chernoble Technologies. Their firm owns a coal-fired blast furnace which produces 25 parts per 1000 of carbon dioxide. A prosecution has been lodged against them under s 4 of the Act. For extra guidance and suggested answers to these questions, please refer to .

179

CHAPTER 12

Defence Covered in this chapter After reading this chapter you will understand: • the executive and legislative bases of the Commonwealth’s defence power • the purposive nature of the defence power • how the power varies in its scope, expanding and contracting according to ­prevailing conditions • what matters have been held to be intra vires the power in its various stages.

Cases to remember Stenhouse v Coleman (1944) 69 CLR 457 Australian Communist Party v Commonwealth (1951) 83 CLR 1

The defence power The Commonwealth’s power in relation to defence has both a legislative and an executive basis.

Section 51(vi) of the Constitution Section 51(vi) of the Constitution gives the Commonwealth Parliament the power to legislate with respect to: the naval and military defence of the Commonwealth and of the several States; and the control of the forces to execute and maintain the laws of the Commonwealth.

Note that the defence power is an exclusive power of the Commonwealth, as s 114 expressly prohibits the States from raising or maintaining military forces. Furthermore, the power is unique in that it is one that the Commonwealth is obliged to exercise, as s 119 requires the Commonwealth to protect the States. The absence of any mention of the air force (which of course did not exist in 1901) is of no consequence—s 51(vi) is given an ambulatory interpretation to include types of defence activity not envisaged by the drafters of the Constitution, and so the words ‘naval and military’ are interpreted as being exemplary, rather than as restricting the power.

180

Part Two: Enumerated Powers

The phrase ‘control of the forces to execute and maintain the laws of the Commonwealth’ confers on Parliament the power to legislate in relation to law enforcement agencies such as the Australian Federal Police (AFP).

Executive power under s 61 Quite apart from the legislative power granted to the Commonwealth by s 51(vi), the executive power conferred by s 61 includes a power to defend the constitutional order. It states that the executive power: extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth.

In Farey v Burvett (1916) 21 CLR 433 this phrase was interpreted as meaning that the Commonwealth has an inherent executive power to defend the country. In addition to the s 61 statutory executive power, the Crown’s common law prerogatives include the power of defence of the realm, which extends to declaring war and deploying troops. The existence of these executive defence powers has the consequence that many defence-related actions can be conducted by the executive without any reference to Parliament. Finally, when combined with the s 51(xxxix) incidental power, s 61 also has a legislative dimension which, as we saw in Chapter 4, includes the power to legislate to defend the Commonwealth against threats to its security.

Example When the government decided to commit Australian forces to the war in Iraq in 2003, it held a debate in Parliament on the question. However, this was done for purely political reasons, so that it could not be said that Australia entered the war without an opportunity for question or debate. No parliamentary authorisation of the war was required. The government could despatch troops overseas using its inherent executive powers.

Of course, s 81 of the Constitution requires parliamentary authorisation for the expenditure of money and so, in theory, Parliament could block defence activities by not funding them. However in practice, as is explained in Chapter 13, appropriations legislation is usually drafted in such broad language as to permit expenditure on any activity that falls within the broad description of a department’s allocation under the Act. Thus, since commitment of troops overseas obviously falls within the ambit of ‘defence’ as an item in the appropriations legislation, the government is free to use those funds to pay for overseas deployments without reference to Parliament. The ability of the Commonwealth to use its executive power to engage in defencerelated activity attracts little attention. Most case law on the topic relates to the legislative power contained in s 51(vi).

CHAPTER 12: Defence

External and internal threats Although the word ‘defence’ conjures up an image of the government engaging in activities relating to threats emanating from outside Australia, in Thomas v Mowbray (2007) 233 CLR 307 a majority of the High Court found that s 51(vi) also extends to legislation designed to confront internal threats. The court upheld the validity of anti-terrorist provisions contained in the Criminal Code 1995 (Cth). These enabled the AFP to apply to the courts for control orders to be imposed on people where the Commonwealth could discharge the burden of proving that a control order was reasonably necessary to protect the country from a terrorist attack. The defence power thus enables the Commonwealth to enact legislation to address both external and internal threats.

The purposive nature of s 51(vi) As was noted in Chapter 6, the s 51(vi) defence power (along with the treatyenactment aspect of the external affairs power) is different from all the other powers in that it is purposive in nature. Accordingly, the courts will enquire whether a law enacted under s 51(vi) serves a defence-related purpose.

A case to remember In Stenhouse v Coleman (1944) 69 CLR 457 the High Court held that the defence power is interpreted as requiring that a law purporting to rely on it must not only deal with matters that are related to defence, but must also be passed for a defence-related purpose. In other words, it is not enough that such a law have something to do with defence; it must also actually further the defence of the Commonwealth. This is an important restriction—laws enacted using the defence power can significantly limit civil liberties, so it is appropriate that the courts interpret the power in such a way as to prevent it from being used for purposes unrelated to defence. (Similar reasoning was used in relation to the proscription of members of the Jehovah’s Witness Church in Adelaide Company of Jehovah’s Witnesses v Commonwealth (1943) 67 CLR 116.) In Australian Communist Party v Commonwealth (1951) 83 CLR 1, the High Court considered a challenge to the Communist Party Dissolution Act 1950 (Cth), which empowered the Governor-General to declare that associations or persons were, in his opinion, likely to engage in activities prejudicial to the security and defence of the Commonwealth, to dissolve such associations and to deny civil liberties to their members. The Governor-General’s discretion was purely subjective, as the Act contained no criteria upon which he was to base his decision. The court held that the GovernorGeneral’s declaration that the Communist Party posed a threat to the Commonwealth was not enough to bring the law within the ambit of s 51(vi). The Commonwealth had to demonstrate a connection between the law and the defence of the Commonwealth. This it had failed to do, as there was insufficient evidence to show how the dissolution of the Communist Party served the defence of the Commonwealth.

181

182

Part Two: Enumerated Powers

This case illustrates that a law purportedly relying on s 51(vi) must be objectively connected to defence—in other words, the Commonwealth must be able to show that the law is reasonably necessary for the defence of the Commonwealth. The proportionality test also applies to the scope of the law. For example, a law authorising the detention of persons who have engaged in activities that prejudice the defence of the Commonwealth might be found to be necessary for the defence of the Commonwealth and thus prima facie valid, and yet ultimately be found to be invalid if the detention is of excessive duration or removes other rights, such as that of access to a lawyer.

The varying scope of the power As was held in Farey v Burvett (1916) 21 CLR 433, a unique feature of the defence power is that its scope—that is, the topics which it can be used to regulate— expands and contracts depending on the situation in which Australia finds itself. In other words, it expands so as to permit the Commonwealth to legislate in wartime on topics that it cannot legislate on when the power has contracted to its narrower scope during peacetime. Thus the matters upon which the Commonwealth can legislate using s 51(vi) depends upon the security threat facing the country at any given time.

The stages through which the power may pass In Australian Communist Party v Commonwealth (1951) 83 CLR 1 the High Court identified three distinct phases through which the power may expand and contract: • those aspects of the defence power that are always available, including during peacetime • an expanded aspect of the power, which exists during times of increasing ­international tension falling short of war and during the period following war, and • the most expansive aspect of the power, which is available during wartime. An illustration of how the Commonwealth’s power under s 51(vi) expands and contracts is provided in Figure 12.1. One can thus imagine a scenario where the power expands from its peacetime core into the intermediate zone during a period of international tension, then expands further to its outermost extent during a resulting war, then contracts back to a lesser extent during the aftermath of war, before finally retreating to its peacetime core. It is difficult to say what the extent of the power in the aftermath of war is relative to its extent during periods of increasing international tension. Both clearly fall into the intermediate position between absolute peace and wartime. However, it is reasonable to suppose that, given that the power during the aftermath of war is exercised when

CHAPTER 12: Defence

Figure 12.1 Scope of commonwealth’s power under s 51(vi)

Greatest extent of the power: available only during times of war

Intermediate area of the power: available during times of increasing international tension and during the aftermath of war

Core area of the power: available during times of peace

the power falls just short of its most expansive scope, most exercises of the power during the aftermath of war will probably be beyond the power during periods of increasing tension. Because the scope of the power depends upon prevailing conditions, and in particular the international political situation, a court’s determination of whether a law is intra vires will often depend upon its assessment of the facts that gave rise to those conditions. The High Court has held (in cases such as Stenhouse v Coleman (1944) 69 CLR 457 and Australian Communist Party v Commonwealth (1951) 83 CLR 1) that courts may take judicial notice of such facts as are sufficiently notorious to be within the realm of general public knowledge (for example, whether there is increasing international tension and what economic conditions the country faces during the aftermath of war) in determining whether a law is intra vires s 51(vi).

183

184

Part Two: Enumerated Powers

Applications of the defence power The varying scope of the defence power can be illustrated by the following cases:

Peacetime The core of the defence power has been held to include matters such as the following: • the enlistment (compulsory or voluntary) of armed forces personnel, their training and provisioning, the manufacture of weapons, the construction of fortifications and the prohibition and punishment of activities obstructive of such preparations (Australian Communist Party v Commonwealth (1951) 83 CLR 1) • the protection of Australia from internal subversion (Thomas v Mowbray (2007) 233 CLR 307) • the maintenance of a separate judicial system for the enforcement of military discipline (Re Tracey; Ex parte Ryan (1989) 166 CLR 518).

Periods of increasing international tension falling short of war During periods of international tension falling short of war, a wider range of activities can be legislated on. The High Court upheld, for example, the validity of economic regulations prohibiting the raising of capital without government approval. The law was designed to channel investment funds into government stock, thereby enhancing the government’s capacity to build up the armed forces during a period of increasing international tension (Marcus Clarke & Co Ltd v Commonwealth (Capital Issues Case) (1952) 87 CLR 177).

Wartime The defence power during wartime has been held to include the following: • laws giving the Commonwealth overall control over the economy, including the fixing of prices (Farey v Burvett (1916) 21 CLR 433 and Victorian Chamber of Manufactures v Commonwealth (Prices Regulation Case) (1943) 67 CLR 413) and the imposition of restrictions on the sale or distribution of essential items (Stenhouse v Coleman (1944) 69 CLR 457) • the detention of persons thought to be subversive of the war effort (Lloyd v ­Wallach (1915) 20 CLR 299) • the Commonwealth’s monopolisation of income tax collection in order to put national finances on a war footing (South Australia v Commonwealth (First ­Uniform Tax Case) (1942) 65 CLR 373).

Aftermath of war The courts have recognised that during the immediate aftermath of war, it may be necessary for the Commonwealth to continue to use the defence power to regulate

CHAPTER 12: Defence

matters that lie beyond the core extent of the power during peacetime, even if it can no longer justify exercising the maximum scope of the power that is available during war. However, the case law reveals that there will come a point in time at which the court will say that the ‘aftermath’ has passed. • The High Court upheld continued regulation of the economy (in this case, controls on the transfer of land) under the National Security Act 1946 (Cth), on the ground that it could still reasonably be considered that there was a real ­connection between the subject matter of the legislation and the defence power, in that the economy had not yet returned to its normal pre-war condition ­(Dawson v Commonwealth (1946) 73 CLR 157). • The Commonwealth continued to regulate the sale of commodities during the postwar period, and the High Court upheld regulations governing the meat trade within Victoria (Morgan v Commonwealth (1947) 74 CLR 421). • The courts adopted a liberal attitude to legislation enacted for the ­benefit of returning servicemen, and upheld a Commonwealth scheme requiring ­preference to be given to former service personnel in employment (Wenn v Attorney-General (Vic) (1948) 77 CLR 84). • However, the ‘aftermath of war’ argument finally failed in 1949, when the High Court invalidated several pieces of Commonwealth legislation that fixed wages, rationed petrol and gave preferential housing to returning service personnel, holding that these could no longer be justified. Note that the court held that this was so even though a formal state of war continued to exist, as peace treaties had not yet been signed. Although it could be argued that the court’s adoption of 1949 as a cut-off point was arbitrary, it is clear from the decision that the question is one of degree and, at some point, the after-effects of war will not be considered to be sufficiently significant to justify using the defence power, even though, as a matter of fact, society may continue to feel the after-effects of a war for ­decades to come (R v Foster; Ex parte Rural Bank of New South Wales (1949) 79 CLR 43).

185

186

Part Two: Enumerated Powers

Assessment preparation Problem question Concerned about the need to take steps to counter international terrorism in the wake of the attacks on the United States in 2001 and the Bali Bombings of 2002, the Commonwealth Government secures passage of the Prevention of Terrorism (Professional Services) Act 2015 (Cth), the essential provisions of which are as follows: 1 Prohibition on access to financial services No person may offer or provide financial services to any organisation declared by the Governor-General to be a designated organisation under this Act. 2 Security clearance for providers of legal services Where a person or organisation is charged with an offence under the ­Prevention of Terrorism Act 2015 (Cth), and the Minister of Defence issues a certificate to the effect that evidence that is, or will be, tendered by the prosecution involves matters of national security, no person may provide legal services to the person or organisation unless they have applied for and been granted security clearance under this Act.

The remaining three sections of the Act prescribe the conditions that have to be satisfied before a provider of legal services can obtain security clearance, one of which being that no person who is a partner or employee of the provider of legal services can have been convicted of a criminal offence. The Governor-General declares the Western Australian Liberation Front (WALF)—a group campaigning for the independence of Western Australia—to be a designated organisation under the Act. Following a bomb blast outside the electorate office of a Western Australian federal MP, several members of WALF are charged under a section of the Prevention of Terrorism Act 2015 (Cth), which makes it an offence to commit certain acts with a political motive. The Commonwealth’s case is largely based on evidence of an ASIO informer who infiltrated WALF that members of WALF placed the bomb in order to mark their disapproval of what they viewed as the co-option of Western Australian federal politicians by Commonwealth Government structures. WALF wishes to challenge the Governor-General’s declaration, as it prevents them from obtaining donations from supporters. They also want to obtain legal representation for the upcoming criminal trial. They approach Gill, Goldonton & Gerrans, a Perth law firm, asking the firm to represent them. Gill, Goldonton & Gerrans apply for security clearance, but it is denied to them on the ground that one of its partners was convicted of swearing a false statutory declaration in 2013. Advise WALF and Gill, Goldonton & Gerrans of their legal positions. For extra guidance and suggested answers to these questions, please refer to .

Part three

Financial Relations and Federalism

189

CHAPTER 13

Taxation, Grants and Expenditure Covered in this chapter After reading this chapter you will understand: • the definition of a tax • the difference between fees, penalties and taxes • the scope of the s 51(ii) taxation power • the s 51(ii) prohibition against geographic discrimination in the imposition of ­taxation • the s 99 prohibition of geographic preference in relation to laws of trade, ­commerce and revenue • how the Commonwealth uses its s 96 grants power to achieve political ­objectives and • the requirement in s 83 for parliamentary approval of government expenditure.

Cases to remember Matthews v Chicory Marketing Board (1938) 60 CLR 263 Australian Tape Manufacturers Association v Commonwealth (1993) 176 CLR 480 Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 Victoria v Commonwealth (Federal Roads Case) (1926) 38 CLR 399 Attorney-General (Vic); Ex relator Black v Commonwealth (DOGS Case) (1981) 146 CLR 559 South Australia v Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373 Victoria v Commonwealth and Hayden (AAP Case) (1975) 134 CLR 81 Combet v Commonwealth (2005) 224 CLR 494

The taxation power Section 51(ii) confers power on the Commonwealth to legislate ‘with respect to taxation; but so as not to discriminate between States or parts of States’ Taxation is obviously crucial to the operation of government, and so the scope of the taxation power has a significant effect on the powers of the Commonwealth, in particular the balance of power between the Commonwealth and the States.

What is a tax? The definition of a tax depends partly on a negative definition contained in s 53 of the Constitution and partly on a positive definition contained in case law.

190

Part Three: Financial Relations and Federalism

Section 53 of the Constitution, which relates to the legislative powers of each of the houses of Parliament, draws a distinction between laws imposing taxation and other laws. As discussed in Chapter 3 this distinction relates to the special procedures governing taxation laws contained in ss 53–55. Although s 53 does not define what a taxation law is, it states that: a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.

Bearing s 53 in mind, we can proceed on the basis that the neutral term ‘imposition’ means a demand by the government to pay money, and the Constitution draws a distinction between those impositions that are taxes, and those that charge a fee or impose a penalty, saying that the last two are not taxes. But this does not tell us what a ‘tax’ is. For this we have to rely on interpretations of that word by the courts.

A case to remember The classic definition is contained in Matthews v Chicory Marketing Board (1938) 60 CLR 263, where it was held that a tax is: • a compulsory exaction • by a public authority • for public purposes which (consistent with s 53) is not: • a licence fee • a fee for services, or • a penalty.

Although the court in Air Caledonie v Commonwealth (1988) 165 CLR 462 cautioned that the test in Matthews was not exhaustive (in other words, impositions that do not meet all of the Matthews requirements might in future be found to be taxes), thus far it remains authoritative. Accordingly, a tax can be defined as a compulsory payment for a public purpose that is not a fee or a penalty. Note also that the name given by the Commonwealth to an exaction of money does not determine its nature—the courts will examine the reality of the situation to see whether the exaction is a tax, a fee or a penalty. Case law subsequent to Matthews has expanded on the three elements required for a tax and on the fee and penalty exceptions.

CHAPTER 13: Taxation, Grants and Expenditure

Compulsory exaction/public body/public purposes The issue of whether an exaction is compulsory and imposed by a public body for a public purpose is not usually contentious, as, in the vast majority of cases, exactions are compulsorily imposed, by Parliament, in order to raise revenue that will fund governmental expenditure—clearly a public purpose. However the revenue-raising factor will not always be determinative, as an imposition may serve a public purpose other than the raising of revenue.

A case to remember In Australian Tape Manufacturers Association v Commonwealth (1993) 176 CLR 480, the High Court considered a challenge to legislation that conferred upon an industry association—which represented producers of recorded music—the right to collect royalties from manufacturers of blank audiotapes. The court held that the legislation imposed a tax, even though payments were made to the Association rather than to the Commonwealth. The policy underlying the legislation, which was to compensate recording artists for the revenue they were losing as a result of people copying music onto tapes, served a public purpose, even though it did not raise revenue for the Commonwealth. Thus, a compulsory exaction of money made under statutory power can still be a tax when no net gain for the Commonwealth results. The case is also important because it shows the operation of two other provisions in the Constitution. Because the imposition was a tax and was contained in legislation that dealt with other, non-tax, matters, the court found that s 55—which requires that laws imposing a tax deal only with the tax—had been breached. The law also breached s 81—which requires that all revenue be paid into the ­Consolidated Revenue Fund—as the law stated that the levy should be paid direct from the tape manufacturers to the recording artists.

Note, however, that there will be occasions on which an imposition of money is not a tax, a fee or a penalty. In Luton v Lessels (2002) 210 CLR 333 the court held that legislation establishing a child maintenance scheme did not impose a tax. Under the scheme, persons liable to pay child maintenance payments (for example, to ex-spouses) were required to pay them to the Commonwealth, while those entitled to the payments were given a statutory right to claim them from the Commonwealth in lieu of the right to recover them from the person obliged to provide the support. The recipient was thus guaranteed payment, and the Commonwealth would pursue the payer if the latter failed to comply with their obligations. As in Tape Manufacturers, the Commonwealth obtained no net revenue, but the court in Luton distinguished the two schemes on the ground that the beneficiaries in Luton were the recipients of payments arising from individually identifiable pre-existing private debts;

191

192

Part Three: Financial Relations and Federalism

whereas in Tape Manufacturers the manufacturers of blank tapes as a group had to make payments that benefited music recorders as a group—the obligation to pay arose even if the tapes manufactured by a particular manufacturer were not used to copy music.

The fee and penalty exceptions The issue of whether an imposition is a fee for service, a licence fee or a penalty (and, thus, not a tax) has arisen in a number of cases.

A case to remember In Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133, the High Court held that charges imposed by the Civil Aviation Authority to airlines that used airport, air traffic control and meteorological facilities in Australia were fees, not taxes. The court defined a ‘fee’ as a charge that has a ‘discernible relationship’ to the value of the services being provided or to the costs of providing them. In other words, an exaction will be a fee only if, in exchange for the payment, there is a direct quid pro quo, taking the form of goods or services rendered to the person who has paid the fee (or to some other identifiable person). This may be contrasted with taxes which, although they may be said to be used for the provision of ‘services’ (such as health, education and defence) to society as a whole, lack the element of a service being provided to a specific person. The court also held that to be a fee, an imposition did not have to directly correspond to the value or cost; but if a fee is clearly disproportionate to the value or cost, it will be characterised as a tax. In the instant case, the airlines were receiving a service from the Authority, for which they were paying a fee. The fees were not imposed in order to provide revenue for the Commonwealth; rather they enabled the Authority (which was required to run Airservices Australia as a commercial operation) to recover the expenses associated with the provision of these services. It made no difference that the service was one that airlines entering Australian airspace had to use, nor did it matter that the fees structure was such that some users were cross-subsidising others.

In Air Caledonie v Commonwealth (1988) 165 CLR 462, the High Court held that an amendment to the Migration Act 1958 (Cth), which required aircraft passengers arriving in Australia to pay a ‘fee for immigration clearance’, was in reality a tax. The imposition could not be described as a fee for a service requested by the returnee, as citizens have a right to re-enter Australia without permission from the authorities. The imposition was a tax imposed to cover the administrative costs of immigration control. In Re Dymond (1959) 101 CLR 11, it was held that an imposition under the Sales Tax Assessment Act 1930 (Cth)—which stated that a person who failed to pay their tax liability under the Act would be subject to an additional tax—was a penalty and not a tax, because liability for it depended upon an unlawful act or omission, which is the hallmark of a penalty.

CHAPTER 13: Taxation, Grants and Expenditure

The scope of the power The s 51(ii) power provides the Commonwealth with an important tool that can be used to achieve social policies unrelated to revenue raising. As seen in Chapter 6, taxation (or exemption from taxation) has been used to encourage employers to provide training for employees (Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555) and to encourage investment in government securities (Fairfax v Commissioner of Taxation (1965) 114 CLR 1). It is also important to note that, subject to the geographical restrictions discussed below, and the implied federal doctrine discussed in Chapter 17, there is no limit to what types of taxation can be imposed by the Commonwealth. Any assets, income or activities can be taxed, and in any amount—constitutionally there is no such thing as an ‘excessive’ or ‘unreasonable’ tax.

Geographical discrimination and preference The taxation power is qualified, in that the Commonwealth cannot discriminate on geographic grounds when it imposes a tax: • under s 51(ii), the Commonwealth may not use its taxation power in such a way as to discriminate ‘between States or parts of States’, and • under s 99, the Commonwealth may not give preference in respect of laws or regulations on trade, commerce or revenue to ‘any one State or part thereof over another State or part thereof’. These provisions arose out of a concern on the parts of the colonies that they, or any part of them, might not be treated equally by the Commonwealth once Australia became a federation. Note the very important point that the prohibitions apply only to the Commonwealth. Thus, States can discriminate between parts of their own territory in framing their taxation laws, and may impose a tax on one part of their territory and not another. The prohibitions are badly drafted, and it would have been preferable had the prohibitions contained in s 51(ii) and s 99 been combined into a single provision. Understanding their operation requires careful analysis, because while they overlap, the prohibitions operate in different ways. • The prohibition in s 51(ii) covers only taxation. The prohibition in s 99 is broader, as it covers ‘revenue’—which includes both taxation and bounties (that is, the ­payment of subsidies for the production of goods) as well as trade and ­commerce. • Section 51(ii) prohibits differential treatment of: • different States, or • parts of the same State, while s 99 prohibits preference in relation to: • different States, or • part of one State as compared to part of another State.

193

194

Part Three: Financial Relations and Federalism

This can be illustrated by the diagram below. Figure 13.1 The operation of s 51(ii) and s 99

Key: Operation of s 99 Operation of s 51(ii) Qld

Brisbane

NSW Sydney

•

•

•

In some circumstances, both s 51(ii) and s 99 could be breached. For example, if a Commonwealth tax was imposed only on areas within a 50-kilometre radius of Sydney and Brisbane: • this would infringe s 51(ii), as it would involve discriminating against part of New South Wales and Queensland as compared with the rest of those States it would also infringe s 99, as it would give preference to part of one State—for example, that part of New South Wales outside the 50-kilometre radius around Sydney—as compared to part of another—the area of Queensland within a 50-kilometre radius of Brisbane. Section 51(ii) prohibits discrimination, whereas s 99 prohibits preference. Although the High Court held in Elliott v Commonwealth (1936) 54 CLR 657 that discrimination—in the sense of the targeting of laws towards a particular class— does not necessarily involve conferring a preference or benefit on any other class, in reality it is difficult to imagine a set of circumstances in which the two do not go hand in hand: preference towards one surely involves discrimination against those not favoured, while discrimination against one involves a preference towards those not discriminated against. The distinction between discrimination and preference can therefore probably be ignored. Neither section covers laws other than those falling within the specific ­categories of revenue, trade and commerce. Therefore, laws falling into other ­categories may involve geographical discrimination or preference. Thus, in Morgan v Commonwealth (1947) 74 CLR 421, the High Court rejected a s 99 challenge to a

CHAPTER 13: Taxation, Grants and Expenditure

Commonwealth law which rationed the supply of meat only in Victoria (and which, it was argued, treated other States preferentially), holding that the law was made under the s 51(vi) defence power rather than the s 51(i) trade and commerce power. (As the law regulated the meat trade within Victoria, it could not have been enacted under s 51(i).) • The effect of ss 51(ii) and 99 has yet to be tested in a situation where a law can be characterised as falling under one of the areas mentioned in ss 51(ii) or 99 and under one not covered by them (for example, a discriminatory tax on ­banking, which could be characterised either as a law on tax or a law on banking). The essence of discrimination and/or preference is that it occurs when a law differentially treats one part of the country as compared with another—that is, when locale is a criterion of operation of the law. Discrimination or preference will, therefore, not be taken to have occurred where a law applies to the whole country but its effect is such that one part of the country is hit harder than another. If this were not the case, revenue law would become paralysed. For example, a tax on sugar that applied throughout Australia would be seen as discriminatory against Queensland on that reasoning, because most sugar is produced in that State. An example of the application of this principle is provided by Fortescue Metals Group Ltd v Commonwealth (2013) 300 ALR 26, in which a challenge was launched against the Minerals Resource Rent Tax (or MRTT). Under the MRRT Act, miners throughout Australia had to pay a tax on their profits, less any amount already paid to the Commonwealth or a State or Territory as royalties. Since different States charge different royalties, the amount payable varied from State to State. The court held that the Act did not discriminate against States—it operated uniformly throughout Australia, and the fact that it had a different impact depending on the circumstances obtaining in different States did not mean that s 51(ii) had been breached. The geographic element of the s 99 prohibition against preference has proved problematic because of the definition given to the concept of ‘part’ of a State in Elliott v Commonwealth (1936) 54 CLR 657. In that case it was held that legislation which required seamen seeking employment in five named ports (Sydney, Newcastle, Brisbane, Melbourne and Port Adelaide) to be licensed did not breach s 99, even though it: (a) did not apply in other ports in those States, and (b) did not apply to any port in Western Australia or Tasmania. This is a highly formalistic interpretation of s 99, because it effectively means that, in order to fall foul of the section, legislation must have as an explicit criterion either (named) States or localities within States referred to as parts of States—for example, as ‘ports in New South Wales’—which the challenged legislation did not! There have been no cases since Elliot in which this point has been decided; however if it remains good law, it has the consequence that s 99 can easily be evaded by careful legislative drafting.

195

196

Part Three: Financial Relations and Federalism

One other point to make in relation to discrimination/preference in the area of taxation is that even though the Commonwealth must tax different geographical areas equally, it can give rebates unequally. Thus the zonal rebates that are available under the Income Tax Assessment Act 1936 (Cth) are constitutional because all taxpayers notionally pay the same tax, even though they are entitled to claim a rebate on their income tax form if they live in a remote geographical area to which the rebate applies.

Section 96 grants The principal sources of revenue for the Commonwealth are income taxes imposed on individuals, taxes on corporate earnings, and the Goods and Services Tax (GST), which is a sales tax imposed on all goods and services. The GST revenue is given by the Commonwealth to the States as general purpose grants under s 96, which states that: the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

This power provides the Commonwealth with an important instrument to induce the States to achieve objectives on behalf of the Commonwealth which the Commonwealth can itself not achieve under its enumerated powers.

Section 96 grants as a policy tool There are numerous examples of the Commonwealth using its s 96 powers as a policy tool. Although a State can decline a Commonwealth grant if it finds the conditions too onerous, in reality States are unwilling to bear the political cost of being seen by the voters to have rejected money, and thus almost always accept Commonwealth grants with their attached conditions.

A case to remember The earliest case in which the High Court ruled on the use of s 96 for this purpose was Victoria v Commonwealth (Federal Roads Case) (1926) 38 CLR 399, in which the court held that the Commonwealth could grant the States money on condition that it be used to construct roads along routes designated by the Commonwealth, even though road building did not fall within any Commonwealth enumerated power.

Section 96 can even be used to circumvent restrictions on Commonwealth legislative powers. In WR Moran v Deputy Federal Commissioner of Taxation (NSW) [1940] AC 83, the Privy Council upheld a Commonwealth scheme in which a tax was imposed on flour millers throughout Australia by one Act, while another Act provided for the reimbursement to Tasmania of revenue raised from millers in that State as

CHAPTER 13: Taxation, Grants and Expenditure

a s 96 grant—effectively taxing flour millers in all the States except Tasmania. The court held that ss 51(ii) and 99 had not been breached—the tax was still being raised equally, even though the unequal distribution cancelled its effect in Tasmania. As discussed above, the same device is used to pay taxpayers zonal rebates. In Pye v Renshaw (1951) 84 CLR 58, the High Court upheld legislation under which the Commonwealth used its s 96 power to grant money to the States, on condition that they used the money to effect the compulsory purchase of land for returning servicemen at less than its true value. The Commonwealth thereby evaded the s 51(xxxi) requirement that property can be acquired only on just terms. Section 96 cannot, however, be used in direct contravention of express prohibitions contained in the Constitution.

A case to remember In Attorney-General (Vic); Ex relator Black v Commonwealth (DOGS Case) (1981) 146 CLR 559 the court upheld the use of s 96 to pay money to the States, on condition that the States gave it to religious schools. Even though the money had to be passed on to the schools by the States, the money was still considered to be a grant ‘to the States’ under s 96, as the States received the money as principals (rather than as agent for the schools) and themselves received a benefit, in that they were relieved of the financial burden of supporting religious schools. However, the court noted that a condition that sought to evade an express prohibition—for example, granting money only to schools run by a particular religion—would be unlawful under s 116. This is because s 96 is, like all other sections, subject to prohibitions such as that contained in s 116.

The Commonwealth’s monopolisation of income tax In discussing Commonwealth–State revenue relations, one must first recognise that, since the taxation power is not exclusive, both the Commonwealth and the States may impose income tax. Furthermore, although individuals might be hard-pressed to pay both, s 109 inconsistency would not arise if income tax was imposed by both levels of government. The Commonwealth has used s 96 to obtain de facto exclusive control over the levying of income tax, with significant consequences for the federal balance.

A case to remember In South Australia v Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373 the High Court upheld the constitutionality of a legislative scheme whereby the Commonwealth obtained control over the levying of income tax. Both the Commonwealth and the States levied income taxes prior to 1942, however the Commonwealth argued that it needed to

197

198

Part Three: Financial Relations and Federalism

obtain complete control of income tax in furtherance of the war effort. Relying on both the taxation power and the defence power, the Commonwealth passed a series of Acts that: • brought Commonwealth income tax up to the levels hitherto being raised by the ­Commonwealth and States together • forbade taxpayers from paying State income taxes until Commonwealth tax had been paid, and • provided for a s 96 grant from the Commonwealth to compensate those States that refrained from imposing income taxes. The High Court held that this scheme was a valid use of the s 51(ii) taxation power and the s 96 grants power.

The Commonwealth found the monopolisation of income tax convenient and continued the policy after the war. This led to a second challenge to the statutory regime in Victoria v Commonwealth (Second Uniform Tax Case) (1957) 99 CLR 575. A majority of the court again upheld the power of the Commonwealth to impose whatever conditions it saw fit on financial grants to the States. However, in the absence of the availability of the defence power, it struck down that part of the scheme which gave priority to tax due to the Commonwealth, holding that such a law did not fall within s 51(ii) or its implied incidental power. (The reason for this relates to the concept of an implied federal balance contained in the Constitution, which is addressed in Chapter 17.) In practical terms, the victory in the Second Uniform Tax Case was of little assistance to the States. Even though they could then have imposed income taxes, and would have ranked equally with the Commonwealth as creditors of their taxpayers, the reality was that the States found it easier to forgo the imposition of income taxes in exchange for grants from the Commonwealth. Indeed, following an agreement between the States and the Commonwealth, the State Grants Act 1959 (Cth) removed the statutory condition on grants to States that the States must not impose income taxes; it being accepted on a purely political level that the Commonwealth had a monopoly on income taxes and could use the s 96 power to secure State compliance.

Federal financial relations Since the Commonwealth monopolises income tax, and since s 90 prohibits the States from imposing excise duties (taxes on goods), the States have very limited sources of revenue available to them (these are discussed in the next chapter). The States are, on average, able to raise only about 45 per cent of the income they need to provide health, education and other services. The remaining 55 per cent comes from Commonwealth grants. This situation of dependence on the Commonwealth by the States is often referred to as the ‘federal fiscal imbalance’.

CHAPTER 13: Taxation, Grants and Expenditure

Commonwealth grants take two major forms: • GST grants—this category consists of the GST revenue collected by the ­Commonwealth, which is given to the States to spend as they see fit. These grants replaced what used to be called ‘general revenue grants’, which were given to the States in compensation for their not levying income tax. The GST revenue is divided among the States by the Commonwealth Grants Commission, using a complex (and frequently disputed) formula, designed to ensure per capita equality between the States, adjusted for factors such as geographic difficulty of delivering services. • Special purpose grants—this category consists of moneys granted by the Commonwealth to the States on condition that the States achieve an objective that lies outside the Commonwealth’s legislative enumerated power, the bulk of such moneys being tied to education, health, roads and housing. This is why, even though the Commonwealth has no legislative responsibility with regard to education, for example, there is a Commonwealth Department of Education that sets policies with which the States and Territories must comply as a condition of receiving grants for schools and universities.

Commonwealth expenditure: ss 81 and 83 Section 81 confers on the Commonwealth the power to appropriate money—that is, to allocate it for expenditure—‘for the purposes of the Commonwealth’. Does s 81 leave it to Parliament to determine what the ‘purposes of the Commonwealth’ are, or are the purposes restricted to those over which the Commonwealth has legislative authority? In Pape v Commissioner of Taxation (2009) 238 CLR 1, the High Court held that the power in s 81 to appropriate money, with parliamentary approval, ‘for the purposes of the Commonwealth’ does not leave it to the Commonwealth to decide on what it will spend the money. In so doing, the court rejected previous authority which suggested that the concept of the ‘purposes of the Commonwealth’ was a purely subjective one to be determined by Parliament. The court held that expenditure has to be for a legislative purpose found in the Constitution. Thus, s 81 is not a free-standing power to spend money—Parliament must be able to point to a legislative basis for the purpose for which it is authorising the expenditure. In the instant case, which involved legislation disbursing a stimulus payment to taxpayers, the court held that a legislative purpose was provided by s 51(xxxix) (the express incidental power) coupled with the s 61 executive power. The court held that it was an inherent function of the national executive to address the 2009 world financial crisis, and providing an economic stimulus in the form of payments to taxpayers fell within that function.

199

200

Part Three: Financial Relations and Federalism

Appropriations legislation Section 83 of the Constitution prohibits the expenditure of money by the Commonwealth unless such expenditure has been authorised by appropriations legislation. The requirement that the government obtain legislative approval for the expenditure of money is a key feature of the parliamentary system of government. Longstanding practice is for the government to introduce two separate appropriations Bills to Parliament each year. These, along with the government’s taxation legislation, constitute what is colloquially known as ‘the Budget’. The Appropriations Bill (No 1) is for the ‘ordinary annual expenses of the government’— that is, it authorises the expenditure of money for the running of government departments and for existing government programs. The Appropriations Bill (No 2) is for new programs, such as capital expenditures and expenditures on grants to the States not approved by Parliament in any previous year. These types of expenditure are dealt with in separate Appropriations Acts because s 53 of the Constitution provides that appropriations Bills relating to the ‘ordinary annual expenses of the government’ must either be accepted or rejected by the Senate and may not be amended. In order to give the Senate an opportunity to amend other appropriations, it was agreed in a compact between the House of Representatives and the Senate in 1965 that appropriations legislation relating to the ordinary annual expenses of the government would be kept separate from other appropriations legislation which is not subject to s 53.

A case to remember In Combet v Commonwealth (2005) 224 CLR 494 the ACTU challenged the constitutionality of the government’s use of public money to promote the Work Choices Bill it was planning to introduce into Parliament. The High Court held that s 83 requires that government expenditure be authorised by legislation. In its Appropriation Act (No 1) 2005–06 (Cth), the government had allocated two amounts to the Department of Workplace Relations: one for ‘Administered Items’ and the other for ‘Departmental Items’. ‘Administered Items’ related to the achievement of specific outcomes, and money so allocated could be spent only on those matters. However, although ‘Departmental Items’ were not linked to specific outcomes, the court held that funds so allocated could be spent on anything falling broadly within the Department’s activities, including the promotion of legislation for which it would be responsible.

The significance of the different parliamentary processes used for the ordinary annual expenses of the government and other expenditures is shown by Williams v Commonwealth (No. 1) (School Chaplains Case) (2012) 288 ALR 410, in which the High Court held that a general appropriation does not provide a sufficient basis to

CHAPTER 13: Taxation, Grants and Expenditure

authorise expenditure on programmes lying outside the ordinary annual expenses of government. In this case the court declared unconstitutional the Commonwealth’s expenditure of money from a general appropriation on a chaplaincy program which was not part of the ordinary expenses of government, noting that the Senate would not have had an opportunity to consider the specifics of the program or to amend the conditions upon which the money was granted. The court held that expenditure of money on such programs required specific statutory authorisation. In the wake of Williams (No. 1), the government inserted provisions into the Financial Management and Accountability Act 1997 (Cth) purporting to authorise expenditure on the program. However, in Williams v Commonwealth (No. 2) [2014] HCA 23, the High Court held that that Act, which simply regulates how the Commonwealth spends money, could not in itself provide authorisation for the Commonwealth to spend money on anything it chose. As had been held in Pape v Commissioner of Taxation (2009) 238 CLR 1, expenditure of money by the Commonwealth has to be supported by a law made under the Constitution—in other words, by a law falling within the legislative powers of the Commonwealth. Since the chaplaincy program was not supported by any identifiable legislative power, the court held that expenditure on it was unlawful. The decisions in the two Williams cases meant that the Commonwealth was unable to continue direct funding of a large number of programs which were not supported by a head of legislative power. It could, however, do so indirectly by using the s 96 mechanism of giving grants to the States on the condition that the grants were used for the purposes specified by the Commonwealth—remembering of course that the States could always decline such grants.

Control over government finances Control over the actual expenditure of money that has been appropriated by Parliament is done by means of the Financial Management and Accountability Act 1997 (Cth), usually referred to as the FMA Act. The Act is of major importance to the day-to-day operation of the government, as it, and the regulations made under it, establish a legislative framework governing who has authority to draw money from official bank accounts and to spend it.

201

202

Part Three: Financial Relations and Federalism

Assessment preparation Problem questions There are two problem questions dealing with the broad area of taxation, grants and expenditure. Remember to look at procedural issues (dealt with in Chapter 3) when answering these questions. There is also an issue from Chapter 8 hidden in Problem 1! Problem 1 Following a severe drought in the summer of 2014–15 caused by the El Nino phenomenon, representatives of rural industry lobby the Commonwealth Government for assistance. The Commonwealth decides to provide assistance by, among other things, encouraging decentralisation, and enacts the Rural Assistance Act 2015 (Cth), parts of which provide as follows: 3 Rural Assistance Board There is hereby established a Rural Assistance Board, which will administer assistance to applicants for drought relief. 4 Composition of Board The Minister for Agriculture shall appoint members of the Rural Assistance Board. 5 Decentralisation levy Any business the registered office of which is located within 50 kilometres of any State or Territory capital shall pay a levy equal to 5 per cent of its annual income.

The Commonwealth also enacts the Drought Assistance Act 2015 (Cth), the essential provision of which provides as follows: 3 Drought relief (1) The Commonwealth hereby appropriates for transfer to any State which enacts the Commonwealth Rural Industries Employment Award contained in Schedule I of this Act an amount calculated at a rate of $10,000 per employee covered by the award per annum (or pro rata). (2) Money appropriated to a State under subsection 1 of this section shall be paid by the State to employers in the amount of $10,000 per employee employed by the employer for a calendar year (or pro rata), provided that the employer is resident in the State.

The award in Schedule I prescribes rates of pay, conditions of employment and ­procedures for mediation, conciliation and arbitration of industrial disputes covering ­workers employed in rural industries. Queensland passes legislation enacting the award into State law. Sam lives in Sydney but owns a garage close to the city centre of Brisbane and a ­cattle station near Mt Isa in north-west Queensland. Advise him as to the constitutionality of the above scheme.

CHAPTER 13: Taxation, Grants and Expenditure

Problem 2 Assume that you are legal adviser to Sydney Electronics Ltd, a manufacturer and retailer of electronic goods, including microprocessors. The Commonwealth enacts the Electronic Industry Workers Benefit Act 2015 (Cth) which contains the following provisions: 16 Application This Act applies to trading and financial corporations. 17 Electronic Industries Board (1) Any corporation which manufactures electronic goods shall register with the Electronics Industries Board. (2) The register shall be maintained by the Minister for Industry. 18 Electronic Industries Levy (1) Every manufacturer registered under s 17(1) shall pay an annual levy in the amount of $1000 per employee to the Electronic Workers Benefit Fund Ltd. (2) Distributions from the Fund will be determined by the managers of the Fund and shall be for the benefit of workers employed by manufacturers registered under s 17(1) of this Act. 19 Safety The Minister for Industry may make rules governing the safety of employees employed by corporations registered under s 17(1) of this Act.

Advise Sydney Electronics Ltd as to its liabilities under the Act. For extra guidance and suggested answers to these questions, please refer to .

203

204

CHAPTER 14

Excise Duties Covered in this chapter After reading this chapter you will understand: • the definition of an excise • the operation of the Commonwealth’s exclusive power to impose excises under s 90 • the distinction between genuine licence fees and excise duties • the impact of s 90 on State and Territory finances.

Cases to remember Harper v Victoria (1966) 114 CLR 361 Parton v Milk Board (Vic) (1949) 80 CLR 229 Harper v Minister for Sea Fisheries (1989) 168 CLR 314 Matthews v Chicory Marketing Board (1938) 60 CLR 263 Western Australia v Chamberlain Industries (1970) 121 CLR 1 Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 Capital Duplicators v Australian Capital Territory (No 2) (1993) 178 CLR 561 Ha v New South Wales (1997) 189 CLR 465

Duties of customs and excise The essential provision in s 90 of the Constitution states as follows: On the imposition of uniform duties of customs, the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive.

The purpose of this provision was to ensure uniformity in freedom of economic activity throughout the Commonwealth by giving exclusive power over duties of customs (taxes imposed on goods upon importation into a country) and excise (taxes imposed on goods within a country) to the Federal Government or, to put it differently, s 90 prohibits the States from imposing duties of customs or excise. This prohibition has also been interpreted as extending to the Territories. A body of case law has arisen on the issue of what types of State tax fall foul of the s 90 prohibition.

CHAPTER 14: Excise Duties

Example Some of the States want to impose a compulsory ‘levy’ on plastic bags as a measure to deter their use and thus protect the environment. However, the scheme has to be abandoned because such a ‘levy’ would amount to a tax on plastic bags (that is, goods) and so would be unconstitutional.

Defining excise duties An excise is a tax on goods. • Because it is levied on goods rather than people, it is an ‘indirect tax’, as distinct from (for example) income tax, which is a tax levied directly on the individual in proportion to their income. • Because it is a tax on goods, it will usually be calculated by reference to the value or quantity of the goods (for example, a tax of 17 per cent on the price of a diamond ring, or a tax of 2 cents per litre of petrol). • Because it is a type of tax, the issue of whether a State has contravened s 90 involves two questions: • does the law impose a tax, and, if so • is the tax an excise?

Whether the law imposes a tax The definition of a tax was discussed in Chapter 13, where it was stated that the combined effect of s 53 of the Constitution and the decision in Matthews v Chicory Marketing Board (1938) 60 CLR 263 is that a tax is a compulsory exaction by a public authority for public purposes which is not a fee for services, a licence fee or a penalty. You should revisit the cases discussed there before reading this chapter further. Note that in all cases of this type it is not what the State calls the exaction that is determinative of the outcome. Courts will examine the effect of impositions such as ‘fees’, ‘levies’ or ‘payments’ to determine what they really are. A number of cases involving challenges to State exactions, which were alleged to be excises imposed in breach of s 90, were decided on the preliminary point of whether the exaction was in fact a licence fee, a fee for service or a penalty, and thus not a tax (and so, logically, not an excise, which is but a specific type of tax). If the imposition is a fee or a penalty, it is not a tax, and so cannot be an excise. Thus some State impositions that look like taxes in fact are not. Annual motor vehicle registration fees are a good example. They are not taxes on motor vehicles; rather they are a fee imposed on motorists for using the roads.

205

206

Part Three: Financial Relations and Federalism

A case to remember The State of Victoria established an Egg Marketing Board, to which producers were required to send their eggs for grading. The State imposed a levy on producers proportionate to the number of eggs they sent to the Board. In Harper v Victoria (1966) 114 CLR 361, it was held that although the levy appeared to be a tax on eggs, it was in fact a fee for the grading and marketing services that the Board provided. It made no difference to the outcome of the case that egg producers were required to purchase the services provided by the Board. However, in Parton v Milk Board (Vic) (1949) 80 CLR 229, it was held that where Victoria had enacted legislation establishing a Milk Board—which was funded by means of a levy on milk producers calculated relative to the amount of milk they produced—the levy was in reality a tax in the form of an excise on milk. It was not a fee for services because the Board was a purely regulatory agency which existed to control the milk industry in accordance with government policy; it provided no service to milk producers. In Harper v Minister for Sea Fisheries (1989) 168 CLR 314, the High Court considered a challenge to Tasmanian legislation that limited the amount of abalone that could be taken from the State’s coastal waters and imposed what was termed a ‘licence fee’, which was calculated pro rata to the amount of abalone taken. It was held that, although, on the face of it, the licence fee seemed to be an excise duty because it was levied pro rata to goods, it was in fact a fee paid to the Crown for the privilege of taking a limited natural resource. Effectively, the State was selling a quota, and pricing it proportionately to the value of the goods to which it related. The scheme would certainly have been in breach of s 90 but for the essential fact that quotas were limited in number.

Whether the law imposes an excise Assuming that the imposition in question is a tax rather than a fee or a penalty, the next issue is whether it is the specific form of tax known as an excise. The most commonly cited definition of an excise is that in Parton v Milk Board (Vic) (1949) 80 CLR 229, where the essential elements were stated as being: • an inland tax • on goods imposed at any stage prior to consumption, which might be at the point of: • production • manufacture • distribution, or • sale (be it wholesale or retail). The effect of this decision is that any imposition on goods by a State which has the effect of increasing the price consumers will pay (because the burden will, of course, ultimately be passed on to them) will be found to be an excise.

CHAPTER 14: Excise Duties

Relationship of the tax to goods What does it mean when it is said that, to be an excise, the tax must be ‘on goods’? First, it should be noted that not all property is a ‘good’. Land and improvements to it are examples of this, and so land taxes are not excises. Second, taxes on services or activities are not taxes on goods, and so can be levied by the States. Examples of these include taxes on employment (payroll tax) and taxes on gambling. Assuming that the tax is on goods, the hallmark of an excise is that it is calculated relative to the value or amount of goods produced, manufactured, distributed or sold. There have been some cases in which this aspect of the definition has been litigated. A key feature of these cases was the High Court’s preference for a ‘practical effect’ test—whereby the constitutionality of a law was determined by how it actually impacted on the price of goods—and its rejection of the ‘criterion of liability’ test— whereby a law would be constitutional as long as it was drafted in such a way as not to make the production, manufacture, distribution or sale of goods the criterion upon which the tax was levied, even if that was its actual effect.

A case to remember A law enacted by Victoria imposed a tax on chicory producers in proportion to the area of land sown with chicory rather than the amount of chicory produced. In Matthews v Chicory Marketing Board (1938) 60 CLR 263, the High Court nevertheless concluded that the tax was an excise, stating that a tax would be found to be one that was on goods where it bore ‘a close relation’ or a ‘natural relation’ to goods, even if not pro rata to the goods themselves. Western Australia imposed a stamp duty on receipts when goods were purchased, calculated by reference to the value of the goods. In Western Australia v Chamberlain Industries (1970) 121 CLR 1, the High Court held that the duty was an excise. The majority applied a practical effect test to look behind the ‘tax on receipts’, and found a tax on goods to which the receipts related. In Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599, a majority of the High Court struck down legislation that imposed a flat annual fee of $10 million upon users of a petroleum pipeline. The legal effect of the legislation was simply to tax pipelines (note, not the oil carried) and the tax took the form of a flat fee, rather than bearing the usual hallmark of being pro rata to goods. However, its practical effect was to burden the production of petroleum products by adding to the cost of goods, and so, the tax was held to be an excise.

Finally, note that because the essence of an excise is that it is a tax related to goods rather than to persons or activities, taxes on services—such as taxes imposed on hotels per guest, or on bus companies per passenger, or on employers per employee (payroll taxes)—do not amount to excises, and so may be imposed by the States.

207

208

Part Three: Financial Relations and Federalism

The ‘licence fees’ device and its overruling Despite the finding in Parton that any tax imposed on goods between production and sale constituted an excise, in a line of cases starting with Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529, the High Court permitted the States to circumvent s 90 by holding that impositions were not excises where: • they took the form ‘licence fees’, supposedly levied not on goods, but on ­persons for the privilege of engaging in commerce relating to the goods, and • the impositions were calculated proportionate to goods sold in a preceding period (for example, liquor purchased from wholesalers in the preceding year) rather than on current sales (this was the so-called ‘backdating’ device). The High Court’s acceptance of the backdating device was clearly anomalous, as it relied on the application of the criterion of liability test which had been rejected by the court in all other s 90 cases. However, despite this, the High Court permitted the States to use the device in relation to petrol, tobacco and alcohol for several decades and, because the States had become reliant on these ‘licence fees’ as a source of revenue, the court was reluctant to overturn the cases in which the device had been allowed to operate. However constitutional principle reasserted itself in two cases during the 1990s which led to the device being ruled unconstitutional.

A case to remember In Capital Duplicators v Australian Capital Territory (No 2) (1993) 178 CLR 561, the High Court struck down an ACT statute which imposed a licence fee, calculated pro rata to the number of X-rated videos that a retailer sold. The court first stated that the s 90 prohibition applied to the Territories just as it did to the States. The court then stated that it would assess s 90 cases on the basis of substance, rather than form (in accordance with the practical effect test), and held that an imposition would, in future, only be found to be a genuine licence fee and not an excise if it was clear that it was imposed as part of a regulatory scheme (as distinct from a revenue-raising one), the indicia of which would be that the imposition: was modest in amount (which would indicate that it was, indeed, not a tax, unlike the massive levy in Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599, for example), and took the form of a flat fee, as distinct from being pro rata to goods (which would indicate that it was not an excise).

By making its decision in Capital Duplicators, the court was indicating that the backdating device would be likely to be found unconstitutional when next it was challenged. This occurred a few years later.

CHAPTER 14: Excise Duties

A case to remember In Ha v New South Wales (1997) 189 CLR 465, the High Court invalidated a New South Wales licence fee on the sale of tobacco, calculated pro rata to sales in a preceding licence period. The case established the following propositions of law: • The definition of an excise in Parton was correct, but the description of an excise as an ‘inland’ tax on goods did not mean that only those taxes which applied to locally manufactured goods were excises. Any tax on goods imposed within Australia was an excise, irrespective of where the goods originated. • The backdating device would no longer be accepted by the court as taking ­impositions outside the category of excises—the practical effect of such legislation in no way ­differed from legislation that imposed a tax on current sales of goods.

As a result of the decision in Ha, a swathe of State licence fees that used the backdating device became unconstitutional. However, this did not result in any benefit to consumers. The Commonwealth enacted legislation whereby it collected excise duties on behalf of the States, and then passed these duties on to the States in the form of s 96 grants.

Sources of State revenue In light of the Commonwealth’s monopolisation of income taxes (discussed in the preceding chapter) and the inability of the States to tax goods, what revenues can the States raise themselves? The main sources of State revenues are the following: • business licence fees (so long as they meet the requirements set in Capital ­Duplicators) • fees for the use of services, such as annual motor vehicle registration fees (often referred to as ‘road user charges’ so as to emphasise their nature) • mining royalties, which are payments for the privilege of extracting minerals, rather than as taxes on the minerals themselves • taxes on activities, such as gambling and employment • stamp duties on land transfers (as land is not a ‘good’) • stamp duty on motor vehicles (arguably a breach of s 90, as the duty is clearly revenue raising in nature and is not a payment for a service).

209

210

Part Three: Financial Relations and Federalism

Assessment preparation Problem question In answering this question, remember to look at the issue of when a law imposes a tax, discussed in Chapter 13. The Queensland Parliament enacts the Meat Processors Licensing Act 2014 (Qld), which provides as follows: 12 Licences No person shall conduct any meat-processing business in Queensland unless they have been issued with such licences as are required by this Act. 13 Licence fees The State Licensing Commissioner shall grant an annual Meat Processor’s Licence to a person applying on the prescribed form and upon payment by that person of the following fees: (a) a fee of $50 per annum (b) a fee of $100 per carcass slaughtered in the 12-month period preceding the date of the licence application. 14 Special licence fees for dugongs (1) The processing of dugong meat is restricted to persons who were registered as Dugong Meat Processors as of 1 January 2013. (2) A person may not process dugong meat unless they hold a Dugong Meat Processing Licence in respect of each dugong to be processed. (3) No more than 300 Dugong Meat Processing Licences may be issued in any one year and no meat processor may be granted more than 20 such licences in any one year. (4) Subject to this section, the State Licensing Commissioner shall grant a Dugong Meat Processing Licence upon application on the prescribed form and payment of a licence fee of $2000 per dugong processed by the applicant during the 12-month period prior to the date of the licence application.

Susan, who has been operating a meat-processing plant for a number of years and is ­registered as a Dugong Meat Processor under the Act, is worried about the application of this licensing regime on her business. She processes about 15,000 cattle carcasses per annum and wants to process 15 dugong carcasses this year. Advise her of her position under the Act. For extra guidance and suggested answers to these questions, please refer to .

211

CHAPTER 15

Freedom of Interstate Trade, ­Commerce and Intercourse Covered in this chapter After reading this chapter you will understand: • how the concept of free trade underpins the interpretation of s 92 • the test of whether a law imposes a ‘discriminatory burden of a protectionist kind’ • how proportionality is used to determine whether a law imposes a permissible burden on interstate trade • the scope of the prohibition against interference in interstate intercourse.

Cases to remember Fox v Robbins (1909) 8 CLR 115 Cole v Whitfield (1988) 165 CLR 360 Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1

Section 92 Section 92 of the Constitution provides: On the imposition of uniform duties of customs, trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

The section is grammatically inelegant: it is not apparent on a first reading that the first part of the section, ending with the word ‘customs’, is an adverbial phrase followed by a definite pause—it would have been better had the section read: Trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigation, shall, on the imposition of uniform duties of customs, be absolutely free.

Section 92 binds the Commonwealth, the States and the Territories.

212

Part Three: Financial Relations and Federalism

Interpreting s 92 Section 92 provided the High Court with one of its most difficult interpretative challenges. Throughout most of the last century, the court was divided between the ‘laissez-faire’ and the ‘free trade’ approaches. • Under the laissez-faire approach, s 92 was interpreted as prohibiting any interference with interstate trade. However, this approach was inconsistent with s 51(i), which gives the Commonwealth the power to regulate interstate and overseas trade and commerce. The laissez-faire approach is now redundant. • By contrast, under the free trade approach, s 92 is seen as prohibiting only such interferences as discriminate against interstate trade and intercourse, and as permitting restrictions on interstate trade that are merely incidental to a non-­discriminatory scheme. This means that the word ‘absolutely’ in s 92 cannot be interpreted literally. This is consistent with s 51(i), which clearly cannot be given effect to unless the word ‘absolutely’ in s 92 is disregarded. The free trade approach has now become authoritative.

Free trade Even at the time of the Constitutional Conventions, it was apparent that inter-colonial free trade would be fundamental to federation. Section 92 was designed to ensure that neither the States nor the Commonwealth could interfere with free trade by means of burdening transactions involving interstate trade.

A case to remember A case that well illustrates the operation of s 92 is Fox v Robbins (1909) 8 CLR 115, where the High Court invalidated a Western Australian law which imposed a £2 licence fee on retailers who sold alcohol produced within the State, and a £50 licence fee for alcohol from out-of-State. The High Court held that the law clearly placed a burden on interstate trade and that it was, therefore, invalid under s 92.

Unfortunately, the simplicity of this approach was lost in intervening decades, due to the contest between the free trade and laissez-faire theories. However, a unanimous decision of the High Court in 1988 did much to settle uncertainty in this area and to cement the dominance of the free trade theory.

A case to remember In Cole v Whitfield (1988) 165 CLR 360 the respondent purchased crayfish in South Australia, for sale in Tasmania. The crayfish were of legal size under South Australian law, but not under Tasmanian law, and the Tasmanian authorities prosecuted for possession

CHAPTER 15: Freedom of Interstate Trade, ­Commerce and Intercourse

of undersized crayfish. In arriving at its decision that s 92 had not been breached by the Tasmanian law, the court established the following propositions: • The word ‘absolutely’ in s 92 cannot be understood literally, especially in light of the power conferred by s 51(i). • The history of s 92 indicates that its purpose is to protect free trade; that is, to prevent discrimination between interstate and intrastate trade. • The essential test of whether a law infringes s 92 is whether it imposes a discriminatory burden of a protectionist kind. • The court adopted a practical effect test in determining whether a suspect law was discriminatory: a law will be found to discriminate against interstate trade either if it does so on its face, or if its practical effect is to single out interstate trade for differential ­treatment. • In determining whether a law is protectionist, the courts will inquire whether the effect of the law is to protect intrastate trade from the competition of interstate trade. • Commonwealth schemes that apply uniformly across the country will, given their nature, generally not be found to be discriminatory. • A law that is found to discriminate against interstate trade will not fall foul of s 92 if it has a non-protectionist purpose and if, in the light of the purpose, the protectionism it ­incidentally causes is not disproportionate in its extent (a point that was further developed in Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436, discussed below). Applying the above law to the facts of the case, the court found that the Tasmanian law applied to all crayfish sold in Tasmania (whether sourced inside or outside Tasmanian waters); in other words, it was not discriminatory. The law was not protectionist—it served the non-protectionist objective of ensuring that Tasmanian crayfish breeding stocks were preserved. No market advantage was given to Tasmanian fishers, as their catch was equally subject to the law.

The essence of the decision in Cole v Whitfield is that s 92 protects free trade by prohibiting discrimination that is protectionist. Section 92 does not protect the laissez-faire principle (in other words, it does not prohibit all laws which happen to affect interstate trade). Similarly, s 92 was held not to have been breached in Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182, where a barley grower challenged a New South Wales statute requiring that all barley grown in the State be sold to the Board, not direct to customers such as malt manufacturers. The mere fact that that the grower could not sell barley to out-of-State malt manufacturers did not amount to a breach of s 92. Although the Act’s general prohibition of transactions obviously included a prohibition on interstate trade, the prohibition was not discriminatory, as it applied to all growers, irrespective of whether they intended to sell their barley within the State or outside it. The Act was also not discriminatory from the perspective of purchasers: New South Wales malt manufacturers and those from outside the State were equally bound by the requirement of purchasing barley from the Board rather than directly from the growers.

213

214

Part Three: Financial Relations and Federalism

The test in Cole v Whitfield was again applied in Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 in which amendments to the Betting Control Act 1954 (WA) were challenged. The amendments had been enacted in response to the establishment of a betting exchange by the appellant in Tasmania. Gamblers could place bets on sports events via the internet. The betting exchange operated differently from other types of betting in that people using the service bet against each other, rather than against the operator of the service, which obtained its revenue from taking a percentage of winnings. The service also allowed gamblers to ‘bet to lose’— in other words, to bet that a team, person or horse would lose an event. The Western Australian statute made it an offence to either operate or use a betting exchange, and also made it an offence for the race field of Western Australian events to be communicated for business purposes without a licence. Betfair had been denied a licence by Western Australia. Betfair’s on-line operation run from Tasmania operations provided competition to betting operators in Western Australia, and also deprived the State of revenue which it raised from taxes on gambling. Western Australia argued that the prohibition of betting exchanges was designed to avert the risk of corruption which it said was presented by the ability of gamblers to bet to lose. The High Court rejected this argument. It held that by prohibiting the use of betting exchanges by residents of the State and the communication of field information to betting exchange operators, the law shielded operators in the State from competition by Betfair. The court held that there was no evidence that the service had led to gambling corruption, and that that risk could have been averted by prohibiting that type of bet, rather than by prohibiting all betting exchange operations. However, in Betfair Pty Ltd v Racing New South Wales (2012) 286 ALR 221 the High Court fund that s 92 had not been breached. In this case, Betfair challenged provisions of the Racing Administration Act 1998 (NSW) which imposed a 1.5% fee on the turnover of betting operators who used field information relating to races in New South Wales. The Act expressly directed that the fee was to apply irrespective of the location of the betting operation’s location. Betfair challenged the fee on the basis that, as a betting exchange, its cost structure was such that the fee would have a relatively larger impact on it than on bookmakers and totalisators. The High Court held that the Act did not impose a burden which discriminated against in State and out of State operators. The burden was equal. Its impact was harsher on Betfair simply because the latter had a different business model—it had nothing to do with the fact that it was an interstate operator.

Proportionate limitations The court in Cole v Whitfield had raised the possibility that a law might discriminate against interstate trade and have a protectionist effect, and yet not be found to contravene s 92.

CHAPTER 15: Freedom of Interstate Trade, ­Commerce and Intercourse

A case to remember The High Court in Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 held that a protectionist law will escape invalidity if it serves a non-protectionist purpose and passes the proportionality test. Castlemaine Tooheys brewed beer in various States and transported it for sale in South Australia. Most of the Castlemaine Tooheys’ product was bottled in non-refillable cans, while most brewers in South Australia used refillable bottles. It was uneconomical for Castlemaine Tooheys to transport beer to South Australia in bottles. The Beverage Container Act 1975 (SA) established a container-recycling scheme. It required that purchasers pay a higher deposit on non-refillable containers. The Act also compelled retailers to refund the deposit on cans returned to them by consumers. There was no compulsion on retailers to refund deposits on bottles—this was done at container depots. The net result was that the retail price of products in cans went up, retailers preferred not to stock product in cans, and Castlemaine Tooheys lost market share in South Australia. The company challenged the validity of the law under s 92. All of the parties agreed that producers of beverages in cans were disadvantaged, because it was uneconomic for them to sell beer in South Australia, given the container deposit rates and refund regime prescribed in the legislation. However, South Australia argued that the objective of the legislation was environmental—to promote the use of refillable bottles and to discourage the use of non-refillable cans. The High Court unanimously struck down the South Australian statute, holding that: • legislation that has the practical effect of discriminating against interstate trade in a protectionist manner will not fall foul of s 92, provided that • it has a legitimate non-protectionist objective (broadly defined as protecting the ­community from danger or enhancing its welfare), and • the legislation is either necessary, or appropriate and adapted, to the achievement of the objective (note that the court expressly denied that only such legislation as is ‘­necessary’ to achieve a legitimate non-protectionist objective is exempt from s 92), and • the protectionist effect of the legislation is only incidental to the achievement of the objective, and • there is proportionality between the objective achieved by the legislation and its protectionist effect. The court found that, if the legislation had simply set container deposit rates at a level necessary to achieve the environmental objective, then even if that had the effect of advantaging brewers within South Australia, the legislation would not have fallen foul of s 92, because that effect would have been incidental to the legitimate non-protectionist objective. However, because the container deposit rates set by the legislation went far beyond what was necessary to achieve the environmental objective, the legislation was invalid. In other words, Parliament could have enacted a law that achieved the environmental objective without having such a protectionist effect; or, to look at it differently, the law caused a level of protectionism that was disproportionate to what was necessary to achieve the environmental objective. Essentially what South Australia had attempted to do was to give an economic advantage to its brewers under cover of an environmental law.

215

216

Part Three: Financial Relations and Federalism

Intercourse between the States Section 92 guarantees not only freedom of trade and commerce, but also free ‘intercourse’ between the States. Judicial interpretation indicates that ‘intercourse’ has a very broad meaning, including not only the physical movement of people and goods across State boundaries, but also the transmission of information. In Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 83, Brennan J defined ‘intercourse’ as: the movement of people, the transport of goods, the transmission of ­communications, the passage of signals of any kind and any other means by which ‘interchange, ­converse and dealings between the States in the affairs of life’ are carried on across State boundaries. The protection is given to the movement of persons and things across the border or, in the case of intangibles, the means by which their movement is effected. The means of movement will vary with what is moved; it is not essential that the means of movement be physically perceptible … the expression of ideas, whether in literary or other form, can be moved and a movement of that kind across State ­borders is capable of attracting the operation of s 92.

Clearly, the test of discriminatory protectionism enunciated in Cole v Whitfield (1988) 165 CLR 360 is not relevant to the free intercourse aspect of s 92. However, this does not mean that this aspect of the freedom is absolute and, as in cases involving free trade, the courts have used the proportionality test to determine the constitutionality of limits on freedom of interstate intercourse.

A case to remember In Nationwide News Pty Ltd v Wills the High Court considered a challenge to a provision in the Industrial Relations Act 1988 (Cth) which prohibited the publication of statements likely to bring members of the Industrial Relations Commission into disrepute. The main ground of the challenge was that the provision was inconsistent with an implied freedom of political communication (see Chapter 8); however some members of the court found that the law was invalid because it also infringed s 92, in that it restricted the communication of ideas across State boundaries. Brennan J propounded the following principles to be used in determining whether a law infringed the free intercourse aspect of s 92. • A law which, on the face of it, is enacted with the very purpose of interfering with interstate movement (of people, things or communications) will prima facie contravene s 92. • A law which does not expressly target interstate movement, but which has the practical effect of impeding such movement, will similarly be invalid. • In either of the above two circumstances, a law which interferes with interstate intercourse will be held not to contravene s 92 where: • the law is enacted for a purpose other than interference with interstate movement per se (for example, a law enacted to prohibit the import of diseased plants or harmful drugs into a State)

CHAPTER 15: Freedom of Interstate Trade, ­Commerce and Intercourse

• the law is appropriate and adapted to the fulfilment of the purpose, and • the limitation on interstate intercourse is an appropriate and adapted means of achieving the objective—that is, it passes the proportionality test.

An example of the application of the above test is provided by AMS v AIF (1999) 199 CLR 160, in which it was held that, where the Family Court of Western Australia had made an order under the Family Court Act 1975 (WA)—which subjected a mother’s custody of a child to a requirement that she must not remove the child from Perth—s 92 was not contravened. The prohibition against removal from the State was incidental to the making of whatever custody order was in the best interests of the child, and went no further than was required to achieve that objective, thus satisfying the proportionality test. Similarly the High Court held that legislative schemes that indirectly affected interstate trade by prohibiting a person from practising as a migration agent unless they were registered (Cunliffe v Commonwealth (1994) 182 CLR 272), or restricting what type of advertising lawyers (some of whom were from out of State) could publish within a State (APLA Limited v Legal Services Commissioner (NSW) (2005) 224 CLR 322) did not contravene s 92, because in each case the legislative scheme amounted to a proportionate step taken in the course of professional regulation.

Alert Because there are so many constitutional provisions to remember whenever legislation imposes an obligation to pay money, this checklist is provided to help ensure you consider all possible constitutional implications of legislation containing an imposition (a neutral term used deliberately because of the legal implications of words such as ‘tax’). Note that the law you need to refer to is scattered far and wide: in Chapters 3, 13, 14 and 15. 1 Does the imposition meet the definition of a tax, or is the imposition a fee for services, a licence fee or a penalty? (If the imposition is a fee or a penalty, then you do not have to concern yourself with any of the issues discussed below.) 2 If the imposition is a tax then consider the following: (a) Were the procedural requirements of s 55—which prohibits legislation imposing a tax from dealing with non-tax matters—complied with? Remember also the special problem involved where an amendment imposing a tax is inserted into a non-tax statute. (b) Is there geographical discrimination, prohibited by s 51(ii)? (c) Is there geographical preference, prohibited by s 99? (d) Once collected, is the money paid into the Consolidated Revenue Fund, in accordance with s 81? (e) Does the imposition amount to a discriminatory burden of a protectionist kind which interferes with the freedom of interstate trade and commerce, contrary to s 92?

217

218

Part Three: Financial Relations and Federalism

(This will be very unusual, given that Commonwealth legislation usually applies uniformly to transactions across Australia.) 3 Does the imposition meet the definition of a tax, or is the imposition a fee for services, a licence fee or a penalty? 4 If the imposition is a tax then consider the following: (a) Is the tax an excise, which s 90 prohibits States from imposing? (b) Does the imposition amount to a discriminatory burden of a protectionist kind which interferes with the freedom of interstate trade and commerce, contrary to s 92?

CHAPTER 15: Freedom of Interstate Trade, ­Commerce and Intercourse

Assessment preparation Problem question Note how some of the information contained in this question has been tabulated. You may find it helps you to organise information in this way when assessing the impact of a law on interstate trade. The South Australian Parliament enacts the Wine and Spirits Control Board Act 2015 (SA), the long title of which states that it is ‘an Act to set and maintain standards in the grape, wine and spirits wholesale and retail industry’. The Act provides as follows: 1 South Australia Wine and Spirits Control Board There is hereby established the South Australia Wine and Spirits Control Board (‘the Board’), whose members shall be appointed by the Minister of Consumer Affairs. 2 Functions of Board The Board shall maintain standards in the wine and spirits industry in South Australia. 3 Regulations The Governor shall make regulations on the advice of the Board in respect of the cultivation, distribution and sale of grapes, the distillation of liquor and the ­distribution and sale (both wholesale and retail) of wine and spirits in South Australia.

In 2007 statistics were produced which revealed the following: Origins of wine

Grams of ­sulphur/ 100 ml of wine

Litres sold in SA

Vic

9.5

2000

WA

2.1

70,000

Tas

2.2

40,000

NSW

1.7

4000

SA

1.9

25,000

A study by the School of Medicine at the University of Adelaide shows that adverse effects are caused to the brain if wine with a sulphur content in excess of 2.5g/100ml is consumed on a regular basis. In response, the Wine and Spirits Control Board issues a public statement to the effect that it wishes to discourage the consumption of wine with a ‘high sulphur content’, and, on the advice of the Board, the Governor proclaims the Wine Sales (Sulphur Limitation) Regulations 2015 (SA), the essential section of which provides as follows: 4 Prohibition of the sale of high-sulphur wine No person shall sell, give or offer for sale in South Australia any wine unless such wine has a sulphur content of less than 2g/100ml.

219

220

Part Three: Financial Relations and Federalism

That same week, a scientific study reveals that the highly transmissible disease phylloxera, which is carried by grapes and is highly damaging to vines, has broken out on four of the 20 vineyards in Tasmania. On the advice of the Board the Governor proclaims the Grape Control Regulations 2015 (SA), the essential section of which provides as follows. 5 Prohibition of Tasmanian grapes No person shall bring any grape, vine or part of any vine originating in Tasmania into the State of South Australia.

You are legal adviser to Bacchus Industries Ltd, which imports bottled wine from other States for sale in South Australia, as well as grapes from Tasmania used for the ­fermentation of its own range of table wines. Advise the company of its legal position in light of the new regulations. For extra guidance and suggested answers to these questions, please refer to .

221

CHAPTER 16

Inconsistency Covered in this chapter After reading this chapter you will understand: • what the term ‘law’ means in relation to inconsistent laws under s 109 • the three tests for inconsistency and how they operate • how the courts determine whether the Commonwealth intends to ‘cover the field’ relating to a topic of legislation.

Cases to remember R v Licensing Board of Brisbane; Ex parte Daniell (1920) 28 CLR 23 Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 Wenn v Attorney-General (Vic) (1948) 77 CLR 84 Hume v Palmer (1926) 38 CLR 441 O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 TA Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177 Australian Broadcasting Commission v Industrial Court of South Australia (1977) 138 CLR 399 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 McWaters v Day (1989) 168 CLR 289 Viskauskas v Niland (1983) 153 CLR 280 Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 139 CLR 54 Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47

Section 109 Clashes between Commonwealth and State laws are inevitable, given that—with the exception of the exclusive powers contained in ss 52, 90, 114 and 115—all topics lying within the legislative capacity of the Commonwealth may also be legislated on by the States. Accordingly, the federal Constitution provides a mechanism for addressing conflict between federal and regional law through s 109, which states: When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.

222

Part Three: Financial Relations and Federalism

Before examining the ways in which inconsistency may arise, it is necessary to discuss a few general points about s 109.

What is a ‘law’? The term ‘law’, as used in s 109, refers to both Acts and regulations. Thus s 109 will operate when Commonwealth Acts or regulations are inconsistent with State Acts or regulations. Although industrial awards are not ‘laws’, it was held in Ex parte McLean (1930) 43 CLR 472 that, since they are made under the authority of Commonwealth legislation, Commonwealth industrial awards override inconsistent awards made under State legislation. However administrative orders made by members of the executive—even if made under the authority of Commonwealth legislation—are not ‘laws’ and thus cannot override inconsistent State law: Airlines of NSW Pty Ltd v New South Wales (No 1) (1964) 113 CLR 1. The substance of the order would have to be put in an Act or delegated legislation for inconsistency to arise.

To what extent is an inconsistent State law invalid? Under s 109, State laws are invalid only to the extent of the inconsistency. Thus, if the inconsistent parts are able to be severed from the rest, the latter remain in force. Whether the State legislation is severable will depend upon the court’s determination as to the intent of the State legislature after applying the rules of statutory interpretation, discussed in Chapter 6. • In Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466, the Forty-Four Hours Week Act 1925 (NSW) was found to be inconsistent with an award made under the Conciliation and Arbitration Act 1904 (Cth). However, the New South Wales legislation was invalid only in respect of those employees covered by the Commonwealth award, and it was held to remain applicable in respect of other employees. • By contrast, in Wenn v Attorney-General (Vic) (1948) 77 CLR 84, Commonwealth legislation dealing with the issue of preferential employment of veterans in the private sector after World War II was held to be inconsistent with Victorian legislation dealing with both private and public sector employees. It was held that the Victorian Parliament had intended to enact a uniform scheme covering all categories of employee and, therefore, that the State law was not severable into discrete parts dealing with private and public sector employees. It followed that the entire State Act, and not just those parts dealing with private sector employees, was declared invalid.

CHAPTER 16: Inconsistency

What is the effect of invalidity? Where a State law is invalid under s 109, it is not a nullity; rather, its operation is suspended so long as the inconsistency persists. If the Commonwealth legislation is later repealed, the State law will be revived: held in Butler v Attorney-General (Vic) (1961) 106 CLR 268.

Tests for inconsistency Case law has identified three tests for inconsistency. Note that more than one type of inconsistency can exist concurrently. The tests are: • where it is impossible to obey both laws • where the Commonwealth law permits conduct or confers a right, and the State law prohibits that conduct or removes that right • where the Commonwealth law evinces an intention to ‘cover the field’. The first two types of inconsistency are sometimes referred to as ‘direct inconsistency’, and the third as ‘indirect inconsistency’. This distinction is explained below. It is also important to note that the three tests often overlap, and that a single instance of inconsistency may satisfy more than one of the tests.

Impossible to obey both laws Inconsistency will be found to exist where it is impossible to obey both laws. This type of inconsistency is relatively easy to identify.

A case to remember The Liquor Act 1912 (Qld) required that a referendum be held on the same day as Senate elections, while the Commonwealth Electoral (Wartime) Act 1917 (Cth) prohibited referenda on Senate election days. In R v Licensing Board of Brisbane; Ex parte Daniell (1920) 28 CLR 23, the High Court held that compliance with the Queensland provision would have resulted in a contravention of the Commonwealth provision and that the Queensland provision was, therefore, invalid on grounds of inconsistency.

Commonwealth law confers a right denied by State law The second type of inconsistency arises where, although it is possible to obey both laws, Commonwealth law confers a right or permits conduct which is denied or prohibited under State law.

223

224

Part Three: Financial Relations and Federalism

A case to remember This type of inconsistency was first identified in Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466. The Forty-Four Hours Week Act 1925 (NSW) prescribed a 44-hour working week at a particular wage, while an award made under the Conciliation and Arbitration Act 1904 (Cth) required a 48-hour working week for the same wage. Although the two pieces of legislation could both be obeyed (by the employer paying the minimum wage for 44 hours’ work and overtime for work above that), it was held that direct inconsistency was not the only way in which s 109 could be activated, and that the laws were inconsistent because the Commonwealth legislation gave employers a right—to receive 48-hours work in exchange for the minimum wage—denied to them by the State legislation. The Commonwealth award thus overrode the State Act.

Commonwealth conferral of rights denied by State law has arisen in a number of cases. • The Factories and Shops Act 1912 (NSW) prohibited the employment of women on milling machines, while a Commonwealth industrial award permitted their employment. In Colvin v Bradley Brothers (1943) 68 CLR 151, the State law was declared invalid on the ground that, although it was possible to obey both pieces of legislation (by not employing women), the State law forbade activity that the Commonwealth permitted, and so was invalid. • The Queensland Coast Islands Declaratory Act 1985 (Qld) sought to remove any traditional land rights that might vest in the Miriam people of the Torres Strait Islands. Section 10 of the Racial Discrimination Act 1975 (Cth) provided that any law purporting to confer on a racial group a more limited category of rights than those enjoyed by members of another racial group would be of no effect. In Mabo v Queensland (No 1) (1988) 166 CLR 186, the High Court held that, assuming the Miriam people’s traditional title had survived colonisation (an assumption which became established as law in the subsequent case of Mabo v Queensland (No 2) (1992) 175 CLR 1), the Queensland law was invalid, in that by depriving people of property rights derived from Indigenous law, it sought to deprive them of a right (namely, the right to equal treatment as compared with other ethnic groups) conferred by the Commonwealth Act.

Commonwealth law ‘covers the field’ The third type of inconsistency arises where Commonwealth legislation evinces an intention to ‘cover the field’ in respect of a particular topic. This means that the Commonwealth intends its legislation to be the exclusive law on the topic, overriding any State law relating thereto. ‘Covering the field’ inconsistency is far broader than

CHAPTER 16: Inconsistency

the other two types of inconsistency, and can exist even in the absence of either of the first two types—it may be possible to obey both laws, and there may be no clash of rights, but the State law will be found to be invalid simply because it is on the same topic as the Commonwealth law and the Commonwealth intended its law to be the sole law on the topic. This highlights the key difference between the first two types of inconsistency and ‘covering the field’ inconsistency. • The first two types of inconsistency are referred to as ‘direct’ inconsistency, because they arise when there is an actual clash between the Commonwealth law and the State law, and they result in only those specific inconsistent provisions of the State law (which could be a word, a phrase, a section or some larger part of the State law) becoming invalid. • By contrast, ‘covering the field’ inconsistency is referred to as ‘indirect’ inconsistency, because it arises even in the absence of a clash between the Commonwealth law and the State law—all that is necessary for covering the field inconsistency to arise is that the laws be on the same subject matter. Furthermore, the result of a finding of ‘covering the field’ inconsistency is that the entire State law on the topic is ‘blotted out’ by the Commonwealth law, so a finding that ‘covering the field’ inconsistency exists usually has a far more drastic effect on State law than does a finding of direct inconsistency. This can be illustrated by Figures 16.1 and 16.2. Figure 16.1 Direct inconsistency Commonwealth Act 1

Mauris pulvinar odio a fringilla

2

State Act Direct inconsistency

1

Lorem ipsum dolor sit amet

consetetur sadipscing elitr

2

consetetur sadipscing elitr

3

sed diam nonumy

3

sed diam nonumy

4

eirmod tempor delevit ut

4

eirmod tempor invidunt

5

labore et dolore magna

5

labore et dolore magna

Direct inconsistency

Figure 16.1 shows two instances of direct inconsistency. In the first, s 1 of the State Act is inconsistent with s 2 of the Commonwealth Act, so s 1 of the State Act is overridden and is severed from the Act. In the second instance, a word in s 4 of the State Act is inconsistent with s 5 of the Commonwealth Act, and so that word is severed from the State Act. Sections 2, 3 and 4 of the State Act remain in effect.

225

226

Part Three: Financial Relations and Federalism

Figure 16.2 Indirect inconsistency Commonwealth Act 1

Lorem ipsum dolor

2

consetetur sadipscing elitr

3

State Act 1

Nunc eu purus

2

donec cursus

sed diam nonumy

3

duis bibendum tincidunt

4

eirmod tempor

4

sed malesuada

5

labore et dolore

5

lobortis ipsum maecenas

Field covered by Commonwealth Act

In Figure 16.2, there is no specific section of the State Act that is inconsistent with the Commonwealth Act. However, the fact that the Commonwealth Act covers the entire field of the State Act means that the whole of the State Act is overridden.

A case to remember ‘Covering the field’ inconsistency was first identified in Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466. A majority of the court ruled the State law invalid, on the ground that a specific provision in it relating to minimum wages denied a right conferred by Commonwealth law (as discussed above). However, Isaacs J said that inconsistency existed because it had been the intention of the Commonwealth Parliament, when it enacted the Conciliation and Arbitration Act 1904 (Cth), that awards made under that Act should supersede all State laws relating to the particular category of employee in respect of whom the award was made. In other words, whereas the Commonwealth may sometimes intend its law to supplement that of a State, and to override only those aspects of State law that are directly inconsistent with Commonwealth law, in this case the Commonwealth law disclosed an intention to supplant State law—that is, to deal with the topic of these employees’ conditions exclusively—and to override the entirety of the State law relating to that topic.

Another example of this type of inconsistency is Bond v The Queen (2000) 201 CLR 213, in which a prosecution for breach of certain State laws had been brought against the appellant by the Commonwealth Director of Public Prosecutions, exercising authority conferred on him by the Commonwealth DPP Act 1983 (Cth) to bring prosecutions under State law. At trial, the appellant pleaded guilty and a sentence was imposed. The Commonwealth DPP formed the opinion that the sentence was too light and brought an appeal to the Western Australian Court of Criminal Appeal, relying on State legislation that gave him authority to do so. The Court of Criminal Appeal increased

CHAPTER 16: Inconsistency

the sentences. The appellant brought an appeal to the High Court, which held that the Commonwealth legislation—vesting the Commonwealth DPP with authority only to bring initial prosecutions under State law and not appeals—was to be interpreted as governing the authority of the DPP exclusively and as intending to ‘cover the field’ in relation to that topic. The State law purporting to confer additional authority on the Commonwealth DPP was therefore inconsistent with the Commonwealth law. In Commonwealth v Australian Capital Territory [2013] HCA 55, the High Court held that the Commonwealth had intended the Marriage Act 1961 (Cth) to define exclusively what types of marriage could be contracted in Australia, and that therefore legislation enacted by the ACT which permitted same-sex marriages could not operate concurrently with the Commonwealth Act.

Determining whether the Commonwealth intends coverage The crucial factor in determining whether there is inconsistency of this type is whether the Commonwealth Parliament intended to cover the field. This is a question of statutory interpretation that involves two issues—the intention of the Commonwealth and the definition of the field.

Express statements of intention to cover the field Coverage of a field may be found to be exclusive because of an express Commonwealth statement to that effect in its legislation.

A case to remember In Wenn v Attorney-General (Vic) (1948) 77 CLR 84 the High Court determined whether inconsistency with State law arose by virtue of the Re-establishment and Employment Act 1945 (Cth), in terms of which the Commonwealth made provision for preferential treatment of veterans who were seeking employment. The Act expressly stated that it was to apply ‘to the exclusion of any provisions, providing for preference in any matter relating to the employment of discharged members of the forces, of any law of a State’. The court held this provision to mean that the Commonwealth clearly intended to exclude State legislation from the field of preferential employment of ex-servicemen, and thus held the Discharged Servicemen’s Preference Act 1943 (Vic) to be invalid.

Implications of intention to cover the field In the absence of some express indication, the question is whether the requisite intention can be implied from the legislation. Sometimes, it will be implied simply because the subject matter of the legislation is such that, in practical terms, it would be difficult to imagine the legislation not being comprehensive.

227

228

Part Three: Financial Relations and Federalism

A case to remember Regulations made under the Navigation Act 1912 (Cth) contained rules for sea navigation. Regulations made under the Navigation Act 1901 (NSW) contained identical provisions to the Commonwealth law, but provided a different penalty. In Hume v Palmer (1926) 38 CLR 441, the High Court held that the Commonwealth law had displaced the State law and that a breach of sea navigation rules, which caused a collision in Sydney Harbour, could no longer be prosecuted under State law. As a matter of practicality, one could not have two sets of rules governing navigation in the same stretch of water and it must, therefore, have been the intention of the Commonwealth to override State legislation on this topic.

The intention may also be implied because of the comprehensiveness and level of detail of the Commonwealth legislation.

A case to remember In O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565, regulations made under the Customs Act 1901 (Cth) required that any premises used for the slaughter of meat for export had to be licensed under the regulations, and that meat processing had to be conducted in accordance with the regulations. The Metropolitan and Export Abattoirs Act 1936 (SA) also required slaughterers of meat for export to obtain a licence from the State Government. A meat processor who held a Commonwealth but not a State licence was prosecuted under State law. The High Court held that the Commonwealth had intended to cover the field of slaughtering meat for export because the breadth and detail of the Commonwealth regulations evinced an intention to address the topic in a comprehensive and exhaustive manner.

Conversely, where the Commonwealth does not provide a detailed code, the inference will be that it intended that State law should survive.

A case to remember An award made under the Conciliation and Arbitration Act 1904 (Cth) dealt with a range of employment conditions, but was silent as to the issue of long service leave. The Long Service Leave Act 1955 (NSW) conferred a right to long service leave on employees. In TA Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177, the court found that the award’s silence on the matter (and, thus, its lack of comprehensiveness) meant that the Commonwealth had not covered the field and that State law continued to operate in respect of long service leave.

Unfortunately, however, the approach in TA Robinson cannot be regarded as establishing an invariable rule, as the courts have also inferred an intention on

CHAPTER 16: Inconsistency

the part of the Commonwealth to cover the field precisely because its law is not comprehensive and is phrased in general and unqualified terms.

A case to remember In Australian Broadcasting Commission v Industrial Court of South Australia (1977) 138 CLR 399 a temporary employee of the ABC sought to engage the jurisdiction of a State Industrial Court, which operated under the Industrial Conciliation and Arbitration Act 1972 (SA). Industrial relations matters pertaining to ABC employees were governed by the Broadcasting and Television Act 1942 (Cth). The provisions of the Commonwealth Act pertaining to permanent employees were comprehensive and detailed, while those relating to temporary employees were not. Despite the brevity of the provisions relating to temporary employees, the High Court inferred an intention on the part of the Commonwealth to cover the field in respect of them, holding that because the Act conferred broad and unqualified powers on the ABC to deal with their employment conditions, the Commonwealth had intended the legislation to cover the field. It may however be that the court was influenced by the fact that the ABC’s employees were employees of the Commonwealth and that, for reasons of federal balance, it was appropriate for employees of the Commonwealth to be subject to uniform employment conditions, irrespective of which State they happened to work in.

The result of this is that a determination of whether the Commonwealth intends to cover the field is an exercise in statutory interpretation that depends on the text of the law in each case. Whether the Commonwealth law is comprehensive or not is an important factor to be taken into consideration, but it is not determinative.

Inconsistent criminal laws Sometimes Commonwealth and State laws make the same conduct a criminal offence. Under which law, then, is it competent to prosecute? This is particularly important where the laws impose different penalties. First of all, it is important to note that the issue of inconsistency between criminal laws arises only if a law of the Commonwealth and a law of a State criminalise the same conduct. If the elements of the offences differ, then there is no inconsistency.

A case to remember In R v Winneke; Ex parte Gallagher (1982) 152 CLR 211, the appellant was convicted under a State law for failing to give evidence at a Royal Commission which had been constituted under both State and Commonwealth law. A Commonwealth statute also made it an offence not to give evidence before a Royal Commission, but imposed a lighter penalty than did the State law. The appellant argued that the State criminal provision was inconsistent with the Commonwealth law, on the ground that the latter had been intended to cover the field relating to failure to give evidence before Royal Commissions.

229

230

Part Three: Financial Relations and Federalism

The majority rejected the application for leave to appeal, holding that although the State and Commonwealth Royal Commissions were being held conjointly, failure to give evidence before a State Royal Commission was a different offence to failure to give evidence before a Commonwealth Royal Commission (as would have been obvious had two separate Royal Commissions been convened and the appellant failed to give evidence at both). There was, therefore, no coverage of the field, and the conviction under the State law was upheld.

Assuming that both a State law and a Commonwealth law criminalise the same conduct, the issue of whether inconsistency arises is answered by applying the three tests for inconsistency discussed above. In Ex parte McLean (1930) 43 CLR 472 Dixon J stated the general principle that, where the same conduct is criminalised by State and Commonwealth law, but the penalties differ, then the Commonwealth law should be interpreted as being intended to supplant the State law. However this principle has not been consistently applied. As in all these cases, everything depends on the intention of the legislature, as interpreted by the court.

A case to remember In R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338, the appellant challenged the validity of s 469 of the Criminal Code 1899 (Qld), which made it an offence wilfully to damage property. He argued that the State law was inconsistent with s 29 of the Crimes Act 1914 (Cth), which made it an offence wilfully to damage property belonging to the Commonwealth. The court held that the Commonwealth Act was intended to cover the field of protection of Commonwealth property, and that the State law was therefore invalid for inconsistency in so far as offences against Commonwealth property were concerned. By contrast, in McWaters v Day (1989) 168 CLR 289, the court found that inconsistency did not exist where an intoxicated soldier drove a vehicle and was prosecuted under the Traffic Act 1949 (Qld), which made it an offence to drive under the influence of alcohol. The court held that although the Defence Force Discipline Act 1982 (Cth) similarly made it an offence for military personnel to drive under the influence of alcohol, the Commonwealth legislation was directed specifically towards the maintenance of military discipline and was not intended to displace the broader criminal law of the State.

The decisions in R v Winneke; Ex parte Gallagher and McWaters v Day raise the possibility that where inconsistency between State and Commonwealth law does not exist, a course of conduct may lead to a prosecution under either law. To avoid the possibility of a person being punished twice for the same conduct, s 4C(2) of the Crimes Act 1914 (Cth) states that, where conduct constitutes an offence under the law of the Commonwealth and under the law of a State or Territory, and a person has been punished for the offence under the law of one jurisdiction, they cannot be punished under the law of another.

CHAPTER 16: Inconsistency

Commonwealth disclaimer of intention to cover the field Just as the Commonwealth can expressly state that its legislation is intended to cover the field, so too can the Commonwealth disclaim the intention to cover the field by expressly stating that its enactment is to operate alongside State law. This is a signal to the courts that the Commonwealth legislation should be read as addressing only the specific matters dealt with therein, rather than covering the entire field into which those matters fall. An example of this is provided by R v Credit Tribunal; Ex parte General Motors Acceptance Corp (1977) 137 CLR 545. This case involved two pieces of consumer protection legislation, the Trade Practices Act 1974 (Cth) and the Consumer Credit Act 1972 (SA), both of which addressed the broad issue of consumer sales. However, there were instances in which each dealt with matters not addressed by the other. Section 75 of the Trade Practices Act stated that it was ‘not intended to exclude the concurrent operation of any law of a State or Territory’. The High Court held this to indicate that the Commonwealth did not intend to legislate exclusively within the field but, rather, wished to leave State law in operation in so far as it was not inconsistent with Commonwealth law. However, the court emphasised that, because s 109 binds the Commonwealth Parliament, an express intention not to cover the field cannot save a State law that is directly inconsistent with Commonwealth law. Thus, if a draughtsperson inadvertently included provisions in a Commonwealth law which could not be obeyed in light of State law, or which conferred a right removed by State law, a statement about not intending to cover the field could not preserve the State law in view of the mandatory operation of s 109.

Automatic operation of s 109 The fact that s 109 operates mandatorily means that the Commonwealth cannot retrospectively deny an intention to cover the field where this type of inconsistency has already been found to exist.

A case to remember In Viskauskas v Niland (1983) 153 CLR 280 the High Court found provisions in the Anti-Discrimination Act 1977 (NSW) inconsistent with the Racial Discrimination Act 1975 (Cth) on grounds that the Commonwealth legislation evinced an intention to cover the field. The Commonwealth then amended the Racial Discrimination Act to provide that it was, ‘and shall be, deemed never to have been intended’ to displace State law—in other words, the Commonwealth sought retrospectively to disclaim an intention to cover the field. In University of Wollongong v Metwally (1984) 158 CLR 447, the majority held that the operation of s 109 was not something that could be controlled by the Commonwealth— once a court had found that Commonwealth legislation, as originally enacted, had

231

232

Part Three: Financial Relations and Federalism

overridden State law, the invalidating effect of s 109 occurred automatically. The Commonwealth could not retrospectively state that its legislation had evinced an intention which it had, in fact, not had. To allow that would be to permit the Commonwealth Parliament to override s 109. All the Commonwealth could do would be to indicate, with prospective effect, that it did not mean to cover the field, and such an amendment would have an effect only on cases arising from the time at which it came into force.

Defining the field In order for inconsistency on the ground of covering the field to exist, a court must find that both the Commonwealth and the State legislation relate to the same field. Many s 109 cases revolve around characterising or defining the ‘field’ that has been legislated on. This leaves wide scope for the operation of judicial discretion: the broader the field that the Commonwealth is found to have legislated on, the more likely it is that State legislation will be found to fall within its ambit. Conversely, interpreting the Commonwealth legislation as dealing only with specific topics within a field, rather than the field in its entirety, will increase the chances (assuming neither of the other types of inconsistency exist) that State legislation continues to operate in tandem with legislation enacted by the Commonwealth.

A case to remember In Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 139 CLR 54 a pilot contested her dismissal by the airline, alleging that the airline had discriminated against her on grounds of gender in contravention of the Equal Opportunity Act 1977 (Vic). The airline argued that the Victorian legislation had been displaced by an award made under the Conciliation and Arbitration Act 1904 (Cth) which, in so far as it dealt with dismissal, simply stipulated what periods of notice employees were entitled to. The court rejected the airline’s argument, characterising the State law as dealing with anti-discrimination matters and the Commonwealth law as dealing with notice provisions— in other words, holding that they related to entirely different fields. There was no evident intention on the part of the Commonwealth to deal comprehensively with dismissal and to exclude State legislation. The Commonwealth intended to address notice provisions only, leaving other matters to be regulated by State law, and thus ‘covering the field’ inconsistency did not arise. This case can also be seen as one in which the failure of the Commonwealth to provide a detailed set of rules relating to the employment of pilots operated to raise an inference of lack of intent to cover the field. In Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47 a radio station had obtained a licence under the Broadcasting and Television Act 1942 (Cth). An environmental group brought an action under the Environmental Planning and Assessment Act 1979 (NSW) to prevent construction of the transmitter pending an environmental impact study under the Act. The radio station argued that the Commonwealth Act had overridden the State Act and that therefore it needed only the Commonwealth licence.

CHAPTER 16: Inconsistency

The High Court rejected this argument, stating that whereas the Commonwealth licence was granted on criteria relating to the technical quality of broadcasting, the State legislation imposed conditions relating to environmental factors. The laws did not relate to the same field; thus there was no inconsistency and both had to be complied with. This case is also important because it was held that the fact that Commonwealth legislation establishes a regime, whereby people wishing to engage in a particular activity must obtain permission to do so, does not in itself imply an intention to exclude State law or to exempt people from requirements imposed under State law when engaging in the activity. Whether the Commonwealth law was intended to cover the field depends upon the interpretation of the legislation in each case.

233

234

Part Three: Financial Relations and Federalism

Assessment preparation Problem question A recent study by the CSIRO has concluded that in order to prevent electronic ­interference in the operation of telephone and fax machines, all telephone and fax machines should have 9 mm of shielding on parts subject to interference. In 2014 the Queensland ­Parliament enacts the Telecommunications Act 2014 (Qld), the long title of which states that it is ‘an Act to regulate telephone communication standards in Queensland’. ­Section 4 of the Act empowers the Minister of Business Affairs to ‘make such regulations as are ­necessary to give effect to the Act’. The Minister enacts the Telecommunications ­Regulations 2014 (Qld), part of which states as follows: 26 Shielding No telecommunications device shall be sold unless every reception component therein is encased in lead shielding of 15mm or more. 27 Earpieces No telecommunications device shall be sold unless its earpiece is ­manufactured wholly from ceramics.

Subsequently, the Commonwealth enacts the Commonwealth ­Telecommunications ­Standardisation Act 2015 (Cth), the long title of which is ‘an Act to provide for national standards relating to telecommunications devices in Australia’. Each type of ­telecommunications device (faxes, modems, videophones, telephones etc) is dealt with in its own Chapter of the Act. Chapter XXIV deals with telephones, and contains just one section, which states as follows: 435 Telephone shielding (1) A seller of telephones must obtain a licence under this Act (2) A licence shall not be issued to a person under subsection (1) of this section unless every reception component contained in the telephones that person sells is encased in shielding of no less than 9mm.

Mary Marconi operates a business in Brisbane, selling telephones. The telephones that she sells have shielding of 9mm thickness, and do not have ceramic earpieces. Mary has obtained a licence under s 435 of the Commonwealth Act. She has been prosecuted by the Queensland DPP for breaching ss 26 and 27 of the Telecommunications Regulations 2014 (Qld). She approaches you for advice. For extra guidance and suggested answers to these questions, please refer to .

235

CHAPTER 17

Intergovernmental Immunities Covered in this chapter After reading this chapter you will understand: • how to determine whether a statute binds the Crown • the meaning of the terms ‘Crown in right of the Commonwealth’ and ‘Crown in right of a State’ • the circumstances in which a law of the Commonwealth binds the States • how the implied federal principle limits the capacity of each level of government to bind the other • the circumstances in which State laws bind the Commonwealth • the circumstances in which s 64 of the Judiciary Act 1903 (Cth) operates to ­subject the Commonwealth to State laws • the way in which ss 114, 52, 51(xiii) and (xiv) affect the capacity of each level of government to bind the other.

Cases to remember Bropho v Western Australia (1990) 171 CLR 1 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129 Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31 Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 Austin v Commonwealth (2003) 215 CLR 185 Re Residential Tenancies Tribunal of New South Wales v Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410

The intergovernmental immunities issue An important issue in any federal system is whether one level of government can subject the other to its laws. For example, must the Commonwealth comply with State planning laws when a Commonwealth Government building is constructed, and are the States liable to pay tax to the Commonwealth on the income they receive? The answers to these questions are important, because they determine the extent to which either level of government may subject the other to its control, and this obviously has implications for the balance of power in the federation. This issue is usually referred to as the ‘intergovernmental immunities’ issue, in that it raises the

236

Part Three: Financial Relations and Federalism

question of to what extent, if any, one level of government is immune from laws enacted by another. In discussing intergovernmental immunities you will often see reference made to the ‘Crown in right of the Commonwealth’ and the ‘Crown in right of the States’. This terminology is used to emphasise the fact that in a federal system such as ours, the Crown has separate manifestations or identities because the governments of the Commonwealth and the States are all separate legal personalities. Although one could simply use the terms ‘the Commonwealth’ and ‘the States’, the ‘Crown in right of …’ terminology is used in this chapter because that is what you will usually see in case law and in academic writing.

Statutes binding the Crown Before considering whether Commonwealth and State Governments can be made subject to each other’s laws, we need to examine the general question of the extent to which the Crown is subject to statute law. This is a matter of statutory interpretation. Under the common law, the Crown is presumed not to be bound by legislation. However the presumption can be displaced by Parliament simply by putting an express statement in the relevant piece of legislation that it does bind the Crown. Even in the absence of an express provision, the presumption can be displaced by implication.

A case to remember The Western Australian Parliament enacted the Aboriginal Heritage Act 1982 (WA), s 17 of which prohibited interference with sites of cultural significance to Indigenous people. The Act contained no express statement that it bound the Crown. An agency of the Western Australian Government planned to develop the Swan Brewery site, which covered areas of Indigenous cultural significance. The Supreme Court of Western Australia held that the common law presumption of Crown immunity from statute law meant that the government was not bound by the Act. In Bropho v Western Australia (1990) 171 CLR 1 the High Court overturned this decision. The court departed from the then prevailing approach that, in the absence of an express statement binding the Crown, the Crown would be bound by legislation only if the legislation would be unworkable unless the Crown was bound. Instead, it was held that courts should take a general view of legislation in order to determine whether the legislature intended the Crown to be bound, and that legislation would be held to bind the Crown if the underlying purpose of the legislation indicated that the legislature intended the Crown to be bound. In Bropho itself, the court held that the Act would be largely ineffective if the Crown was not bound, given that 93 per cent of Western Australia was Crown land. On this basis, the court held that the intention of the legislature had been to displace Crown immunity.

CHAPTER 17: Intergovernmental Immunities

Bropho dealt with the situation where the court needed to determine whether legislation enacted by one level of government bound the Crown in right of that same level of government (that is, whether a law enacted by the Western Australian Parliament bound the Crown in right of Western Australia). However, the Bropho test was also adopted in cases where the courts needed to decide whether: • Commonwealth legislation applied to the Crown in right of the States (Jacobsen v Rogers (1995) 182 CLR 572) • State legislation applied to the Crown in right of the Commonwealth (Re Residential Tenancies Tribunal of New South Wales v Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410) • State legislation applied to the Crown in right of another State (State ­Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253).

Can one level of government bind the other? We now need to examine the extent to which it is possible for one level of government to bind the Crown in right of another in the context of Australia’s federal system. The relationships that need to be examined are represented in the following diagram. Figure 17.1 Intergovernmental relationships Crown in right of the Commonwealth

Crown in right of State 1

?

Commonwealth Parliament

?

Crown in right of State 2

?

State 1 Parliament

?

State 2 Parliament

It is uncontroversial to state that the Crown in right of the Commonwealth can be bound by a law enacted by the Commonwealth Parliament, and that the Crown in right of a State can be bound by a law of that State’s Parliament. The questions that this chapter addresses is whether the Commonwealth Parliament can bind the Crown in right of a State, whether a State Parliament can bind the Crown in right of the Commonwealth, and whether the Parliament of one State can bind the Crown

237

238

Part Three: Financial Relations and Federalism

in right of another. If one level of government can pass legislation directing another to do something or to refrain from doing something, is there not a risk that the Commonwealth or the States might interfere in each other’s operations?

Commonwealth laws binding the States In the early years of Federation the weight of authority was to the effect that neither level of government could legislate to bind the Crown in right of the other. However, that changed when the decision in the Engineers Case established that the Commonwealth and the States could be subject to each other’s laws.

A case to remember In Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129, the High Court had to decide whether the State of Western Australia, in its capacity as employer of railway workers, was bound by a Commonwealth award made under the authority of legislation enacted under s 51(xxxv) of the Constitution. The majority held as follows: • Commonwealth laws did bind the Crown in right of the States. • The principle was reciprocal—State laws could bind the Crown in right of the ­Commonwealth. • The Commonwealth’s subjection to State laws was subject to there being no ­inconsistent Commonwealth law overriding the State law by virtue of s 109.

The Engineers decision radically changed the federal balance. As discussed in Chapter 6, the decision saw an abandonment of the narrow interpretation of Commonwealth legislative powers, and the adoption of a broad approach in its stead. In addition, by holding that the Commonwealth could use its powers to enact laws binding not only on the people of the Commonwealth but also on the States as entities, the decision raised the prospect of the Commonwealth using its powers to interfere in the operation of State Governments. Furthermore, although the principle was reciprocal, and the Commonwealth might find itself bound by State laws, the Commonwealth had an ace up its sleeve in the form of s 109: if the State law was on a topic that fell within the Commonwealth’s legislative powers, the Commonwealth could evade the State law simply by enacting inconsistent legislation which would then override the State law by virtue of s 109.

The Melbourne Corporation principle The apparent dominance in federal relations conferred on the Commonwealth by the Engineers decision was counterbalanced by the equally important decision in the Melbourne Corporation case, which imposed a limit on the extent to which the Commonwealth and the States can bind each other.

CHAPTER 17: Intergovernmental Immunities

A case to remember The Commonwealth enacted the Banking Act 1945 (Cth), s 48 of which prohibited private banks from carrying out business for States or State authorities, such as municipalities. The legislation was challenged in Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31. The High Court held that, although the Engineers Case had established that the Commonwealth could use its legislative powers to enact laws that applied to the States, the federal nature of the Constitution meant that the Constitution was based upon the coexistence of the two levels of government, and that there was to be implied in the Constitution a federal principle that the Commonwealth could not use its power in such a way as to: • discriminate against the States by singling them out as the subjects of legislation, or • threaten the continued existence of States or substantially curtail or interfere with the ability of their governments to function. Section 48 did this because, although it was ostensibly aimed at private banks, in reality, it dictated to the State Governments with whom they could and could not do their banking. The importance of the Melbourne Corporation principle is that it establishes that, even if Commonwealth legislation is prima facie within s 51, if its effect is substantially to interfere with the functioning of a State Government then it will be invalid. Note also that the principle is reciprocal: the States too are barred from destroying or substantially curtailing the powers of the Commonwealth.

The test formulated in Melbourne Corporation was modified following the decision in Richardson v Forestry Commission (Lemonthyme & Southern Forests Case) (1988) 164 CLR 261. In this case, Tasmania challenged a Commonwealth law, enacted under the s 51(xxix) external affairs power, prohibiting the development of a certain area within the State pending a decision as to whether it was to be a World Heritage Site. In rejecting the challenge, which was based inter alia on an alleged infringement by the Commonwealth of the implied federal principle, the court held that simply because a law applies to a specific State (and to that extent ‘discriminates’ against it) does not in itself invalidate the law because, as on the facts of Richardson itself, legislation must sometimes of necessity be directed towards a State in which a particular thing is located or event takes place. The Melbourne Corporation test was therefore subsequently reformulated in Austin v Commonwealth (2003) 215 CLR 185, in which it was held that the principle is infringed if a law imposes a special burden on a State which has the effect of substantially curtailing its capacity to function as a separate government. Whether a law enacted by one level of government goes so far as to substantially curtail the functioning of another is a matter of degree and, in practice, the High Court has not often found that this has occurred. Thus, the court did not accept the argument that the Commonwealth had breached the Melbourne Corporation principle when: • t he Payroll Tax Act 1941 (Cth) subjected the Crown in right of the States to the obligation to pay tax to the Commonwealth in respect of employees on the State payroll (Victoria v Commonwealth (Payroll Tax Case) (1971) 122 CLR 353)

239

240

Part Three: Financial Relations and Federalism

the Commonwealth legislated so as to prohibit the Crown in right of Tasmania from developing an area of Crown land which was listed as a World Heritage Site (Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1) • t he Commonwealth enacted legislation under its s 51(xxxv) conciliation and ­arbitration power, which made special provision for a dispute between ­Queensland electricity providers and employers, and subjected them to a ­legislative regime which differed from that governing other industrial disputes in the industry (Queensland Electricity Commission v Commonwealth (1985) 159 CLR 152) • t he Commonwealth taxed the States on the value of fringe benefits paid to State employees (State Chamber of Commerce and Industry v Commonwealth (1987) 163 CLR 329) • d  evelopment in areas of Tasmania was prohibited pending a determination as to whether they were to be World Heritage Sites (Richardson v Forestry ­Commission (Lemonthyme & Southern Forests Case) (1988) 164 CLR 261) • t he Commonwealth used the s 51(xx) corporations power to enact a law ­regulating the employment conditions of employees of corporations, a provision of which prohibited State industrial tribunals from hearing cases that were the subject of proceedings before the Australian Industrial Relations Commission (New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1). There have however been instances in which the courts have found that a Commonwealth law has intruded so far into the governmental functions of a State that it has been found to have breached the implied federal principle. •

A case to remember In Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 an award governing the employment conditions of workers in the public service in Victoria was made under the Industrial Relations Act 1988 (Cth). The High Court held that the implied federal principle limited the circumstances in which the Commonwealth could use its s 51(xxxv) conciliation and arbitration power to regulate the State’s employment relationship with its public servants. The court held that the Commonwealth could not regulate the number and identity of persons whom a State wanted to employ or make redundant, their qualifications, or the terms of their employment or redundancy. The Commonwealth could make awards regulating minimum wages and working conditions. However, in the case of holders of high office—including ministers, ministerial assistants and advisers, high-level statutory office holders and judges—even this limited Commonwealth power would not apply, as the autonomy of the States required that they have complete control over employment conditions at the higher levels of government. The implied federal principle was also applied in Austin v Commonwealth (2003) 215 CLR 185, in which the Commonwealth enacted legislation that imposed a special tax on

CHAPTER 17: Intergovernmental Immunities

the superannuation benefits of State judges. The High Court invalidated the legislation on the ground that it amounted to an impermissible interference by the Commonwealth in the way in which the States remunerated judges, a matter that lay at the heart of relationships between the organs of State Governments. The same conclusion was reached in relation to taxation of superannuation benefits of members of State Parliaments in Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272.

Another case in which the reasoning of the High Court was similar to that underpinning the implied federal principle (although the principle was not expressly mentioned in the case) is Victoria v Commonwealth (Second Uniform Tax Case) (1957) 99 CLR 575. This case concerned the constitutionality of the legislative scheme enacted by the Commonwealth to enable it to monopolise the levying of income tax. The court held that the federal nature of the Constitution precluded the Commonwealth from using its s 51(ii) power to prohibit taxpayers from paying their tax liability to States before they had discharged their liability to the Commonwealth. It was also stated obiter that the power could not be used to enact legislation that prohibited the States from imposing taxes. Although such legislation would fall within the field of taxation, the use of s 51(ii) in such a way would obviously terminate the States’ ability to function effectively.

State laws binding the Commonwealth There has been some uncertainty about the States’ power to bind the Commonwealth as a result of challenges to early decisions. However, competing interpretations have now largely been resolved.

Early applications of the ENGINEERS CASE In the Engineers Case, the court stated that, as Commonwealth legislation could apply to the Crown in right of the States, there was no reason why State law should not apply to the Commonwealth, subject to s 109 override in cases where the Commonwealth enacted legislation that was inconsistent with State legislation. Initially, the reciprocity found in the Engineers Case was followed in a number of cases in which the Commonwealth was held to be subject to State laws. • In Pirrie v MacFarlane (1925) 36 CLR 170, a member of the air force, who was driving a vehicle in the course of his employment, was prosecuted under the Motor Car Act 1915 (Vic) for driving without a licence. The High Court held that servants of the Crown in right of the Commonwealth acting within the course and scope of their duties were not exempt from State criminal law. • T  he Companies Act 1936 (NSW) provided that when a company was ­liquidated, the Crown in right of the Commonwealth as creditor would no longer enjoy

241

242

Part Three: Financial Relations and Federalism

the common law privilege it enjoyed under Crown prerogative as ­preferred creditor. The Commonwealth challenged this provision, but in Uther v ­Federal ­Commissioner of Taxation (1947) 74 CLR 508 the court held that, in the absence of any contrary legislation overriding State enactments, the ­Commonwealth was ­subject to the general law—that is, the common law and statute law of the States—against the background of which it conducted its affairs. The Crown in right of the Commonwealth thus lost its priority by the operation of the State enactment. The Commonwealth can, of course, always evade the effect of State law by enacting legislation that is inconsistent with the State enactment: the Stamps Act 1946 (Vic) imposed a stamp duty on receipts issued within the State. The State claimed an amount of duty from the Australian Coastal Shipping Commission. The Commission was established by the Australian Coastal Shipping Commission Act 1956 (Cth), under the interstate and overseas trade and commerce power. Section 36(1) of that Act contained an express statement that the Commission was not subject to State taxes. In Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46, it was held that the Commission was not bound by the State tax because there was inconsistency between the Stamps Act and the Commonwealth legislation.

Uncertainty on Commonwealth subjection to State law Unfortunately, the initial clarity of the decision in the Engineers Case was lost, due to decisions that created uncertainty in this area. In Commonwealth v Cigamatic Pty Ltd (1962) 108 CLR 372 the Commonwealth again challenged the removal of its common law priority as creditor by the Companies Act 1936 (NSW). By a majority, the High Court overruled Uther v Federal Commissioner of Taxation (1947) 74 CLR 508, holding that State law could not override the prerogative rights of the Crown in right of the Commonwealth as preferred creditor. In reaching this conclusion Dixon CJ held that: • States may not define or regulate the rights and duties of the Crown in right of the Commonwealth vis-à-vis its subjects or interfere in its fiscal or prerogative rights, but • the Commonwealth could be bound by State law when it entered into a transaction (the example given by Dixon CJ was sale of goods), in relation to which the State had made a general law governing those choosing to enter into the transaction. The first statement was clearly incompatible with the previously established view that the Engineers Case conferred reciprocal rights upon the States and Commonwealth to bind each other (subject only to Commonwealth statutory

CHAPTER 17: Intergovernmental Immunities

override under s 109). Furthermore, the court in Cigamatic did not overrule the Engineers decision on this point. The second statement introduced an element of uncertainty, because subjection of the Crown in right of the Commonwealth to a State law of general application relating to a particular activity could well affect the rights of the Crown vis-à-vis its subjects, or its fiscal or prerogative rights. The uncertainty created by the Cigamatic decision, on the question of whether the States could bind the Commonwealth, has largely been resolved by the Defence Housing Authority case.

A case to remember Cigamatic was reinterpreted in Re Residential Tenancies Tribunal of New South Wales v Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410. In this case, the court had to determine whether the Commonwealth Defence Housing Authority was subject to the jurisdiction of the New South Wales Residential Tenancies Tribunal in relation to a dispute arising out of a lease that the Commonwealth had entered into. In finding that the Commonwealth, as landlord, was subject to the Residential Tenancies Act 1987 (NSW), a majority of the court distinguished between: • capacities of the Crown in right of the Commonwealth, which the States cannot limit, and • the exercise of those capacities, which may be subject to State laws of general ­application in activities that the Commonwealth carries out in common with other citizens. What is the difference between ‘capacities’ and the ‘exercise of capacities’? Surely, by limiting the way in which capacities are exercised to State law, one also limits the capacities themselves? The following principles, contained in the majority judgments, provide an answer to this problem. • The majority distinguished between exclusive capacities of the Crown (for example, ­privileges or immunities) and those capacities which it exercises in common and on an equal footing with its subjects (for example, entering into contracts). This ­distinction between exclusive and non-exclusive capacities of the Crown reflects the debate (discussed in Chapter 4) over the meaning of the words ‘prerogative’, which some ­commentators use to refer to all common law powers of the Crown, but which others use only when referring to the exclusive common law powers of the Crown. • T  he majority stated that interference by the States with exclusive capacities of the Crown is not permitted. • B  y contrast, when the Commonwealth uses its non-exclusive common law powers, it does so subject to the provisions of State law. • In addition, State laws that discriminate against the Commonwealth, even in respect of the capacities it enjoys in common with its subjects, are invalid. The imposition of a special disability on the Crown in right of the Commonwealth is impermissible. In other words, the Commonwealth’s subjection to State when it exercises its non-exclusive powers depends on the State law applying uniformly to all parties who might engage in the activity being regulated.

243

244

Part Three: Financial Relations and Federalism

• The Commonwealth may escape the operation of State law by enacting inconsistent legislation and triggering the operation of s 109. On the facts of the Defence Housing Authority case, the Commonwealth was held to be subject to the jurisdiction of the Residential Tenancies Tribunal, because the activity it was engaged in (being a landlord) was not one involving an exclusive prerogative and was therefore subject to State law governing landlords and tenants.

Clearly, in light of the decision in Defence Housing Authority, much depends upon the characterisation of the activity of the Crown in right of the Commonwealth. If it is an activity unique to the Commonwealth, then the Commonwealth will not be subject to State law when engaging in it. However, day-to-day commercial transactions will be subject to State law, because those activities are of a type that are not unique to the Crown.

Section 64 of the Judiciary Act 1903 (Cth) The Crown in right of the Commonwealth is also made subject to State law in certain circumstances by virtue of the operation of s 64 of the Judiciary Act 1903 (Cth), which provides that: In any suit to which the Commonwealth or a State is a party, the rights of the parties shall, as nearly as possible, be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject.

The purpose of this section is to make the Crown subject to liability in the same way as private litigants—in other words, to remove its prerogative immunity. Does this mean that the Crown in right of the Commonwealth has subjected itself to State law and is, thus, on a par with any other person within the State’s jurisdiction? In Maguire v Simpson (1977) 139 CLR 362, it was held that, by virtue of the operation of s 64, a Commonwealth agency—which had brought an action to recover a debt—was subject to provisions in the Limitations Act 1969 (NSW), which barred rights of action in certain circumstances. The court noted that s 64 had not been argued in Commonwealth v Cigamatic Pty Ltd (1962) 108 CLR 372, but made no comment on the effect this might have on its precedent value. Note that the operation of s 64 is restricted to ‘suits’, interpreted in Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254 as meaning civil claims, and not actions arising out of the criminal or administrative law.

Summary In light of the above, one can make the following statements in relation to the subjection of the Crown in right of the Commonwealth to State law: • The general principle, established in Amalgamated Society of Engineers v ­Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129, that the ­Commonwealth may be subject to State laws, remains valid.

CHAPTER 17: Intergovernmental Immunities

•

•

•

 hen a civil suit is brought against the Commonwealth, it will be subject to State W law by virtue of s 64 of the Judiciary Act 1903 (Cth). In accordance with the decision in Re Residential Tenancies Tribunal of New South Wales v Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410, the Commonwealth will also be subject to State laws which do not interfere with the exclusive prerogatives of the Commonwealth and which do not ­discriminate against the Commonwealth. Liability of the Crown in right of the Commonwealth can be avoided if the Commonwealth Parliament enacts a law inconsistent with that of the State and triggers s 109 override.

Other provisions affecting Commonwealth–State immunities Certain sections in the Constitution contain express provisions affecting intergovernmental immunities.

Section 114 Section 114 prohibits the Commonwealth and States from imposing tax on property owned by the other. The key issue in such cases has been to determine whether the challenged imposition is a ‘tax on property’. Queensland v Commonwealth (Fringe Benefits Tax Case) (1987) 162 CLR 74 considered a tax imposed on employers, including the States, in respect of fringe benefits which were given to employees. It was held that this did not amount to an infringement of s 114. The State was not being taxed on its ownership or use of its property—rather, it was being taxed on its employees’ use of the property. In other words, the tax was on a particular transaction in respect of the property. By contrast, in Deputy Commissioner of Taxation v State Bank of New South Wales (1992) 174 CLR 219, the Commonwealth had sought to impose a tax on the bank in respect of forms it manufactured for its own use. It was held that, as a State Government entity, the bank was protected from the tax by s 114, because that section protected States from taxes on their property. Similarly, in South Australia v Commonwealth (1992) 174 CLR 235, it was held that the imposition of a Commonwealth capital gains tax on the sale by a State of its property infringed s 114, because the tax was on an asset. However, Commonwealth tax on interest earned by the State was a tax on income, not on assets, and thus did not contravene s 114.

Section 52 Section 52(i) gives the Commonwealth the exclusive right to make laws for all places acquired by the Commonwealth for public purposes. Thus, under the Constitution, no State law applies in Commonwealth places.

245

246

Part Three: Financial Relations and Federalism

A worker who was injured while employed at an air force base owned by the Commonwealth claimed compensation under State law. In Worthing v Rowell & Muston Pty Ltd (1970) 123 CLR 89, it was held that, upon Commonwealth acquisition of a place, the State in which the place was located ceased to have legislative competence in respect of it. Therefore, the worker was not covered by the State workers’ compensation scheme. In order to prevent a legal vacuum in places acquired by it, the Commonwealth enacted the Commonwealth Places (Application of Laws) Act 1970 (Cth), which provides that the law of the surrounding State is of effect in Commonwealth places, subject to certain express exclusions of State laws (such as those imposing taxes). Section 52(ii) gives the Commonwealth exclusive power to legislate with respect to the Commonwealth public service. Thus Commonwealth public servants are not subject to State industrial relations legislation.

Sections 51(xiii) and (xiv) Section 51(xiii) and (xiv) give the Commonwealth the power to legislate with respect to banking and insurance respectively, excluding State banking and insurance. The term ‘State banking’ was interpreted in Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31 as excluding from the ambit of Commonwealth legislative power the engagement in banking business by the States themselves (for example, where a State Government establishes its own bank). However, this did not preclude the Commonwealth from legislating on State transactions with other banks.

Laws of one State binding another Most case law on intergovernmental immunities has involved disputes over Commonwealth laws binding the States or vice versa. However, in view of the fact that the States enjoy extraterritorial legislative competence (as discussed in Chapter 7), the law of one State can impose obligations on the Crown in right of another. In State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253, the High Court held that the appellant, which was an instrumentality in right of the Crown of New South Wales, was bound to pay duty on the transfer of property situated in Western Australia as assessed under the Stamp Act 1921 (WA). There will however be a point at which the application of the law of one State to the Crown in right of another infringes the implied federal principle. In Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 the High Court stated obiter that if a State’s law did happen to substantially interfere with the functioning of another State’s Government, such a law might be invalid. This reasoning is consistent with that enunciated by the court in Austin v Commonwealth (2003) 215 CLR 185, relating to cases involving the application of laws of the Commonwealth and of the States to each other.

CHAPTER 17: Intergovernmental Immunities

Assessment preparation Problem question In a report on housing affordability, the Australian Productivity Commission states that a major reason why houses are so expensive in Australia is that State and Territory ­governments have been slow to develop land for house construction. The ­Commonwealth Government decides to remedy the situation. It registers a corporation called the Commonwealth Housing Corporation, which is wholly owned by the Commonwealth Government. It then enacts the Housing Act 2015 (Cth), s 1 of which authorises the ­Commonwealth to employ people under the Public Service Act 1999 (Cth) to run the corporation. Section 2 of the Act states that it applies to the Crown in right of the States. Section 3 of the Act provides as follows: 3 Exclusive right to develop land for residential purposes The Commonwealth Housing Corporation has the exclusive right to develop land for residential purposes.

The economic consequence of the Act is that landowners on the periphery of major cities and towns in the States sell their land to the Commonwealth for development of ­infrastructure instead of to the States, and the States lose a significant income stream from the sale of developed land to builders. In response, the Parliament of Victoria enacts the Land Development ­Taxation Act 2008 (Vic), s 1 of which is stated to be binding on the Crown in right of the ­Commonwealth, and s 2 of which provides as follows: 2 Land development taxation Taxes are imposed as follows: (a) A tax of 2 per cent on the assets of the Commonwealth Housing Corporation. (b) A payroll tax on the Commonwealth Housing Corporation of $500 per person employed by it.

Advise as to the constitutionality of the above legislation. For extra guidance and suggested answers to these questions, please refer to .

247

248

Table of Cases Bold entries indicate ‘Cases to Remember’ Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169  161, 165–7 Adelaide Company of Jehovah’s Witnesses v Commonwealth (1943) 67 CLR 116  127, 132–3, 181 Air Caledonie v Commonwealth (1988) 165 CLR 462  46, 190, 192 Airlines of New South Wales v New South Wales (No 2) (1965) 113 CLR 54  100, 155–7, 172 Airlines of NSW Pty Ltd v New South Wales (No 1) (1964) 113 CLR 1  222 Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133  127, 140, 189, 192 Albarran v Members, CALDB (2007) 231 CLR 350  87 Al-Kateb v Godwin (2004) 219 CLR 562  149 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers Case) (1920) 28 CLR 129  17, 30, 95, 97, 235, 238, 241–4 Amman Aviation (Pty) Ltd v Commonwealth (1988) 19 FCR 223  53 AMS v AIF (1999) 199 CLR 160  217 Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 139 CLR 54  221, 232 APLA Limited v Legal Services Commission of New South Wales (2005) 224 CLR 322  143, 217 Assistant Commissioner Condon v Pompano Pty Ltd (2013) 295 ALR 638  93 Attorney-General (Commonwealth) v The Queen; Ex parte Australian Boilermakers’ Society [1957] AC 288  84 Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542  89 Attorney-General (NSW) v Trethowan [1932] AC 526  115 Attorney-General (NSW) v Trethowan (1931) 44 CLR 395  109, 115–21 Attorney-General (Vic); Ex relator Black v Commonwealth (DOGS Case) (1981) 146 CLR 559  127, 132, 189, 197 Attorney-General (WA); Ex relator Ansett Transport Industries (Operations) Pty Ltd v Australian National Airlines Commission (1976) 138 CLR 492  157 Attorney-General (WA) v Marquet (2003) 217 CLR 545  116–18, 120–1 Attorney-General v De Keyser’s Royal Hotel [1920] AC 508  57, 69 Austin v Commonwealth (2003) 215 CLR 185  235, 239–41, 246 Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77  137 Australian Broadcasting Commission v Industrial Court of South Australia (1977) 138 CLR 399  221, 229 Australian Building Construction Employees’ and Builders Labourers’ Federation v Commonwealth (1986) 161 CLR 88  83

Table of Cases

Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106  127, 142 Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46  242 Australian Communist Party v Commonwealth (1951) 83 CLR 1  72, 74, 82, 100, 179, 181–4 Australian Education Union, Re; Ex parte Victoria (1995) 184 CLR 188  235, 240 Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29  106, 123, 156 Australian Tape Manufacturers Association v Commonwealth (1993) 176 CLR 480  189, 191–2 Bank of New South Wales v Commonwealth (Bank Nationalisation Case) (1948) 76 CLR 1  35, 97, 100–1, 127, 136–8, 167 Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182  213 Barton v Commonwealth (1974) 131 CLR 477  70 Barton v Taylor (1886) 11 App Cas 197  51 Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283  159 Bennett v Commonwealth (2007) 231 CLR 91  123 Betfair Pty Ltd v Racing New South Wales (2012) 286 ALR 221  214 Betfair Pty Ltd v Western Australia (2008) 234 CLR 418  103, 214 Bodrudazza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651  76 Bond v The Queen (2000) 201 CLR 213  226 Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245  88–9 Bribery Commissioner v Ranasinghe [1965] AC 172  115 British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1925) 35 CLR 422  88 Broken Hill Proprietary Co Ltd v Dagi [1996] 2 VR 106  115 Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337  121 Bropho v Western Australia (1990) 171 CLR 1 235–7 Brown v Members of Classification Review Board (1998) 154 ALR 676  145 Brown v The Queen (1986) 160 CLR 171  131 Brown v West (1990) 169 CLR 195  69 Building Construction Employees and Builders Labourers’ Federation of NSW v Minister of Industrial Relations (1986) 7 NSWLR 372  128 Burton v Honan (1952) 86 CLR 169  102 Butler v Attorney-General (Vic) (1961) 106 CLR 268  223 Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248  124 Capital Duplicators v Australian Capital Territory (No 2) (1993) 178 CLR 561  204, 208–9 Case of Proclamations (1611) 12 Co Rep 74; 77 ER 1352  57, 68, 72, 170–1 Case of Prohibitions del Roy (1607) 12 Co Rep 63; 77 ER 1342  57, 68 Case of the Sheriff of Middlesex (1840) 11 Ad & E 273; 113 ER 419  55 Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436  103, 211, 213, 215

249

250

Table of Cases

Cheatle v The Queen (1993) 177 CLR 541  131 Cheyney v Conn [1968] 1 All ER 779  112 Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1  74, 82, 127, 148 Church of the New Faith v Commissioner of Pay Roll Tax (Vic) (1983) 154 CLR 120  133 City of Collingwood v Victoria (No 2) [1994] 1 VR 652  111 Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272  241 Clayton v Heffron (1960) 105 CLR 214  118, 121 Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466  221–2, 224, 226 Clyne v East (1967) 68 SR (NSW) 385  89, 110 Coe v Commonwealth (No 2) (1993) 118 ALR 193  11 Cole v Whitfield (1988) 165 CLR 360  35, 104, 211–14, 216 Coleman v Power (2004) 220 CLR 1  103, 127, 142, 144 Colvin v Bradley Brothers (1943) 68 CLR 151  224 Combet v Commonwealth (2005) 224 CLR 494  189, 200 Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47  221, 232–3 Commonwealth Aluminium Corp Pty Ltd v Attorney-General (Qld) (COMALCO Case) [1976] Qd R 231  109, 118–19, 121 Commonwealth v Australian Capital Territory [2013] HCA 55  105, 227 Commonwealth v Cigamatic Pty Ltd (1962) 108 CLR 372  242–4 Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254  244 Commonwealth v Hospital Contribution Fund (1992) 150 CLR 49  85 Commonwealth v Tasmania (Tasmanian Dams Case) (1983) 158 CLR 1  72, 98, 103, 138, 163, 165, 170, 173, 240 Commonwealth v WMC Resources Ltd (1998) 194 CLR 1  140 Cormack v Cope (1974) 131 CLR 432  36, 48, 113, 119–21 Craig v South Australia (1995) 184 CLR 163  77 Croome v Tasmania (1997) 191 CLR 119  79 Cunliffe v Commonwealth (1994) 182 CLR 272  217 Davis v Commonwealth (1988) 166 CLR 79  72 Dawson v Commonwealth (1946) 73 CLR 157  185 Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529  208 Deputy Commissioner of Taxation v State Bank of New South Wales (1992) 174 CLR 219 245 Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177  35 Dingjan, Re; Ex parte Wagner (1995) 183 CLR 323  161, 166–7 DPP, Re; Ex parte Lawler (1994) 179 CLR 270  139 Dr Bonham’s Case (1610) 8 Co Rep 113; 77 ER 647  127, 129 Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399  129 Dymond, Re (1959) 101 CLR 11  46, 192 Eastgate v Rozzoli (1990) 20 NSWLR 188  120 Edinburgh & Dalkeith Railway Co v Wauchope (1842) 8 Cl & F 710; 8 ER 279  112

Table of Cases

Egan v Chadwick (1999) 46 NSWLR 563  52, 65 Egan v Willis (1998) 195 CLR 424  52, 65–6 Ellen Street Estates v Minister of Health [1934] 1 KB 590  112 Elliott v Commonwealth (1936) 54 CLR 657  194–5 Entick v Carrington (1765) 19 St. Tr. 1030 3–4 F, Re; Ex parte F (1986) 161 CLR 376  96, 107 FAI Insurances Ltd v Winneke (1982)151 CLR 342  110 Fairfax v Commissioner of Taxation (1965) 114 CLR 1  95, 98–9, 193 Fardon v Attorney-General (Qld) (2004) 223 CLR 575  90, 111 Farey v Burvett (1916) 21 CLR 433  180, 182, 184 Fencott v Muller (1983) 152 CLR 270  163 Forge v ASIC (2006) 228 CLR 45  90–1 Fortescue Metals Group Ltd v Commonwealth (2013) 300 ALR 26  195 Fox v Robbins (1909) 8 CLR 115 211–12 Georgiadis v Australian & Overseas Telecommunications Commission (1994) 179 CLR 297 136–7 Gilbertson v South Australia [1978] AC 772  89, 110 Goryl v Greyhound Australia Pty Ltd (1994) 179 CLR 463  134 Governor, Goulburn Correctional Centre, Re; Ex parte Eastman (1999) 200 CLR 322  81, 125 Grace Bible Church v Reedman (1984) 36 SASR 376  128 Grain Pool of WA v Commonwealth (2000) 202 CLR 479  95–6, 105 Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55  95, 101–2 Grollo v Palmer (1995) 184 CLR 348  86 Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532  91–2 Ha v New South Wales (1997) 189 CLR 465  35, 204, 209 Hamsher v Swift (1992) 33 FCR 545  53–4 Harper v Minister for Sea Fisheries (1989) 168 CLR 314  204, 206 Harper v Victoria (1966) 114 CLR 361  204, 206 Harris v Caladine (1991) 172 CLR 84  85 Harris v Minister of the Interior 1952 (2) SA 428 (A)  115 HC Sleigh Ltd v South Australia (1977) 136 CLR 475  155, 158 Health Insurance Commission v Peverill (1994) 179 CLR 226  139 Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599  204, 207–8 Henry v Boehm (1973) 128 CLR 482  35 Hilton v Wells (1985) 157 CLR 57  85 Hogan v Hinch (2011) 243 CLR 506  145 Horta v Commonwealth (1994) 181 CLR 183  170, 177 Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330  74, 86 Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492  155–6 Hume v Palmer (1926) 38 CLR 441  221, 228

251

252

Table of Cases

ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140  140 International Finance Trust Company Ltd v New South Wales Crime Commission (2009) 240 CLR 319  91 Jacobsen v Rogers (1995) 182 CLR 572  237 JT International SA v Commonwealth [2012] HCA 43  138 Judiciary and Navigation Acts (Advisory Opinions Case), Re (1921) 29 CLR 257  74, 78, 83 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51  74, 90–1, 93–4, 111 Kingswall v The Queen (1985) 159 CLR 264  131 Kirk v The Industrial Court of New South Wales (2010) 239 CLR 531  92 Koowarta v Bjelke-Petersen (1982) 153 CLR 168  170, 173 Kruger v Commonwealth (1997) 190 CLR 1  124, 131 Lane v Morison (2009) 239 CLR 230  85 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520  127, 143–4, 146–8 Leask v Commonwealth (1996) 187 CLR 579  102 Levy v Victoria (1997) 189 CLR 579  145 Lloyd v Wallach (1915) 20 CLR 299  184 Luton v Lessels (2002) 210 CLR 333  191–2 Mabo v Queensland (No 1) (1988) 166 CLR 186  89, 110, 224 Mabo v Queensland (No 2) (1992) 175 CLR 1  3, 11, 224 Madzimbamuto v Lardner-Burke [1969] 1 AC 645  3, 8 Marcus Clarke & Co Ltd v Commonwealth (Capital Issues Case) (1952) 87 CLR 177  184 Matthews v Chicory Marketing Board (1938) 60 CLR 263  189–90, 204–5, 207 McBain, Re; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372  79 McCawley v The King [1920] AC 691  115 McCawley v The King (1920) 28 CLR 106  111 McGinty v Western Australia (1996) 186 CLR 140  17, 20–1 McLean, Ex parte (1930) 43 CLR 472  222, 230 McWaters v Day (1989) 168 CLR 289  221, 230 Melbourne Corporation v Commonwealth (State Banking Case) (1947) 74 CLR 31  31, 33, 141, 235, 238–9, 246 Minister of State for the Army v Dalziel (1944) 68 CLR 261  127, 135–6 Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1  246 Momcilovic v The Queen (2011) 245 CLR 1  89 Morgan v Commonwealth (1947) 74 CLR 421  185, 194–5 Mulholland v Australian Electoral Commission (2004) 220 CLR 181  143, 147 Murphyores Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1  95, 98–9 Mutual Pools and Staff Ltd v Commonwealth (1994) 179 CLR 155  127, 138–9

Table of Cases

Nationwide News Pty Ltd v Wills (1992) 177 CLR 1  102, 141–2, 211, 216–17 Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495  137 New South Wales v Commonwealth (Incorporation Case) (1990) 169 CLR 482  164 New South Wales v Commonwealth (Seas and Submerged Lands Act Case) (1975) 135 CLR 337  122, 170, 175–7 New South Wales v Commonwealth (Wheat Case) (1915) 20 CLR 54  74, 81 New South Wales v Commonwealth (Work Choices Case) (2006) 229 CLR 1 100, 161, 167, 240 Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513  139–40 Nintendo v Centronic (1994) 181 CLR 134  139 Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555  193 Oates v Attorney-General (Cth) (2003) 214 CLR 496  69 O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565  155, 158–9, 221, 228 Pape v Commissioner of Taxation (2009) 238 CLR 1  57, 71, 79, 199, 201 Parton v Milk Board (Vic) (1949) 80 CLR 229  204, 206, 208–9 Pearce v Florenca (1976) 135 CLR 507  121 Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388 46 Pickin v British Railways Board [1974] AC 765  112 Pidoto v Victoria (1943) 68 CLR 87  107 Pirrie v MacFarlane (1925) 36 CLR 170  241 PJ Magennis Pty Ltd v Commonwealth (1959) 80 CLR 382  136 Plaintiff S 157/2002 v Commonwealth (2003) 211 CLR 476  74, 76–7, 87 Pochi v MacPhee (1982) 151 CLR 101  107 Pollentine v Bleijie [2014] HCA 30  91 Polyukhovich v Commonwealth (1991) 172 CLR 501  83, 170, 176 Port Macdonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340  122 Precision Data Holdings v Wills (1991) 173 CLR 167  87 Prince’s Case, The (1606) 8 Co Rep 1a; 77 ER 481  113 Pye v Renshaw (1951) 84 CLR 58  197 Queensland Electricity Commission v Commonwealth (1985) 159 CLR 152  240 Queensland v Commonwealth (Fringe Benefits Tax Case) (1987) 162 CLR 74  245 Queensland v Commonwealth (Second Territorial Senators Case) (1977) 139 CLR 585  42 Quickenden v O’Connor (2001) 184 ALR 260  163 R v Archdall (1928) 41 CLR 128  131 R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235  165 R v Bernasconi (1915) 19 CLR 629  124, 130 R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 453  84

253

254

Table of Cases

R v Brislan; Ex parte Williams (1935) 54 CLR 262  105 R v Burgess; Ex parte Henry (1936) 55 CLR 608 170–1 R v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (1960) 103 CLR 368  88 R v Credit Tribunal; Ex parte General Motors Acceptance Corp (1977) 137 CLR 545  231 R v Federal Court of Australia; Ex parte Western Australian National Football League Inc (Adamson’s Case) (1979) 143 CLR 190 161–3 R v Foster; Ex parte Rural Bank of New South Wales (1949) 79 CLR 43  185 R v Joske; Ex parte Shop Distributive and Allied Employees’ Association (1976) 135 CLR 194 85 R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254  74, 83 R v Licensing Board of Brisbane; Ex parte Daniell (1920) 28 CLR 23  221, 223 R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338  221, 230 R v Oakes (1986) 26 DLR (4th) 200  104 R v Poole; Ex parte Henry (No 2) (1939) 61 CLR 634 170–2 R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157  36, 55, 84 R v Sharkey (1949) 79 CLR 121  72, 176 R v Spicer; Ex parte Australian Builders Labourers’ Federation (1957) 100 CLR 277  87–8 R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170  8 R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533  162 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361  87 R v Winneke; Ex parte Gallagher (1982) 152 CLR 211  221, 229–30 Residential Tenancies Tribunal of New South Wales v Henderson, Re; Ex parte Defence Housing Authority (1997) 190 CLR 410  235, 237, 243–5 Richardson v Forestry Commission (Lemonthyme & Southern Forests Case) (1988) 164 CLR 261  174, 239–40 Roach v Electoral Commissioner (2007) 233 CLR 162  17, 19–20, 104, 127, 149 Rowe v Electoral Commissioner (2010) 243 CLR 1  20, 149 Ruddock v Vidarlis (2001) 183 ALR 1  70 Shell Co of Australia v Federal Commissioner of Taxation [1931] AC 245  88 South Australia v Commonwealth (1992) 174 CLR 235  245 South Australia v Commonwealth (First Uniform Tax Case) (1942) 65 CLR 373  105, 184, 189, 197–8 South Australia v Totani (2010) 242 CLR 1  92–3 South-Eastern Drainage Board v Savings Bank of South Australia (1939) 62 CLR 603  117 Spratt v Hermes (1965) 114 CLR 226  123 State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253  237, 246 State Chamber of Commerce and Industry v Commonwealth (1987) 163 CLR 329  47, 240 State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282  163

Table of Cases

Stenhouse v Coleman (1944) 69 CLR 457  95, 99, 179, 181, 183–4 Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211  143 Stockdale v Hansard (1839) 9 Ad & E 1; 112 ER 1112  36, 54–5 Street v Queensland Bar Association (1989) 168 CLR 461  35, 104–5, 127, 134 Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468  95, 100, 161, 165, 168 Sue v Hill (1999) 199 CLR 462  43 Swift Australian Co Pty Ltd v Boyd-Parkinson (1962) 108 CLR 189  159 Sykes v Cleary (No 2) (1992) 176 CLR 77  43 TA Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177  221, 228–9 Tajjour v New South Wales [2014] HCA 35  103–4, 144–5 Telstra Corporation Limited v Commonwealth (2008) 234 CLR 210  140 Theophanous v Commonwealth (2006) 225 CLR 101  141 Theophanous v Herald and Weekly Times (1994) 182 CLR 104  143 Thomas v Mowbray (2007) 233 CLR 307  181, 184 Tracey, Re; Ex parte Ryan (1989) 166 CLR 518  84, 184 Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397  136–8 Trethowan v Peden (1930) 31 SR (NSW) 183  119 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591  79 Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1  109, 111–12, 122, 128 Unions NSW v New South Wales [2013] HCA 58  103, 143–4 University of Wollongong v Metwally (1984) 158 CLR 447  231–2 Uther v Federal Commissioner of Taxation (1947) 74 CLR 508  242 Victoria v Commonwealth and Hayden (AAP Case) (1975) 134 CLR 81 189 Victoria v Commonwealth (Federal Roads Case) (1926) 38 CLR 399  189, 196 Victoria v Commonwealth (Industrial Relations Case) 187 CLR 416  170, 174 Victoria v Commonwealth (Payroll Tax Case) (1971) 122 CLR 353  239 Victoria v Commonwealth (PMA Case) (1975) 134 CLR 81  36, 48, 60, 118, 121 Victoria v Commonwealth (Second Uniform Tax Case) (1957) 99 CLR 575  198, 241 Victorian Chamber of Manufactures v Commonwealth (Prices Regulation Case) (1943) 67 CLR 413  184 Victorian Stevedoring and General Contracting Co Ltd v Dignan (1931) 46 CLR 73  28 Viskauskas v Niland (1983) 153 CLR 280  221, 231 Visnic v ASIC (2007) 231 CLR 381  87 W & A McArthur Ltd v Queensland (1920) 28 CLR 530  155 Wainohu v New South Wales (2011) 243 CLR 181  93 Wakim, Re; Ex parte McNally (1999) 198 CLR 51  80 Walker v New South Wales (1994) 82 CLR 45  11 Waterside Workers’ Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434  81–2

255

256

Table of Cases

Wenn v Attorney-General (Vic) (1948) 77 CLR 84  185, 221–2, 227 West Lakes Ltd v South Australia (1980) 25 SASR 389  109, 119, 121 Western Australia v Chamberlain Industries (1970) 121 CLR 1  204, 207 Western Australia v Commonwealth (First Territorial Senators Case) (1975) 134 CLR 201  35–6, 41–2, 49, 60 White v Director of Military Prosecutions (2007) 231 CLR 570  84 Williams v Commonwealth (No. 1) (School Chaplains Case) (2012) 288 ALR 410  71, 200–1 Williams v Commonwealth (No. 2) [2014] HCA 23  72, 201 Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1  86 Wood, Re (1988) 167 CLR 145  43 Worthing v Rowell & Muston Pty Ltd (1970) 123 CLR 89  107, 246 WR Moran v Deputy Federal Commissioner of Taxation (NSW) [1940] AC 83  196–7 Wurridjal v Commonwealth (2009) 237 CLR 309  124, 135 XYZ v Commonwealth (2006) 227 CLR 532  176

257

Table of Statutes Commonwealth Acts Interpretation Act 1901 s 15A  105 s 46  105 Administrative Decisions (Judicial Review) Act 1977 (ADJR Act)  66–7 Air Navigation Act 1920 s 4  171 Appropriation Act (No 1) 2005–06  200 Archives Act 1983  64 Australia Act 1986  6, 14, 15, 122, 142 s 1  14, 58 s 2  14 s 2(1)  121 s 3  14 s 6  117–18, 120–1 s 7  58, 110 s 7(2)  110 Australian Bicentennial Authority Act 1980 72–3 Australian Coastal Shipping Commission Act 1956  242 Banking Act 1945 s 48  239 s 51  239 Broadcasting and Television Act 1942  229, 232 Broadcasting Regulation Act 2015  150 s 2  150 s 3  151 s 3(ii)  151 Child Support Legislation Amendment (Reform of the Child Support Scheme—New Formula and Other Measures) Act 2006 s 6  28 Circuit Layouts Act 1989  139 Civil Aviation Act 1988  140 Coastal Waters (State Powers) Act 1980  122, 175 Coastal Waters (State Title) Act 1980  122 Commonwealth Constitution  5, 7, 15, 18, 22, 31, 95, 115, 128, 141, 146, 149

Chap I  36, 37 Chap II  39 Chap III  32, 33, 74, 78, 85, 89–91, 125, 127, 148 s 1  36, 58, 116 s 2  37, 58 s 5  37, 59 s 6  37 s 7  18, 19, 39, 40, 41, 142, 149 s 8  19, 20, 149 s 9  115 s 13  40–1 s 16  42 s 22  44 s 23  44, 116 s 24  18, 19, 37–8, 142, 149 s 28  25, 38 s 29  38 s 30  19, 20, 149 s 32  59 s 34  42 s 39  44 s 40  44, 116 s 41  19 s 44  42–3 s 44(i)–(v)  42 s 47  42 s 49  51, 84 s 51  32, 71, 96, 111, 123, 124 s 51(i)  98, 99, 100, 106, 138, 141, 155, 156, 157, 158–9, 161, 165, 168, 195, 212, 213 s 51(ii)  33, 71, 99, 102, 138, 141, 189, 193–5, 197, 198, 217, 241 s 51(v)  105 s 51(vi)  31, 82, 84, 99–100, 103, 133, 138, 171, 179–83, 195 s 51(x)  139 s 51(xii)  31 s 51(xiii)  101, 167, 235, 246 s 51(xiv)  167, 235, 246 s 51(xix)  107 s 51(xviii)  139 s 51(xx)  34, 98–9, 100–1, 158, 161–8, 240 s 51(xxi)  105, 107 s 51(xxii)  107 s 51(xxiiiA)  139

258

Table of Statutes

s 51(xxix)  70, 71, 99, 100, 103, 122, 141, 170–7, 239 s 51(xxxi)  33, 124, 127, 134–6, 138, 139–41, 197 s 51(xxxix)  85, 101, 156, 180, 199 s 51(xxxv)  100, 156, 238, 240 s 51(xxxvii)  34, 164 s 52  96, 221, 235, 245–6 s 52(i)  31, 32, 107, 245 s 52(ii)  31, 32, 70, 246 s 53  43–4, 45, 47, 62, 72, 189–90, 200, 205 s 54  33, 45–6, 190 s 55  33, 45–7, 190, 191, 217 s 56  59 s 57  33, 41, 47–9, 53, 59, 113, 119–20 s 58  6, 37, 58, 59, 116 s 59  37, 59 s 60  37 s 61  7, 23, 57, 58, 67, 70, 71, 72, 180, 199 s 62  23 s 63  59 s 64  7, 9, 23, 24, 59, 62–3 s 67  59 s 68  58, 59 s 71  74, 78, 79, 85, 86, 89, 125 s 72  59, 75, 81, 82, 85 s 73  77–8, 89 s 74  37, 59 s 75  75, 78, 79, 80 s 75(iii)  67, 76, 87 s 75(v)  67, 76–7, 82, 87, 149 s 76  75–6, 77, 78, 79, 80 s 77  74 s 77(i)  78, 80 s 77(iii)  79 s 80  33, 124, 130–1 s 81  32, 33, 71, 180, 191, 199–201 s 83  9, 45, 61, 63, 69, 189, 199–201, 200 s 90  31, 32, 35, 96, 124, 198, 204–5, 206, 208, 209, 221 s 92  32, 33, 35, 103, 104, 211–17, 217–18 s 96  32, 72, 189, 196–7, 197, 198, 209 s 99  33, 189, 193–5, 197, 217 s 106  30, 109

s 107  30 s 109  31, 32, 33, 97, 221, 221–3, 231–2, 238, 241, 243, 244, 245 s 114  31, 179, 221, 235, 245 s 115  31, 221 s 116  33, 124, 127, 131–3, 171, 197 s 117  32, 33, 35, 104, 127, 133–4 s 119  179 s 122  32, 38, 41, 81, 96, 123–4, 125, 131, 135, 157 s 128  15, 30, 35, 44, 59, 109, 142, 144 s 143  143 Commonwealth Electoral Act 1918  6, 19, 20, 41, 149 s 48  38 s 93  19 s 159  37 s 163  42 s 354  42 s 376  42 Commonwealth Electoral (Wartime) Act 1917 223 Commonwealth Places (Application of Laws) Act 1970  246 Commonwealth Telecommunications Standardisation Act 2015  234 Chap XXIV  234 s 435  234 Communications (Interception) Act 1979 s 20  85–6 Communist Party Dissolution Act 1950 181 Conciliation and Arbitration Act 1904  83, 87–8, 222, 224, 226, 228, 232 Corporations Act 2001  89, 164 s 556(1)  70 Crimes (Superannuation Benefits) Act 1989 141 Crimes Act 1914  165 s 4C(2)  230 s 29  230 Customs Act 1901  155, 228 Defence Force Discipline Act 1982  230 Disability Discrimination Act 1992  129

Table of Statutes

Discharged Servicemen’s Preference Act 1943 227 Drought Assistance Act 2015  202 Sch I  202 Electronic Industry Workers Benefit Act 2015 203 s 17(1)  203 Euthanasia Laws Act 1997  123 Extradition (Foreign States) Act 1966  70 Family Law Act 1975  107 Financial Management and Accountability Act (FMA Act) 1997  201 Flags Act 1953, s 5(2)  116 Income Tax Assessment Act 1922  88 Income Tax Assessment Act 1936  196 Industrial Relations Act 1988  141–2, 166, 216, 240 Inter-State Commission Act 1912  81 Judiciary Act 1903  77, 78 s 34(2)  78 s 35(2)  78 s 35A  78 s 64  67, 70, 235, 244–5

s 8  56 s 9  55, 56 s 10  56 s 16(1)  52 s 16(2)  53 s 16(3)  53 s 16(5)  53, 56 Parliamentary Proceedings Broadcasting Act 1946  56 Passports Act 1938  70 Payroll Tax Act 1941  239–40 Prevention of Terrorism (Professional Services) Act 2015  186 Public Service Act 1922  70 Public Service Act 1999 s 2  247 Racial Discrimination Act 1975  129, 172, 231 s 10  224 s 10(1)  116 Re-establishment and Employment Act 1945 227 Restrictive Trade Practices Act 1971  162 Royal Style and Titles Act 1953  58

Jurisdiction of Courts (Cross-Vesting) Act 1987 80

Rural Assistance Act 2015  202

Legislative Instruments Act 2003 s 38  28 s 42  28 s 44  28

Seas and Submerged Lands Act 1973  122, 175

Sales Tax Assessment Act 1930  192

Sex Discrimination Act 1984  129

Marriage Act 1961  227

State Grants Act 1959  198

Members of Parliament (Staff) Act 1984 64

Statute of Westminster Adoption Act 1942  6, 10, 14, 175

Migration Act 1958  46–7, 70, 76, 82, 107, 192

Trade Practices Act 1965  165

National Security Act 1946  185 Navigation Act 1912  228 Parliamentary Papers Act 1908  56 Parliamentary Privileges Act 1987  6, 51, 53, 56, 65 s 4  56 s 5  51 s 7  56

Trade Practices Act 1974  137, 162, 166, 231 s 52  79 s 75  231 s 80  79 s 163A  79 War Crimes Amendment Act 1988  176 Workplace Relations Amendment (Work Choices) Act 2005  167

259

260

Table of Statutes

Australian Capital Territory

Queensland

Australian Capital Territory (SelfGovernment) Act 1988  5, 124 s 48  125

Constitution Act Amendment Act 1934 s 3  114

Human Rights Act 2004  129–30 s 30  130 s 32  130 s 40B  130 s 40C  130

New South Wales

Constitution of Queensland 2001  110 s 9  52 Corporations (Commonwealth Powers) Act 2001 34 Criminal Code 1899 s 469  230 Criminal Code 1995  155, 181

Anti-Discrimination Act 1977  231

Criminal Law Amendment Act 1945 s 18(1)  91

Companies Act 1936  241–2

Criminal Organisation Act 2009  93–4

Constitution Act 1902  110, 118, 121 s 7A  115, 117

Defamation Act 2005  148

Corporations (Commonwealth Powers) Act 2001 34 Crimes (Criminal Organisations Control) Act 2009 93 Crimes Act 1900, s 93X  104, 144–5 Criminal Assets Recovery Act 1990 s 10  91–2 Defamation Act 2005  148 Engineers’ Board Act 2014  169 Environmental Planning and Assessment Act 1979  232 Factories and Shops Act 1912  224 Forty-Four Hours Week Act 1925 222, 224 Limitations Act 1969  244 Local Government Act 1919  162 Long Service Leave Act 1955  228 Navigation Act 1901  228 Parliamentary Elections and Electorates Act 1902 6 s 20  19

Liquor Act 1912  223 Queensland Coast Islands Declaratory Act 1985 224 Telecommunications Act 2014  234 s 4  234 Traffic Act 1949  230

South Australia Beverage Container Act 1975  215 Constitution Act 1934  5, 110 Consumer Credit Act 1972  231 Corporations (Commonwealth Powers) Act 2001 34 Defamation Act 2005  148 Fisheries Act 1982 s 13  122 Industrial Conciliation and Arbitration Act 1972 229 Metropolitan and Export Abattoirs Act 1936 228

Residential Tenancies Act 1987  243

Public Sector Efficiency Act 2014 s 35  126 s 36  126 s 37  126

Workers’ Compensation Act 1926  122

Real Property Act 1886  117

Northern Territory

Serious Organised Crime (Control) Act 2008 92

Racing Administration Act 1998  214

Northern Territory Self-Government Act 1978  5, 124

Wine and Spirits Control Board Act 2015 219

Table of Statutes

Tasmania Constitution Act 1934  110 Corporations (Commonwealth Powers) Act 2001  34 Defamation Act 2005  148 Electoral Act 2004  6 s 31  19

Electoral Distribution Act 1947  20–1, 117 s 13  116 Family Court Act 1975  217 Parliamentary Privileges Act 1889 s 1(b)  52 Stamp Act 1921  246

United Kingdom Victoria

Constitution Act 1975  110 s 85  116

Australia Act 1986  6, 14, 122, 142 s 1  14, 58 s 2  14 s 2(1)  121 s 3  14 s 5  15 s 6  117–18, 120–1 s 7  58, 110 s 7(2)  110

Corporations (Commonwealth Powers) Act 2001  34

Bill of Rights Act 1689  4, 68 Article 9  52–3, 55, 56, 112

Defamation Act 2005  148

Colonial Laws Validity Act 1865  13–14, 117, 118, 177 s 2  13 s 3  13 s 5  13, 116, 117–18

Charter of Human Rights and Responsibilities Act 2006  89, 130 s 32  130 s 38  130 s 39  130

Equal Opportunity Act 1977  232 Motor Car Act 1915  241 Stamps Act 1946  242

Western Australia Aboriginal Heritage Act 1982 s 17  236

Commonwealth of Australia Constitution Act 1900  5, 13, 15–16, 57 s 2  15, 58 Constitution Act 1867  5, 110

Betting Control Act 1954  214

Defence Act 1842  69

Constitution Act 1889  110 s 73  20

Southern Rhodesia Constitution Act 1961 8

Corporations (Commonwealth Powers) Act 2001  34

Statute of Westminster 1931  10, 14–15 s 3  175

Defamation Act 2005  148

261

262

Index acquisition concept acquisition versus regulation 138 property acquisition 134–41 appellate jurisdiction 77–8 Australia colonisation 12–13 common law protection of human rights 128–9 Constitutional Law, fundamental concepts 17–35 defence of see defence power federal structure 30–1 Federation see Federation matters external to Australia 175–6 parliamentary privilege in 51–2 protection from internal subversion 184 a republic? 16 separation of powers in 27–8 settlement, reception of UK law 10–11 subversion 184 United Kingdom independence from 13–15 relationship, statutory dealings 6 sovereignty 10–11 terminated legislative power—Australia Act 1986 (UK & Cth) 14 Balfour Declaration 10, 14, 58 banks/banking 167–8 bank nationalisation scheme 136–7 bicameral legislatures 12, 18 conflict resolution 47–8 Bills of Rights 52–3, 55, 112, 116, 128, 129 Budget, the 200–1 bureaucracy 64–7 business 155, 158–9 Cabinet 22, 27 and bureaucracy 64–7 Prime Minister’s choice 64 case law 190–2 certiorari 77 cession 10, 11 characterisation 96–101 courts consider direct legal effect 97, 99 exception—purposive powers 99–100 general principles 96–101

a law may be characterised in multiple ways 98–9 non-purposive approach 99 exceptions 99–100 powers interpreted generously 96–7 not mutually limiting 100–1 significant connection with, a matter of degree 97–8 citizenship 43 civil liberties 181–2 collective responsibility doctrine 64 colonies/colonisation bicameralism 12, 18, 47–8 colonial constitutional development 12–13 Commonwealth Constitution drafting 7 Constitution Acts 5 Dominions 10, 14, 58 UK subordination 12–13 Colonial Laws Validity Act 1865 (UK) 13 commerce 155–9 across State boundaries/overseas 158 freedom of 211–18 see also economic activity common law constitutional law source 6 Crown’s defence prerogatives 180 English doctrine underpinnings 6 legislative supremacy 112–13 parliamentary privilege rules 56 prerogative powers derivation 69 protections 128–9 legislative override 122, 128 Commonwealth Constitution amendment 5, 15–16 Chapter III, separation of powers 74–81, 148–9 drafting (1891–8) 13 colonial proposal 13 conventions operations 7 embodiment of representative ­government 149 enactment 5 fundamentals 3–16, 17–35, 36–56, 57–73, 74–94, 95–108, 109–25, 127–49

Index

‘integrationist’ reading approach 124 Judicial Branch 74–94 legislative power 33 prohibitions 33 ‘practical effect’ test 104 proportionality test 103 representative government provisions 18 responsible government rules 23–5 rules implicit in 141–3 s 22, s 23, s 39, s 40 44 s 41—voting in Commonwealth elections 19–21 s 49 51 s 51(i) trade and commerce power 155–9 illustrative cases 156–9 as legislative tool 98 s 51(i)–s 51(xx) combination 168 s 51(ii) taxation power 189–96 breach 194 prohibition operation 193–4 s 51(vi) defence power 179–80 purposive nature 181–2 varying scope 182–5 s 51(XII), s (XIV)—intergovernmental immunities 246 s 51(xx) corporations power 161–8 s 51(i)–s 51(xx) combination 168 s 51(xxix) external affairs power 170–7 geographic externality dimension 175–6 illustrative cases 171–2, 175–6 purposive treaty-enactment dimension 171 s 51(xxxi)—legislative power 134–6 illustrative cases 139–41 protection afforded 140–1 reduced scope 137–41 s 52—intergovernmental immunities 245–6 s 53 43–4 taxation laws–other laws, distinction 190 taxes versus fees/penalties 190 s 54 45–6 ‘tacking on’ prohibits 45 s 55 45–6 ‘one subject of taxation’ rule 47 ‘tacking on’ prohibits 45

s 57, interpretative cases 48–9 s 61 executive power 67, 180 Constitutional order 181 s 71 courts judicial power 74, 86–9 federal courts creation 78 ‘s 71 courts’ 75, 81 s 72 81–2 justice appointment 75 s 73 77–8 s 75 and s 76 75, 78, 80 s 77 74 s 77(i) 78, 80 s 80—jury trial 130–1 strict requirements 131 s 81 and s 83—Commonwealth ­expenditure 199–201 s 90 duties prohibition 204–6 ‘criterion of liability’ test 207, 208 licence fees circumvention 204–6 State contravention 204–6 unconstitutionality of backdating device 208–9 s 92 211 interpreting 212–15 operation 212 s 96 grants 196–9 s 99 taxation power breach 194 prohibition operation 193–4 s 106 30, 109 s 107 30 s 109 conflict-addressing mechanism 221 ‘law’ definition 222 overriding State law 238 s 114—intergovernmental immunities 245 s 116—freedom of religion 131–3 non-establishment clause 132 s 122—Territories power 123–4 s 128 30 Commonwealth Electoral Act 1918 (Cth) 38, 41 Commonwealth of Australia 6 colony status 13–14 Commonwealth laws binding laws 211, 238–41 Commonwealth laws–State laws clash 221 constitutionality of 71, 83–4

263

264

Index

Commonwealth of Australia cont. determining if law intra vires Constitution 96–101 implied federal principle breach 31, 240–1, 246 legislation for banking and insurance 246 legislation for public purposes 245–6 statutory rights protections 129–30 validity of legislation 32–3 ‘Crown in right of the Commonwealth’ 236–8 determining intended coverage 227–30, 231–3 illustrative cases 227–32 economic activity 156, 185 uniformity and freedom of 204–5 economic control, during and after war 184–5 establishment 57 expenditure 199–201 illustrative cases 200–1 legislative approval 200–1 ‘purposes of the Commonwealth’ 199 judicial power, defining 86–9 plenary power 123–4 security of 133 State laws binding 241–5 limit—Melbourne Corporation principle 238–41 uncertainty on subjection to State law 242–4 taxation 189 income tax monopolisation 184, 197–8, 209 rebates given 196 revenue sources 196–8 Commonwealth of Australia Constitution Act 16 Commonwealth Parliament Chapter I governance 36–7 Constitutional restraint 4 election qualifications 42–3 executive power, s 61 Constitutional order 181 governing rules—’Standing Orders’ 44 Governor-General dissolving 61 intergovernmental relationships 237–8 legislative power corporations power 161–8 defence power 179–81

distribution of 31–4 exercising see proportionality external affairs power 100, 170–7 with extraterritorial effect 175–6 incidental aspects 102–3 interstate and overseas trade and ­commerce power 155–9 law supported by more than one 98–9 legislative competence 173 non-discriminatory tax legislation regarding States 189–96 parliamentary sovereignty 112 in relation to law enforcement agencies 180 s 53 houses’ power 190 s 96 restrictions circumventions 196–7 omnicompetence 112–13 parliamentary committees ‘estimates committees’ 50 powers 50 parliamentary privilege see parliamentary privilege 51–6 parliamentary processes—expenses 200–1 Parliament–Executive relationship 7 procedural restraints 116–18 qualifications for election to 42–3 s 53 taxation laws–other laws, distinction 190 scrutiny by legislature 65–6 voting entitlements 19–20 compensation 134–41 conflict resolution 47–9 conquest 10, 11 constitutional conventions balance of power 29–30 breach consequences 8–9 unconstitutional versus unlawful 7 Constitutional Crisis and 61–3 content 9 court recognition 8 enacting into law 9–10 flexibility of 7–8, 9 Governor–General subject to 60 origins 6–7 Parliament–Executive relationship ­regulation 7

Index

regarding Federation 13 as rules source 6–10 affecting constitutional law 6 underlying practical considerations 9 unenforceability of 8–9 case example—Madzimbamuto v Lardner-Burke 8 constitutional corporations 161 Constitutional Crisis (1975) 7–8, 61–3 constitutionality of 62–3 events 61–2 constitutional law 17–35 affectation by convention 6 definition 3–16 sources 5, 6 State and Territory 109–25 constitutional writs 76–7 constitutionalism 3–5, 76 adherence to 4–5 operation, illustrative case 4 Constitutions colonial constitutional development 12–13 Commonwealth Constitution see Commonwealth Constitution constitutional law source 5 convention-given flexibility 7–8, 9 free exercise of religion protection 132 State constitutions 5, 109–11 amendment 5 constitutional primacy 5 entrenched provisions 114 Roach reasoning application 149 of the United States 25–7 control orders 181 conventions see constitutional conventions cooperative agreements 34 corporations 161 creation—incorporation 164 human agents of 165 purpose of formation 162 relationships with others 167 contractual 165–7 third party actions towards 165–7 trading versus financial, illustrative cases 162–3 corporations power 161–4 activities activity tests 162–3 of human agents 165 preparatory activities 165

s 51(xx) regulation 164–8 trading and financial activities 162–5 compared with trade and commerce power 168 ‘constitutional corporations,’ defining 161 purpose tests 162 and shelf companies 163–4 restrictions 167–8 scope 164–8 illustrative cases 165–7 incorporation, no role in 164 courts courts may not exercise non-judicial power 81, 83–4, 85–6 illustrative cases 87–9 federal courts created under s 71 78 hierarchy 80–1 High Court see High Court jurisdiction relates to ‘matters’ 77–9 only courts may exercise judicial power 81–3, 84–5 State courts 79–81, 89–94 covering the field 224–33 Crown 58 as constitutional link with UK 15 constitutional position 58 ‘Crown in right of the Commonwealth’ and ‘Crown in right of the States’ 236–8 Crown’s defence prerogatives 180 Engineers Case early applications 241–2 Engineers decision 238, 242–4 reciprocity of 241–2 ‘reserve powers’ doctrine 30, 97 entering transactions 242–3 fiscal/prerogative rights of 242–4 intergovernmental relationships 237–8 Judiciary Act 1903 (Cth), s 64 liability 244, 245 royal assent 36, 43–4 statutes binding 236–7 Bropho test 236–7 express statements 236–7 customs 46 duties of 204–5 defamation 145–8 common law definition 146 illustrative case 146–7 immunity and 54

265

266

Index

defamation cont. law standardisation 148 rules application to two distinct law bodies 147 defence power 179–85 applications 184–5 armed forces enlistment 184 availability absence 198 civil liberties limitations, illustrative case 181–2 Commonwealth exclusive power 179–80 core power 184 defence activities, parliamentary ­authorisation for 180 expropriation of property 69 external and internal threats 181 internal subversion protection 184 international tensions (increasing) 184 military discipline 184 naval and military defence 179–80 peacetime 184 peacetime contraction 182–3 preference for returning servicemen 185 purposive nature, illustrative cases 181–2 scope, variability according to conditions 182–5 stages 182–3 intra vires the power 183 wartime 184 aftermath of war 184–5 wartime expansion 182–3 democracy 18 detention implied freedom from arbitrary detention 148–9 separation of powers doctrine, Chapter III 148–9 of subversive people 184 discrimination court interpretation 105 geographical discrimination and ­preference 193–6 non-discriminatory tax legislation ­regarding States 189–96 occurrence, essence of 195 prohibitions 194, 214–15 illustrative cases 212–15 disendorsement 22 distributive severance (reading down) 106–7 illustrative cases 107

divisible severance 106 domestic law 176–7 enacting treaty into 100, 103, 170–4 duties 204–9 economic activity activity–s 51(i) connection 156 economic control 184–5 freedom of 204–5 participation in 156 regulation of 156 Strickland 165, 168 elections 19–21, 37 double dissolution elections 49 electoral laws 18–19 electoral systems 20–1 of House of Representatives 39 of Senate 40 employment conditions 100 employees 193, 229 legislation benefiting servicemen 185 of women 224 Engineers Case early applications 241–2 Engineers decision 238, 242–4 ‘reserve powers’ doctrine 30, 97 entrenchment 114–16, 117–18, 120–1 single and double 114 enumerated powers 96, 155–9, 161–8, 170–7, 179–85 involving the Commonwealth acquisition of property 138–9 exactions 191–2, 205–6 illustrative case 191 excise duties 46 calculating 205, 206 defining 205–9 Parton v Milk Board 206 duties of customs and excise fees 204–5 fees/penalties versus excises 205–6 ‘licence fees’ device and overruling 208 imposed by law 206–9 Executive, The the Cabinet and bureaucracy 64–7 civil liability 67 composition 57 Constitutional Crisis (1975) 61–3 controlling 64–7 the Crown 58

Index

delegated legislation produced by 28 executive power 67–73 exercised independently 60–1 expenditure restrictions 71–2 the Governor–General 58–60 legal remedies 66–7 Legislature–Executive overlap 27–8 Parliament–Executive relationship, ­regulation by convention 7 political and professional personnel division 64 responsible government control 21–5 Executive Council 23, 27, 64 executive power 67–73 executed by ministers 57 exercised independently 60–1 Governor-General vestment 7 prerogative powers 67–70 s 61 67 expenditure 189–201 export, s 51(i) regulation 155, 158–9 express rights 127–49 external affairs power air navigation/transport 171–2 environmental protection, illustrative cases 173–4 industrial relations 174 international law and domestic law 176–7 matters external to Australia 175–6 racial equality 172–3 States as internal actors 177 treaty implementation 100, 170–4 (law) conformity with treaty 171–2, 174 specific obligations imposition 173, 174 federal courts 78 ability to hear matters involving State law 80 hierarchy 80–1 reducing High Court workload 78 Federal Parliament scrutiny by 65–6 voting for 19 federal systems constitutional structure in 29 unitary systems–federal systems ­distinction 28–9

federalism 28–34 Australian federalism 30–1 distribution of legislative powers 31–4 financial relations and 189–201, 204–9, 211–18, 221–33, 235–46 nature 28–30 Federation Commonwealth Constitution enactment 5 establishment 12–13 federal balance 31, 238 Engineers decision 238, 242–4 ‘reserve powers’ doctrine 96–7 s 92 interstate trade approaches 212–14 fees exceptions 192 taxes versus fees 190 ‘immigration clearance fee 192 financial relations federal financial relations 198–9 federalism and excise duties 204–9 freedom of interstate trade, commerce and intercourse 211–18 inconsistency 221–33 intergovernmental immunities 235–46 taxation, grants and expenditure 189–201 government finances, control over 201 franchise 19–21 enfranchisement of women 18 responsible government protection 21 free trade 212–14 inter-colonial free trade 212 freedom of commerce 211–18 freedom of economic activity 204–5 freedom of interstate trade 211–18 freedom of religion 131–3 elements 131 goods export/import—s 51(i) regulation 155 taxes on goods—excise duties 204–9 price increase effect 206 tax–goods relationship 207 value/quantity of 205, 206, 207 government Can one government level bind the other? 237–8 conduct 65–6

267

268

Index

government cont. executive branch, Parliament–Executive relationship 7 government finances, FMA Act control over 201 governmental institutions, statutory regulation 6 intergovernmental immunities 235–46 intergovernmental relationships 237–8 organs interactions, law governing see ­constitutional law powers see constitutionalism representative government 12, 17–21, 64, 141–3, 149 responsible government 12, 21–5, 64–7, 109 self-government 124–5 of Territories 124–5 Governor-General 23, 58–60 dissolving Parliament 61 refusing 61 legislative and executive functions 37 powers 37 acting on government advice 59 allocation 16 executive powers exercised on advice 59–60 legislative powers 59 subject to conventions 7, 37 vestment of 7, 60 Prime Minister appointing 60 dismissing 60–1 grants 189–201 forms 199 GST grants 199 s 96 grants 196–9 federal financial relations 198–9 as policy tools 196–7 special purpose grants 199 High Court Governor-General’s discretion, vestment of 60 jurisdiction appellate jurisdiction 77–8 original jurisdiction 75–7 Melbourne Corporation principle, non-acceptance of breach 239–40

precedent 35 s 92 interpretative challenges 212–15 House of Representatives 24–5, 27, 37–9, 60, 61, 149 committees 50 composition 38 elections 39 House of Representatives–Senate conflict 47–9 voting for 19 human rights 128–30 immunity immunity from inquiry by courts 52–5 illustrative cases 53–4 limits 54–5 purpose and scope 53–4 intergovernmental immunities 235–46 prerogative category 68 implied federal principle 31, 240–1, 246 implied rights 127–49 import, s 51(i) regulation 155 incidental powers 101–2 sources 101 inconsistency Commonwealth laws confers State law-denied right 223–4 ‘covers the field’ 224–33 direct inconsistency 223–4 illustrative cases 224 indirect/direct distinction 225–6 existence 223 inconsistent criminal laws 229–30 indirect inconsistency 224–33 indirect/direct distinction 225–6 s 109 221–3 tests for 223–33 Indigenous peoples franchise rights 18 sovereignty extinguishment 11 subjugation of 10–11 industrial awards 222, 224, 226 industrial relations 141–2, 174 injunction 76–7 institutions governmental institutions, statutory ­operational regulation 6 origins 10–15 insurance 167–8

Index

intellectual property, existed previously or statute-created 139 intercourse freedom of 211–18 s 92 between the States 216–18 intergovernmental immunities binding Can one government level bind the other? 237–8 Commonwealth laws binding States 238–41 laws of one State binding another 246 State laws binding Commonwealth 241–5 statutes binding the Crown 236–7 Commonwealth–State immunities, other provisions affecting 245–6 the issue 235–6 interpretation challenges 212–15 contemporary meaning 105 ‘reserve powers’ doctrine 96–7 Engineers Case 30, 97 as a technique 95 interstate trade 155–9 freedom of 211–18 invalidity 105–8, 113 judicial power decision-making 87 decision conclusiveness 87 enforceability 87 procedure 87 defining 86–9 determining factors 87 separation of courts may not exercise non-judicial power 83–4 only courts may exercise 81–3 judicial review 119–21 judiciary appointments to 75 independence of 75 Judiciary Act 1903 (Cth) s 34(2), s 35(2) 78 s 64 244–5 jurisdictional error 77 jury trial 130–1 just terms compensation ‘just terms’ 137 property acquisition on 134–41

land rights 224 land taxes 207 law characterising 96–101 in multiple ways 98–9 common law see common law Commonwealth laws confers State law-denied right 223–4 ‘covers the field’ 224–33 implied federal principle breach 31, 240–1, 246 constitutionality 207 contrary to ‘right reason’ 129 ‘dealing only with taxation’ 46 definition 222 domestic law 100, 176–7 enacting treaty into 103, 170–4 electoral laws 18–19 enacted using defence power, restrictions 181 proportionality test 182 imposition of excise by 206–9 ‘licence fees’ device and overruling 208 relationship of tax to goods 207 State revenue sources 209 imposition of tax by 205–6 inconsistent criminal laws 229–30 international law 176–7 invalidity 222, 223 protectionist law 214–15 rights and 128–30 treaty—conformity principle 171–2, 174 illustrative case 172 legal practice 134 legislation Act of Attainder 83 ‘aftermath of war’ argument 185 appropriations legislation 180, 200–1 benefiting returning servicemen 185 binding statutes 236–7, 241–5, 246 limits on 238–41 delegated legislation 28 enactment 43–4 exclusion by powers 100–1 express statements insertion 236–7 financial legislation 44–7 legislative procedures 43–9, 50 plain packaging legislation 138 legislative supremacy 112–13 ‘enrolled Bill rule’ 112

269

270

Index

Legislature, The House of Representatives see House of Representatives legislative procedures 43–50 Legislature–Executive overlap 27–8 Monarch 37 Parliament 36, 42–3 parliamentary privilege 51–6 scrutiny by 65–6 Senate 39–42 Letters Patent 58 licence fees 204–6 and backdating device, unconstitutionality of 209 long service leave 228 Magna Carta 4 mandamus 76–7 Melbourne Corporation principle 238–41 High Court non-acceptance of breach 239–40 reciprocity of 239 military discipline 184 ministers 50 Cabinet support 64 ‘children overboard’ affair 50, 66 executive power executed by 57 personal error, misconduct or ­maladministration 65 political responsibility 64–5 Prime Minister see Prime Minister Monarch 37 national security 72–3 religious conduct inimical to 133 nationhood power 33, 70–3 scope 73 native title 11 navigation 156–7, 171–2, 228 original jurisdiction types constitutionally mandated s 75 75, 76 ‘optional’ original s 76 76 Paris Convention 171, 172 parliamentary privilege 42, 112, 113 in Australia 51–2 immunity from inquiry by courts 52–5 origins 51

scope 54–5 specific rules 56 penalties exceptions, unlawful act or omission hallmark 192 taxes versus penalties 190 political communication constitutionality of limits on 144–5 constitutionally-protected freedoms, invasiveness 103–4 defamation and 145–8 implied freedom of 141–8 proportionality test 144–5 s 92 infringements 216–17 proportionality test 217 politics 25–8 power enumerated powers see enumerated powers executive power 60–1, 67–73 of the Governor-General 7 incidental powers 101–2 judicial power of Commonwealth 86–9 legislative and executive power 12 monarchical (UK) power 4 transferring—conventions 6–7 nationhood power 33, 70–3 plenary power 31, 111, 118, 121–2, 123–4, 128–9, 135 prerogative category 68 prerogative powers 67–70 purposive powers 99–100 reserve powers—Governor-General 59–60 residuum of power 29–30 separation of powers see separation of powers 74–94 source of Parliamentary power to impose restrictions 116–18 ‘practical effect’ test 104 precedent 35 prerogative powers 67–70 common law derivation 69 displacement by statute 70 exercise of 69 overriding 69–70 powers, rights, privileges and immunities 68

Index

Prime Minister 16, 21, 22, 23–4 Governor-General appointment and dismissal 60–1 privileges 42, 51–6, 68, 112, 113 procedural restraints 113–21 entrenchment 114–16, 117–18, 120–1 judicial review, timing of 119–21 pre-existing, illustrative cases 115 self-imposed, illustrative cases 115–16 source of Parliamentary power to impose restrictions 116–18 substantive restraints–procedural restraints distinguished 118–19 production 158–9, 228 prohibition (writ) 76–7 property limitations on scope of obligation 137–41 rights acquired are inherently ­susceptible to variation 139–41 ‘property’ 135–6 property acquisition ‘acquisition’ 136–7 acquisition on just terms compensation 134–41 limitations on scope of obligation legislation is incidental to acquisition under another power 138–9 when mere regulation rather than acquisition occurs 137–8 When is property acquired? 135–6 proportionality 20, 21, 102–4, 144–5, 182, 217 application, illustrative cases 145 public servants 50, 64 ‘reading down’ 106–7 religion 131–3 religious conduct and law mandates 132–3 representative government 12, 17–21, 64, 149 franchise rights protection 21 requirements 141–3 republic 16 responsible government 12, 64–7, 109 controlling Executive purpose 21–2 historical origins 21–2 in operation 22–5 rights Bill of Rights 1689 (UK), Art 9 52–3, 55 express rights 127–49

human rights 128–30 implied rights 127–49 intellectual property rights 139 the law and 128–30 pre-existing rights 87 prerogative category 68 right to vote 18–21 to trial by jury 130–1 Senate 36, 39–42, 149 committees 50 composition 39–40 House of Representatives–Senate conflict 47–9 senator rotation 40–1 Territorial representation 41–2 separation of powers 25–8 in Australia 27–8 Chapter III separation of powers doctrine 148–9 exceptions to doctrine 84–6 judicial power 81–6 and State courts 89–94 in the United States 25–7 settlement 10–11 severance 105–7 shelf companies 163–4 sovereignty Indigenous peoples, sovereignty ­extinguishment 11 international law, obtaining by 10, 11 parliamentary sovereignty 112 UK sovereignty, Australia’s independence from 10–11, 13–15 Standing Orders 44, 56 State courts exercising federal jurisdiction 79–81 illustrative cases 89–94 operational implications 89 separation of powers and 89–94 State Parliament intergovernmental relationships 237–8 legislative power international 177 plenary power 31, 111, 118, 121–2 procedural restraints 113–21 entrenchment 114–16, 117–18, 120–1 judicial review 119–21 pre-existing 114–15

271

272

Index

State Parliament cont. self-imposed 115–16 substantive restraints 113, 118–19 States boundaries, trade across 158 Commonwealth laws binding States 238–41 Commonwealth laws–State laws clash 221 s 92 binding 211 Constitutional Law 109–25 ‘Crown in right of the States’ 236–8 electoral laws 18–19 equal treatment as between residents of 133–4 extraterritorial legislation 121–2 competence 246 intercourse between 216–18 as international actors 177 laws of one State binding another 246 legislative competence 111–13, 246 maintenance as political entities 31 Melbourne Corporation principle 238–41 non-discriminatory taxation legislation regarding 189–96 ‘parts’ of States, definition 195 prohibitions contravention 204–6 s 20—duties, customs, excise 204–5 s 114—military forces raising/­ maintaining 179 responsible government rules 23–5 revenue sources 209 ‘federal fiscal imbalance’ 198 GST grants/special purpose grants 199 State banking/insurance 167–8 privatisation 168 State constitutions 109–11 constitutional primacy 5 features 110–11 Roach reasoning application 149 State laws binding Commonwealth 241–5 denied rights conferred by Commonwealth law 223–4 inconsistent law, invalidity extent 222 non-exclusive legislative topics 34 referral of powers 34

statutory rights protections 129–30 uncertainty on Commonwealth ­subjection to State law 242–4 validity of legislation 31–2 tax exactions/impositions cases challenging 205–6 forgoing in exchange for grants 198 services/activities 207 territorial discrimination 193 Statute of Westminster 1931 (UK) 10, 14, 15 statutory interpretation see interpretation statutory protections 129–30 substantive restraints 113 substantive restraints–procedural restraints distinguished 118–19 Supreme Court 125 taxation 189–201 definition 189–92, 205 compulsory exaction/public body/public purposes 191–2 Matthews requirements 190 positive case law definition 190–2 fees/penalties versus excises 205–6 GST grants 199 imposition by law 205–6 income tax 184, 197–8, 209 indirect taxes 204–9 land taxes 207, 246 law ‘dealing only with taxation’ 46 ‘one subject of taxation’ rule 47 relationship to goods 207 taxes versus fees/penalties 190 exceptions 192 taxation power 189–96 geographical discrimination and ­preference 193–6 scope 193 effect on Commonwealth powers 189 employee training 193 terra nullius doctrine 10–11 Territories Constitutional Law 109–25 constitutional position 123–5 governmental regulation 5 government of 124–5 plenary power 123–4 s 92 binding 211 Senate Territorial representation 41–2

Index

terrorism 181 trade 155–9, 214–15 freedom of 211–18 trade and commerce power 156 air navigation/transport 156–7 compared with corporations power 168 geographical limitations 158 incidental aspects 156–7 interstate trade 155–9 production governance 159 intrastate trade 157, 158 production 158–9 regulation 158–9 ‘trade and commerce,’ meaning 155 treaty domestic law giving effect to 172–4 extradition treaties 70 implementation 170–4 partial enactment 174 recommendations–treaty distinguished 174

unconstitutionality 105, 208–9 unicameral legislatures 124 unitary systems 28–9 United Kingdom Australia relationship with 6, 14 UK laws, Australian reception of 10–11 Crown as constitutional link with 15 Dominions 10, 14, 58 Magna Carta signing (1215) Bill of Rights Act 1689 (Eng) 4 monarchical power 4, 6–7 sovereignty 10–11, 13–15 voting ‘alternative vote’ system 39 in Commonwealth elections 19–21 implied right to 18–21, 149 ‘single transferable vote’ system 40 in State elections 18–19

273

Your guide to the essentials of constitutional law. Learn how to link the key concepts from your lectures, textbooks and tutorials to get the most from your study, improve your knowledge of law and develop legal problem-solving skills. This guidebook will help you navigate through the fundamental points of constitutional law using: • clear and concise explanations of what you need to know • guidelines for answering problem questions • cases to remember • ‘examples’ and ‘alerts’ to help you understand the interlinked nature of constitutional law • assessment preparation sections • diagrams to help explain difficult concepts • up-to-date cases and legislation.

Bede Harris is Senior Lecturer in Law in the School of Accounting and Finance, Charles Sturt University.

ISBN 978-0-19-559400-3

9 780195 594003