Hanks Australian constitutional law : materials and commentary [Tenth edition.] 9780409341973, 0409341975

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Table of contents :
Full Title
Copyright
Preface
Acknowledgments
Table of Cases
Table of Statutes
Table of Contents
Chapter 1 An Introduction to Australian Constitutional Law
Introduction
The Nature, Forms and Enforcement of Constitutional Law
Constitutions and ‘the rule of law’
Constitutions as ‘higher’ or ‘paramount’ laws
State Constitution Acts are not ‘higher laws’
The common law in Australia
Enforcement of constitutional law
A mainly judicial function
Judges and ‘counter-majoritarianism’
What Australian constitutions do and don’t say about their enforcement
How (and why) the High Court of Australia became the final authority as to the constitutionality of legislation and government action
Consequences of unconstitutionality
Constitutional conventions
Sources of Australian Constitutional Law
The contribution of history
The longevity of Imperial power in Australia
Imperial power to legislate and the problem of ‘repugnancy’ of local laws
Colonial Laws Validity Act 1865
Privy Council appeals
Balfour Declaration 1926 and Statute of Westminster 1931
The Australia Acts
Federalism
A federal compact
Co-operative federalism
Parliamentary Government and Sovereignty
Territorial Limits on Legislative Power
State parliaments
Commonwealth Parliament
Representative and Responsible Government
Responsible government
Representative government
The Separation of Powers
The political theory of a separation of powers
Legislative and executive powers — the Commonwealth
Legislative and executive powers — states
Chapter 2 The Parliaments and Legislative Procedures
Introduction
Parliamentary government in the colonies
Legislative assemblies in the territories
The Structures
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Northern Territory
Australian Capital Territory
Norfolk Island
Restructuring parliaments
Commonwealth Parliament
The federal movement
Duration of Parliament
State parliaments
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
Territory legislative assemblies
Northern Territory
Australian Capital Territory
Commonwealth Parliament
Adjournment, prorogation and dissolution
Members of Parliament: Qualifications and Disqualifications
Voting for Parliament: The Franchise
Removal of income and property qualifications for men
Enfranchising women
The new Commonwealth’s first electoral act
The Distribution of Seats
Parliamentary Privileges
Commonwealth Parliament
State and territory parliaments
New South Wales
Queensland
South Australia
Tasmania
Victoria
Western Australia
The territories
Standard Legislative Procedure
Introduction
The legislation
Standing orders
Royal assent
Reservation
Disallowance
Special Procedures (Financial Legislation)
State parliaments
Commonwealth Parliament
The Senate’s deferral of supply: 1975
Non-compliance with procedures and forms: ss 53, 54 and 56
Non-compliance with form: s 55
Alternative Procedures
State parliaments
The legislation
Commonwealth Parliament
Restrictive Procedures
State parliaments
The legislation
Commonwealth Parliament
Background: an inflexible Constitution
Judicial Review of the Legislative Process
Chapter 3 Constitutional Interpretation and Characterisation
Introduction
Constitutional Interpretation
Different approaches
What approach has been adopted by the High Court?
Judicial views on interpretive method
Rejection of all-embracing theory
Key dimensions of the court’s approach to constitutional interpretation
The Engineers’ rules of interpretation
The Jumbunna principle: interpreting provisions broadly
The relationship of one Commonwealth power to another
Meanings not tied to 1900
Use of history
The influence of precedent and overruling earlier constitutional decisions
Drawing implications
Use of comparative and international law when interpreting the Constitution
The political dimensions of constitutional interpretation
Characterisation
Characterising a law
Sufficient connection
Subject matter powers vs purposive powers
Core area vs incidental area of subject matter powers
Establishing a sufficient connection
Dual characterisation
The relevance of legislative purpose to characterisation
Proportionality and characterisation
Chapter 4 Commonwealth Legislative Powers
Trade and Commerce Power
Corporations Power
External Affairs
Matters geographically external to Australia
Implementation of international agreements
Matters of international concern
Relations with other countries
The ‘Races’ Power
The original s 51(xxvi)
The 1967 referendum
Proposals to replace s 51(xxvi)
Judicial interpretation of s 51(xxvi)
‘[T]he people of any race’
‘… for whom it is deemed necessary to make special laws’
Laws discriminating against Indigenous Australians
Kartinyeri v Commonwealth
Should the Constitution prohibit racially discriminatory laws?
Effect of the Commonwealth Racial Discrimination Act on the states and state laws
Proposed constitutional reform
Defence Power
Anti-terrorism laws
Discipline of defence force members
Preparation for war
The power during wartime
Chapter 5 Commonwealth Financial Powers
Taxation Power
The general definition of a tax
A compulsory exaction or charge
Public authority
Public purposes
Fees for services and related payments
Fines and penalties
Taxes must not be arbitrary
Non-compliance with form: s 55
Characterisation and s 51(ii)
Excise Duties
Commonwealth Grants
The Uniform Tax cases
Specific purpose grants
Limitations on s 96
Commonwealth Power to Spend
Chapter 6 Federalism: The Legal Relations
Inconsistency of Laws
Federal supremacy
Requirement of valid and operative laws
What is a ‘law’ for the purposes of s 109?
The common law is not ‘law’ for the purposes of s 109
‘Inconsistent’
The orthodox tests
Two added layers of complexity: operational inconsistency and the ‘vary, detract from or impair’ test
There must be a ‘real conflict’
The tests applied
Express intention to displace state law (or ‘cover the field’)
Express intention to avoid inconsistency
‘Invalid’
Inconsistency between Commonwealth and territory laws
Intergovernmental Immunities
Foundation of intergovernmental immunities
The ‘reserved powers’ doctrine
Erosion of the two doctrines
Commonwealth laws and state governments
State laws and the Commonwealth
State laws and Commonwealth places
Intergovernmental Co-Operation: Involvement of Officials
Commonwealth–state ‘bucket’ schemes
Commonwealth officials performing functions under state law
Performance of functions under Commonwealth law by state officials
Express Prohibitions On Commonwealth Discrimination against the States
‘Between States’
The meaning of discrimination and preference
Chapter 7 The Executive
Introduction
The law and convention of ‘the Crown’
‘The Crown’: a term with many meanings
The Sovereign and her Australian Representatives
The Queen and Commonwealth of Australia
Sovereign, sovereignty and citizenship
Elizabeth the Second, Queen of Australia
The law of royal succession
‘Demise of the Crown’
The Queen, the Commonwealth and the Governor-General
The Queen, the states and their Governors
Is there a Queen of Queensland (and of each other state)?
The office of Governor since colonial times
The Australia Acts and 1986 Letters Patent
Responsible Government and the ‘Reserve Powers’
Responsible government
Responsibility, mandate and representation
Principles of responsible government and their limitations
Conventional actors and institutions of responsible government
Parliament’s ‘scrutiny function’
Reconciliation of competing conventions
Constitutional acknowledgment of responsible government
‘Caretaker conventions’
Reserve powers of the Queen’s representatives
Formation of a government where there is a ‘hung’ parliament
Dismissing a First Minister who has lost the confidence of the house
Refusing a dissolution of parliament
Dismissing a government that acts illegally?
Sources of advice for a sovereign’s representative contemplating exercise of a ‘reserve power’
Constitutional provisions relating to the ‘reserve’ powers
The Executive arm of Government
What kind of legal creature is a government?
The legal institutions of the executive
Core executive institutions
Constitutional provisions and Letters Patent
Statutory authorities and government-owned or controlled companies
Outsourcing of government functions
Executive Powers, Rights and Privileges
Sources (or origins)
Legislation
Common law
Constitutional instruments
Executive powers
State
Commonwealth
Constitutional mechanisms for control and accountability of executive action
Executive rights and privileges
Executive ‘immunities’ and ‘the rule of law’
Application of legislation and private law to the executive
Application of statutory regimes to the executive
Liability of ‘the Crown’ to private law suits and judgment enforcement
Crown servants, agents, contractors and others acting under government orders
Chapter 8 The Australian Judicial System
Introduction
Separation of Commonwealth Judicial Power
Establishing the separation of judicial power principles
Defining judicial power
Application of the separation of judicial power principles
Only courts can exercise Commonwealth judicial power
Courts cannot exercise non-incidental non-judicial power
Exceptions to the separation rules
Commonwealth Judicial Power and Federal Jurisdiction
‘Matters’
The heads of federal jurisdiction — ss 75 and 76
Section 75(iii) and (iv): government parties
Section 76(ii): arising under laws made by parliament
Section 75(v): officer of the Commonwealth
Section s 76(i) and the power of judicial review
Section 75(i) — treaties
Accrued jurisdiction
The exclusivity of Ch III as a source of original jurisdiction — cross-vesting of state jurisdiction
Federal Courts
Power to define jurisdiction
Exercise of federal jurisdiction by court officers other than judges
Persona designata
State Courts Exercising Federal Jurisdiction
Investiture of federal jurisdiction
The place of state courts in the federal system
Parliament’s power over state courts
Which members of a state court can exercise federal jurisdiction?
Chapter III limitations on state legislative power
The development of the Kable principles
Kable refined
Independence and impartiality
Procedural fairness
New directions for the Kable principles
Territory Courts
The High Court’s Appellate Jurisdiction
‘Judgments, decrees, orders, and sentences’
‘Exceptions’ and ‘regulations’
Appeals to the Privy Council
Chapter 9 Express Rights and Freedoms
Introduction
‘The Australian Reluctance about Rights’
Rights and Freedoms and the States
Freedom of Interstate Trade, Commerce and Intercourse
Trade and commerce
A clash of visions
Cole v Whitfield — a new start
Section 92 and the modern economy
An expanded operation for s 92 — national markets?
Freedom of intercourse
Acquisition of Property
Section 51(xxxi): role and relationship to other Commonwealth powers
What constitutes ‘property’?
Acquisition where property interest taken by others
Acquisition vs regulation of property
Resolving or adjusting competing claims
Rights inherently susceptible to variation
No acquisition where just terms incongruent
Just terms
Jury Trial
‘Law of the Commonwealth’
‘Trial on indictment’
The elements of the ‘offence’ to be tried by jury
Jury waiver
The requirements of a s 80 jury trial
Concluding observations
Religious Freedom
Introduction
Relationship between ss 116 and 122 — does s 116 apply to laws made under the territories power?
‘Religion’
‘Establishing any religion’
‘Prohibiting the free exercise of any religion’
No religious test for any office under the Commonwealth
Interstate Discrimination
Introduction
The High Court’s decision in Street
Street applied in subsequent cases
Chapter 10 Implied Rights and Freedoms
Introduction
The Nature of Implied Rights and Freedoms
Rights Implied from the System of Representative and Responsible Government Established by the Constitution
The implied freedom of political communication: origins and derivation
The implied freedom of political communication: expansion and disagreement
The High Court’s unanimous acceptance of the implied freedom of political communication
What is ‘political communication’ for purposes of the implied freedom of political communication?
The first limb of the Lange test
The second limb of the Lange test
Reformation
When is the end or purpose of a law not ‘legitimate’ in the relevant constitutional sense?
The reasonably appropriate and adapted test and proportionality
The implied freedom of political communication and the distinctive Australian conception of representative government
The implied freedom of political communication and discretionary power
Freedom of movement and freedom of association
Voting in federal elections
Constitutionally required franchise — an implied right to vote in federal elections?
Compulsory system of preferential voting
Rights Derived from Chapter III of the Constitution
Legal equality (as substantive due process)
Due process
Involuntary detention — the Lim principle
Control orders, preventative detention and the courts
Index

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Hanks Australian constitutional law : materials and commentary [Tenth edition.]
9780409341973, 0409341975

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This is the tenth edition of the work previously published under the following titles: Australian Constitutional Law: Cases, Materials and Text F I Fajgenbaum and P J Hanks, 1972 Fajgenbaum and Hanks’ Australian Constitutional Law P J Hanks, 1980 Australian Constitutional Law P J Hanks, 1985 Australian Constitutional Law: Materials and Commentary P J Hanks, 1990 Australian Constitutional Law: Materials and Commentary P J Hanks, 1993 Australian Constitutional Law: Materials and Commentary P J Hanks and D Z Cass, 1999 Australian Constitutional Law: Materials and Commentary P J Hanks, P Keyzer and J Clarke, 2004 Hanks’ Australian Constitutional Law: Materials and Commentary J Clarke, P Keyzer and J Stellios, 2009 Hanks Australian Constitutional Law: Materials and Commentary J Clarke, P Keyzer, J Stellios and J Trone, 2013

HANKS

Australian Constitutional Law Materials and Commentary Tenth Edition

Dan Meagher BEc, LLB, LLM (Monash), PhD (UNSW) Associate Professor, School of Law, Deakin University

Amelia Simpson BA Hons (ANU); LLB Hons (ANU); LLM (Columbia); SJD (Columbia) Associate Professor, ANU College of Law, Australian National University Barrister and Solicitor in the High Court of Australia

James Stellios BEc, LLB (ANU), LLM (Cornell), PhD (ANU) Professor, ANU College of Law, Australian National University

Barrister, New South Wales Bar

Fiona Wheeler BA, LLB (Hons); PhD (ANU) Professor, ANU College of Law, Australian National University

LexisNexis Butterworths Australia 2016

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National Library of Australia Cataloguing-in-Publication entry Author: Title: Edition: ISBN: Notes: Subjects: Other Authors/Contributors: Dewey Number:

Meagher, Dan. Hanks Australian constitutional law: materials and commentary 10th edition. 9780409341973 (pbk). 9780409341980 (ebk). Includes index. Constitutional law — Australia. Simpson, Amelia. Stellios, James. Wheeler, Fiona. 342.94.

© 2016 Reed International Books Australia Pty Limited trading as LexisNexis. 1st edition 1972; 2nd edition 1980; 3rd edition 1985; 4th edition 1990; 5th edition 1993; 6th edition 1999; 7th edition 2004; 8th edition 2009; 9th edition 2013. This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers.

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Preface

This is the tenth edition of Australian Constitutional Law: Materials and Commentary, first published in 1972 under the joint authorship of Jack Fajgenbaum and Peter Hanks. Peter Hanks was responsible for the next four editions (1980– 1994). The sixth edition was written by Peter Hanks, Deborah Cass and Jennifer Clarke (1999). The seventh edition was written by Peter Hanks, Patrick Keyzer and Jennifer Clarke (2003). The eighth edition was written by Jennifer Clarke, Patrick Keyzer and James Stellios (2009). The ninth edition (2013) was written by Jennifer Clarke, Patrick Keyzer, James Stellios and John Trone. This tenth edition has been written by Dan Meagher, Amelia Simpson, James Stellios and Fiona Wheeler. Some material from earlier editions has been retained and adapted. The authors gratefully acknowledge the work of their predecessors.

WHAT IS IN THIS BOOK? Although there have been many changes in the organisation and content of this book over the past 40 years, its basic objective has

remained: to examine the institutional, particularly federal, aspects of Australian constitutional law. Despite the shifts in the constitutional law agenda, the underlying issues and dilemmas remain. These issues focus on the proper role of constitutional law and judges in a democratic polity. This edition continues the tradition of analysing the major ongoing constitutional issues facing the High Court and exploring the tensions between the principles of parliamentary democracy and judicial law-making in the context of an evolving legal, political and social environment. Our objective is not to present a comprehensive encyclopedia of Australian constitutional law, but to explore its principal themes and examine some basic issues which affect the location and the exercise of public power in Australia. The topics we have chosen for that examination raise fundamental questions about the organisation and functioning of our system of government, and illuminate the process of constitutional adjudication. The present edition builds on the work of previous authors, while incorporating significant re-writing and re-structuring in some areas. In particular, a revised chapter arrangement has been adopted. Chapter 1 (‘An Introduction to Australian Constitutional Law’) has been streamlined and material on Parliament moved towards the front of the book in Chapter 2 (‘The Parliaments and Legislative Procedures’). A separate chapter on ‘Constitutional Interpretation and Characterisation’ (Chapter 3) follows. Commonwealth Legislative and Financial Powers are dealt with in Chapters 4 and 5 respectively. Chapter 6 deals with ‘Federalism: The Legal Relations’, Chapter 7, ‘The Executive’ and Chapter 8, ‘The Australian Judicial System’. The topic of s 92, previously in a separate chapter, is now part of Chapter 9 (‘Express Rights and Freedoms’). Chapter 10 deals with ‘Implied Rights and Freedoms’.

Without Jennifer Clarke’s specialist expertise, separate chapters on ‘“Indigenous” People and Constitutional Law’ and ‘The Territories’ have not been retained, with material on the ‘races’ power and ‘territory courts’ now appearing in Chapters 4 and 8 respectively. Jennifer Clarke’s contribution to these important areas remains part of the legacy of previous editions.

THANKS TO … Dan thanks James for the invitation to contribute to this edition, his co-authors for their friendship and support and his family (Fee, Spencer and Albert) for keeping things in perspective. Amelia thanks her co-authors for their great teamwork ethic and Alice, Andrew and Jesse for providing happy diversions. James thanks his co-authors for their enthusiasm for and commitment to this new edition. He also thanks Marita and Elesa for their love and patience. Fiona thanks her co-authors for inviting her to be part of this edition and for their support and good-humour throughout the project. She also thanks Chris for his unwavering optimism and patience. The authors also thank the LexisNexis Butterworths editorial team — Serena Cubie, Geraldine MacLurcan, Georgia O’Neill and Pamela O’Neill — for keeping us all on track.

CURRENCY The law is stated as at July 2016. Dan Meagher, Amelia Simpson, James Stellios and Fiona Wheeler

August 2016

Acknowledgments

The authors and publisher are grateful to the holders of copyright in material from which extracts appear in this work, particularly the following: Australasian Gaming Council Australian Government Publishing Service Australian Historical Studies, University of Melbourne Australian National University Law School Carswell, a division of Thomson Reuters Canada Limited Division of Law, Macquarie University Federal Law Review Harper Collins Publishers (Aust) Pty Limited Hutchinson Education Limited Johns Hopkins University Press Longman Group, UK, Limited

Macmillan Press Limited, England Macmillan Publishers Australia Pty Limited Melbourne University Law Review Melbourne University Press Memorial University of Newfoundland, Canada Monash University Law Review Nelson ITP Oxford University Press Quadrant Magazine Co Queensland University Press Sweet & Maxwell Limited The Federation Press University of Chicago Law Review UNSW Press Material from The Commonwealth of Australia Constitution reproduced by permission While every effort has been taken to establish and acknowledge copyright, the publishers tender their apologies for any accidental infringement. They would be pleased to come to a suitable arrangement with the rightful owners in each case.

Table of Cases References are to paragraph numbers Case extracts are in bold

A A v Hayden (1984) 156 CLR 532 …. 6.2.86C, 7.5.42C, 7.5.98C Abebe v Commonwealth of Australia (1999) 197 CLR 501 …. 8.3.9, 8.4.3, 8.4.5C Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 …. 4.2.9, 4.2.15, 4.2.16C, 4.2.18, 4.2.19, 4.2.20, 4.2.21, 4.2.22C, 4.2.24, 4.2.29C Adair v United States 208 US 161 (1908) …. 9.4.7 Adam, Re (1837) 1 Moo PCC 460; 12 ER 889 …. 7.5.49C Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 116 …. 4.5.17C, 5.3.21, 9.7.11, 9.7.12C, 9.7.18C, 9.7.20, 9.7.21C Adkins v Children’s Hospital 261 US 525 (1923) …. 8.2.17C Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 …. 8.3.9 AH Yick v Lehmert (1905) 2 CLR 593 …. 8.4.2

Aid/Watch Incorporated v Federal Commissioner of Taxation (2010) 241 CLR 539 …. 10.3.48C Ainsworth v Criminal Justice Commission (1992) 106 ALR 11 …. 10.4.19 Air Caledonie International v Commonwealth (1988) 165 CLR 462 …. 5.1.5, 5.1.6C, 5.1.7, 5.1.8, 5.1.10, 5.1.11C, 5.1.12, 5.2.21, 5.1.24, 5.1.27, 5.1.32, 5.1.36 Aird, Re; Ex parte Alpert (2004) 220 CLR 308 …. 4.5.9 Airlines of New South Wales Pty Ltd v New South Wales (No 1) (1964) 113 CLR 1 …. 6.1.10 — v — (No 2) (1965) 113 CLR 54 …. 4.1.18C, 4.1.19, 4.1.20, 4.1.21, 4.1.22, 4.1.26, 4.3.17, 6.1.42C Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133 …. 5.1.23, 9.5.23, 9.5.26, 9.5.40C Akar v Attorney-General (Sierra Leone) [1970] AC 853 …. 6.1.76C Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 …. 8.2.30, 8.3.9 Alcock v Fergie (1867) 4 WW & A’B 285 …. 2.9.2 Al-Kateb v Godwin (2004) 219 CLR 562 …. 3.2.14, 3.2.15C, 3.2.59, 3.2.62, 10.4.23, 10.4.24C, 10.4.26, 10.4.27 Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630 …. 5.1.34, 6.2.95, 6.2.97, 6.2.98 Alqudsi v R [2016] HCA 24 …. 3.2.50, 3.2.51C, 9.6.8, 9.6.12, 9.6.25 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129 …. 1.4.3, 1.4.8, 1.4.9, 3.2.4E, 3.2.13C, 3.2.20, 3.2.21, 3.2.22C, 3.2.23, 3.2.25, 3.2.26, 3.2.27, 3.2.28, 3.2.35, 3.2.36, 3.2.48, 3.2.52, 3.2.55, 3.2.57C,

4.1.27, 4.2.4, 4.2.5C, 4.2.31, 4.2.39C, 4.3.18C, 4.3.22C, 5.2.7, 5.3.4C, 5.3.7, 5.4.17, 6.2.21C, 6.2.22, 6.2.23, 6.2.24, 6.2.25, 6.2.26, 6.2.27, 6.2.28, 6.2.30C, 6.2.31, 6.2.33, 6.2.35, 6.2.36, 6.2.45C, 6.2.50C, 6.2.53C, 6.2.58, 6.2.59C, 6.2.61, 6.2.62, 6.2.69C, 6.2.70, 6.2.76, 6.2.77, 6.2.90, 7.2.2, 10.3.5C, 10.3.8 Amman Aviation Pty Ltd v Commonwealth (1988) 19 FCR 223 …. 2.7.8, 2.7.9 AMS v AIF (1999) 199 CLR 160 …. 9.4.31, 9.4.40, 9.4.41 Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353 …. 5.2.20, 5.2.30C, 5.2.31, 5.2.40C Andrews v Howell (1941) 65 CLR 255 …. 9.5.45 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 …. 9.4.13C, 10.3.1 — v Wardley (1980) 142 CLR 237 …. 6.1.27C, 6.1.37, 6.1.40, 6.1.42C, 6.1.43, 6.1.46, 10.3.1 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 …. 1.2.15C, 8.5.38C, 9.4.30C, 9.4.41, 10.3.21, 10.3.22, 10.3.23C, 10.3.27C, 10.3.30C, 10.3.31, 10.4.11 Arena v Nader (1997) 42 NSWLR 427 …. 2.7.12 Armstrong v Budd (1969) 71 SR (NSW) 386 …. 2.7.2, 2.7.11 Arthur Yates & Co Pty Ltd v Vegetable Seeds Committee (1945) 72 CLR 37 …. 3.3.16, 9.7.21C Arver v United States 245 US 366 (1918) …. 9.7.18C Asiatic Steam Navigation Co Ltd v Commonwealth (1956) 96 CLR 397 …. 6.2.82 Assistant Commissioner Condon v Pompano (2013) 252 CLR 38 …. 8.5.52, 8.5.53C Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223 …. 8.4.3, 8.4.4

Aston v Irvine (1955) 92 CLR 353 …. 6.3.11C Atlantic Smoke Shops Ltd v Conlon [1943] AC 550 …. 5.2.10 Attorney-General v Adelaide City Corporation (2013) 249 CLR 1 …. 3.3.24 — v De Keyser’s Royal Hotel Ltd [1920] AC 508 …. 7.5.14, 7.5.16, 7.5.49C, 7.5.52C — v Finch (No 2) (1984) 155 CLR 107 …. 8.7.16C — v Guardian Newspapers (No 2) [1990] 1 AC 109 …. 10.2.3C — v Prince Ernest Augustus of Hanover [1957] AC 436 …. 7.2.8 — v Times Newspapers Ltd [1974] AC 273 …. 10.3.5C — v Vernazza [1960] AC 965 …. 10.4.14C — v Wilts United Dairies Ltd (1920) 37 TLR 884 …. 2.9.2 Attorney-General (Alberta) v Attorney-General for Canada [1939] AC 117 …. 5.3.4C Attorney-General (Canada) v Attorney-General for Ontario [1937] AC 326 …. 4.3.6 — v Cain [1906] AC 542 …. 7.5.52C Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 …. 8.2.27 — v Breckler (1999) 197 CLR 83 …. 8.2.30, 8.2.34 — v Colonial Sugar Refining Co Ltd (1913) 17 CLR 644; [1914] AC 237 …. 3.2.22C, 3.3.1 — v R; Ex parte Australian Boilermakers’ Society (1957) 95 CLR 529 …. 1.8.9, 8.2.8, 8.2.10 — v Schmidt (No 1) (1961) 105 CLR 361 …. 3.2.38, 3.2.51C, 9.5.9, 9.5.36C Attorney-General (Cth); Ex rel McKinlay v Commonwealth

(1975) 135 CLR 1 …. 1.7.10C, 2.2.19, 2.6.4, 2.6.5, 2.6.9, 2.6.10C, 2.6.11, 2.6.16, 26.17, 10.3.5C, 10.3.54, 10.3.56 Attorney-General (NSW) v Brewery Employés Union (NSW) (Union Label case) (1908) 6 CLR 469 …. 3.1.5C, 3.2.4E, 3.2.11C, 3.2.13C, 3.2.18C, 3.2.21, 6.2.13 — v Butterworth & Co (Australia) Ltd (1938) 38 SR (NSW) 195 …. 7.5.19C — v Collector of Customs (Steel Rails case) (1908) 5 CLR 818 …. 6.2.9 — v Commonwealth Savings Bank (1986) 160 CLR 315 …. 8.4.5C — v Homebush Flour Mills Ltd (1937) 56 CLR 390 …. 5.1.9, 5.2.43C — v Stocks and Holdings (Constructors) Pty Ltd (1970) 124 CLR 262 …. 6.2.93 — v Trethowan (1931) 44 CLR 394 …. 2.10.5, 2.11.2, 2.11.5, 2.11.10C, 2.11.11, 2.11.15, 2.11.17, 2.11.20, 2.11.21, 2.11.22C, 2.11.24, 2.11.28, 2.11.31C, 2.11.39C, 2.12.12 — v — (1932) 47 CLR 97 …. 2.11.34, 2.11.39C, 2.12.1 Attorney-General (NSW); Ex rel McKellar v Commonwealth (1977) 139 CLR 527 …. 2.2.18, 2.2.19, 2.2.25, 2.6.4, 2.6.17, 2.6.18, 10.1.2 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 …. 9.5.33, 9.5.34C, 9.5.36C — v Emmerson (2014) 253 CLR 393 …. 8.5.22, 8.5.47, 8.5.48C, 8.6.2, 8.6.10, 9.5.41, 9.5.42C — v Hand (1989) 25 FCR 345 …. 6.1.86 Attorney-General (Ontario) v Attorney-General for Canada [1912] AC 571 …. 3.2.22C, 3.2.26

Attorney-General (Qld) v Attorney-General for the Commonwealth (1915) 20 CLR 148 …. 3.2.22C, 5.3.4C, 6.2.16, 6.2.21C Attorney-General (Vic) v Commonwealth (1935) 52 CLR 533 …. 5.7.75C — v Commonwealth (Marriage Act case) (1962) 107 CLR 529 …. 3.2.18C, 6.1.92C Attorney-General (Vic); Ex rel Black v Commonwealth (1981) 146 CLR 559 …. 5.3.16, 5.3.21, 5.3.23C, 9.7.2, 9.7.6, 9.7.7, 9.7.13C, 9.7.21C Attorney-General (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits case) (1945) 71 CLR 237 …. 5.4.9, 5.4.14, 5.4.15, 5.4.16, 5.4.17C, 5.4.19, 5.4.22C, 5.4.24C, 5.4.26, 7.5.57C, 7.5.59C Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 …. 4.1.2, 4.1.20, 4.1.23C, 4.1.25, 4.2.18 — v Marquet (2003) 217 CLR 545 …. 2.3.15, 2.6.7, 2.6.8, 2.11.16E, 2.11.38, 2.11.39C, 2.11.40 Auckland Harbour Board v R [1924] AC 318 …. 5.4.17C Austin v Commonwealth (2003) 215 CLR 185 …. 1.4.12, 3.2.62, 6.2.45C, 6.2.48, 6.2.49, 6.2.50C, 6.2.53C, 6.3.9, 6.3.11C, 6.4.16, 6.4.18C, 6.4.20C Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136 …. 7.5.87 Australasian Scale Co Ltd v Commissioner of Taxes (Qld) (1935) 53 CLR 534 …. 1.6.5C Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77 …. 9.5.10C

Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399 …. 6.1.27C, 6.1.39 Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106 …. 1.2.27C, 1.3.28, 2.6.15, 3.2.57C, 10.1.1, 10.1.2, 10.2.1, 10.2.2C, 10.3.2, 10.3.4, 10.3.5C, 10.3.8, 10.3.9, 10.3.10, 10.3.11C, 10.3.13, 10.3.20C, 10.3.33, 10.3.38C, 10.3.46, 10.3.49, 10.3.55, 10.3.62C Australian Coarse Grains Pool Pty Ltd v Barley Marketing Board (1985) 157 CLR 605 …. 9.4.16 Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46 …. 6.2.63, 6.2.64 Australian Commonwealth Shipping Board v Federated Seamens’ Union (Shipping Board case) (1925) 36 CLR 442 …. 8.2.37C Australian Communications and Media Authority v Today FM (2015) 255 CLR 352 …. 8.2.28, 8.2.29C Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 …. 1.2.10C, 1.2.15C, 1.2.41, 3.1.1, 4.5.4C, 4.5.11C, 4.5.12, 4.5.13, 4.5.14, 4.5.15, 5.1.30, 5.4.24C, 7.4.10C, 7.5.55C, 7.5.57C, 7.5.59C, 8.3.41, 9.7.21C, 10.4.19 Australian Education Union, Re; Ex parte State of Victoria (1995) 184 CLR 188 …. 1.4.12, 6.2.41, 6.2.42C, 6.2.44C, 6.2.45C, 6.2.46, 6.2.91, 6.3.11C Australian Mutual Provident Society v Goulden (1986) 160 CLR 330 …. 6.1.53, 6.1.54C Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 …. 3.2.31, 3.2.52, 3.2.53, 4.1.7, 4.2.39C, 7.4.28C, 9.4.9, 9.4.14, 10.3.5C Australian Railways Union v Victorian Railway Commissioners (1930) 44 CLR 319 …. 1.4.13, 6.2.27, 6.2.28

Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 …. 8.3.1, 8.3.24 Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 …. 5.1.7, 5.1.10, 5.1.11C, 5.1.12, 5.1.13, 5.1.15, 5.1.16C, 5.1.17, 5.1.18C, 9.5.36C Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 …. 5.4.17C, 7.5.65C B Bachelor, Re [1855] 25 TL (OS) 248 …. 8.2.17C Bank of New South Wales v Commonwealth (Bank Nationalisation case) (1948) 76 CLR 1 …. 1.2.13C, 4.1.8, 4.2.39C, 6.2.32, 6.2.45C, 7.4.28C, 7.5.75C, 8.3.23, 8.3.31C, 8.4.5C, 9.4.9, 9.4.11, 9.5.2, 9.5.12C, 9.5.19C, 9.5.36C, 9.5.46 Bank of Toronto v Lambe (1887) 12 App Cas 575 …. 3.2.22C Bank of United States v Halstead 10 Wheat 51 (1825) …. 8.2.17C Barber v State of Victoria [2012] VSC 166 …. 7.3.25 Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182 …. 9.4.16, 9.4.27C, 9.4.37 Barnard v Thorstenn (1989) 57 LW 4316 …. 9.8.5C Barton v Commonwealth (1974) 131 CLR 477 …. 6.2.86C, 7.5.15, 7.5.28E, 7.5.42C, 7.5.49C, 7.5.59C — v Taylor (1886) 11 App Cas 197 …. 2.7.2 Bartter’s Farms Pty Ltd v Todd (1978) 139 CLR 499 …. 4.1.9, 9.4.13C Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 …. 7.5.86C, 7.5.87, 8.3.9, 8.3.17, 10.4.12 Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 …. 5.2.43C,

9.4.14, 9.4.17, 9.4.18C, 9.4.19, 9.4.20, 9.4.21, 9.4.22C, 9.4.27C, 9.4.35 Baxter v Ah Way (1909) 8 CLR 626 …. 1.8.8C — v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 …. 3.1.5C, 3.2.21, 6.2.7, 6.2.8, 6.2.15, 6.2.18, 6.2.21C, 8.3.4 Bayside City Council v Telstra Corporation Ltd (2004) 216 CLR 595 …. 4.1.1, 6.1.6, 6.4.20C Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283 …. 4.1.9, 4.1.13, 4.1.14, 9.4.13C Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486 …. 7.4.30, 10.4.23 Belfast Corporation v OD Cars Ltd [1960] AC 490 …. 9.5.16C Bennett v Commonwealth (2007) 231 CLR 91 …. 2.2.13, 3.2.62 Berwick Ltd v Gray (1976) 133 CLR 603 …. 2.1.12 Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356 …. 9.4.28, 9.4.30C, 9.4.36, 9.4.37 — v — (2012) 249 CLR 217 …. 9.4.30C, 9.4.31, 9.4.33C, 9.4.35, 9.4.37 — v Western Australia (2008) 234 CLR 318 …. 3.2.58, 9.4.26, 9.4.27C, 9.4.28, 9.4.30C Bethell, Re; Bethell v Hildyard (1888) 38 Ch D 220 …. 3.2.18C Betts, Re; Ex parte Official Receiver [1901] 2 KB 39 …. 8.2.17C Bhinder v Canadian National Railway Co [1985] 2 SCR 561 …. 9.8.5C Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 …. 9.5.19C, 9.5.34C Bignold v Dickson (1991) 23 NSWLR 683 …. 2.2.2, 2.12.11

Birmingham City Council v Equal Opportunities Commission [1989] AC 1155 …. 9.8.5C Bistricic v Rokov (1976) 135 CLR 552 …. 2.1.10 Bivens v Six Unknown Named Agents of Federal Bureau of Narcotics 403 US 388 (1971) …. 10.2.3C, 10.3.20C Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 …. 6.1.27C, 6.1.62C Bluett v Fadden (1956) 56 SR (NSW) 254 …. 8.3.45C Board of Fire Commissioners (NSW) v Ardouin (1961) 109 CLR 105 …. 10.3.23C Bolton, Re; Ex parte Bean (1987) 162 CLR 514 …. 10.4.19 Bolton v Madsen (1963) 110 CLR 264 …. 5.2.19, 5.2.20, 5.2.24C, 5.2.30C, 5.2.35, 5.2.40C, 5.2.43C Bonanza Creek Gold Mining Co v R (1916) 1 AC 566 …. 7.2.20 Bond v R (2000) 201 CLR 213 …. 1.4.23 Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 …. 8.3.30, 8.3.31C, 8.3.33, 8.5.38C Botany Municipal Council v Federal Airports Authority (1992) 175 CLR 453 …. 6.2.65, 7.5.5 Bourke v State Bank of New South Wales (1990) 170 CLR 276 …. 3.2.38 Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 374 …. 9.4.27C Boyd v Carah Coaches Pty Ltd (1979) 145 CLR 78 …. 9.4.2 Bradfield v Roberts 175 US 291 (1899) …. 9.7.13C Brandy v Human Rights and Equal Opportunity Commission (1994) 183 CLR 245 …. 8.2.31 Breen v Sneddon (1961) 106 CLR 406 …. 3.2.49

Brisbane City Council v Groups Projects Pty Ltd (1979) 145 CLR 143 …. 7.5.82C Bribery Commissioner v Ranasinghe [1965] AC 172 …. 2.11.21, 2.11.22C, 2.11.25, 2.11.31C, 2.11.32, 2.11.33, 2.11.34, 2.11.40, 2.12.3C British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 …. 6.2.80E, 7.5.87, 7.5.96, 10.2.5, 10.3.20C British Broadcasting Corp v Johns [1965] Ch 32 …. 7.5.13 British Coal Corporation v R [1935] AC 500 …. 1.3.24, 2.11.39C British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1925) 35 CLR 422 …. 8.2.9C, 8.2.19, 8.2.21, 8.2.31 — v — (No 2) (1926) 38 CLR 153 …. 8.2.22 British Railways Board v Pickin [1974] AC 765 …. 1.5.10, 1.5.16, 2.8.7 Broadbent v Medical Board of Queensland (2011) 282 ALR 96 …. 7.4.31 Broken Hill Proprietary Co Ltd v Dagi [1996] 2 VR 117 …. 2.11.37 Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337 …. 1.6.3, 1.6.5C Bropho v Western Australia (1990) 171 CLR 1 …. 7.4.7, 7.5.82C, 7.5.97 Brown v R (1986) 160 CLR 171 …. 3.2.50, 3.2.51C, 9.6.11, 9.6.12 — v West (1990) 169 CLR 195 …. 2.9.2, 5.4.8, 5.4.9, 7.5.28E, 7.5.75C Brownlee v R (2001) 207 CLR 278 …. 9.6.18, 9.6.19 Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117 ….

5.2.13C, 5.2.43C Bruce v Cole (1998) 45 NSWLR 163 …. 8.6.8C Buchanan v Commonwealth (1913) 16 CLR 315 …. 2.9.24, 5.1.32 Buck v Bavone (1976) 135 CLR 110 …. 10.3.1 Buckley v Valeo (1976) 424 US 1 …. 10.3.5C Building Construction Employees & Builders Labourers’ Federation of New South Wales v Minister for Industrial Relations (BLF case) (1986) 7 NSWLR 372 …. 1.5.15C, 1.5.16, 1.5.17, 8.5.14, 9.3.2 Burmah Oil Company (Burma Trading) Limited v Lord Advocate [1965] AC 75 …. 7.5.14 Burns v Ransley (1949) 79 CLR 101 …. 7.5.59C Burton v Honan (1952) 86 CLR 169 …. 3.2.53, 9.5.38C Butler v Attorney-General (Vic) (1961) 106 CLR 268 …. 6.1.7, 6.1.85 Butterworth v Commonwealth Bank (1916) 22 CLR 206 …. 7.4.28C Byrnes v R (1999) 199 CLR 1 …. 9.6.3 C Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 …. 7.5.18, 7.5.19C, 7.5.79 Cain v Doyle (1946) 72 CLR 109 …. 7.5.97 Caltex Oil (Aust) v XL Petroleum (NSW) (1984) 155 CLR 72 …. 8.7.16C Calvin’s Case (1609) 77 ER 377 …. 7.2.1, 7.2.4 Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 …. 6.4.9C, 6.4.14, 6.4.18C — v R (2002) 209 CLR 339 …. 10.4.10

Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 …. 1.4.2, 5.2.38, 5.2.40C, 5.2.43C — v Australian Capital Territory (No 2) (1993) 178 CLR 561 …. 5.2.16, 5.2.40C, 5.2.42, 5.2.43C Capital Television and Appliances Pty Ltd v Falconer (1971) 125 CLR 591 …. 8.6.2, 8.6.4 Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 …. 7.4.16 Carter v Egg & Egg Pulp Marketing Board (Vic) (1942) 66 CLR 557 …. 8.3.46, 8.3.49C Case of Mines (1568) 1 Plowden 310; 75 ER 472 …. 7.5.19C Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 …. 9.4.22C, 9.4.24, 9.4.25, 9.4.27C, 9.4.30C, 9.4.36 Chaplin v Commissioner of Taxes (SA) (1911) 12 CLR 375 …. 6.2.9 Charles Marshall Pty Ltd v Collins (1957) 96 CLR 1 …. 6.1.32 Cheatle v R (1993) 177 CLR 541 …. 3.2.6, 3.2.46, 3.2.48, 9.6.13, 9.6.14, 9.6.15, 9.6.17 Chemists’ Federation Agreement (No 2), Re [1958] 1 WLR 1192 …. 8.2.25C Chenard and Co v Joachim Arissol (1949) AC 127 …. 1.5.15C Cheng v R (2000) 203 CLR 248 …. 9.6.8, 9.6.9, 9.6.26 Cheung v R (2001) 209 CLR 1 …. 9.6.8, 9.6.24, 9.6.26 China Ocean Shipping Co v South Australia (1979) 145 CLR 172 …. 1.3.15, 1.3.21, 6.2.86C Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 …. 7.5.52C, 8.5.38C, 10.4.1, 10.4.12, 10.4.13, 10.4.14C, 10.4.21, 10.4.23, 10.4.24C, 10.4.26, 10.4.27, 10.4.28, 10.4.29, 10.4.30, 10.4.31

Chu Shao Hung v R (1953) 87 CLR 575 …. 10.4.26 Church of the New Faith v Commissioner for Pay-Roll Tax (Vic) (1983) 154 CLR 120 …. 9.7.9, 9.7.23, 9.7.24 Cincinatti Soap Co v United States 301 US 308 (1937) …. 5.4.22C City Bank, Ex parte 3 Howard 291 (1845) …. 8.2.17C City of Collingwood v Victoria [1993] 2 VR 66 …. 2.11.35, 2.11.36 — v — (No 2) [1994] 1 VR 652 …. 2.11.36, 2.11.37, 8.5.14 Clark King & Co Pty Ltd v Australian Wheat Board (1978) 140 CLR 120 …. 9.4.13C, 10.2.2C Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272 …. 1.4.12, 6.2.48, 6.2.49, 6.2.50C, 6.2.51, 6.2.53C Clayton v Heffron (1960) 105 CLR 214 …. 2.2.12, 2.6.18, 2.10.5, 2.10.11, 2.10.15C, 2.10.17, 2.10.25C, 2.11.15, 2.11.17, 2.11.25, 2.12.14, 2.12.15, 2.12.16 Clough v Leahy (1904) 2 CLR 139 …. 7.5.32, 7.5.33C, 7.5.42C, 7.5.58 Clunies-Ross v Commonwealth (1984) 155 CLR 193 …. 5.3.23C, 9.5.2, 9.5.36C, 9.5.40C Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 …. 6.1.8, 6.1.16, 6.1.18, 6.1.19, 6.1.22C, 6.1.56, 6.1.83 Clydesdale v Hughes (1934) 51 CLR 518 …. 2.11.39C Clyne v East (1967) 68 SR (NSW) 385 …. 8.5.14 Coastace Pty Ltd v New South Wales (1989) 167 CLR 503 …. 5.2.43C Cobb & Co Ltd v Kropp [1965] Qd R 285 …. 1.8.13 — v — [1967] 1 AC 141 …. 1.6.5C, 1.8.12, 1.8.13, 1.8.14, 6.2.77

Cockle v Isaksen (1957) 99 CLR 155 …. 8.4.2 Cole v Whitfield (1988) 165 CLR 360 …. 3.2.4E, 3.2.27, 3.2.47, 3.2.49, 3.2.57C, 4.1.3, 4.1.9, 4.2.39C, 5.1.34, 5.2.3, 5.2.37, 5.2.41, 5.2.43C, 9.1.2, 9.2.4, 9.4.2, 9.4.4, 9.4.5, 9.4.12, 9.4.13C, 9.4.14, 9.4.15, 9.4.16, 9.4.17, 9.4.18C, 9.4.19, 9.4.22C, 9.4.24, 9.4.25, 9.4.27C, 9.4.30C, 9.4.33C, 9.4.36, 9.4.39 Colenso’s case (1864) 3 Moo PC NS 116 …. 1.3.2 Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 …. 6.1.27C, 6.1.34C, 6.1.42C, 6.1.72, 8.4.2 Colonel Aird, Re; Ex parte Alpert (2004) 220 CLR 308 …. 8.2.51 Colonial Sugar Refining Co Ltd v Attorney-General (Cth) (1912) 15 CLR 182 …. 1.3.6, 8.7.16C — v Irving [1906] AC 360 …. 6.4.15 Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151 …. 6.1.38 Combet v Commonwealth (2005) 224 CLR 494 …. 5.4.8, 5.4.21, 5.4.22C, 5.4.24C Cominos v Cominos (1972) 127 CLR 588 …. 8.2.47 Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47 …. 10.3.20C Commissioner for Motor Transport v Train (1972) 127 CLR 396 …. 10.4.24C Commissioner of Stamp Duties (NSW) v Millar (1932) 48 CLR 618 …. 1.6.5C Commissioner of Taxation v Clyne (1958) 100 CLR 246 …. 6.4.11 Commonwealth v Australian Capital Territory (2013) 250 CLR 441 …. 3.2.17, 3.2.18C, 3.2.41, 6.1.52, 6.1.91, 6.1.92C, 6.1.93 — v Australian Commonwealth Shipping Board (1926) 39 CLR 1

…. 7.5.57C, 7.5.65C — v Bank of New South Wales (Bank Nationalisation case) (1949) 79 CLR 497; [1950] AC 235 …. 4.1.8, 9.4.2, 9.4.4, 9.4.9, 9.4.10, 9.4.11, 9.4.30C — v Bogle (1953) 89 CLR 229 …. 6.2.71, 6.2.86C — v Burns [1971] VR 825 …. 1.7.7, 2.9.2 — v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 …. 6.2.68, 6.2.74C, 6.2.75, 6.2.76, 6.2.77, 6.2.79, 6.2.83, 6.2.85, 6.2.86C, 6.2.87, 6.2.89, 6.2.90, 6.2.91, 7.5.63C — v Colonial Ammunition Co Ltd (1924) 34 CLR 198 …. 5.4.17C — v Colonial Combing Spinning and Weaving Co Ltd (1922) 31 CLR 421 …. 1.7.7, 2.9.2, 3.2.4E, 7.5.57C, 7.5.59C, 7.5.65C, 7.5.73C — v Evans Deakin Industries Ltd (1986) 161 CLR 254 …. 6.2.84, 7.5.87, 7.5.92 — v Hospital Contribution Fund (1982) 150 CLR 49 …. 8.4.9, 8.4.10C, 8.5.12C, 8.5.13C, 8.5.15, 8.5.18 — v John Fairfax & Sons Ltd (1980) 147 CLR 39 …. 7.5.25, 7.5.65C — v Kreglinger & Fernau Ltd and Bardsley (1926) 37 CLR 393 …. 7.3.38C, 10.3.5C — v Limerick Steamship Co Ltd (1924) 35 CLR 69 …. 8.5.6C — v Melbourne Harbour Trust Commissioners (1922) 31 CLR 1 …. 10.4.14C — v Mewett (1997) 191 CLR 471 …. 7.5.88, 7.5.93, 7.5.94, 7.5.96, 9.5.31 — v New South Wales (1923) 33 CLR 1 …. 7.5.10, 7.5.19C — v Northern Land Council (1993) 176 CLR 604 …. 7.3.20C,

7.3.31C — v Queensland (1975) 134 CLR 298 …. 7.2.26, 8.5.15, 8.7.16C — v South Australia (Petrol case) (1926) 38 CLR 408 …. 5.2.8, 5.2.10, 5.2.24C — v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 …. 4.2.9, 4.2.13, 4.2.21, 4.2.22C, 4.2.24, 4.2.25, 4.2.26, 4.2.27, 4.2.29C, 4.2.37, 4.2.38, 4.3.3, 4.3.22C, 4.3.23, 4.3.24, 4.3.25, 4.3.26, 4.3.27, 4.3.29, 4.3.30C, 4.3.31, 4.3.33, 4.3.34C, 4.3.35, 4.3.39, 4.3.40, 4.3.43, 4.4.18, 4.4.19C, 4.4.23C, 4.4.26, 4.4.27, 6.2.36, 6.2.37, 6.2.45C, 9.4.22C, 9.5.17, 9.5.19C, 9.5.21C, 10.4.7C — v Western Australia (1999) 196 CLR 392 …. 6.2.91, 7.1.5C, 9.5.96 — v WMC Resources Ltd (1998) 194 CLR 1 …. 9.5.25, 9.5.30, 9.5.31, 9.5.34C, 9.5.36C Commonwealth Aluminium Corporation Ltd v Attorney-General (Qld) (Comalco case) [1976] Qd R 231 …. 2.11.28, 2.11.29, 2.11.31C, 2.11.32 Commonwealth & Air Marshal McCormack in his capacity as Chief of Air Force v Vance [2005] ACTCA 35 …. 2.7.19 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail (2015) 89 ALJR 434; [2015] HCA 11 …. 4.2.13, 4.2.33, 4.2.36C, 4.2.37, 4.2.41, 7.4.29 Congreve v Home Office [1976] QB 629 …. 2.9.2 Consolidated Press Ltd v Australian Journalists’ Association (1947) 73 CLR 549 …. 8.2.37C Constitution of Canada, Re (1981) 125 DLR (3d) 1 …. 1.2.52C, 1.3.8

Conway v Rimmer [1968] AC 910 …. 7.3.20C Coomber v Justices of Berks (1883) 9 App Cas 74 …. 6.2.69C Cooper v Stuart (1889) 14 App Cas 286 …. 1.3.1, 10.3.1 Copyright Owners Reproduction Society Ltd v EMI (Aust) Pty Ltd (1958) 100 CLR 597 …. 1.3.3, 1.3.12, 1.3.23 Cormack v Cope (1974) 131 CLR 432 …. 2.10.24, 2.10.25C, 2.10.27, 2.10.36, 2.11.31C, 2.12.2, 2.12.3C, 2.12.15, 2.12.16 Council of the Municipality of Botany v Federal Airports Corporation (Third Runway case) (1992) 175 CLR 453 …. 6.1.50, 6.1.51C, 6.1.71 CPCF v Minister for Immigration and Border Protection (2015) 89 ALJR 207; [2015] HCA 1 …. 7.5.51, 7.5.52C Cram, Re; Ex parte New South Wales Colliery Proprietors’ Association Ltd (1987) 163 CLR 117 …. 1.4.23 Cram, Re; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 …. 8.2.26C Crandall v Nevada 73 US 35 (1867) …. 10.3.50 Crittenden v Anderson (1977) 51 ALJ 171 …. 9.7.5 Croft v Dunphy [1933] AC 156 …. 1.6.11 Croome v Tasmania (1997) 191 CLR 119 …. 6.1.62C, 6.1.82, 8.3.8, 8.3.19 Crowe v Commonwealth (1935) 54 CLR 69 …. 1.6.11 Cunliffe v Commonwealth (1994) 182 CLR 272 …. 3.3.18, 3.3.19, 4.3.34C, 10.1.4, 10.2.3C, 10.3.11C, 10.3.50 Curran v Federal Commissioner of Taxation (1974) 131 CLR 409 …. 9.8.5C D Dao v Australian Postal Commission (1987) 162 CLR 317 ….

6.1.39, 6.1.46, 6.2.85, 7.5.87 Davies and Jones v Western Australia (1904) 2 CLR 29 …. 9.8.3, 9.8.5C, 9.8.7 Davis v Commonwealth (1988) 166 CLR 79 …. 3.2.54, 5.4.20, 5.4.24C, 7.5.42C, 7.5.58, 7.5.59C, 7.5.73C, 10.3.2, 10.3.3, 10.3.14 De Keyser’s Royal Hotel Ltd v R [1919] 2 Ch 197 …. 7.5.14, 7.5.52C Deakin v Webb (1904) 1 CLR 585 …. 3.2.21, 6.2.5, 6.2.7, 6.2.18, 6.2.21C, 6.2.58, 8.7.16C Dean v Attorney-General (Qld) [1971] St R Qd 391 …. 1.8.13 D’Emden v Pedder (1904) 1 CLR 91 …. 3.2.21, 3.2.22C, 3.2.53, 4.1.12C, 5.3.4C, 6.2.4, 6.2.8, 6.2.9, 6.2.15, 6.2.17, 6.2.21C, 6.2.58, 6.2.59C Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 …. 5.2.4, 5.2.12, 5.2.13C, 5.2.15, 5.2.16, 5.2.17, 5.2.18, 5.2.19, 5.2.22, 5.2.24C, 5.2.25, 5.2.27, 5.2.28, 5.2.30C, 5.2.33, 5.2.34, 5.2.35, 5.2.36, 5.2.37, 5.2.40C, 5.2.43C, 5.2.45, 9.4.18C Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 55 …. 6.2.85, 7.5.87 — v State Bank of New South Wales (1992) 174 CLR 219 …. 6.2.55, 6.2.56 Deputy Federal Commissioner of Taxation v Brown (1958) 100 CLR 32 …. 5.1.28 — v State Bank of NSW (1992) 174 CLR 219 …. 7.4.4 — v Truhold Benefit Pty Ltd (1985) 158 CLR 678 …. 5.1.6C, 5.1.27, 5.1.29, 5.1.30 — v W R Moran Pty Ltd (1939) 61 CLR 735 …. 5.3.9C, 5.3.21 Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 ….

5.2.12, 5.2.17, 5.2.18, 5.2.23, 5.2.24C, 5.2.26, 5.2.27, 5.2.28, 5.2.30C, 5.2.33, 5.2.34, 5.2.35, 5.2.36, 5.2.40C, 5.2.45, 9.4.18C Dickson v R (2010) 241 CLR 491 …. 6.1.27C, 6.1.31, 6.1.61, 6.1.62C, 6.1.63, 6.1.64, 6.1.65, 6.1.82 Dietrich v R (1992) 177 CLR 292 …. 10.4.18 Dill v Murphy (1864) 1 Moo PC (NS) 487; 15 ER 784 …. 2.7.5C, 2.7.17 Dingjan, Re; Ex parte Wagner (1995) 183 CLR 323 …. 3.1.5C, 3.3.3, 4.2.27, 4.2.29C Director of Public Prosecutions, Re; Ex parte Lawler (1994) 179 CLR 270 …. 9.5.40C, 9.5.42C Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 …. 8.3.17, 8.7.8 Ditfort, Re; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 …. 8.3.8 DJL v Central Authority (2000) 201 CLR 226 …. 8.7.11 Dobbs v National Bank of Australasia Ltd (1935) 53 CLR 643 …. 8.2.36C Doyle v Falconer (1866) LR 1 PC 328 …. 2.7.2 Dred Scott v Sandford 60 US 393 (1856) …. 3.2.15C Drivers v Road Carriers (1982) 1 NZLR 374 …. 1.5.15C Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583 …. 10.4.7C Duncan v Independent Commission Against Corruption (2015) 89 ALJR 835; [2015] HCA 32 …. 8.5.49 — v Queensland (1916) 22 CLR 556 …. 9.4.13C, 9.4.14 Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 …. 1.2.29, 1.5.17, 9.3.2

Dymond, Re (1959) 101 CLR 11 …. 5.1.26, 5.1.33, 5.1.34, 5.1.35C Dynes v Hoover 61 US 65 (1858) …. 8.2.49 E East, Re; Ex parte Nguyen (1998) 196 CLR 354 …. 3.2.62, 8.3.44, 8.3.45C Eastern Trust Co v McKenzie, Mann & Co [1915] AC 750 …. 7.5.80 Eastgate v Rozzoli (1990) 20 NSWLR 188 …. 2.12.10, 2.12.11 Eastman v R (2000) 203 CLR 1 …. 8.6.3 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 …. 8.5.21C, 8.5.31C, 8.6.8C Edinburgh and Dalkeith Railway Co v Wauchope (1842) 8 Cl & F 710; 8 ER 279 …. 2.8.7 Egan v Chadwick (1999) 46 NSWLR 563 …. 1.2.51, 7.3.17, 7.3.20C, 7.3.31C, 7.3.32, 7.3.33, 7.3.40 — v Willis (1998) 195 CLR 424 …. 1.2.51, 2.7.13, 7.3.27C, 7.3.31C, 7.3.33, 7.3.40 — v Willis and Cahill (1996) 40 NSWLR 650 …. 7.3.27C, 7.3.31C, 7.3.33, 7.3.40 Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309 …. 1.2.17C Ellen Street Estates Ltd v Minister for Health [1934] 1 KB 590 …. 2.11.39C Elliott v Commonwealth (1936) 54 CLR 657 …. 6.4.5, 6.4.9C, 6.4.10, 6.4.11, 6.4.12, 6.4.18C Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 …. 8.3.31C

Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1 …. 6.2.66, 6.2.69C, 10.3.5C Evans v Crichton-Browne (1981) 147 CLR 169; 33 ALR 609 …. 10.3.5C Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 …. 5.2.18, 5.2.33, 5.2.34, 5.2.40C, 5.2.43C, 9.4.18C Exxon Corporation v Governor of Maryland 437 US 117 (1978) …. 9.4.22C F F, Re; Ex parte F (1986) 161 CLR 376 …. 3.1.5C FAI Insurances Ltd v Winneke (1982) 151 CLR 342 …. 7.3.11C, 7.4.9, 7.4.10C Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 …. 3.2.65, 3.3.12, 3.3.13, 4.1.29C, 4.1.30, 4.3.34C, 5.1.18C, 5.1.42, 5.1.43C, 5.1.44, 5.1.45, 5.3.19, 6.2.26 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 …. 8.5.24, 8.5.25C, 8.5.28, 8.5.29, 8.5.31C, 8.5.38C, 8.5.45C, 8.5.48C, 8.5.53C, 8.5.61C, 10.4.26, 10.4.27, 10.4.31, 10.4.34, 10.4.35, 10.4.36, 10.4.37 Farnell v Bowman (1887) 12 App Cas 643 …. 7.5.42C Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582 …. 6.1.86, 8.6.3 Federal Commissioner of Taxation v Clyne (1958) 100 CLR 246 …. 9.5.38C — v Munro; British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1926) 38 CLR 153 …. 5.1.33, 5.1.35C, 7.3.38C — v Official Liquidator of EO Farley Ltd (1940) 63 CLR 278 …. 6.2.28, 6.2.38C, 6.2.78, 6.2.86C, 7.5.19C, 7.5.42C — v Official Receiver (1956) 95 CLR 300 …. 9.5.27C

Federated Amalgamated Government Railway and Tramway Service Association v New South Wales Railway Traffic Employees Association (Railway Servants case) (1906) 4 CLR 488 …. 3.2.21, 6.2.6, 6.2.17, 6.2.21C Federated Engine Drivers’ and Firemen’s Association of Australia v Broken Hill Pty Co Ltd (Federated Engine Drivers’ case) (1911) 12 CLR 398 …. 6.2.9, 6.2.15, 6.2.18 Federated Municipal and Shire Council Employees’ Union of Australia v Melbourne Corporation (1919) 26 CLR 508 …. 6.2.9, 6.2.17 Federated State School Teachers’ Association of Australia v Victoria (1929) 41 CLR 569 …. 3.2.32 Felton v Mulligan (1971) 124 CLR 367 …. 8.3.27C, 8.3.52C, 8.3.56C, 8.5.4, 8.5.6C Fencott v Muller (1983) 152 CLR 570 …. 4.2.14, 4.2.20, 8.3.51, 8.3.52C, 8.3.53, 8.3.57, 8.3.58, 8.3.59, 8.3.60C, 10.4.14C Fenton v Hampton (1858) 11 Moo PC 347; 14 ER 727 …. 2.7.2 Ffrost v Stevenson (1937) 58 CLR 528 …. 8.5.4 Fidelity & Deposit Co of Maryland v United States 187 US 315 (1902) …. 8.2.17C Finemores Transport Pty Ltd v New South Wales (1978) 139 CLR 338 …. 9.4.2, 9.4.15 Fish Board v Paradiso (1956) 95 CLR 443 …. 9.4.33C Fisher v Fisher (1986) 161 CLR 438 …. 8.7.5, 8.7.7C Fittock v R (2003) 217 CLR 508 …. 9.6.3, 9.6.20 Flaherty v Girgis (1987) 162 CLR 574 …. 6.1.9 Foreman & Sons Pty Ltd, Re; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 …. 6.2.38C, 6.2.66, 6.2.67C, 6.2.68, 6.2.71, 6.2.73, 6.2.74C, 6.2.77, 6.2.86C, 6.2.90

Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 …. 8.3.2, 8.5.8, 8.5.10, 8.5.23, 8.5.29, 8.5.30, 8.5.31C, 8.5.32, 8.5.57C Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 …. 6.2.52, 6.2.53C, 6.4.5, 6.4.12, 6.4.13, 6.4.19, 6.4.20C, 6.4.21 Fox v Robbins (1909) 8 CLR 115 …. 9.4.8, 9.4.14, 9.4.18C Fraser v State Services Commission (1984) 1 NZLR 116 …. 1.5.15C Freightlines & Construction Holding Ltd v New South Wales (1967) 116 CLR 1; [1968] AC 625 …. 9.4.13C G Garcia v San Antonio Metropolitan Transit Authority (1985) 469 US 528 …. 4.1.27 Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227 …. 6.2.64, 6.2.65 Georgiadis v Australian and Overseas Telecommunications Corp (1994) 179 CLR 297 …. 7.5.93, 9.5.13, 9.5.19C, 9.5.21C, 9.5.30, 9.5.31, 9.5.36C Gerhardy v Brown (1985) 159 CLR 70 …. 4.4.36, 6.1.72, 8.3.8 Gertz v Robert Welch Inc 418 US 323 (1974) …. 10.2.3C Gibbons v Ogden 9 Wheat 1 (1824) …. 3.2.22C Gilbert v Western Australia (1962) 107 CLR 494 …. 9.5.7 Gilbertson v Attorney-General (SA) [1978] AC 772 …. 2.6.8 — v South Australia (1976) 15 SASR 66 …. 8.5.14 Giris Pty Ltd v Commissioner of Taxation (1969) 119 CLR 365 …. 1.8.10 Gonzales v Raich 545 US 1 (2005) …. 4.127

Goryl v Greyhound Australia Pty Ltd (1994) 179 CLR 463 …. 9.8.10, 9.8.11C, 9.8.13, 9.8.14C Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368 …. 5.2.18, 5.2.33, 9.4.18C Gould v Brown (1998) 193 CLR 346 …. 8.3.63, 8.3.64C, 8.3.65 Governor, Goulburn Correctional Centre, Re; Ex parte Eastman (1999) 200 CLR 322 …. 6.1.92C, 8.6.2, 8.6.3, 8.6.5, 8.6.8C Grace Bible Church v Reedman (1984) 54 ALR 571 …. 9.3.1 Grace Bros Pty Ltd v Commonwealth (1946) 72 CLR 269 …. 9.5.16C, 9.5.36C Graham v Paterson (1950) 81 CLR 1 …. 1.4.18, 1.4.19C Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 …. 3.1.4, 3.1.5C, 3.2.1, 3.2.12, 3.2.13C, 3.2.18C, 3.2.29, 3.2.41, 3.2.44, 3.2.46, 3.3.2 Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 …. 3.2.53, 3.3.8, 3.3.20, 3.3.23, 4.1.10, 4.2.19, 9.4.2, 9.4.13C Grassby v R (1989) 168 CLR 1 …. 10.4.14C Gratwick v Johnson (1945) 70 CLR 1 …. 9.4.13C, 9.4.39, 9.4.40 Grollo v Palmer (1995) 184 CLR 348 …. 8.4.15C, 8.4.16C, 8.4.17, 8.4.19, 8.4.20C, 8.5.61C Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 …. 7.3.47, 7.3.51, 7.3.52 Grey v Pearson (1857) 6 HLC 61 …. 3.2.22C Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532 …. 8.5.51, 8.5.53C H Ha v New South Wales (1997) 189 CLR 465 …. 1.2.45C, 1.4.10,

5.2.3, 5.2.5, 5.2.11, 5.2.12, 5.2.15, 5.2.16, 5.2.18, 5.2.42, 5.2.43C, 5.2.44, 5.2.45, 5.2.46, 5.2.47, 5.2.48, 5.2.51, 5.3.1 HA Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 …. 8.5.53C Hamdi v Rumsfeld (2004) 72 USLW 4607 …. 10.4.26 Hamilton v University of California 293 US 245 (1934) …. 9.7.18C Hammond v Commonwealth (1982) 152 CLR 188 …. 9.6.22 Hamsher v Swift (1992) 33 FCR 545 …. 2.7.10 Hancock, Re [1904] 1 KB 585 …. 8.2.17C Harper v Minister for Sea Fisheries (1989) 168 CLR 314 …. 5.1.24 — v Victoria (1966) 114 CLR 361 …. 5.1.20 Harris v Caladine (1991) 172 CLR 84 …. 8.4.9, 8.4.10C, 8.4.12 — v Donges [1952] 1 TLR 1245 …. 2.11.25 — v Minister of the Interior 1952 (2) SA 428 …. 2.11.23, 2.11.25 Haskins v Commonwealth (2011) 244 CLR 22 …. 1.2.42, 8.2.52 Hastings Deering (Australia) Ltd v Smith (2004) 18 NTLR 1 …. 9.5.34C Hayden v Teplitzky (1997) 74 FCR 7 …. 8.5.38C HC Sleigh Ltd v South Australia (1977) 136 CLR 475 …. 4.1.8, 5.2.18, 5.2.28, 5.2.33, 5.2.34, 5.2.35, 5.2.40C, 5.2.43C Health Insurance Commission v Peverill (1994) 179 CLR 226 …. 9.5.19C, 9.5.23, 9.5.27C, 9.5.31 Heart of Atlanta Motel v United States 379 US 241 (1964) …. 4.1.27 Heiner v Scott (1914) 19 CLR 381 …. 7.4.28C Helvering v Gerhardt 304 US 405 (1938) …. 6.2.45C

Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 …. 5.2.4, 5.2.5, 5.2.12, 5.2.17, 5.2.29, 5.2.30C, 5.2.32, 5.2.35, 5.2.37 Hempel v Attorney-General (Cth) (1987) 29 A Crim R 133 …. 4.3.48 Henry v Boehm (1973) 128 CLR 482 …. 9.7.13C, 9.8.4, 9.8.5C, 9.8.7, 9.8.11 Herald & Weekly Times Ltd v Commonwealth (1966) 115 CLR 418 …. 4.1.1, 9.4.22C Hilton v Wells (1985) 157 CLR 57 …. 8.4.14, 8.4.15C, 8.4.17, 8.4.20C, 8.5.61C Hogan v Hinch (2011) 243 CLR 506 …. 8.5.50, 10.3.26, 10.3.27C, 10.3.34, 10.3.35, 10.3.38C, 10.3.47 Holmes v Angwin (1906) 4 CLR 297 …. 8.7.2 Hooper v Hooper (1955) 91 CLR 529 …. 8.2.37C Hopper v Egg & Egg Pulp Marketing Board (Vic) (1939) 61 CLR 665 …. 8.3.46, 8.3.49C Horta v Commonwealth (1994) 181 CLR 183 …. 4.3.11 Hospital Provident Fund Pty Ltd v Victoria (1953) 87 CLR 1 …. 4.1.8, 9.4.13C Hodge v R (1883) 9 App Cas 117 …. 1.5.15C, 1.8.12 Houston v Moore 5 Wheat 1 (1820) …. 8.5.9C Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 …. 3.2.21, 4.1.2, 4.2.3, 4.2.5C, 4.2.9, 4.2.16C, 4.2.22C, 4.2.39C, 4.2.40, 6.2.14, 6.2.26, 8.2.16, 8.2.17C, 8.2.22, 8.2.25C, 8.2.34, 8.2.36C, 9.6.21, 9.6.22, 10.4.14C Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492 …. 1.8.8C, 4.1.6 Hughes & Vale Pty Ltd v Gair (1954) 90 CLR 203 …. 2.12.3C,

2.12.13 — v New South Wales (No 2) (1955) 93 CLR 127 …. 9.4.13C Hume v Palmer (1926) 38 CLR 441 …. 6.1.22C, 6.1.57, 6.1.58, 6.1.59, 6.1.60, 6.1.62C, 6.1.66 HV McKay Pty Ltd v Hunt (1926) 38 CLR 308 …. 6.1.22C Hyde v Hyde (1866) LR 1 PD 130 …. 3.2.17, 3.2.18C I Ibralebbe v R [1964] AC 900 …. 1.5.15C, 1.5.16 ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 …. 5.3.22, 5.3.23C, 9.5.4, 9.5.6, 9.5.7, 9.5.8, 9.5.21C Independent Commission Against Corruption v Cunneen (2015) 89 ALJR 475; [2015] HCA 14 …. 8.5.49 Initiative and Referendum Ac, Re [1919] AC 935; 35 TLR 630 …. 1.8.12 Inland Revenue Commissioners v Herbert [1913] AC 332 …. 3.2.22C Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 …. 4.2.39C International Finance Trust Co Ltd v NSW Crime Commission (2009) 240 CLR 319 …. 8.5.36, 8.5.38C, 8.5.48C, 8.5.53C, 10.4.13 J James v Commonwealth (1928) 41 CLR 442 …. 6.4.9C, 6.4.10, 6.4.13 — v — (1936) 55 CLR 1; [1936] AC 578 …. 9.4.2, 9.4.12, 9.4.13C, 9.7.18C, 9.8.5C — v — (1939) 62 CLR 339 …. 10.2.5 — v Cowan (1930) 43 CLR 386 …. 9.4.13C, 10.2.2C

Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 …. 7.3.40, 7.4.16 Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 …. 6.1.8, 6.1.17, 6.1.26, 6.1.27C, 6.1.28, 6.1.29, 6.1.30, 6.1.31, 6.1.32, 6.1.33, 6.1.34C, 6.1.36, 6.1.38 Jenkins v Commonwealth (1947) 74 CLR 400 …. 9.5.15C John v Federal Commissioner of Taxation (1989) 166 CLR 417 …. 3.2.51C, 9.8.5C John Cooke & Co Pty Ltd v Commonwealth (1924) 34 CLR 269 …. 9.5.3, 9.5.16C, 9.5.27C John Fairfax Publications Pty Ltd v Attorney-General (NSW) (2000) 181 ALR 694 …. 8.6.8C John Holland Pty Ltd v Victorian Workcover Authority (2009) 239 CLR 518 …. 6.1.74 Johnson v Commissioner of Stamp Duties (NSW) [1956] AC 331 …. 1.6.5C Johnson Fear & Kingham v Commonwealth (1943) 67 CLR 314 …. 9.5.2, 9.5.45 Jones v Commonwealth (No 2) (1965) 112 CLR 206 …. 3.1.5C, 3.2.45 JT International SA v Commonwealth of Australia (2012) 250 CLR 1; [2012] HCA 43 …. 9.5.20, 9.5.21C Judd v McKeon (1926) 38 CLR 380; [1926] ALR 389 …. 9.7.17, 10.3.60C Judiciary and Navigation Acts, Re (1921) 29 CLR 257 …. 1.2.15C, 1.8.8C, 8.3.8, 8.3.9, 8.3.10C, 8.3.12, 8.3.62, 8.4.5C, 8.5.45C, 8.6.6, 8.7.7C Jumbunna Coal Mine NL v Victorian Coal Miners’ Association

(1908) 6 CLR 309 …. 3.2.4E, 3.2.29, 3.2.30, 3.2.32, 3.2.33, 3.2.34, 3.2.58, 4.3.22C, 10.2.3C K Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51; 70 ALJR 814 …. 1.5.17, 1.5.18, 8.2.11, 8.2.14, 8.3.2, 8.3.66C, 8.5.16, 8.5.17C, 8.5.19, 8.5.20, 8.5.22, 8.5.23, 8.5.24, 8.5.25C, 8.5.26, 8.5.27, 8.5.28, 8.5.29, 8.5.31C, 8.5.35, 8.5.37, 8.5.38C, 8.5.42, 8.5.44, 8.5.45C, 8.5.47, 8.5.48C, 8.5.49, 8.5.50, 8.5.51, 8.5.52, 8.5.53C, 8.5.55, 8.5.60, 8.5.61C, 8.5.63, 8.5.64, 8.6.1, 8.6.4, 8.6.8C, 8.6.10, 9.3.3, 10.4.7C, 10.4.31, 10.4.34, 10.4.36, 10.4.37 Kartinyeri v Commonwealth (1998) 195 CLR 337 …. 2.11.13, 3.1.5C, 3.2.62, 4.4.28, 4.4.29, 4.4.30C Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 …. 7.4.29 Katsuno v R (1999) 199 CLR 40 …. 9.6.23 Kelleher v Parole Board (NSW) (1984) 156 CLR 364 …. 7.5.30 Keller v United States 213 US 138 (1909) …. 3.2.22C K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 …. 8.5.41C, 8.5.51, 8.5.53C Kielley v Carson (1842) 4 Moo PC 63; 113 ER 225 …. 2.7.2, 2.7.11 Kill v Hollister (1746) 1 Wils KB 129 …. 8.2.36C King v Jones (1972) 128 CLR 221 …. 2.5.9, 2.5.10, 3.2.11C Kingswell v R (1985) 159 CLR 264 …. 9.6.9 Kirk v Industrial Relations Commission of NSW (2010) 239 CLR 531 …. 1.2.14, 7.4.31, 8.5.55, 8.5.56, 8.5.57C, 8.5.58, 8.5.63, 8.6.4, 10.1.4 Kirkpatrick v Preisler 394 US 526 (1969) …. 2.6.10C

Kirmani v Captain Cook Cruises Pty Ltd (No 1) (1985) 159 CLR 351 …. 1.3.25 — v — (No 2) (1985) 159 CLR 461 …. 8.7.16C Klein, Re 1 Howard 277; 42 US 256 (1843) …. 3.1.5C Knight v Knight (1971) 122 CLR 114 …. 8.5.11, 8.5.12C Koowarta v Bjelke-Petersen (1982) 153 CLR 168 …. 4.3.17, 4.3.18C, 4.3.19, 4.3.20, 4.3.21, 4.3.22C, 4.3.24, 4.3.27, 4.3.34C, 4.3.35, 4.3.43, 4.3.47, 4.4.15, 4.4.16C, 4.4.22, 4.4.23C, 4.4.26, 4.4.27, 4.4.36 Kotsis v Kotsis (1970) 122 CLR 69 …. 8.5.11, 8.5.13C Korematsu v United States 323 US 214 (1944) …. 3.2.15C Kruger v Commonwealth (1997) 190 CLR 1 …. 1.2.47, 8.6.1, 9.2.2, 9.6.3, 9.7.8, 9.7.15, 9.7.20, 9.7.21C, 9.7.24, 10.1.2, 10.2.5, 10.3.14, 10.3.20C, 10.3.49, 10.3.51, 10.3.52, 10.4.6, 10.4.7C, 10.4.10, 10.4.22, 10.4.24C, 10.4.26 Kruger & Bray v Commonwealth (1995) 69 ALJR 885 …. 9.7.21C Krygger v Williams (1912) 15 CLR 366 …. 9.7.16, 9.7.17, 9.7.18C Kuczborski v Queensland (2014) 254 CLR 51 …. 8.5.49 L Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC 134 …. 8.2.17C, 8.2.25C, 8.2.26C Lamb v Cockatoo Docks & Engineering Co Pty Ltd [1961] SR (NSW) 459 …. 6.1.83 Lamshed v Lake (1958) 99 CLR 132 …. 2.2.21C, 6.1.9, 8.5.17C, 10.3.5C Lane v Morrison (2009) 239 CLR 230 …. 4.5.9, 8.2.31, 8.2.33, 8.2.52

Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 …. 1.2.31, 1.2.32C, 1.7.2, 1.7.3C, 1.7.8, 1.7.10C, 3.3.21, 3.3.23, 6.1.11, 7.3.27C, 7.3.31C, 7.3.33, 7.3.36C, 7.3.38C, 7.4.6, 8.6.1, 10.1.4, 10.2.3C, 10.3.7, 10.3.10, 10.3.11C, 10.3.12, 10.3.13, 10.3.14, 10.3.16, 10.3.17C, 10.3.18, 10.3.20C, 10.3.21, 10.3.23C, 10.3.24, 10.3.25, 10.3.27C, 10.3.29, 10.3.30C, 10.3.31, 10.3.32, 10.3.33, 10.3.34, 10.3.35, 10.3.38C, 10.3.39, 10.3.40, 10.3.42C, 10.3.44, 10.3.47, 10.3.48C, 10.3.52, 10.3.57C Langer v Commonwealth (1996) 186 CLR 302 …. 10.3.11C, 10.3.61, 10.3.62C, 10.3.63 Le Mesurier v Connor (1929) 42 CLR 481 …. 8.2.17C, 8.4.10C, 8.5.8, 8.5.9C, 8.5.12C, 8.5.17C Leask v Commonwealth (1996) 187 CLR 579 …. 3.1.5C, 3.3.19, 3.3.20, 4.5.4C, 10.3.3 Lee v New South Wales Crime Commission (2013) 251 CLR 196 …. 1.2.18 Leeth v Commonwealth (1992) 174 CLR 455 …. 1.4.24, 8.5.17C, 8.5.38C, 10.4.2, 10.4.6, 10.4.7C Levy v Victoria (1997) 189 CLR 579 …. 10.2.4, 10.3.13, 10.3.20C, 10.3.33 Li Chia Hsing v Rankin (1978) 141 CLR 182 …. 9.6.8 Liechtenstein v Guatemala 1955 ICJ 4 …. 2.4.6C Lipohar v R (1999) 200 CLR 485 …. 1.2.31, 8.6.1 Liquidators of Maritime Bank of Canada v Receiver-General (New Brunswick) [1892] AC 437 …. 7.5.10 Little v Commonwealth (1947) 75 CLR 94 …. 10.4.24C Livingston v Story 9 Peters 632 (1835) …. 8.2.17C Liyanage v R [1967] 1 AC 259 …. 8.5.14, 10.4.14C

Lloyd v Wallach (1915) 20 CLR 299 …. 4.5.14, 10.4.24C LNC Industries v BMW (1983) 151 CLR 575 …. 8.3.26, 8.3.27C Lochner v New York 198 US 45 (1905) …. 9.4.7 Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 …. 5.2.16, 5.2.22, 5.2.23, 5.2.28, 5.2.30C, 5.2.35, 5.2.40C, 5.2.41 Lorenzo v Carey (1921) 29 CLR 243 …. 8.5.4, 8.5.6C Luton v Lessels (2002) 210 CLR 333 …. 5.1.15, 5.1.16C, 8.2.30, 8.4.12 M Mabo v Queensland (No 1) (1988) 166 CLR 186 …. 4.4.36 — v — (No 2) (1992) 175 CLR 1 …. 1.2.31, 1.3.1, 4.4.23C MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 …. 5.1.6C, 5.1.25, 5.1.27, 5.1.28, 5.1.29, 5.1.30 Macks, Re; Ex parte Saint (2000) 204 CLR 158 …. 8.3.17 Macleod v Attorney-General (NSW) [1891] AC 455 …. 1.6.1, 1.6.2 — v Australian Securities and Investments Commission (2002) 211 CLR 287 …. 1.4.23 Magaming v R (2013) 252 CLR 381 …. 10.4.20 Maguire v Simpson (1977) 139 CLR 362 …. 6.2.83, 6.2.84, 7.5.92 Malone v Metropolitan Police Commissioner [1979] Ch 344 …. 7.5.23 Maloney v R (2013) 252 CLR 168 …. 4.4.37 Mandla v Dowell Lee [1983] 2 AC 548 …. 9.8.5C Manuel v Attorney-General [1983] Ch 77 …. 2.11.39C Marbury v Madison 5 US 137; 1 Cranch 137 (1803) …. 1.2.36, 1.2.39, 1.2.40C, 1.2.41, 3.1.1, 3.1.3, 3.2.58, 4.5.11C, 4.5.13, 7.5.94, 8.3.30, 8.3.41

Martin v Hunter’s Lessee 1 Wheat 304; 14 US 141 (1816) …. 3.1.5C, 8.5.9C Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101 …. 6.1.11 Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 …. 5.1.5, 5.1.6C, 5.1.7, 5.1.10, 5.1.11C, 5.1.13, 5.2.13C, 5.1.16C, 5.1.17, 5.1.19, 5.2.9, 5.2.13C, 5.2.30C, 5.2.43C McArthur v Williams (1936) 55 CLR 324 …. 10.2.3C McBain, Re; Ex parte Catholic Bishops Conference (2002) 209 CLR 372 …. 8.3.7, 8.3.8, 8.3.13, 8.3.15C, 8.3.20, 8.7.8 McCawley v R (1920) 28 CLR 106; [1920] AC 691 …. 1.5.12, 1.8.12, 2.10.5, 2.10.13, 2.10.14, 2.10.15C, 2.11.2, 2.11.10C, 2.11.22C, 2.11.25, 2.11.42 McClintock v Commonwealth (1947) 75 CLR 1 …. 9.5.15C McCloy v New South Wales (2015) 89 ALJR 857; [2015] HCA 34 …. 3.3.26, 7.3.38C, 10.3.32, 10.3.36, 10.3.41, 10.3.42C, 10.3.44, 10.3.45, 10.3.46 McClure v Australian Electoral Commission (1999) 73 ALJR 1086; 163 ALR 734 …. 10.3.20C McCulloch v Maryland 4 Wheat 316 (1819) …. 3.2.4E, 3.2.53, 3.2.58, 3.3.8, 5.1.43C McDonald v Cain [1953] VLR 411 …. 2.11.25, 2.11.31C, 2.12.8 McGinty v Western Australia (1996) 186 CLR 140 …. 1.2.27C, 1.2.29, 1.7.9, 1.7.10C, 2.2.18, 2.2.19, 2.6.8, 2.6.16, 10.3.11C, 10.3.56, 10.3.58, 10.3.62C, 10.4.7C McGuinness v Attorney-General (Vic) (1940) 63 CLR 73 …. 7.5.36 McKain v R W Miller & Co (1991) 174 CLR 1 …. 9.8.11C McLean, Ex parte (1930) 43 CLR 472 …. 6.1.21, 6.1.22C,

6.1.24C, 6.1.27C, 6.1.38, 6.1.56, 6.1.58, 6.1.60, 6.1.66, 6.1.67 McWaters v Day (1989) 168 CLR 289 …. 6.1.60, 6.1.62C Medical Board of Victoria v Meyer (1937) 58 CLR 62 …. 8.5.61C Melbourne Corporation v Commonwealth (State Banking case) (1947) 74 CLR 31 …. 1.4.11, 1.4.12, 3.2.55, 3.2.57C, 3.2.66, 4.3.22C, 5.3.9C, 6.1.73, 6.2.28, 6.2.30C, 6.2.32, 6.2.33, 6.2.34, 6.2.36, 6.2.38C, 6.2.40, 6.2.41, 6.2.42C, 6.2.44C, 6.2.45C, 6.2.47, 6.2.48, 6.2.49, 6.2.50C, 6.2.53C, 6.2.66, 6.2.67C, 6.2.74C, 6.2.86C, 6.2.91, 6.3.11C, 7.5.65C, 10.3.5C, 10.3.8, 10.4.7C Mellifont v Attorney-General (Qld) (1991) 173 CLR 289 …. 8.7.2, 8.7.3, 8.7.6, 8.7.7C, 8.7.8 Merchant Service Guild of Australasia v Commonwealth Steamship Owners’ Association (No 3) (1920) 28 CLR 495 …. 1.6.12, 1.6.14 Metal Trades Industry Association v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 …. 6.1.39, 6.1.72 MG Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245 …. 5.2.18, 5.2.27, 5.2.28, 5.2.33 MIMIA v B (2004) 219 CLR 365 …. 8.7.11 Milicevic v Campbell (1975) 132 CLR 307 …. 10.4.14C Miller v Miller (1978) 141 CLR 269 …. 6.1.27C — v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 …. 9.4.12, 9.4.13C, 9.4.15, 9.4.33C, 10.3.1, 10.3.5C, 10.3.20C, 10.3.48C Minister for Immigration and Multicultural and Indigenous Affairs, Re; Ex parte Lam (2003) 214 CLR 1 …. 8.5.53C Minister for Immigration and Multicultural and Indigenous Affairs v Al Khafaji (2004) 219 CLR 664 …. 10.4.23

— v Al Masri (2003) 126 FCR 54 …. 10.4.23 — v B (2004) 219 CLR 365 …. 8.3.4, 8.3.6, 8.3.8, 8.3.21 Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151; 119 ALR 108 …. 9.5.19C, 9.5.34C Minister of Arts Heritage and Environment; Attorney-General (Commonwealth) and the Commonwealth v Peko-Wallsend Ltd (1987) 15 FCR 274 …. 7.3.18C Minister of State for the Army v Dalziel (1944) 68 CLR 261 …. 9.5.10C, 9.5.12C, 9.5.15C, 9.5.27, 9.5.36C — v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459 …. 8.5.4, 9.5.45 Minor v Happersett 89 US 162 (1875) …. 9.7.18C Mistretta v United States 488 US 361 (1989) …. 8.5.17C, 8.5.48C Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 …. 1.6.10, 8.7.2 Momcilovic v R (2011) 245 CLR 1 …. 6.1.28, 6.1.29, 6.1.31, 6.1.64, 6.1.65, 6.1.67, 6.1.74, 6.1.84, 6.1.92C, 8.3.9, 8.3.18, 8.3.29, 8.5.42, 8.5.44, 8.5.45C, 8.5.46 Monis v R (2013) 249 CLR 92 …. 10.3.29, 10.3.30C, 10.3.39, 10.3.40 Moore v Commonwealth (1951) 82 CLR 547 …. 5.1.33, 9.5.38C — v Smaw (1861) 17 Cal 199 …. 7.5.19C Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 …. 8.3.52C Morgan v Commonwealth (1947) 74 CLR 421 …. 6.4.18C Mulholland v Australian Electoral Commission (2004) 220 CLR 181 …. 1.7.9, 1.7.10C, 10.3.19, 10.3.20C, 10.3.33, 10.3.34, 10.3.52

Municipal Council of Sydney v Commonwealth (1904) 1 CLR 208 …. 6.2.69C, 7.4.4 Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1 …. 3.3.10, 3.3.14, 3.3.17, 4.1.29C, 4.1.30, 4.1.31, 5.1.42 Muskrat v United States 219 US 346 (1911) …. 8.2.17C Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 …. 7.5.93, 9.5.19C, 9.5.21C, 9.5.22, 9.5.27C, 9.5.29, 9.5.36C, 9.5.37 Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation (1992) 173 CLR 450 …. 5.1.37 MZXOT v Minister for Immigration and Citizenship (2008) 233 CLR 601 …. 8.5.6C N Nadan v R [1926] AC 482 …. 1.3.8 National Federation of Independent Business v Sebelius (2012) 132 S Ct 2566 …. 4.1.27 National Labor Relations Board v Jones & Laughlin Steel Corporation 301 US 1 (1937) …. 4.1.26 Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 …. 2.6.15, 3.3.19, 7.3.38C, 10.1.1, 10.1.2, 10.2.1, 10.2.2C, 10.3.2, 10.3.3, 10.3.5C, 10.3.6, 10.3.9, 10.3.10, 10.3.38C, 10.3.46, 10.3.55, 10.4.19 Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495 …. 9.5.44, 10.4.14C — v — (1952) 85 CLR 545 …. 8.3.56C NEAT Domestic Trading v AWB Ltd (2003) 216 CLR 277 …. 7.4.31 New South Wales v Bardolph (1934) 52 CLR 455 …. 2.9.2, 7.5.38C, 7.5.58, 7.5.65C, 7.5.88

— v Commonwealth (2006) 229 CLR 1 …. 3.2.37, 3.2.38, 3.2.39, 3.3.15 — v Commonwealth (Incorporation case) (1990) 169 CLR 482 …. 3.2.33, 3.2.57C, 4.2.38, 4.2.39C, 4.2.41 — v Commonwealth (No 1) (1932) 46 CLR 155 …. 7.5.38C — v Commonwealth (Seas and Submerged Lands case) (1975) 135 CLR 337 …. 1.6.4, 1.6.5C, 4.3.2, 4.3.9, 4.3.10, 6.3.2, 7.1.5C, 7.2.20, 7.2.24 — v Commonwealth (Surplus Revenue case) (1908) 7 CLR 179 …. 5.4.17C, 5.4.22C, 5.4.24C — v Commonwealth (Wheat case) (1915) 20 CLR 54 …. 1.8.8C, 8.2.2, 8.2.3C, 8.2.9C, 8.2.12, 8.2.19, 8.3.10C — v Commonwealth (Work Choices case) (2006) 229 CLR 1 …. 4.1.2, 4.1.25, 4.2.9, 4.2.18, 4.2.24, 4.2.28, 4.2.29C, 4.2.30, 4.2.31, 4.2.32, 4.2.33, 4.2.35, 4.2.38, 4.2.41, 5.4.21, 6.1.73 — v Kable (2013) 252 CLR 118 …. 10.4.37 New York Central Railroad Co v Winfield 244 US 147 (1917) …. 6.1.12 New York Times Co v Sullivan 376 US 254 (1964) …. 10.2.3C Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 …. 3.2.59, 3.2.62, 9.5.19C, 9.5.34C Newmarch v Atkinson (1918) 25 CLR 381 …. 10.4.24C Ng v R (2003) 217 CLR 521 …. 9.6.20 Nicholas v Commonwealth (2011) 244 CLR 66 …. 8.2.52 — v R (1998) 193 CLR 173 …. 8.5.38C, 10.4.13, 10.4.14C, 10.4.16, 10.4.17, 10.4.20 — v Western Australia [1972] WAR 168 …. 8.5.14 Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR

134 …. 3.1.5C, 3.2.40, 3.2.44, 9.5.24 Nolan, Re; Ex parte Young (1991) 172 CLR 460 …. 4.5.7C, 4.5.8C, 8.2.50, 8.5.17C Nolan v Minister for Immigration & Ethnic Affairs (1988) 165 CLR 178 …. 7.2.3 North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16; [2015] HCA 41 …. 8.5.22, 8.5.64, 8.6.2, 8.6.4, 8.6.10, 10.4.29 North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 …. 8.5.20, 8.5.21C, 8.5.22, 8.5.23, 8.5.25C, 8.5.29, 8.5.31C, 8.5.32, 8.5.61C, 8.6.2, 8.6.7, 8.6.8C, 8.6.9 North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559 …. 9.4.2, 9.4.13C, 9.4.15 Northern Land Council v Commonwealth (1986) 161 CLR 1 …. 2.1.12 Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 …. 2.9.22 Northern Territory v GPAO (1998) 196 CLR 553 …. 6.1.87, 6.1.88C, 6.1.90, 6.1.92C, 8.6.2, 8.6.8C Norton v Crick (1894) 15 LR (NSW) 172 …. 2.7.2 — v Shelby County 118 US 425 (1886) …. 1.2.42 NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90 …. 7.5.86C O O’Donoghue v Ireland (2008) 234 CLR 599 …. 6.3.10, 6.3.11C, 6.3.12 O Gilpin Ltd v Commissioner for Taxation (NSW) (1940) 64 CLR 169 …. 9.4.30C

O’Malley v Woodrough 307 US 277 (1939) …. 6.2.45C O’Neill v Mann (2000) 101 FCR 160 …. 8.6.3 Ontario Human Rights Commission v Simpsons-Sears Ltd [1985] 2 SCR 536 …. 9.8.5C O’Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1 …. 7.4.16 Osborne v Commonwealth (1911) 12 CLR 321 …. 2.9.20, 5.1.35C, 5.1.41, 5.1.45, 5.3.4C Osland v Secretary to the Department of Justice (2008) 234 CLR 275 …. 7.5.30 O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 …. 3.2.53, 3.2.58, 4.1.9, 4.1.12C, 4.1.13, 4.1.14, 4.1.31 — v — [1957] AC 1 …. 4.1.21 O’Toole v Charles David Pty Ltd (1990) 172 CLR 232 …. 3.2.66, 8.7.5, 8.7.7C Ozmanian v Minister for Immigration, Local Government and Ethnic Affairs (1996) 137 ALR 103 …. 7.4.16 P P J Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 …. 5.3.22, 5.3.23C, 9.5.5, 9.5.7 Pacific Coal Pty Ltd, Re; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 …. 4.2.29C, 4.2.30, 4.2.35 Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) (2003) 219 CLR 325 …. 6.2.93, 6.2.94 Palling v Corfield (1970) 123 CLR 52 …. 8.5.38C Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 …. 4.3.38, 4.3.45, 5.4.8, 5.4.10, 5.4.23, 5.4.24C, 5.4.25, 5.4.26,

5.4.27, 7.5.58, 7.5.61, 7.5.62, 7.5.63C, 7.5.65C, 7.5.72, 7.5.73C Pareroultja v Tickner (1993) 42 FCR 32 …. 4.4.35 Parkin v James (1905) 2 CLR 315 …. 8.7.14C Parton v Milk Board (Vic) (1949) 80 CLR 229 …. 5.1.20, 5.2.4, 5.2.5, 5.2.7, 5.2.10, 5.2.11, 5.2.13C, 5.2.15, 5.2.22, 5.2.24C, 5.2.30C, 5.2.37, 5.2.39, 5.2.40C, 5.2.42, 5.2.43C, 5.2.44, 5.2.45, 8.3.46, 8.3.49C Pasini v United Mexican States (2002) 209 CLR 246 …. 6.3.11C Patterson, Re; Ex parte Taylor (2001) 207 CLR 391 …. 1.7.10C, 7.4.18, 7.5.65C Pearce v Florenca (1976) 135 CLR 507 …. 1.6.4, 1.6.5C, 1.6.10 Peacock v Newtown, Marrickville & General Co-Operative Building Society No 4 Ltd (1943) 67 CLR 25 …. 8.2.40 Peanut Board v Rockhampton Harbour Board (1933) 48 CLR 266 …. 9.4.16 Pedersen v Young (1964) 110 CLR 162 …. 6.2.81 Penn Dairies v Milk Control Commission (1943) 318 US 270 …. 6.2.63 Pennsylvania Coal Co v Mahon 260 US 393 (1922) …. 9.5.16C Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388 …. 5.1.34, 5.1.35C, 6.2.98, 6.4.12, 6.4.13, 6.4.17, 6.4.18C, 6.4.19, 6.4.20C, 6.4.21, 6.4.25 Permewan Wright Consolidated Pty Ltd v Trewhitt (1979) 145 CLR 1 …. 4.1.9, 9.4.11, 9.4.13C Peterswald v Bartley (1904) 1 CLR 497 …. 5.2.6, 5.2.7, 5.2.8, 5.2.10, 5.2.13C, 5.2.15, 5.2.16, 5.2.35, 5.2.37, 5.2.40C, 5.2.42, 5.2.43C, 6.2.11

Peverill v Health Insurance Commission (1991) 104 ALR 449 …. 9.5.27C Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 …. 8.3.48, 8.3.49C, 8.3.51, 8.3.52C, 8.3.53, 8.3.58, 8.3.59 Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 …. 5.2.16, 5.2.18, 5.2.35, 5.2.36, 5.2.37, 5.2.39, 5.2.40C, 5.2.43C, 5.2.45, 9.4.25 Pickin v British Railways Board (1974) AC 765; [1974] UKHL 1 …. 1.5.15C Pilkington v Frank Hammond Pty Ltd (1974) 131 CLR 124 …. 9.4.13C Pioneer Express Pty Ltd v Hotchkiss (1958) 101 CLR 536 …. 9.4.38 Pirrie v McFarlane (1925) 36 CLR 170 …. 6.1.6, 6.2.58, 6.2.59C, 6.2.61, 6.2.62, 6.2.67C, 6.2.71, 6.2.76, 6.2.86C, 7.5.97 Plaintiffs M61/2010E and M69/2010 v Commonwealth of Australia (2010) 243 CLR 319 …. 7.4.30, 7.4.31 Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1 …. 5.4.25, 7.5.8, 7.5.41, 7.5.42C, 7.5.53, 7.5.70, 7.5.73C, 7.5.74, 7.5.75C, 10.4.30 Plaintiff S156/2013 v Minister for Immigration and Border Protection (2014) 254 CLR 28 …. 3.3.10, 3.3.27 Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 …. 1.2.12, 1.2.13C, 8.3.31C, 8.3.34, 8.3.39C, 8.5.56, 8.5.58 Polish National Alliance v National Labour Relations Board 322 US 643 (1944) …. 4.1.18C Pollentine v Bleijie (2014) 253 CLR 629 …. 8.5.49

Polyukhovich v Commonwealth (War Crimes Act case) (1991) 172 CLR 501 …. 4.3.10, 4.3.11, 4.3.12, 4.3.13, 4.3.44, 4.5.18, 10.4.1, 10.4.12, 10.4.17, 10.4.20, 10.4.27 Port MacDonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340 …. 1.3.19, 1.6.10, 2.11.39C, 2.11.44 Port of Portland Pty Ltd v Victoria (2010) 242 CLR 348 …. 1.5.8, 7.5.80, 7.5.97 Potter v Minahan (1908) 7 CLR 277 …. 1.2.17C Poulton v Commonwealth (1953) 89 CLR 540 …. 9.5.16C Powell v Appollo Candle Co (1885) 10 App Cas 282 …. 1.5.12, 1.5.15C, 1.8.12 Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 …. 3.2.66, 8.2.26C, 8.2.27 Printz v United States 521 US 898 (1997) …. 6.3.8, 6.3.12 Proclamations, The Case of (1611) 12 Co Rep 74; 77 ER 1352 …. 1.5.3 Prohibitions, The Case of (1607) 12 Co Rep 63; 77 ER 1342 …. 1.5.3 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 …. 2.10.17 Province of Bombay v Municipal Corporation of Bombay [1947] AC 58 …. 7.5.82C PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975; [2015] HCA 36 …. 8.3.28 Putland v R (2004) 218 CLR 174 …. 10.4.9 Pye v Renshaw (1951) 84 CLR 58 …. 5.3.21, 5.3.22, 5.3.23C, 9.5.4, 9.5.7, 9.5.8

Q Queanbeyan City Council v ACTEW Corporation Ltd (2011) 244 CLR 530 …. 5.1.14 Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 …. 8.2.17C, 8.2.45, 8.2.46, 8.5.45C Queensland v Commonwealth (1987) 162 CLR 74 …. 6.2.54, 6.2.55 — v Commonwealth (Second Territory Senator’s case) (1977) 139 CLR 585 …. 2.2.26, 3.2.51C — v Commonwealth (Tropical Rainforests case) (1989) 167 CLR 232 …. 4.3.15 Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 …. 1.4.12, 6.2.38C, 6.2.40, 6.2.42C, 6.2.45C, 6.2.46, 6.2.48, 6.2.50C, 6.2.53C, 6.2.86C, 10.3.5C Queensland Nickel Pty Ltd v Commonwealth (2015) 255 CLR 252 …. 6.4.22, 6.4.25 R R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 …. 9.4.2, 9.4.13C — v Archdall and Roskruge; Ex parte Carrigan and Brown (1928) 41 CLR 128 …. 9.6.5, 9.6.6, 9.6.7, 9.7.13C — v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235 …. 4.2.20 — v Barger (1908) 6 CLR 41 …. 3.2.21, 3.3.12, 4.1.29C, 5.1.18C, 5.1.25, 5.1.38, 5.1.39C, 5.1.40, 5.1.41, 5.1.42, 5.1.43C, 5.1.44, 5.1.45, 5.3.4C, 5.3.19, 6.2.12, 6.2.19, 6.2.26, 6.4.8, 6.4.9C, 6.4.10, 6.4.11 — v Bernasconi (1915) 19 CLR 629 …. 8.6.2, 8.6.3, 9.6.2, 9.6.3, 9.6.5, 9.7.7

— v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 …. 1.3.3, 8.2.49, 8.3.46, 8.3.49C — v Brislan; Ex parte Williams (1935) 54 CLR 262 …. 3.1.5C, 3.2.45 — v Burah (1878) 3 App Cas 889 …. 1.5.12, 1.5.15C, 1.8.12, 3.2.22C — v Burgess; Ex parte Henry (1936) 55 CLR 608 …. 4.1.14, 4.1.15, 4.1.18C, 4.3.16, 4.3.17, 4.3.18C, 4.3.19, 4.3.20, 4.3.22C, 4.3.40 — v Caldwell (2009) 22 VR 93 …. 6.1.62C — v Carter; Ex parte Kisch (1934) 52 CLR 221 …. 8.3.46, 8.3.49C — v Clarence (1888) 22 QBD 23 …. 5.3.5 — v Coldham; Ex parte Australian Social Welfare Union (1983) 153 CLR 297 …. 3.2.32, 3.2.46 — v Coldham; Ex parte Australian Workers’ Union (1982) 153 CLR 415 …. 8.3.37, 8.3.39C — v Commissioner for Transport; Ex parte Cobb & Co Ltd [1963] Qd R 547 …. 2.8.9 — v Commonwealth Conciliation and Arbitration Commission; Ex parte Professional Engineers’ Association (1959) 107 CLR 208 …. 3.2.11C, 3.2.32, 3.2.42 — v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett v Opitz (1945) 70 CLR 141 …. 8.2.26C, 8.2.37C, 8.3.27C — v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (1960) 103 CLR 368 …. 8.2.38C, 8.2.46, 8.5.50 — v Cox; Ex parte Smith (1945) 71 CLR 1 …. 8.2.49

— v Credit Tribunal; Ex parte General Motors Acceptance Corporation Australia (1977) 137 CLR 545 …. 6.1.74, 6.1.88C — v Davison (1954) 90 CLR 353 …. 8.2.9C, 8.2.16, 8.2.17C, 8.2.18, 8.2.25C, 8.2.26C, 8.5.45C — v Director-General of Social Welfare (Vic); Ex parte Henry (1975) 133 CLR 369 …. 10.3.1 — v Duncan; Ex parte Australian Iron & Steel Pty Ltd (1983) 158 CLR 535 …. 6.3.4C, 8.3.64C — v Electricity Commissioners [1924] 1 KB 171 …. 8.2.23C — v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 …. 4.2.11, 4.2.12, 4.2.13, 4.2.14, 4.2.15, 4.2.16C, 4.2.19, 4.2.21, 4.2.22C, 4.2.36C, 4.2.37 — v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556 …. 8.2.7, 9.6.6, 9.6.8, 9.6.10, 9.6.25 — v Foreign Sec; Ex parte Indian Assocn [1982] QB 892 …. 7.2.3 — v Foster; Ex parte Commonwealth Steamship Owners’ Association (1953) 88 CLR 549 …. 6.1.8 — v Foster; Ex parte Eastern and Australian Steamship Co Ltd (1959) 103 CLR 256 …. 1.6.5C, 1.6.15, 4.1.6 — v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 …. 8.2.26C — v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 …. 8.3.35, 8.3.36C, 8.3.37, 8.3.39C, 8.3.40 — v Hughes (2000) 202 CLR 535 …. 1.4.17, 1.4.23, 6.3.5, 6.3.6C, 6.3.7 — v Humby; Ex parte Rooney (1973) 129 CLR 231 …. 10.4.14C — v Joske; Ex parte Australian Building Construction Employees

and Builders’ Labourers’ Federation (1974) 130 CLR 87 …. 8.2.13 — v Joske; Ex parte Shop Distributive and Allied Employees’ Association (1976) 135 CLR 194 …. 8.2.47, 8.2.48 — v Judges of Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 …. 3.2.11C — v Kearney; Ex parte Japanangka (1984) 158 CLR 395 …. 6.1.86 — v Kidman (1915) 20 CLR 425 …. 6.1.76C, 8.3.29 — v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 …. 1.2.32C, 8.2.8, 8.2.9C, 8.2.13, 8.2.37C, 8.2.44C, 8.2.48, 8.3.62, 8.4.9, 8.4.13, 8.4.14, 8.4.15C, 8.4.16C, 8.5.38C, 10.2.3C — v Licensing Court of Brisbane; Ex parte Daniell (1920) 28 CLR 23 …. 6.1.15, 6.1.35 — v LK (2010) 241 CLR 177 …. 9.6.15 — v Local Government Board for Ireland [1902] 2 IR 349 …. 8.2.17C, 8.2.25C — v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 …. 6.1.58, 6.1.59, 6.1.60, 6.1.62C, 6.1.74 — v Ludeke; Ex parte Queensland Electricity Commission (1985) 159 CLR 178 …. 6.2.38C — v Marshall [1981] VR 725 …. 8.5.25C — v Metal Trades Employers’ Association; Ex parte Amalgamated Engineering Union, Australian Section (1951) 82 CLR 248 …. 8.3.37 — v Murray; Ex parte Proctor (1949) 77 CLR 387 …. 8.3.39C — v Murray and Cormie (1916) 22 CLR 437 …. 8.5.9C — v Panel on Take-overs and Mergers; Ex parte Datafin [1987] QB 815 …. 7.4.31

— v Pearson; Ex parte Sipka (1983) 152 CLR 254 …. 2.5.10, 2.5.11C, 2.5.14, 10.3.54 — v Phillips (1971) 125 CLR 93 …. 6.2.93 — v Pitt (1762) 97 ER 861 …. 2.7.6 — v Porter; Ex parte Yee (1926) 37 CLR 42 …. 8.6.2 — v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 …. 1.4.18, 3.1.5C, 3.2.29 — v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 …. 8.2.12 — v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157 …. 2.7.4, 2.7.5C, 2.7.6, 2.7.13, 8.2.49 — v Secretary of State for Foreign and Commonwealth Affairs; Ex Parte Indian Association of Alberta [1982] AC 894 …. 7.2.1 — v Secretary of State for Health; Ex parte C [2000] 1 FLR 627; All ER D 215 …. 7.5.23 — v Secretary of State for Home Department; Ex parte Northumbria Police Authority [1989] QB 26 …. 7.5.31 — v Secretary of State for Home Department; Ex parte Pierson [1998] AC 539 …. 1.2.17C — v Sharkey (1949) 79 CLR 121 …. 4.3.46, 4.3.47, 7.5.55C, 7.5.58, 7.5.59C — v Smithers; Ex parte Benson (1912) 16 CLR 99 …. 9.4.38, 10.3.11C — v Smithers; Ex parte McMillan (1982) 152 CLR 477 …. 9.5.40C — v Snow (1915) 20 CLR 315 …. 9.6.14, 9.6.15 — v Spicer (1957) 98 CLR 40 …. 8.4.2

— v Spicer; Ex parte Australian Builders’ Labourers Federation (1957) 100 CLR 277 …. 8.2.37C, 8.2.38C, 8.2.46 — v Spicer; Ex parte Waterside Workers Federation of Australia (1957) 100 CLR 312 …. 8.2.25C — v Sutton (Wire Netting case) (1908) 5 CLR 789 …. 6.2.9 — v Tang (2008) 237 CLR 1 …. 4.3.41C — v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533 …. 4.2.10, 4.2.11, 4.2.12, 4.2.13, 4.2.15, 4.2.16C, 4.2.22C — v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 …. 8.2.15, 8.2.25C, 8.2.26C, 8.2.29C, 8.5.38C, 8.5.61C — v Wallace; Ex parte O’Keefe [1918] VLR 285 …. 10.4.24C — v Watson; Ex parte Armstrong (1976) 136 CLR 248 …. 10.4.14C — v White; Ex parte Byrnes (1963) 109 CLR 665 …. 8.2.53 — v Winneke; Ex parte Gallagher (1982) 152 CLR 211 …. 6.1.59, 6.1.66, 9.7.4 — v Wright; Ex parte Waterside Workers’ Federation of Australia (1955) 93 CLR 528 …. 4.1.6 R (on the application of Bancoult) v Secretary of State for Foreign and Commonwealth Affairs [2009] 1 AC 453 …. 7.5.14 Racing New South Wales v Sportsbet Pty Ltd (2010) 189 FCR 448 …. 9.4.31 Ranger Uranium Mines Pty Ltd, Re; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656 …. 8.2.26C Read v Bishop of Lincoln [1892] AC 644 …. 3.2.22C Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 ….

4.1.16, 4.1.17 Rediffusion (Hong Kong) Ltd v Attorney-General (Hong Kong) 1970 AC 1936 …. 2.11.31C Reference re The Power of the Governor General in Council to disallow provincial legislation and the Power of Reservation of the Lieutenant-Governor of a Province [1938] SCR 71 …. 1.2.52C Refugee Tribunal, Re; Ex parte Aala (2000) 204 CLR 82 …. 8.3.32 Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 …. 6.2.45C Resch v Federal Commissioner of Taxation (1942) 66 CLR 198 …. 5.1.37 Residential Tenancies Tribunal of New South Wales and Henderson, Re; Ex parte Defence Housing Authority (1997) 190 CLR 410 …. 6.1.47, 6.2.68, 6.2.77, 6.2.86C, 6.2.87, 6.2.88, 6.2.89, 6.2.90, 6.2.91, 6.2.96, 6.2.97, 7.4.7, 7.5.42C, 7.5.75C, 7.5.97 Reynolds v United States 98 US 145 (1878) …. 9.7.13C Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 …. 9.5.40C Richardson, Re 160 NE 655 (1928) …. 8.5.17C Richardson v Forestry Commission (1988) 164 CLR 261 …. 4.3.24, 4.3.25, 4.3.29, 4.3.30C, 4.3.32, 4.3.33, 4.3.34C, 9.4.22C Ridgeway v R (1995) 184 CLR 19 …. 10.4.13 Riel v R (1885) 10 App Cas 675 …. 1.5.15C Roach v Electoral Commissioner (2007) 233 CLR 162 …. 3.2.58,

3.2.62, 9.2.3, 10.1.2, 10.1.4, 10.3.48C, 10.3.56, 10.3.57C, 10.3.58, 10.3.59, 10.3.60C Roberts v Bass (2002) 212 CLR 1 …. 10.3.20C — v Bradfield (1898) 12 App DC 453 …. 9.7.13C Robertson v Baldwin 165 US 275 (1897) …. 8.5.9C Robinson (TA) and Sons Pty Ltd v Haylor (1957) 97 CLR 177 …. 6.1.42C Robtelmes v Brenan (1906) 4 CLR 395 …. 7.5.52C Roche v Kronheimer (1921) 29 CLR 329 …. 1.8.8C Rodway v R (1983) 152 CLR 281 …. 10.4.14C Rowe v Electoral Commissioner (2010) 243 CLR 1 …. 10.1.2, 10.1.4, 10.3.59, 10.3.60C Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 …. 5.1.3, 5.1.13, 5.1.17, 5.1.18C, 5.1.19, 5.1.23, 5.1.30, 5.1.46 Ruddock v Vadarlis (2001) 110 FCR 491 …. 7.5.20, 7.5.49C, 7.5.50, 7.5.51, 7.5.52C, 7.5.53 Ruhani v Director of Police (Nauru) (2005) 222 CLR 489 …. 8.6.6 Russell v Russell (1976) 134 CLR 495 …. 8.5.10 S Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 …. 1.2.17C Saffron v R (1953) 88 CLR 523 …. 8.7.5, 8.7.7C Samuels v Readers’ Digest Association Pty Ltd (1969) 120 CLR 1 …. 9.4.13C Sankey v Whitlam (1978) 142 CLR 1 …. 2.7.8, 7.3.20C Saraceni v Jones (2012) 246 CLR 251 …. 8.2.18 Schenck v United States 249 US 47 (1919) …. 9.7.18C

SGH v Federal Commissioner of Taxation (2002) 210 CLR 51 …. 3.2.16, 3.2.18C, 6.2.54, 6.2.57, 6.2.91 Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530; [1931] AC 275 …. 8.2.17C, 8.2.22, 8.2.23C Sheriff of Middlesex (1840) 11 Ad & E 273 113 ER 419 …. 2.7.5C Shrimpton v Commonwealth (1945) 69 CLR 613 …. 10.3.48C Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1 …. 4.5.16, 8.2.9C Simpson v Attorney-General [1955] NZLR 271 …. 2.6.18 Singh v Commonwealth (2004) 222 CLR 322 …. 7.2.4, 9.4.33C Smith v ANL Ltd (2000) 204 CLR 493 …. 9.5.13, 9.5.21C, 9.5.31, 9.5.34C, 9.5.36C — v Handcock (1944) 46 WALR 21 …. 9.7.20 — v Mann (1932) 47 CLR 426 …. 8.7.5 Smith Kline & French Laboratories (Australia) Ltd v Commonwealth of Australia; Carson v John Fairfax & Sons Ltd (recs & mgrs appt’d) (1991) 173 CLR 194 …. 8.7.12, 8.7.14C Snowdon v Dondas (1996) 188 CLR 48 …. 2.5.14 Solomons v District Court of New South Wales (2002) 211 CLR 119 …. 6.2.81 Sonzinsky v United States 300 US 506 (1937) …. 5.3.4C Sorby v Commonwealth (1983) 152 CLR 281 …. 9.6.22, 10.4.14C South Australia v Commonwealth (1962) 108 CLR 130 …. 8.3.8 — v Commonwealth (1992) 174 CLR 235 …. 6.2.56 — v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373

…. 1.4.10, 3.2.64, 4.5.16, 5.1.2, 5.1.18C, 5.3.11, 5.3.4C, 5.3.6, 5.3.7, 5.3.9C, 5.3.16, 5.3.19, 5.3.23C, 6.1.6, 6.2.67C — v O’Shea (1987) 163 CLR 378 …. 7.3.18C — v Tanner (1989) 166 CLR 161 …. 9.4.22C — v Totani (2010) 242 CLR 1 …. 8.2.36C, 8.5.14, 8.5.40, 8.5.41C, 8.5.45C, 8.5.48C, 8.5.53C, 8.5.61C, 8.5.64 — v Victoria (1911) 12 CLR 667 …. 8.3.10C, 8.4.5C South Eastern Drainage Board v Savings Bank of South Australia (1939) 62 CLR 603 …. 2.11.20, 2.11.21, 2.11.31C Southern Centre of Theosophy Inc v South Australia (1979) 145 CLR 246 …. 2.8.4 Speaker of the Legislative Assembly of Victoria v Glass (1871) LR3PC 560 …. 2.7.5C, 2.7.17 Spencer v Commonwealth of Australia (2010) 241 CLR 118 …. 9.5.8 Sportodds Systems Pty Ltd v New South Wales (2003) 133 FCR 63 …. 9.4.27C Sportsbet Pty Ltd v New South Wales (2010) 186 FCR 226 …. 9.4.35, 9.4.37 — v — (2012) 249 CLR 298 …. 9.4.31, 9.4.33C, 9.4.35 Spratt v Hermes (1965) 114 CLR 226 …. 8.6.2, 8.6.4, 9.6.8 SRA (Inc) v Minnesota (1946) 327 US 558 …. 6.2.71 Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 …. 8.3.53, 8.3.56C, 8.3.58, 8.3.59, 8.4.5C State Chamber of Commerce and Industry v Commonwealth (Second Fringe Benefits Tax case) (1987) 163 CLR 329; 73 ALR 161 …. 5.1.37, 6.2.45C, 10.3.5C State of New South Wales v Public Transport Ticketing

Corporation [2011] NSWCA 60 …. 7.3.20C State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 …. 4.2.12, 4.2.13, 4.2.14, 4.2.15, 4.2.22C, 4.2.26, 4.2.37 Steele v Defence Forces Retirement Benefits Board (1955) 92 CLR 177 …. 8.5.45C Stenhouse v Coleman (1944) 69 CLR 457 …. 3.1.5C, 4.5.2 Stephens v Abrahams (No 2) (1903) 29 VLR 229 …. 5.1.35C — v West Australian Newspapers Ltd (1994) 182 CLR 211 …. 10.1.4, 10.3.9, 10.3.10, 10.3.11C, 10.3.12 Stevens v Head (1993) 176 CLR 433 …. 9.8.11C Stevenson v R (1865) 2 WW & A’B 143 …. 2.8.6 Stewart v Ronalds (2009) 76 NSWLR 99 …. 7.4.12 Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 …. 6.1.27C, 6.1.30, 6.1.88C, 6.1.92C Stockdale v Hansard (1839) 9 Ad & E 1; 112 ER 1112 …. 2.7.6, 2.8.6 Storey v Lane (1981) 147 CLR 549 …. 3.1.5C, 10.4.24C Street v Queensland Bar Association (1989) 168 CLR 461 …. 6.4.16, 6.4.18C, 9.2.4, 9.4.25, 9.4.30C, 9.8.5C, 9.8.6, 9.8.7, 9.8.11C, 9.8.12, 9.8.13, 9.8.15, 10.4.19 Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 …. 3.2.36, 4.1.2, 4.2.5C, 4.2.7, 4.2.9, 4.2.10, 4.2.15, 4.2.16C, 4.2.17, 4.2.18, 4.2.39C, 6.1.76C, 6.2.26 Sue v Hill (1999) 199 CLR 462 …. 2.4.8, 2.8.4, 2.11.39C, 3.2.13C, 7.1.5C, 7.1.6, 7.2.1, 7.2.3, 7.2.5, 7.2.6, 7.2.24, 7.4.6, 8.7.16C Sussex Peerage, Re (1844) 11 CL & Fin 85 …. 3.2.22C

Sweedman v Transport Accident Commission (2006) 226 CLR 362 …. 8.3.24, 9.8.13, 9.8.14C, 9.8.15, 10.4.9 Swift Australian Co Pty Ltd v Boyd Parkinson (1962) 108 CLR 189 …. 4.1.13, 4.1.15, 4.1.17 Swiss Aluminium Australia Ltd v Federal Commissioner of Taxation (1987) 163 CLR 421 …. 8.7.3, 8.7.4C, 8.7.5, 8.7.7C Sykes v Cleary (No 2) (1992) 176 CLR 77 …. 2.4.5, 2.4.6C T T A Robinson & Sons Pty Ltd v Haylor (1957) 97 CLR 177 …. 6.1.34C Tajjour v New South Wales (2014) 254 CLR 508; [2014] HCA 35 …. 10.3.36, 10.3.40, 10.3.53 Tasker v Fulwood [1978] 1 NSWLR 20 …. 2.10.17 Tasmania v Commonwealth & State of Victoria (1904) 1 CLR 329 …. 3.2.28, 4.2.39C Taylor v Attorney-General (Qld) (1917) 23 CLR 457 …. 1.2.30, 2.2.11, 2.10.5, 2.10.12, 2.10.13, 2.10.16, 2.11.17, 2.12.12 — v — [1917] St R Qd 208 …. 2.12.6 — v New Zealand Poultry Board [1984] 1 NZLR 394 …. 1.5.11, 1.5.15C TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 …. 8.2.35, 8.2.36C, 8.3.28 Telstra Corporation Ltd v Commonwealth of Australia (2008) 234 CLR 210 …. 9.5.36C — v Worthing (1999) 197 CLR 61 …. 6.1.27C, 6.1.62C Teori Tau v Commonwealth (1969) 119 CLR 564 …. 9.7.6 Theodore v Duncan [1919] AC 696 …. 7.3.36C

Theophanous v Commonwealth (2006) 225 CLR 101 …. 3.3.27, 9.5.39, 9.5.40C, 9.5.41, 9.5.42C, 10.3.3 — v Herald & Weekly Times Ltd (1994) 182 CLR 104 …. 3.2.4E, 3.2.57C, 9.4.38, 10.1.4, 10.2.1, 10.2.2C, 10.2.3C, 10.3.7, 10.3.9, 10.3.10, 10.3.11C, 10.3.12, 10.3.13, 10.3.62C Thomas v Mowbray (2007) 233 CLR 307 …. 1.4.17, 1.4.20, 4.3.14, 4.3.37, 4.3.49, 4.5.2, 4.5.4C, 4.5.15, 8.2.41, 8.2.44C, 8.2.47, 8.3.8, 8.5.38C, 8.5.41C, 10.4.11, 10.4.13, 10.4.27, 10.4.31, 10.4.32, 10.4.35 Tickner v Chapman (1995) 57 FCR 451 …. 4.4.28 Tonkin v Brand [1962] WAR 2 …. 2.6.6 Toogood v Spyring (1834) 1 CM & R 181 …. 10.2.3C Town Investments Ltd v Department of Environment [1978] AC 359 …. 7.4.1 Toy v Musgrove (1888) 14 VLR 349 …. 7.3.27C, 7.5.48, 7.5.49C Tracey, Re; Ex parte Ryan (1989) 166 CLR 518 …. 4.5.6C, 4.5.7C, 4.5.8C, 4.5.9, 6.1.60, 8.2.50, 8.2.51 Trade Practices Act 1974 (s 163A), Re (1978) 19 ALR 191 …. 8.3.17 Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 …. 5.3.23C, 9.5.3, 9.5.14, 9.5.15C, 9.5.16C, 9.5.38C, 9.5.40C Transport Accident Commission v Sweedman (2004) 10 VR 31 …. 9.8.15 Trethowan v Peden (1930) 31 SR (NSW) 183 …. 2.12.7, 2.12.11, 2.12.13, 2.12.15, 2.12.16 Trustees Executors and Agency Co Ltd v Federal Commissioner of Taxation (1933) 49 CLR 220 …. 1.6.5C Truth About Motorways Pty Ltd v Macquarie Infrastructure

Investment Management Ltd (2000) 200 CLR 591 …. 8.3.20 Tunnock v The State of Victoria (1951) 84 CLR 42 …. 9.5.7 Tyler, Re; Ex parte Foley (1994) 181 CLR 18 …. 4.5.8C, 8.2.50 Tyson & Brother v Banton 273 US 418 (1927) …. 9.5.23 U Uebergang v Australian Wheat Board (1980) 145 CLR 266 …. 9.4.3, 9.4.11, 9.4.12, 9.4.13C, 10.3.1 Ukley v Ukley [1977] VR 121 …. 1.3.16, 1.3.21, 2.1.10 Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 …. 1.5.13, 1.5.14, 1.5.15C, 1.5.17, 1.6.10, 9.3.2 Union Steamship Co of New Zealand Ltd v Commonwealth (1925) 36 CLR 130 …. 1.3.4, 1.3.7 Unions NSW v New South Wales (2013) 252 CLR 530 …. 10.3.10, 10.3.31, 10.3.36, 10.3.37, 10.3.38C, 10.3.43 United States v Butler 297 US 1 (1936) …. 7.5.65C — v Darby 312 US 100 (1941) …. 4.1.13 — v Kuch 288 F Supp 439 (1968) …. 9.7.10 — v Lopez 514 US 549 (1995) …. 4.1.27 — v Morrison 529 US 598 (2000) …. 4.1.27 — v Sanchez 340 US 42 (1950) …. 5.1.18C, 5.1.43C — v Schwimmer 279 US 644 (1929) …. 9.7.18C — v Union Pacific Railroad Co 98 US 569 (1878) …. 8.2.17C — v Wrightwood Dairy Co 315 US 110 (1942) …. 4.1.18C University of Wollongong v Metwally (1984) 158 CLR 447 …. 4.4.36, 6.1.60, 6.1.62C, 6.1.76C, 6.1.78, 6.1.80, 6.1.81, 6.1.82, 6.1.86 V

Vacher & Sons Ltd v London Society of Compositors [1913] AC 107 …. 3.2.22C, 6.2.21C Vacuum Oil Co Pty Ltd v Queensland (1934) 51 CLR 108 …. 9.4.33C Vasiljkovic v Commonwealth (2006) 227 CLR 614 …. 4.3.48, 6.3.11C Vauxhall Estates Ltd v Liverpool Corporation [1932] 1 KB 733 …. 2.11.39C Veen v R (No 2) (1988) 164 CLR 465 …. 10.4.26 Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25 …. 6.2.35, 6.2.38C, 6.2.45C, 7.5.36 — v Commonwealth (Australian Assistance Plan case) (1975) 134 CLR 338 …. 5.4.17C, 5.4.20, 5.4.22C, 5.4.24C, 5.4.25, 6.3.4C, 7.5.28E, 7.5.56, 7.5.57C, 7.5.59C, 7.5.63C, 7.5.65C, 7.5.75C — v Commonwealth (Federal Roads case) (1926) 38 CLR 399 …. 5.3.4C, 5.3.9C, 5.3.15, 5.3.16, 5.3.21, 5.3.23C, 5.4.12 — v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 …. 1.4.12, 4.3.1, 4.3.3, 4.3.6, 4.3.12, 4.3.13, 4.3.33, 4.3.34C, 4.3.35, 4.3.36, 4.3.37, 4.3.39, 4.3.40, 4.3.41, 6.2.44C, 6.2.45C, 9.5.34C, 9.5.36C — v Commonwealth (Kakariki case) (1937) 58 CLR 618 …. 6.1.23, 6.1.24C, 6.1.25, 6.1.26, 6.1.27C, 6.1.28, 6.1.31, 6.1.34C, 6.1.42C, 6.1.54C, 6.1.55, 6.1.62C, 6.1.69, 6.1.92C — v Commonwealth (Payroll Tax case) (1971) 122 CLR 353 …. 3.2.4E, 3.2.13C, 3.2.15C, 3.2.57C, 6.2.23, 6.2.33, 6.2.34, 6.2.36, 6.2.45C, 7.2.20, 10.3.5C — v Commonwealth (PMA case) (1975) 134 CLR 81 …. 2.6.18,

2.8.7, 2.9.16, 2.10.24, 2.10.25C, 2.10.28, 2.10.30, 2.10.31, 2.10.33, 2.11.25, 2.11.31C, 2.11.33, 2.11.37, 2.12.1, 2.12.2, 2.12.3C, 2.12.4 — v Commonwealth (Second Uniform Tax case) (1957) 99 CLR 575 …. 1.4.10, 5.1.2, 5.3.6, 5.3.9C, 5.3.11, 5.3.15, 5.3.16, 5.3.19, 6.2.38C, 6.2.45C, 6.2.75 Victorian Chamber of Manufactures v Commonwealth (Prices Regulations case) (1943) 67 CLR 335 …. 4.5.16 Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 …. 1.8.7, 1.8.8C, 1.8.9, 1.8.10, 1.8.11, 7.3.38C, 8.2.7 Virginia v West Virginia 246 US 565 (1871) …. 3.2.22C Viro v R (1978) 52 ALJR 418 …. 1.3.6 Viskauskas v Niland (1983) 153 CLR 280 …. 4.4.36, 6.1.49, 6.1.76C Visnic v ASIC (2007) 231 CLR 381 …. 8.2.30 W W & A McArthur Ltd v Queensland (1920) 28 CLR 530 …. 4.1.5, 9.7.18C Wainohu v New South Wales (2011) 243 CLR 181 …. 8.4.17, 8.5.45C, 8.5.53C, 8.5.55, 8.5.59, 8.5.60, 8.5.61C, 8.5.63, 10.3.53 Wakim, Re; Ex parte McNally (1999) 198 CLR 511 …. 1.4.17, 3.2.10, 3.2.11C, 3.2.12, 3.2.13C, 3.2.17, 3.2.56, 6.2.81, 8.3.1, 8.3.2, 8.3.58, 8.3.59, 8.3.60C, 8.3.65, 8.3.66C, 8.3.67, 8.6.6 Walker v Baird [1892] AC 491 …. 4.3.6 Walsh, Ex parte [1942] ALR 359 …. 3.2.15C, 10.4.24C Waterhouse v Minister for the Arts and Territories (1993) 43 FCR 175; 119 ALR 89 …. 9.5.19C

Waters v Commonwealth (1951) 82 CLR 188 …. 8.6.2 Waterside Workers’ Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 …. 1.8.8C, 8.2.4, 8.2.5, 8.2.6, 8.2.9C, 8.2.11, 8.3.10C Wayman v Southard 10 Wheat 1 (1825) …. 8.2.17C Webb v Hanlon (1939) 61 CLR 313 …. 8.7.2 — v Outrim (1906) 4 CLR 356; [1907] AC 81 …. 3.2.21, 3.2.22C, 6.2.7, 6.2.18, 6.2.21C Webster, Re (1975) 132 CLR 270 …. 2.4.9, 2.4.10 Webster v McIntosh (1980) 49 FLR 317 …. 6.1.86 Wells v Rockefeller 394 US 542 (1969) …. 2.6.10C Wenn v Attorney-General (Vic) (1948) 77 CLR 84 …. 6.1.62C, 6.1.70, 6.1.71, 6.1.73, 6.1.74, 6.1.76C, 6.1.84 Wesberry v Sanders 376 US 1 (1964) …. 2.6.10C, 2.6.11 West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 …. 3.2.52, 6.2.28, 6.2.30C, 6.2.62, 6.2.63, 6.2.66, 6.2.69C, 6.2.86C, 10.3.5C West Lakes Ltd v South Australia (1980) 25 SASR 389 …. 2.11.19, 2.11.30, 2.11.31C, 2.11.34 Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 …. 5.2.5, 5.2.17, 5.2.21, 5.2.22, 5.2.24C, 5.2.30C, 5.2.35 — v Commonwealth (Native Title Act case) (1995) 183 CLR 373 …. 4.4.20, 4.4.21C, 4.4.22, 4.4.23C, 4.4.26, 4.4.27, 4.4.30C, 4.4.36, 6.1.62C, 6.1.72, 6.2.45C, 6.2.53C — v Commonwealth (Territorial Senators’ case) (1975) 134 CLR 201 …. 2.2.15, 2.2.21C, 2.2.23, 2.2.24, 2.2.25, 2.2.26, 2.3.16, 2.10.23, 2.10.30, 2.10.32, 2.10.33, 2.10.34, 2.10.35, 2.10.36, 2.12.4

— v Hamersley Iron Pty Ltd (No 1) (1969) 120 CLR 42 …. 5.2.20, 5.2.21, 5.4.25 — v — (No 2) (1969) 120 CLR 74 …. 8.7.16C — v Ward (2002) 213 CLR 1 …. 6.1.89 — v Wilsmore (1981) 33 ALR 13 …. 2.11.26 — v — (1982) 149 CLR 79 …. 2.11.27, 2.11.39C White v Director of Military Prosecutions (2007) 231 CLR 570 …. 4.5.9, 8.2.51 — v Weiser 412 US 783 (1973) …. 2.6.10C Whitehouse v Queensland (1961) 104 CLR 635 …. 8.7.16C Whittaker v R (1928) 41 CLR 230 …. 9.6.24 Wickard v Filburn 317 US 111 (1942) …. 4.1.18C, 4.1.26 Wik Peoples v Queensland (1996) 187 CLR 1 …. 1.3.2 Wilcox Mofflin Ltd v New South Wales (1952) 85 CLR 488 …. 9.4.33C Williams v Commonwealth (No 1) (2012) 248 CLR 156; 288 ALR 410 …. 4.2.34, 4.2.35, 5.4.23, 5.4.25, 5.4.26, 7.5.8, 7.5.25, 7.5.34, 7.5.44, 7.5.45C, 7.5.47, 7.5.58, 7.5.61, 7.5.64, 7.5.65C, 7.5.66, 7.5.67, 7.5.72, 7.5.73C, 9.7.25 — v — (No 2) (2014) 252 CLR 416; 88 ALJR 701; [2014] HCA 23 …. 4.2.35, 5.4.23, 5.4.25, 5.4.26, 7.5.39, 7.5.54, 7.5.68, 7.5.69C, 7.5.72, 7.5.73C Williamson v Ah On (1926) 39 CLR 95 …. 10.4.14C — v Brown (1914) 18 CLR 433 …. 10.4.24C Wilsmore v Western Australia [1981] WAR 159 …. 2.11.26 Wilson v Esquimalt and Nanaimo Ry Co, [1922] 1 AC 202 …. 1.2.52C — v Minister for Aboriginal and Torres Strait Islander Affairs

(1996) 189 CLR 1 …. 4.4.28, 6.2.47, 8.4.17, 8.4.18, 8.4.20C, 8.5.45C, 8.5.61C, 10.4.12 Wong v R (2001) 207 CLR 584 …. 8.7.2, 10.4.10 Wood, Re (1988) 167 CLR 145 …. 2.4.5 Woolley, Re; Ex parte Applicants M276/2000 (2004) 225 CLR 1 …. 10.4.23, 10.4.24C, 10.4.25 Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 …. 6.2.93, 6.2.96 Wotton v Queensland (2012) 246 CLR 1 …. 10.3.10, 10.3.35, 10.3.47, 10.3.48C WR Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338; [1940] AC 838 …. 5.3.4C, 5.3.9C, 5.3.16, 5.3.17, 5.3.18, 5.3.19, 5.3.20, 5.3.21, 6.4.11, 6.4.26 Wragg v New South Wales (1953) 88 CLR 353 …. 4.1.9, 4.1.11 Wurridjal v Commonwealth (2009) 237 CLR 309 …. 3.2.51C, 9.5.9, 9.7.8 Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) (1955) 93 CLR 376 …. 7.5.86C X XYZ v Commonwealth (2006) 227 CLR 532 …. 4.3.13, 4.3.14, 4.3.42, 4.3.45, 4.3.49 Y Yanner v Eaton (1999) 201 CLR 351 …. 9.5.34C, 9.5.36C Yappeen Holdings Pty Ltd v Calardu Pty Ltd (1992) 36 FCR 478 …. 2.10.17 Yick Wo v Hopkins (1886) 118 US 356 …. 4.4.6C Z

Zarb v Kennedy (1968) 121 CLR 283 …. 9.6.8

Table of Statutes References are to paragraph numbers

COMMONWEALTH CONSTITUTION Ch I …. 1.8.4, 2.2.21C, 6.3.9, 7.3.38C, 7.5.42C, 7.5.63C, 7.5.65C, 7.5.75C, 8.2.1, 8.4.16C, 8.5.38C, 10.3.23C, 10.3.60C Ch I Pt I …. 7.2.14E Ch I Pt II …. 2.2.21C Ch I Pt V …. 1.4.3, 5.4.21C, 7.4.17E Ch II …. 1.8.4, 6.3.6C, 6.3.9, 7.2.14E, 7.3.34E, 7.3.38C, 7.4.17E, 7.5.41, 7.5.42C, 7.5.57C, 7.5.63C, 7.5.65C, 7.5.73C, 7.5.75C, 8.2.1, 8.2.3C, 8.4.16C, 8.5.38C, 10.3.23C Ch III …. 1.2.15C, 1.4.24, 1.5.18, 1.8.4, 1.8.5, 1.8.6, 1.8.9, 2.7.5C, 3.2.14, 4.2.17, 4.5.5, 4.5.6C, 4.5.7C, 4.5.8C, 4.5.9, 6.1.82, 6.3.6C, 6.3.9, 7.2.26, 7.5.42C, 7.5.52C, 7.5.65C, 7.5.75C, 8.1.1, 8.2.1, 8.2.3C, 8.2.4, 8.2.9C, 8.2.10, 8.2.11, 8.2.12, 8.2.14, 8.2.25C, 8.2.26C, 8.2.42, 8.2.43, 8.2.49, 8.2.50, 8.2.52, 8.3.1, 8.3.2, 8.3.6, 8.3.7, 8.3.10C, 8.3.15C, 8.3.18, 8.3.20, 8.3.31C, 8.3.49C, 8.3.56C, 8.3.62, 8.3.64C, 8.3.65, 8.3.66C, 8.3.67, 8.4.1, 8.4.5C, 8.4.12, 8.4.13, 8.4.15C,

8.4.16C, 8.4.18, 8.4.19, 8.4.20C, 8.5.9C, 8.5.13C, 8.5.15, 8.5.16, 8.5.17C, 8.5.18, 8.5.20, 8.5.21C, 8.5.22, 8.5.25C, 8.5.27, 8.5.31C, 8.5.32, 8.5.34, 8.5.38C, 8.5.41C, 8.5.44, 8.5.45C, 8.5.48C, 8.5.50, 8.5.53C, 8.5.57C, 8.6.1, 8.6.2, 8.6.3, 8.6.5, 8.6.6, 8.6.7, 8.6.7C, 9.3.3, 9.5.12C, 9.6.2, 9.7.8, 10.1.2, 10.1.4, 10.3.23C, 10.3.25, 10.4.1, 10.4.2, 10.4.3, 10.4.6, 10.4.7C, 10.4.8, 10.4.11, 10.4.12, 10.4.13, 10.4.14C, 10.4.15, 10.4.16, 10.4.17, 10.4.18, 10.4.21, 10.4.22, 10.4.24C, 10.4.26, 10.4.29, 10.4.30, 10.4.35 Ch IV …. 5.1.11C, 5.2.43C, 5.4.21C, 7.5.65C, 7.5.69C, 8.2.3C, 9.4.5, 9.4.13C Ch V …. 6.2.50C, 9.7.2, 9.7.7, 9.7.21C, 9.8.5C Ch VII …. 7.2.14E Ch VIII …. 10.3.23C covering cl 2 …. 7.1.5C, 7.2.10, 7.2.27 covering cl 3 …. 7.2.23E, 10.4.7C covering cl 5 …. 1.2.20, 1.2.24, 1.2.31, 1.2.32C, 6.3.6C, 8.5.6C, 8.5.17C, 10.2.3C covering cl 6 …. 6.1.42C, 8.5.17C Preamble …. 6.2.50C, 7.2.24 s 1 …. 1.7.3C, 1.7.10C, 1.8.4, 1.8.7, 1.8.8C, 2.8.2, 2.11.43, 7.2.16, 7.3.36C, 8.2.1, 8.2.9C, 8.2.10, 10.3.11C s 2 …. 2.2.17, 2.8.4, 7.2.14E, 7.2.15, 7.2.21, 7.2.23E s 3 …. 5.4.8, 6.2.50C, 7.2.14E, 7.4.18 s 4 …. 2.8.4, 6.2.21C, 7.2.11, 7.2.14E, 7.2.15, 8.5.17C s 5 …. 2.2.17, 2.3.14, 2.3.16, 2.7.6, 6.1.44, 6.2.50C, 7.2.11, 8.5.17C s 6 …. 1.7.3C, 2.3.16, 4.3.16, 6.1.49, 6.2.44C, 6.2.50C, 7.3.36C, 10.3.11C

s 7 …. 1.2.29, 1.4.2, 1.7.3C, 1.7.9, 1.7.10C, 2.2.18, 2.2.20, 2.2.21C, 2.2.23, 2.2.25, 2.2.26, 2.5.15, 2.7.7, 2.10.32, 7.3.36C, 7.4.18, 8.5.17C, 10.2.3C, 10.3.4, 10.3.5C, 10.3.10, 10.3.11C, 10.3.30C, 10.3.54, 10.3.55, 10.3.56, 10.3.58, 10.3.59, 10.3.60C s 8 …. 1.7.3C, 1.7.10C, 2.2.21C, 2.5.5E, 2.5.11C, 2.5.13, 2.11.43, 2.11.47, 7.3.36C, 10.3.11C, 10.3.56 s 9 …. 1.2.29, 2.2.21C, 6.1.49, 9.7.17 s 10 …. 1.2.29, 1.7.9, 2.2.21C s 11 …. 2.2.21C, 5.1.43C, 8.5.6C s 12 …. 1.2.29, 2.2.21C s 13 …. 1.7.3C, 1.7.10C, 6.1.49, 7.3.36C, 10.3.11C s 15 …. 1.2.29, 2.2.21C s 16 …. 2.4.5, 5.2.20, 5.4.23C s 18 …. 2.6.9 s 19 …. 2.6.9, 5.2.13C, 6.1.49 s 21 …. 2.2.21C s 22 …. 1.7.9 s 23 …. 2.2.21C, 2.11.43 s 24 …. 1.4.2, 1.7.3C, 1.7.9, 1.7.10C, 2.2.18, 2.2.20, 2.2.21C, 2.2.26, 2.5.14, 2.5.15, 2.6.9, 2.6.10C, 2.6.12, 2.6.13, 2.6.15, 2.6.16, 2.6.17, 2.6.18, 4.4.2, 4.4.3, 7.3.36C, 10.2.3C, 10.3.4, 10.3.5C, 10.3.10, 10.3.11C, 10.3.30C, 10.3.54, 10.3.55, 10.3.56, 10.3.58, 10.3.59, 10.3.60C, 10.3.61, 10.3.62C, 10.3.63 ss 24–30 …. 2.6.16 s 25 …. 1.7.3C, 1.7.10C, 2.6.10C, 4.4.2, 4.4.3, 4.4.4, 4.4.12E, 10.3.5C, 10.3.11C, 10.4.7C

s 27 …. 2.2.18 s 28 …. 1.7.3C, 1.7.10C, 2.3.11, 2.6.10C, 4.3.16, 7.3.36C, 10.3.11C s 29 …. 1.2.29, 2.6.10C, 2.6.16, 2.11.41 s 30 …. 1.7.3C, 1.7.9, 1.7.10C, 2.5.5E, 2.5.11C, 2.5.13, 2.6.10C, 2.6.16, 2.11.41, 4.4.9, 7.3.36C, 7.4.18, 10.3.11C, 10.3.56, 10.4.7C s 31 …. 1.7.9, 10.3.61, 10.3.62C s 32 …. 2.6.10C, 2.11.41, 7.4.11E s 33 …. 7.4.11E s 34 …. 1.7.9, 2.4.3, 2.11.41 s 39 …. 1.7.9, 2.11.41 s 40 …. 2.11.43 s 41 …. 2.5.6, 2.5.9, 2.5.10, 2.5.11C, 2.5.12, 2.5.13, 2.6.10C, 4.3.16, 10.3.54 s 42 …. 2.4.6C s 43 …. 7.3.14 s 44 …. 1.8.5 s 44(i) …. 2.4.5, 2.4.7, 2.4.8, 3.2.13C, 7.2.5, 9.7.5 s 44(ii) …. 10.3.17C s 44(iv) …. 2.4.5, 2.4.6C, 2.4.7 s 44(v) …. 2.4.9, 2.4.10 s 46 …. 2.4.3 ss 46–48 …. 1.7.9 s 47 …. 2.4.3 s 48 …. 7.4.18 s 49 …. 1.7.3C, 2.7.1, 2.7.5C, 2.7.6, 2.7.7, 7.3.36C, 8.2.49,

10.3.11C s 50 …. 2.7.5C s 51 …. 1.4.2, 1.4.3, 1.4.5, 1.4.19C, 1.8.8C, 2.11.41, 3.1.5C, 3.2.15C, 3.2.39, 3.2.54, 3.3.3, 3.3.8, 3.3.12, 3.3.15, 4.1.4E, 4.1.10, 4.2.16C, 4.2.29C, 4.2.39C, 4.3.9, 4.3.10, 4.3.16, 4.3.18C, 4.3.24, 4.3.34C, 4.4.1E, 4.5.1E, 4.5.4C, 4.5.6C, 4.5.11C, 5.1.18C, 5.1.39C, 5.1.43C, 5.3.19, 5.4.4, 5.4.15, 5.4.17C, 5.4.25, 6.1.2, 6.1.88C, 6.2.21C, 6.2.30C, 6.2.33, 6.2.34, 6.3.7, 7.5.27, 7.5.60, 7.5.63C, 7.5.65C, 7.5.67, 9.5.15C, 9.5.29, 9.5.30, 9.5.40C, 9.5.42C, 9.7.18C, 10.3.3, 10.3.5C, 10.4.7C, 10.4.14C, 10.4.22 s 51(i) …. 1.4.6, 1.4.23, 1.6.11, 1.8.8C, 3.1.1, 3.2.31, 3.2.36, 3.2.53, 3.3.5, 3.3.7, 3.3.9, 3.3.10, 3.3.14, 4.1.2, 4.1.7, 4.1.8, 4.1.9, 4.1.10, 4.1.11, 4.1.12C, 4.1.14, 4.1.16, 4.1.17, 4.1.18C, 4.1.20, 4.1.22, 4.1.23C, 4.1.24, 4.1.25, 4.1.26, 4.1.28, 4.1.31, 4.2.4, 4.2.36C, 6.1.24C, 6.2.13, 6.3.4C, 6.3.6C, 9.4.13C, 9.5.26 s 51(ii) …. 1.4.10, 1.4.13, 3.2.39, 3.3.19, 4.1.1, 4.1.30, 4.2.29C, 5.1.1, 5.1.5, 5.1.12, 5.1.14, 5.1.18C, 5.1.27, 5.1.28, 5.1.30, 5.1.38, 5.1.43C, 5.1.44, 5.1.46, 5.2.1, 5.2.24C, 5.2.35, 5.2.43C, 5.2.46, 5.2.47, 5.3.1, 5.3.4C, 5.3.10, 5.3.18, 5.3.19, 5.3.20, 5.3.21, 5.4.23C, 6.2.12, 6.2.26, 6.2.34, 6.2.45C, 6.2.50C, 6.2.52, 6.2.98, 6.4.2, 6.4.4, 6.4.5, 6.4.6, 6.4.7, 6.4.8, 6.4.9C, 7.5.60, 7.5.63C, 7.5.65C, 9.1.3, 9.5.22, 9.5.38C, 9.8.5C, 10.4.5, 10.4.7C s 51(iii) …. 1.4.6, 3.2.39, 4.2.29C, 5.2.35, 5.3.9C, 6.4.4, 6.4.5, 6.4.9C, 6.4.10, 10.4.7C s 51(iv) …. 1.4.5, 6.1.2 s 51(v) …. 3.1.5C, 3.2.45, 4.1.1, 10.3.5C s 51(vi) …. 1.4.10, 1.4.24, 3.3.6, 4.4.30C, 4.5.2, 4.5.4C, 4.5.6C,

4.5.7C, 4.5.8C, 4.5.11C, 4.5.12, 4.5.14, 4.5.15, 4.5.16, 6.2.38C, 7.5.19C, 7.5.28E, 8.2.49, 8.2.50, 9.5.22, 9.7.18C, 9.7.19 s 51(vii) …. 4.2.40, 4.5.13 s 51(ix) …. 6.2.38C s 51(x) …. 1.4.6, 9.5.40C s 51(xii) …. 1.4.4, 3.3.20, 7.5.19C s 51(xiii) …. 1.4.6, 1.4.13, 3.2.38, 4.1.1, 4.2.4, 4.2.29C, 4.2.39C, 6.2.2, 6.2.30C, 6.4.4 s 51(xiv) …. 1.4.6, 3.2.39, 4.1.1, 4.2.4, 4.2.29, 6.2.2 s 51(xvi) …. 4.1.1 s 51(xvii) …. 3.1.5C, 4.1.1, 6.2.28, 6.2.38C, 6.2.86C, 8.2.9C, 9.5.22 s 51(xviii) …. 3.1.5C, 3.2.12, 3.2.18C, 3.2.40, 3.2.41, 3.2.44, 4.1.1, 4.2.29C, 6.2.13 s 51(xix) …. 1.4.5, 3.2.14, 3.3.5, 3.3.10, 4.2.16C, 7.2.4, 10.4.7C, 10.4.8 s 51(xx) …. 1.4.6, 1.4.9, 1.4.17, 1.4.23, 3.1.1, 3.2.25, 3.2.32, 3.2.33, 3.2.36, 3.2.37, 3.2.38, 3.3.5, 3.3.15, 4.1.2, 4.1.16, 4.1.25, 4.2.1E, 4.2.2, 4.2.3, 4.2.5C, 4.2.6, 4.2.7, 4.2.8, 4.2.9, 4.2.10, 4.2.11, 4.2.12, 4.2.15, 4.2.16C, 4.2.17, 4.2.18, 4.2.19, 4.2.20, 4.2.21, 4.2.22C, 4.2.23, 4.2.24, 4.2.25, 4.2.26, 4.2.27, 4.2.29C, 4.2.30, 4.2.31, 4.2.32, 4.2.33, 4.2.34, 4.2.35, 4.2.36C, 4.2.37, 4.2.38, 4.2.39C, 4.2.40, 4.2.41, 5.4.20, 6.2.14, 6.2.26, 6.2.44C, 6.3.6C, 7.5.65C, 7.5.68 s 51(xxi) …. 3.2.17, 3.2.18C, 3.2.41, 3.3.5, 6.1.92C, 6.2.64 s 51(xxii) …. 3.3.19, 4.4.30C, 6.2.64, 8.2.9C s 51(xxiii) …. 7.5.63C

s 51(xxiiiA) …. 3.2.39, 6.2.38C, 7.5.61, 7.5.63C, 7.5.65C, 7.5.68 s 51(xxiv) …. 6.3.11C, 8.5.17C s 51(xxv) …. 8.5.17C s 51(xxvi) …. 3.3.5, 4.2.16C, 4.4.1E, 4.4.2, 4.4.4, 4.4.5, 4.4.6C, 4.4.8, 4.4.9, 4.4.10, 4.4.11, 4.4.12E, 4.4.14, 4.4.15, 4.4.16C, 4.4.18, 4.4.19C, 4.4.22, 4.4.23C, 4.4.26, 4.4.29, 4.4.30C, 4.4.31, 4.4.39E, 4.4.41, 10.4.7C, 10.4.8 s 51(xxix) …. 1.4.23, 1.6.11, 3.2.25, 3.2.32, 3.3.6, 4.1.18C, 4.3.3, 4.3.4, 4.3.7, 4.3.8E, 4.3.9, 4.3.10, 4.3.13, 4.3.14, 4.3.15, 4.3.16, 4.3.17, 4.3.18C, 4.3.19, 4.3.21, 4.3.22C, 4.3.23, 4.3.24, 4.3.25, 4.3.26, 4.3.27, 4.3.30C, 4.3.31, 4.3.32, 4.3.34C, 4.3.35, 4.3.36, 4.3.37, 4.3.38, 4.3.39, 4.3.40, 4.3.42, 4.3.43, 4.3.44, 4.3.45, 4.3.46, 4.3.47, 4.3.48, 4.3.49, 6.1.2, 6.3.6C, 6.2.44C, 6.3.11C, 6.4.10, 6.4.11, 6.4.12, 6.4.13, 6.4.16, 6.4.17, 6.4.18C, 6.4.19, 6.4.20C, 6.4.21, 6.4.22, 6.4.26, 7.5.28E s 51(xxx) …. 1.4.5 s 51(xxxi) …. 1.4.5, 3.2.40, 4.1.3, 4.4.30C, 5.1.11C, 5.1.12, 5.3.23, 5.3.24C, 6.2.2, 6.2.30C, 6.2.38C, 7.5.65C, 7.5.93, 9.1.1, 9.1.2, 9.2.4, 9.3.2, 9.4.9, 9.4.22C, 9.5.1E, 9.5.2, 9.5.3, 9.5.4, 9.5.5, 9.5.7, 9.5.9, 9.5.10C, 9.5.11, 9.5.12C, 9.5.13, 9.5.15C, 9.5.16C, 9.5.18, 9.5.19C, 9.5.20, 9.5.21C, 9.5.22, 9.5.24, 9.5.25, 9.5.26, 9.5.27C, 9.5.29, 9.5.30, 9.5.32, 9.5.33, 9.5.34C, 9.5.35, 9.5.36C, 9.5.37, 9.5.38C, 9.5.39, 9.5.40C, 9.5.41, 9.5.42C, 9.5.43, 9.7.6, 9.7.8 s 51(xxxii) …. 4.4.30C, 6.2.30C s 51(xxxiii) …. 1.4.7, 6.2.30C s 51(xxxiv) …. 1.4.7, 6.2.30C

s 51(xxxv) …. 1.4.6, 1.6.12, 1.6.15, 3.2.20, 3.2.21, 3.2.23, 3.2.26, 3.2.30, 3.2.32, 3.2.35, 3.2.37, 4.2.29C, 4.2.31, 6.2.17, 6.2.21C, 6.2.30C, 6.2.38C, 6.2.39, 6.2.42C, 6.2.44C, 6.3.4C, 10.3.2, 10.3.3 s 51(xxxvi) …. 1.4.5, 1.7.9, 1.7.10C, 2.4.3, 5.3.23, 5.4.21C, 7.4.18, 7.5.42C, 9.5.39, 10.3.61, 10.3.62C s 51(xxxvii) …. 1.4.14, 1.4.16, 1.4.17, 1.4.19C, 1.4.20, 4.2.41, 5.3.4C, 6.3.5, 7.5.65C s 51(xxxviii) …. 1.3.18, 1.3.19, 1.3.20E, 1.3.26, 1.4.16, 2.11.43, 7.2.9, 7.2.38 s 51(xxxix) …. 1.2.8, 1.4.5, 1.4.9, 1.6.15, 3.2.54, 4.5.4C, 5.4.22, 5.4.23C, 6.3.6C, 6.3.7, 7.5.54, 7.5.57C, 7.5.58, 7.5.59C, 7.5.61, 7.5.63C, 7.5.65C, 7.5.74, 7.5.75C, 8.2.9C, 8.2.49, 8.3.10C, 8.3.11, 10.3.2, 10.3.3 s 52 …. 1.4.4, 1.8.8C, 2.11.41, 3.3.3, 3.3.8, 4.1.10, 5.1.34, 5.4.17C, 6.1.2, 6.2.30C, 6.2.86C, 6.2.93, 6.2.95, 6.2.98, 7.4.17E, 7.5.65C, 9.7.18C s 52(i) …. 6.2.92, 6.2.93, 6.2.94, 6.2.96, 6.2.97, 6.2.98, 6.4.17, 6.4.18C s 52(ii) …. 6.2.62, 6.2.86C, 7.4.17E s 53 …. 1.2.50, 1.4.2, 2.8.2, 2.9.8, 2.9.11, 2.9.12, 2.9.15, 2.9.17, 2.9.19, 2.9.20, 2.9.23, 5.1.6C, 5.1.7, 5.1.32, 5.1.33, 5.1.35C, 5.4.6, 5.4.8, 5.4.21C, 5.4.23C, 7.5.65C ss 53–56 …. 7.5.69C s 54 …. 2.9.8, 2.9.19, 2.9.20, 2.9.23, 2.9.24, 5.1.6C, 5.1.33, 5.4.6, 5.4.8, 5.4.21C, 5.4.23C s 55 …. 2.9.20, 2.9.24, 5.1.6C, 5.1.7, 5.1.11C, 5.1.16C, 5.1.28, 5.1.32, 5.1.33, 5.1.34, 5.1.35C, 5.1.36, 5.1.37, 5.3.4C, 6.2.98

s 56 …. 2.2.17, 2.9.19, 2.9.23, 2.10.26, 5.4.6, 5.4.8, 5.4.21C, 5.4.23C s 57 …. 2.2.17, 2.3.11, 2.3.16, 2.5.10, 2.6.18, 2.8.2, 2.8.7, 2.9.11, 2.9.12, 2.9.15, 2.10.21, 2.10.22, 2.10.23, 2.10.24, 2.10.24, 2.10.27, 2.10.30, 2.10.31, 2.10.32, 2.10.32, 2.10.33, 2.10.34, 2.10.35, 2.10.36, 2.10.37, 2.12.2, 2.12.4, 7.2.11 s 58 …. 2.2.17, 2.8.2, 2.8.4, 2.11.43 s 59 …. 2.2.17, 2.8.4, 2.8.12, 7.2.23E s 60 …. 2.2.17, 2.8.4 s 61 …. 1.8.4, 1.8.7, 1.8.8C, 2.2.17, 4.2.34, 4.3.2, 4.3.3, 4.5.4C, 5.4.22, 5.4.23C, 5.4.25, 6.2.86C, 6.3.7, 7.1.5C, 7.2.14E, 7.2.18, 7.2.19, 7.2.20, 7.2.21, 7.2.23E, 7.3.38C, 7.5.1, 7.5.19C, 7.5.27, 7.5.28E, 7.5.29, 7.5.40, 7.5.41, 7.5.42C, 7.5.43, 7.5.45C, 7.5.46, 7.5.47, 7.5.48, 7.5.49C, 7.5.52C, 7.5.54, 7.5.57C, 7.5.63C, 7.5.64, 7.5.65C, 7.5.66, 7.5.68, 7.5.71, 7.5.72, 7.5.73C, 7.5.74, 7.5.75C, 7.5.94, 8.2.1, 8.2.9C, 9.5.7, 9.7.25, 10.4.30 ss 61–67 …. 10.3.30C ss 61–70 …. 6.3.6C s 62 …. 1.7.3C, 1.7.4, 1.8.5, 2.10.35, 7.3.36C, 7.4.17E, 7.5.42C, 7.5.57C, 7.5.58, 7.5.59C, 7.5.60, 7.5.61, 10.3.11C s 63 …. 1.7.4, 7.4.17E s 64 …. 1.7.3C, 1.7.4, 1.7.6, 1.8.5, 7.3.34E, 7.3.35, 7.3.36C, 7.3.38C, 7.4.11E, 7.4.13, 7.4.15, 7.4.17E, 7.4.18, 7.5.42C, 7.5.65C, 7.5.66, 10.3.10, 10.3.11C s 65 …. 6.1.42C, 7.4.17E, 7.4.18 s 66 …. 7.4.17E, 7.4.18 s 67 …. 7.4.17E, 7.4.18, 7.5.42C, 7.5.63C s 68 …. 7.2.14E, 7.2.23E, 7.5.46, 8.2.49

s 69 …. 5.2.38, 6.2.61, 7.4.15, 7.5.42C ss 69–70 …. 10.3.30C s 70 …. 7.4.15, 7.5.63C s 71 …. 1.8.4, 1.8.8C, 6.3.4C, 8.2.1, 8.2.2, 8.2.3C, 8.2.6, 8.2.9C, 8.2.10, 8.2.11, 8.2.16, 8.2.17C, 8.2.37C, 8.3.10C, 8.3.66C, 8.4.1, 8.4.7, 8.4.9, 8.4.10C, 8.5.17C, 8.5.31C, 8.6.2, 8.6.3, 8.6.4, 10.4.21 ss 71–80 …. 8.2.9C, 8.3.62 s 72 …. 7.5.46, 8.2.3C, 8.2.4, 8.2.5, 8.2.9C, 8.2.17C, 8.2.37C, 8.4.7, 8.4.9, 8.4.10C, 8.5.31C, 8.5.32, 8.6.2, 8.6.5, 8.6.7, 8.6.7C s 73 …. 2.11.26, 8.2.9C, 8.3.10C, 8.5.17C, 8.5.31C, 8.5.56, 8.6.1, 8.6.2, 8.6.4, 8.7.4C, 8.7.6, 8.7.7C, 8.7.8, 8.7.10, 8.7.12, 8.7.13, 8.7.14C, 9.6.13 s 73(ii) …. 8.2.37C, 8.5.17C, 8.6.2, 8.7.2, 8.7.5, 8.5.17C, 8.6.2, 8.7.2, 8.7.5, 8.714C s 74 …. 1.2.25, 1.3.6, 1.7.10C, 2.8.11, 6.2.7, 8.2.4, 8.3.10C, 8.7.14C, 8.7.15, 8.7.16C, 9.2.3 s 75 …. 1.2.13C, 3.1.3, 6.2.81, 7.5.28E, 7.5.94, 7.5.95, 8.2.9C, 8.3.4, 8.3.5, 8.3.10C, 8.3.22, 8.3.31, 8.3.45C, 8.3.49C, 8.3.62, 8.3.66C, 8.4.1, 8.4.2, 8.4.4, 8.4.5C, 8.5.1, 8.5.3 ss 75–77 …. 8.3.56C s 75(i) …. 8.3.22, 8.3.43, 8.3.44, 8.3.45C s 75(iii) …. 3.1.3, 7.5.74, 7.5.75C, 7.5.94, 8.3.22, 8.3.23, 8.3.24, 8.3.25, 8.3.29, 8.3.32, 8.3.34 s 75(iv) …. 7.5.94, 8.3.22, 8.3.23, 8.3.24, 8.3.25, 8.3.37 s 75(v) …. 1.2.12, 1.2.37, 7.3.27C, 7.4.31, 7.5.52C, 7.5.74, 7.5.75C, 8.3.14, 8.3.22, 8.3.30, 8.3.31C, 8.3.32, 8.3.35, 8.3.38, 8.3.39C, 8.4.3, 8.5.56

s 76 …. 2.11.41, 3.1.3, 6.2.81, 8.2.9C, 8.2.37C, 8.3.4, 8.3.5, 8.3.10C, 8.3.22, 8.3.45C, 8.3.49C, 8.3.55, 8.3.62, 8.3.66C, 8.4.1, 8.4.2, 8.4.5C, 8.5.1, 8.5.3 s 76(i) …. 1.2.37, 7.5.96, 8.3.14, 8.3.15C, 8.3.22, 8.3.34, 8.3.41, 8.3.42, 8.3.43, 8.3.45C, 8.3.50 s 76(ii) …. 7.5.95, 8.2.9C, 8.2.37C, 8.2.38C, 8.3.5, 8.3.22, 8.3.26, 8.3.29, 8.3.43, 8.3.45C, 8.3.49C, 8.3.50, 8.3.52C, 8.3.56C, 8.4.6, 8.5.3, 8.5.5, 8.6.2, 8.6.6 s 76(iv) …. 8.3.22 s 77 …. 1.4.24, 1.5.18, 2.11.41, 8.2.3C, 8.2.9C, 8.2.38C, 8.3.10C, 8.3.66C, 8.4.5C, 8.5.9C, 8.5.17C s 77(i) …. 8.2.37C, 8.3.49C, 8.4.1, 8.4.2, 8.4.3, 8.4.5C, 8.4.6 s 77(ii) …. 8.2.9C, 8.3.52C, 8.3.53, 8.4.1, 8.5.3, 8.5.17C s 77(iii) …. 3.2.10, 6.2.86C, 6.3.4C, 6.3.11C, 7.5.96, 8.2.9C, 8.2.37C, 8.3.1, 8.3.49C, 8.3.66C, 8.3.67, 8.4.2, 8.4.5C, 8.4.6, 8.4.7, 8.4.9, 8.5.1, 8.5.7, 8.5.9C, 8.5.11, 8.5.13C, 8.5.17C, 8.5.31C, 8.5.41C, 8.5.48C, 8.6.2, 10.3.27C s 78 …. 7.5.90, 7.5.91, 7.5.95, 7.5.96 s 79 …. 8.4.7, 8.4.10C, 8.5.9C, 8.5.10, 8.5.17C s 80 …. 3.2.46, 3.2.50, 4.3.16, 6.1.61, 6.1.62C, 6.1.63, 6.1.65, 8.5.2E, 9.1.1, 9.1.2, 9.2.4, 9.3.2, 9.6.1E, 9.6.2, 9.6.3, 9.6.4, 9.6.5, 9.6.6, 9.6.8, 9.6.9, 9.6.10, 9.6.11, 9.6.12, 9.6.13, 9.6.14, 9.6.16, 9.6.17, 9.6.18, 9.6.19, 9.6.20, 9.6.21, 9.6.22, 9.6.23, 9.6.24, 9.6.25, 9.7.7, 9.7.13C, 9.8.6 s 81 …. 1.5.8, 5.1.11C, 5.1.16C, 5.1.18C, 5.3.24C, 5.4.2, 5.4.4, 5.4.6, 5.4.8, 5.4.10, 5.4.11, 5.4.12, 5.4.13, 5.4.14, 5.4.17C, 5.4.21C, 5.4.23C, 6.2.86C, 6.4.2, 7.5.61, 7.5.63C, 7.5.65C, 7.5.73C ss 81–83 …. 7.5.69C

s 82 …. 6.2.86C s 83 …. 1.7.3C, 2.9.2, 5.1.11C, 5.1.18C, 5.3.24C, 5.4.4, 5.4.6, 5.4.8, 5.4.21C, 6.2.86C, 7.3.36C, 7.5.63C, 7.5.65C, 7.5.73C, 10.3.11C s 84 …. 7.4.15, 7.5.63C, 7.5.69C s 85 …. 7.4.15, 7.5.69C s 86 …. 5.2.38, 5.2.43C, 7.4.15, 7.5.63C, 7.5.69C, 8.3.56C ss 86–91 …. 7.5.69C s 87 …. 5.2.43C s 88 …. 5.2.4, 5.2.35, 5.2.38, 5.2.43C, 6.4.4, 10.4.7C ss 89–91 …. 9.4.13C s 90 …. 1.4.4, 1.4.6, 5.1.1, 5.1.2, 5.1.5, 5.1.9, 5.2.1, 5.2.3, 5.2.4, 5.2.5, 5.2.7, 5.2.9, 5.2.10, 5.2.11, 5.2.12, 5.2.13C, 5.2.15, 5.2.16, 5.2.17, 5.2.18, 5.2.22, 5.2.24C, 5.2.25, 5.2.27, 5.2.28, 5.2.29, 5.2.30C, 5.2.31, 5.2.32, 5.2.33, 5.2.35, 5.2.36, 5.2.37, 5.2.38, 5.2.39, 5.2.40C, 5.2.41, 5.2.43C, 5.2.44, 5.2.49, 5.3.4C, 5.3.15, 6.1.2, 6.2.9, 6.2.11, 6.2.64, 6.4.2, 6.4.4, 6.4.10, 7.5.96, 9.4.13C, 9.4.18C, 9.4.25 s 91 …. 1.4.6, 7.5.19C s 92 …. 2.12.13, 3.1.1, 3.2.11C, 3.2.26, 3.2.49, 3.2.57C, 3.2.58, 4.1.3, 4.1.8, 4.1.23C, 4.2.36C, 4.3.16, 4.3.18C, 4.4.25, 5.2.35, 5.2.38, 5.2.41, 5.2.43C, 5.3.4C, 6.3.4C, 6.4.4, 6.4.10, 7.5.69C, 8.2.3C, 9.1.1, 9.1.2, 9.2.4, 9.3.3, 9.4.1E, 9.4.2, 9.4.3, 9.4.4, 9.4.5, 9.4.7, 9.4.8, 9.4.9, 9.4.10, 9.4.11, 9.4.12, 9.4.13C, 9.4.14, 9.4.15, 9.4.16, 9.4.18C, 9.4.19, 9.4.20, 9.4.22C, 9.4.23, 9.4.24, 9.4.25, 9.4.26, 9.4.27C, 9.4.29, 9.4.30C, 9.4.31, 9.4.33C, 9.4.35, 9.4.36, 9.4.37, 9.4.38, 9.4.39, 9.4.40, 9.4.41, 9.5.12C, 9.7.18C, 9.8.5C, 10.4.5, 10.4.7C

s 93 …. 5.2.4, 5.2.43C ss 93–95 …. 9.4.13C ss 93-96 …. 7.5.69C s 94 …. 5.4.17C, 5.4.21C s 95 …. 5.2.43C s 96 …. 1.4.10, 4.4.10, 5.3.1, 5.3.4C, 5.3.5, 5.3.7, 5.3.9C, 5.3.12, 5.3.13, 5.3.16, 5.3.17, 5.3.18, 5.3.19, 5.3.22, 5.3.23, 5.3.24C, 5.4.3, 5.4.12, 5.4.16, 5.4.17C, 5.4.21C, 6.4.2, 6.4.26, 7.5.57C, 7.5.61, 7.5.65C, 9.3.2, 9.5.4, 9.5.7, 9.7.15, 10.3.38C s 97 …. 5.4.21C s 98 …. 4.1.4E, 6.1.24C s 99 …. 4.1.3, 4.3.16, 5.1.1, 5.2.38, 5.3.1, 5.3.4C, 5.3.16, 5.3.21, 6.2.52, 6.2.98, 6.4.2, 6.4.4, 6.4.5, 6.4.6, 6.4.7, 6.4.8, 6.4.9C, 6.4.10, 6.4.11, 6.4.12, 6.4.13, 6.4.16, 6.4.17, 6.4.18C, 6.4.19, 6.4.20C, 6.4.22, 6.4.23, 6.4.24, 6.4.25, 6.4.26, 9.1.3, 9.4.13C, 9.7.13C, 9.8.5C, 10.4.5, 10.4.7C s 100 …. 4.3.16 s 101 …. 8.2.3C s 102 …. 6.4.4, 6.4.18C, 9.4.13C s 103 …. 8.2.3C s 105A …. 1.4.21, 6.4.2 s 106 …. 1.2.20, 1.2.29, 1.5.8, 2.2.13, 2.11.26, 4.5.6C, 5.3.4C, 5.4.17C, 6.2.28, 8.3.66C s 107 …. 1.2.20, 2.2.13, 3.2.24, 4.2.5C, 5.3.4C, 5.4.17C, 6.1.72, 6.2.10, 6.2.13, 6.2.21C, 6.2.30C, 6.2.67C, 6.2.90, 7.5.65C, 8.3.66C, 8.5.25C s 108 …. 1.2.20, 6.2.30C, 7.5.65C

s 109 …. 1.2.20, 1.2.43, 1.3.7, 1.4.19, 1.4.23, 1.5.13, 1.5.14, 1.6.4, 1.6.5C, 2.11.15, 3.1.3, 3.2.24, 3.3.1, 4.2.5C, 4.2.16C, 4.4.36, 4.5.6C, 6.1.4, 6.1.5, 6.1.6, 6.1.7, 6.1.8, 6.1.9, 6.1.10, 6.1.11, 6.1.12, 6.1.14, 6.1.15, 6.1.16, 6.1.17, 6.1.18, 6.1.19, 6.1.22C, 6.1.23, 6.1.24, 6.1.27C, 6.1.29, 6.1.31, 6.1.32, 6.1.42C, 6.1.42C, 6.1.48, 6.1.53, 6.1.57, 6.1.59, 6.1.60, 6.1.61, 6.1.62C, 6.1.65, 6.1.66, 6.1.68, 6.1.70, 6.1.71, 6.1.72, 6.1.74, 6.1.75, 6.1.76C, 6.1.78, 6.1.80, 6.1.81, 6.1.82, 6.1.83, 6.1.84, 6.1.87, 6.1.88C, 6.1.90, 6.1.92C, 6.1.93, 6.2.3, 6.2.17, 6.2.21C, 6.2.26, 6.2.30C, 6.2.35, 6.2.50C, 6.2.58, 6.2.59C, 6.2.61, 6.2.62, 6.2.67C, 6.2.68, 6.2.76, 6.2.77, 6.2.80, 6.2.85, 6.2.86C, 6.2.90, 6.2.91, 6.2.95, 6.3.4C, 6.3.6C, 6.3.7, 7.2.26, 7.5.63, 7.5.65C, 7.5.87, 8.3.13, 8.3.14, 8.3.19, 8.3.42, 8.5.4, 8.5.6C, 9.4.31, 9.4.34 s 110 …. 1.2.29, 6.1.51C s 111 …. 9.5.19C, 9.5.34C s 112 …. 1.4.7 s 113 …. 4.3.18C s 114 …. 1.4.4, 1.4.7, 1.4.13, 5.1.1, 5.3.4C, 6.1.2, 6.2.2, 6.2.45C, 6.2.49, 6.2.50C, 6.2.54, 6.2.55, 6.2.56, 6.2.57, 6.2.69C, 7.5.19C, 9.8.5C s 115 …. 1.4.4, 6.1.2, 7.5.19C, 9.8.5C s 116 …. 4.2.16C, 4.3.18C, 5.3.17, 5.3.22, 5.3.24C, 7.5.64, 9.1.1, 9.1.2, 9.2.4, 9.3.1, 9.6.3, 9.7.1E, 9.7.2, 9.7.3, 9.7.5, 9.7.6, 9.7.7, 9.7.8, 9.7.9, 9.7.11, 9.7.12C, 9.7.13C, 9.7.14, 9.7.15, 9.7.16, 9.7.17, 9.7.18C, 9.7.19, 9.7.20, 9.7.21C, 9.7.22, 9.7.24, 9.7.25, 9.8.5C, 9.8.6 s 117 …. 1.2.43, 1.4.24, 3.2.57C, 4.2.16C, 4.4.25, 4.4.31, 5.3.4C, 6.4.18C, 9.1.1, 9.1.2, 9.2.4, 9.3.3, 9.4.25, 9.7.13C,

9.8.1E, 9.8.2, 9.8.3, 9.8.4, 9.8.5C, 9.8.6, 9.8.7, 9.8.8, 9.8.9, 9.8.10, 9.8.11C, 9.8.12, 9.8.13, 9.8.14C, 9.8.15, 10.4.5, 10.4.7C s 118 …. 8.5.17C, 9.8.12 s 119 …. 1.2.29, 1.4.24, 7.5.63C, 9.8.5C s 120 …. 1.4.24, 9.8.5C, 10.4.5 s 121 …. 2.2.21C, 8.5.17C s 122 …. 2.2.13, 2.2.21C, 2.2.22, 2.2.23, 2.2.25, 2.2.26, 4.1.23C, 4.1.24, 4.1.25, 4.4.10, 5.4.17C, 6.1.9, 6.1.88C, 6.1.90, 6.1.92C, 6.2.74C, 7.2.16, 8.6.1, 8.6.2, 8.6.3, 8.6.5, 8.6.7C, 9.5.9, 9.5.19C, 9.6.2, 9.7.6, 9.7.7, 9.7.8, 9.7.21C, 10.4.7C s 123 …. 1.2.29, 1.4.7 s 124 …. 1.2.29, 1.4.7 s 125 …. 1.2.25 s 126 …. 2.8.4, 7.2.14E, 7.2.15, 7.2.23E, 7.4.11E s 127 …. 4.4.2, 4.4.3, 4.4.10, 10.4.7C s 128 …. 1.2.27C, 1.2.29, 1.3.6, 1.3.26, 1.3.28, 2.5.11C, 2.5.13, 2.6.10C, 2.11.41, 2.11.43, 2.11.46, 2.11.47, 3.2.15C, 3.2.51C, 7.2.44, 7.3.38C, 10.3.10, 10.3.11C, 10.3.48C COMMONWEALTH A New Tax System (Goods and Services Tax) Act 1999 …. 5.3.14 s 1.3 …. 5.2.48 s 1.3(b) …. 5.2.48 Aboriginal and Torres Strait Islander Heritage Protection Act 1984 …. 4.4.24, 4.4.28, 4.4.29, 4.4.30C, 8.4.18, 8.4.20C Aboriginal and Torres Strait Islanders (Queensland Discriminatory

Laws) Act 1975 …. 4.4.10 Aboriginal and Torres Strait Islanders (Queensland Reserves and Communities Self-Management) Act 1978 …. 4.4.10 Acts Interpretation Act 1901 …. 1.8.8C s 15A …. 4.1.23C, 8.2.37C s 15AA …. 3.3.19 s 16A …. 2.1.11, 7.4.9 s 19A …. 7.4.13 s 30(2) …. 6.1.59 Acts Interpretation Act 1904–1916 …. 1.8.8C Administrative Decisions (Judicial Review) Act 1977 …. 8.4.3 Air Force Act 1923 …. 6.2.60 Air Navigation Act 1920 …. 4.1.14, 4.1.18C, 4.3.16 Air Navigation Regulations 1920 …. 4.1.18C reg 6(1) …. 4.1.18C reg 198 …. 4.1.18C reg 199 …. 4.1.18C reg 199(4) …. 4.1.18C reg 200B …. 4.1.18C, 4.1.20, 4.1.21 Air Services Act 1995 s 7 …. 7.5.3E s 11 …. 7.5.3E Audit Act 1901 …. 5.4.21C, 6.2.4 Australia Act 1986 …. 1.2.30, 1.3.5, 1.3.6, 1.3.17, 1.3.18, 1.3.19, 1.3.20E, 1.3.25, 1.3.28, 2.1.10, 2.11.15, 2.11.16E, 2.11.43, 7.1.5C, 7.2.27, 7.2.36, 7.2.38, 7.2.39, 7.2.40E, 7.2.42E, 7.2.44, 7.3.53, 7.4.26E, 8.7.15

s 1 …. 1.3.21, 1.3.23, 1.3.25, 7.1.5C, 7.2.9 s 2 …. 1.3.25, 1.6.6, 1.6.7E, 1.6.8, 1.6.9 s 2(1) …. 1.6.8, 2.11.30 s 2(2) …. 1.6.8, 2.11.42 s 3 …. 1.3.22, 1.3.25, 8.5.25C s 3(1) …. 2.10.5 s 5 …. 1.3.25 s 5(b) …. 7.2.44 s 6 …. 2.10.5, 2.11.3, 2.11.15, 2.11.35, 2.11.38, 2.11.40 s 7 …. 1.2.30, 1.3.25, 2.1.11, 7.2.27, 7.2.37E, 7.2.38, 7.2.44 s 7(2) …. 7.2.41, 7.2.42E, 7.2.43, 7.5.27 s 7(3) …. 7.2.41 s 7(5) …. 7.3.45, 7.5.27 s 7(6) …. 7.2.44 s 7(7) …. 7.2.44 s 9 …. 1.3.25, 2.8.9, 2.8.11 s 10 …. 1.3.25, 7.2.28, 7.2.37E, 7.2.38, 7.5.27 s 11 …. 1.3.25 s 12 …. 1.3.25 s 15 …. 1.3.26, 1.6.11, 7.2.44 Australia (Request and Consent) Act 1985 …. 1.3.18 Australian Bicentennial Authority Act 1980 s 10 …. 5.4.20 s 22 …. 7.5.59C s 23 …. 7.5.59C Australian Capital Territory (Self-Government) Act 1988 …. 1.4.1, 6.1.91, 6.1.92C

s 3 …. 6.1.92C s 7 …. 2.1.11 s 8(1) …. 2.1.8 s 14 …. 2.4.4 s 16 …. 2.1.11 s 16(2) …. 2.1.11 s 16(4) …. 2.1.11 s 17 …. 2.3.14 s 24 …. 2.7.19, 2.7.20 s 28 …. 6.1.90, 6.1.91, 6.21.92C, 6.1.93 s 28(1) …. 6.1.92C s 32(2) …. 6.3.4C s 35 …. 2.1.11 ss 36–38 …. 2.1.11 s 57 …. 2.3.16 s 67 …. 2.4.4 s 67B …. 2.3.9 s 67C …. 2.1.8 s 128 …. 6.1.90 Australian Citizenship Act 1948 …. 2.4.8 Australian Coastal Shipping Commission Act 1956 …. 6.2.63 s 36(1) …. 6.2.63 Australian Industries Preservation Act 1906 …. 4.1.16 s 4(1) …. 4.1.16 s 5 …. 4.2.3, 4.2.39C, 6.2.14 s 8 …. 4.2.3, 4.2.39C, 6.2.14 s 15B …. 8.2.16

Australian National Airlines Act 1945 …. 4.1.23C s 19(1)(a) …. 4.1.23C s 19(2) …. 4.1.23C s 19B …. 4.1.23C, 4.1.24 s 19B(1) …. 4.1.23C Australian Securities and Investments Commission Act 2001 …. 1.4.17 Australian Securities Commission Act 1989 …. 4.2.39C s 171 …. 8.2.26C s 172 …. 8.2.26C Banking Act 1945 …. 6.2.29, 6.2.30C, 6.2.50C Pt II …. 6.2.30C s 4 …. 6.2.30C s 5(1) …. 6.2.30C s 9 …. 6.2.30C s 48 …. 6.2.30C, 6.2.45C s 48(1) …. 6.2.30C s 48(2) …. 6.2.30C s 48(3) …. 6.2.30C Banking Act 1947 …. 6.2.32, 9.4.9, 9.5.12C, 9.5.46 Pt IV Div 2 …. 9.5.12C Pt IV Div 3 …. 9.5.12C s 6 …. 9.5.12C s 12 …. 9.5.12C s 13 …. 9.5.12C s 13(1) …. 9.5.12C s 15 …. 9.5.12C

s 16 …. 9.5.12C s 17 …. 9.5.12C s 18 …. 9.5.12C s 19 …. 9.5.12C s 22(1) …. 9.5.12C s 22(5) …. 9.5.12C s 24(4) …. 9.5.12C s 43(2) …. 9.5.12C s 44(3) …. 9.5.12C Bankruptcy Act 1924 …. 8.2.17C, 8.5.8 s 24(1) …. 8.2.17C s 24(1)(a) …. 8.2.17C s 54 …. 8.2.17C s 57 …. 8.2.17C s 217 …. 9.6.6, 9.6.7 Bankruptcy Act 1966 …. 8.3.59 Bills of Exchange Act 1909 …. 6.1.30 Broadcasting Act 1942 …. 10.3.20C Pt IIID …. 10.3.4, 10.3.5C, 10.3.6, 10.3.20C Pt IIID Div 2 …. 10.3.4 Pt IIID Div 3 …. 10.3.4 s 92 …. 10.3.8 s 95(2) …. 10.3.5C s 95A …. 10.3.4, 10.3.5C s 95B …. 10.3.4, 10.3.5C, 10.3.6 s 95B(1) …. 10.3.5C s 95C …. 10.3.5C, 10.3.6

s 95C(3) …. 10.3.5C s 95D …. 10.3.5C, 10.3.6 s 95D(1) …. 10.3.5C s 95H …. 10.3.4 Broadcasting and Television Act 1942 …. 6.1.39 s 42 …. 6.1.39 s 43 …. 6.1.39 Broadcasting Services Act 1992 …. 8.2.28 s 129 …. 8.2.28 s 140A(3) …. 8.2.28 s 141 …. 8.2.28, 8.2.29C s 143 …. 8.2.28, 8.2.29C Sch 2 cl 8(1)(g) …. 8.2.28, 8.2.29C Census and Statistics Act 1905 s 8 …. 2.6.9, 2.6.10C Child Endowment Act 1941 Child Support (Assessment) Act 1989 …. 5.1.16C Child Support (Registration and Collection) Act 1988 …. 5.1.16C Circuit Layouts Act 1989 …. 3.1.5C, 9.5.24 Civil Aviation Act 1988 …. 5.1.23 Commerce (Meat Export) Regulations reg 4B …. 4.1.12C reg 5 …. 4.1.12C, 4.1.31 Commonwealth Conciliation and Arbitration Act 1926 …. 8.2.6 s 25 …. 8.2.9C s 29(1) …. 8.2.9C s 29(1)(b) …. 8.2.9C

s 29(1)(c) …. 8.2.9C s 29A …. 8.2.9C Commonwealth Electoral Act 1902 …. 2.5.4 Commonwealth Electoral Act 1918 …. 2.1.7, 2.5.6, 2.5.7, 2.5.10, 2.6.3, 2.6.9, 10.3.19, 10.3.21, 10.3.59, 10.3.61, 10.3.62C Pt III …. 2.6.4, 2.6.5 Div 3 …. 2.6.4 s 3(iii) …. 8.3.29 s 19 …. 2.6.10C s 24 …. 2.6.9, 2.6.10C s 24(1) …. 2.6.12 s 25 …. 2.6.9, 2.6.10C s 39(5) …. 2.5.8 s 39B …. 2.5.11C ss 40–44 …. 2.2.24 s 43 …. 2.5.10 ss 45–48 …. 2.2.19 s 46 …. 2.6.4 s 46(1B) …. 2.6.4 s 46(1C) …. 2.6.4 s 48 …. 2.6.4 s 48(1) …. 2.6.5 s 48(3) …. 2.6.5 s 49 …. 2.6.4 s 50 …. 2.6.4, 2.6.5 ss 51–54 …. 2.2.24 s 56 …. 2.6.5

s 57 …. 2.6.5, 2.12.4 s 58 …. 2.5.10, 2.6.5 s 59(2) …. 2.6.5 s 59(3) …. 2.6.5 s 59(4) …. 2.6.5 s 59(7) …. 2.6.5 s 59(8) …. 2.6.5 s 59(9) …. 2.6.5 s 59(9A) …. 2.6.5 s 59(9B) …. 2.6.5 s 59(10) …. 2.6.5 s 60 …. 2.6.5 s 66(1) …. 2.6.5 s 66(3) …. 2.6.3, 2.6.5 s 68 …. 2.6.5 s 69 …. 2.6.5 s 70 …. 2.6.5 s 72 …. 2.6.5 s 73 …. 2.6.5 s 73(1) …. 2.6.5 s 73(3) …. 2.6.5 s 73(4) …. 2.6.5 s 73(6) …. 2.6.5 s 74 …. 2.6.5 s 75 …. 2.6.5 s 76 …. 2.6.4, 2.6.5 s 77 …. 2.6.5

s 93(1) …. 2.5.6 s 93(6) …. 2.5.6 s 93(7) …. 2.5.6 s 93(8) …. 2.5.6 s 93(8AA) …. 10.3.56, 10.3.57C s 101 …. 10.3.60C s 101(7) …. 10.3.60C s 102(4) …. 10.3.60C s 102(4AA) …. 103.60C s 128A(12) …. 9.7.17 s 155 …. 10.3.60C s 163 …. 2.4.3 s 168 …. 10.3.20C s 169 …. 10.3.20C s 208(2)(c) …. 10.3.57C s 214 …. 10.3.20C s 240 …. 10.3.61, 10.3.62C, 10.3.63 s 249 …. 10.3.63 s 268 …. 10.3.62C, 10.3.63 s 268(1)(c) …. 10.3.61 s 270 …. 10.3.62C, 10.3.63 s 270(2) …. 10.3.61 s 329A …. 10.3.61, 10.3.62C, 10.3.63 s 353(1) …. 2.4.3 s 354(1) …. 2.4.3 s 376 …. 2.4.3, 2.4.5 Commonwealth Electoral Act 1962

s 2 …. 2.5.8, 2.5.11C s 3 …. 2.5.8 Commonwealth Electoral Act 1973 …. 2.12.4 s 3 …. 2.5.8 Commonwealth Electoral (Wartime) Act 1917 s 14 …. 6.1.15 Commonwealth Places (Application of Laws) Act 1970 …. 5.1.34, 6.2.93 s 4 …. 6.1.60 s 4(1) …. 6.2.96 s 4(2)(a) …. 6.2.96 s 4(5) …. 6.2.96 Commonwealth Places (Mirror Taxes) Act 1998 …. 5.1.34, 6.2.95, 6.2.96, 6.2.97, 6.2.98, 6.4.17, 6.4.18C s 3 …. 6.2.97 s 6 …. 6.2.97 s 6(1) …. 6.2.97 s 6(2) …. 6.2.97 s 6(3) …. 6.2.97 s 6(6) …. 6.2.97 s 8 …. 6.4.18C s 8(4) …. 6.4.18C s 9 …. 6.2.97 s 23(1) …. 6.2.97 Commonwealth’s Clean Energy Regulations 2011 …. 6.4.22 Communist Party Dissolution Act 1950 …. 1.2.9E, 1.2.41, 4.5.11C, 4.5.12, 4.5.14

s 4 …. 4.5.11C s 5 …. 4.5.11C s 5(2) …. 4.5.11C s 6 …. 4.5.11C s 9 …. 4.5.11C s 10 …. 4.5.11C Competition and Consumer Act 2010 …. 4.2.8, 7.5.83, 7.5.84E Pt IV …. 7.5.84E Pt V …. 7.5.84E Pt XIB …. 7.5.84E s 2B …. 7.5.84E s 2B(1) …. 7.5.84E s 2B(2) …. 7.5.84E s 2B(3) …. 7.5.84E Conciliation and Arbitration Act 1904 …. 6.1.16, 6.1.20, 6.1.22C, 6.1.32, 6.1.38, 6.1.42C, 6.2.6, 6.2.9, 6.2.21C, 6.2.38C, 6.2.40, 8.2.37C, 8.2.48 s 12 …. 8.2.4 s 13 …. 6.1.32 s 18 …. 6.2.21C s 25 …. 6.1.32 s 28(3) …. 6.1.40 s 41(1)(d) …. 6.2.38C s 44 …. 6.1.22C, 6.1.83 s 58D …. 8.2.37C s 72(a) …. 1.6.15 s 72(b) …. 1.6.15

s 132 …. 8.2.37C s 133 …. 8.2.37C s 139 …. 8.2.37C s 139(4) …. 8.2.37C s 140 …. 8.2.37C, 8.2.38C s 140(1) …. 8.2.38C s 140(5) …. 8.2.38C Conciliation and Arbitration Act 1956 …. 8.2.37C Conciliation and Arbitration (Electricity Industry) Act 1985 …. 6.2.38C, 6.2.39 s 6(1) …. 6.2.38C, 6.2.39 s 6(2) …. 6.2.38C, 6.2.39 s 6(2)–(5) …. 6.2.39 s 7 …. 6.2.38C, 6.2.39 s 8 …. 6.2.38C s 8(1) …. 6.2.38C s 9 …. 6.2.38C, 6.2.39 s 9(1) …. 6.2.38C s 9(6) …. 6.2.38C s 111(1)(g) …. 6.2.42C s 111(1A) …. 6.2.42C Constitution Alteration (Aboriginals) Act 1967 …. 4.4.26 Constitution Alteration (Establishment of Republic) Bill 1999 …. 7.2.44 Sch 2 cl 5 …. 7.2.44 Constitution Alteration Fair Elections Act 1988 …. 2.5.14, 2.6.14 Copyright Act 1968 …. 5.1.11C

Pt VC …. 5.1.11C, 5.1.12 s 8A …. 7.5.12 s 135ZZM(1) …. 5.1.11C s 135ZZN(1) …. 5.1.11C s 135ZZN(2) …. 5.1.11C s 135ZZP(1) …. 5.1.11C s 135ZZP(2) …. 5.1.11C Copyright Amendment Act 1989 Pt VC …. 5.1.11C Corporations Act 1989 …. 4.2.39C, 6.3.5 Pt 8 …. 6.3.6C Pt 8 Div 3 …. 6.3.6C s 9 …. 4.2.39C ss 37–48 …. 6.3.6C ss 46–48 …. 6.3.6C s 47 …. 6.3.6C s 47(1) …. 6.3.6C s 73 …. 6.3.6C s 82 …. 6.3.6C s 112 …. 4.2.39C s 113 …. 4.2.39C s 153 …. 4.2.39C s 156 …. 4.2.39C s 158 …. 4.2.39C Corporations Act 2001 …. 1.4.17, 7.4.27, 7.4.29, 8.2.18, 8.2.27 s 3 …. 4.2.41 Corporations (Commonwealth Authorities and Officers)

Regulations reg 3(1)(d) …. 6.3.6C Corporations Law 1990 …. 6.3.6C, 8.2.26C s 731 …. 8.2.26C s 732 …. 8.2.26C s 733 …. 8.2.26C s 733(3) …. 8.2.26C s 734 …. 8.2.26C s 1064(1) …. 6.3.6C s 1311(1)(a) …. 6.3.6C Crimes Act 1914 …. 4.3.13, 4.3.46, 6.3.10, 7.5.55C, 9.5.40C, 9.6.17 Pt IAA Divs 2–4 …. 10.3.17C Pt IC …. 10.3.17C s 3 …. 10.3.17C s 4AAA …. 6.3.11C, 6.3.12 s 4AAA(3) …. 6.3.11C s 4C(2) …. 6.1.62C, 6.1.64, 6.1.67 s 4G …. 6.1.62C s 5 …. 6.2.30C s 12(1) …. 9.6.5 s 23B …. 10.3.17C s 24A(1)(c) …. 4.3.46 s 29 …. 6.1.58 s 30K …. 9.6.5 s 233B …. 9.6.11 Crimes (Superannuation Benefits) Act 1989

Pt 2 …. 9.5.40C Criminal Code 1995 …. 1.4.17, 4.3.37, 4.3.49, 8.2.47 Ch 2 …. 2.7.7 Div 104 …. 4.3.14, 4.5.C, 8.2.41, 8.2.44C, 8.5.38C, 10.4.32 s 11.5 …. 6.1.61, 6.1.62C s 11.5(1) …. 6.1.62C s 11.5(2) …. 6.1.62C s 11.5(5) …. 6.1.62C s 100.1 …. 4.3.49, 4.5.C s 101.1 …. 8.5.41 s 104.1 …. 8.2.41, 10.4.32 s 104.4 …. 4.3.49, 4.5.C, 8.2.41, 8.2.42, 8.2.47, 8.5.41, 10.4.32, 10.4.33 s 104.4(1)(d) …. 4.5.4C s 105.5 …. 8.2.42, 8.5.41, 10.4.32 s 131.1 …. 6.1.61, 6.1.62C s 131.1(1) …. 6.1.61 s 270 …. 4.3.41C s 270.1 …. 4.3.41C s 270.3 …. 4.3.41C s 270.3(1)(a) …. 4.3.41C s 302.4 …. 6.1.64 Customs Act 1901 …. 4.1.12C, 9.5.38C, 10.4.13 s 15X …. 10.4.13, 10.4.14C, 10.4.15, 10.4.16 s 233B …. 9.6.9 s 233B(1)(b) …. 9.6.22 s 235 …. 9.6.9

Customs (Prohibited Exports) Regulations …. 4.1.29C reg 9 …. 4.1.29C Defence Act 1903 …. 9.7.16, 9.7.18C Defence Force Discipline Act 1982 …. 6.1.60, 8.2.52 s 40(2) …. 6.1.60 s 190(3) …. 4.5.6C s 190(5) …. 4.5.6C Defence Housing Authority Act 1987 …. 6.1.47, 6.1.48, 6.2.86C s 4 …. 6.2.86C s 5(1) …. 6.2.86C s 5(2) …. 6.2.86C s 7 …. 6.1.47 s 7(1)(a)–(h) …. 6.1.47 s 7(1)(p) …. 6.1.47 s 7(1)(x) …. 6.1.47 s 31(2) …. 6.2.86C Director of Public Prosecutions Act 1983 …. 6.3.6C s 5(2) …. 6.3.6C s 6 …. 6.3.6C s 6(1) …. 6.3.6C s 6(1)(a) …. 6.3.6C s 6(1)(b) …. 6.3.6C s 6(2)(a) …. 6.3.6C s 9 …. 6.3.6C Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Act 2006 …. 10.3.56, 10.3.57C, 10.3.60C s 4(1A) …. 10.3.57C

Electoral and Referendum Amendment (Prisoner Voting and Other Measures) Act 2004 …. 10.3.56, 10.3.57C Environment Protection (Impact of Proposals) Act 1974 …. 4.1.29C, 6.1.50, 6.1.51C, 6.1.72 Excise Tariff Act 1906 …. 5.1.39C, 5.1.40, 6.2.12, 6.4.15 Extradition Act 1988 …. 6.3.10, 6.3.11C Pt II …. 6.3.10 s 5 …. 6.3.10 s 19 …. 6.3.10, 6.3.11C s 19(1) …. 6.3.11C s 46 …. 6.3.10 Extradition (Foreign States) Act 1966 …. 7.5.28E, 7.5.49C Fair Work Act 2009 …. 1.4.17, 4.2.36C Family Law Act 1975 …. 1.4.17, 3.2.17, 6.1.87, 6.1.91, 6.1.92C, 6.2.64, 7.5.80, 8.3.29, 8.4.10C, 8.4.12, 8.5.10 Pt VII …. 6.1.88C s 21 …. 8.4.2 s 23A …. 8.2.5 s 90 …. 6.2.64 s 95 …. 8.7.11 s 95(b) …. 8.7.11 Family Law Amendment Act 1977 …. 8.2.5 Family Law Amendment Act (No 2) 1991 …. 8.2.5 Federal Aid Roads Act 1926 …. 5.3.9C Federal Airports Corporation Act 1986 …. 6.1.50, 6.1.51C, 6.2.65 Pt 5 …. 6.1.51C s 5(1) …. 6.1.51C

s 6 …. 6.1.50 s 7(2)(a) …. 6.1.51C s 7(2)(d) …. 6.1.51C s 7(2)(da) …. 6.1.51C s 7(2)(e) …. 6.1.51C s 7(2)(ea) …. 6.1.51C s 8 …. 6.1.50, 6.1.51C s 8(1)(a) …. 6.1.51C s 8(1)(da) …. 6.1.51C s 11 …. 6.1.51C ss 14–22 …. 6.1.51C Federal Airports Corporation Regulations …. 7.5.5 reg 9(2) …. 6.1.71 Federal Circuit Court of Australia Act 1999 s 8 …. 8.4.2 Federal Court of Australia Act 1976 s 5 …. 8.4.2 s 33 …. 9.7.11 s 33(3) …. 8.7.13 Federal Navigation Act 1912–1935 s 329 …. 6.1.24C Financial Framework Legislation Amendment Act (No 3) 2012 …. 7.5.67 Financial Framework (Supplementary Powers) Act 1997 …. 7.5.67 Financial Framework (Supplementary Powers) Regulations 1997 …. 7.5.67 Financial Management Accountability Act 1997

s 32B …. 7.5.67, 7.5.68 s 44 …. 7.5.65C Financial Management and Accountability Regulations 1997 reg 16 …. 7.5.67 Sch 2 …. 7.5.67 Fisheries Management Act 1991 …. 9.5.40C Health Insurance Act 1973 …. 9.5.27C, 9.5.28 s 20 …. 9.5.27C s 20(a) …. 9.5.27C Health Insurance (Pathology Services) Act 1991 …. 9.5.27C High Court of Australia Act 1979 …. 7.3.54E Hindmarsh Island Bridge Act 1997 …. 4.4.24, 4.4.28, 4.4.29, 4.4.30C Human Rights (Sexual Conduct) Act 1994 s 4 …. 8.3.19 s 4(1) …. 6.1.82 Immigration Restriction Act 1901 s 5 …. 10.4.26 s 5(6) …. 10.4.26 Income Tax Act 1942 …. 5.3.4C s 18 …. 5.3.4C Income Tax and Social Services Contribution Assessment Act 1936 …. 5.1.35C, 6.4.11 s 6 …. 5.1.43C s 23(j) …. 5.1.43C s 23(ja) …. 5.1.43C s 79A …. 6.4.11

s 121C …. 5.1.43C Income Tax and Social Services Contribution Assessment Act 1961 s 11 …. 5.1.43C s 15 …. 5.3.4C s 18 …. 5.3.4C s 20 …. 5.3.4C Income Tax Assessment Act 1922 …. 8.2.21 s 37 …. 8.2.23C s 41 …. 8.2.21 s 41(4) …. 8.2.19 s 44 …. 8.2.19, 8.2.20 s 44(1) …. 8.2.21 s 50 …. 8.2.19, 8.2.20 s 50(4) …. 8.2.19 s 51 …. 8.2.19, 8.2.20, 8.2.23C s 51(1) …. 8.2.20, 8.2.21 s 51(2) …. 8.2.20, 8.2.23C s 51(4) …. 8.2.21 s 51(6) …. 8.2.20, 8.2.21, 8.2.23C s 51(8) …. 8.2.20 s 51(10) …. 8.2.23C s 51A …. 8.2.21, 8.2.23C s 51A(5) …. 8.2.21, 8.2.23C s 51A(6) …. 8.2.21, 8.2.23C s 51A(10) …. 8.2.21, 8.2.23C Income Tax Assessment Act 1936 …. 5.3.4C, 6.2.85

s 99 …. 1.8.10 s 99A …. 1.8.10 s 99A(2) …. 1.8.10 s 99A(3) …. 1.8.10 s 99A(4) …. 1.8.10 s 221 …. 5.3.4C, 5.3.5, 5.3.9C s 221(1)(a) …. 5.3.9C, 5.3.10, 5.3.11 Income Tax Assessment Act 1942 Income Tax (War-time Arrangements) Act 1942 …. 5.3.4C, 5.3.5 Industrial Relations Act 1988 …. 4.3.34C, 6.2.44C Pt VI …. 6.2.44C Pt VIA Div 1 …. 6.2.44C s 6 …. 6.2.44C s 127A …. 4.2.27 s 127A(2) …. 4.2.27 s 127B …. 4.2.27 s 127C(1) …. 4.2.27 s 127C(1)(a) …. 4.2.27 s 127C(1)(b) …. 4.2.27 s 127C(1)(c) …. 4.2.27 s 170AE …. 6.2.44C s 170AE(1) …. 6.2.44C s 170AE(2) …. 6.2.44C s 170AE(3) …. 6.2.44C s 170AE(6) …. 6.2.44C s 170AH …. 6.2.44C s 170BC(1) …. 4.3.34C

s 170BC(3)(b) …. 4.3.34C s 170BC(3)(b)(i) …. 4.3.34C s 170DE(2) …. 4.3.34C s 170EDA(1)(b) …. 4.3.34C s 299(1)(d)(ii) …. 10.3.3 Industrial Relations Amendment Act (No 2) 1994 …. 4.3.34C Industrial Relations Reform Act 1993 …. 4.3.34C Insurance Act 1973 …. 9.8.14C Interactive Gambling Act 2001 …. 9.4.27C International Arbitration Act 1974 …. 8.2.35 Interstate Commission Act 1912 Pt V …. 8.2.3C Judiciary Act 1903 …. 6.2.80E, 6.2.83, 7.3.54E, 7.5.89, 8.5.2E, 8.7.9E Pt IX …. 7.5.91 Pt XII …. 8.3.9, 8.3.10C, 8.7.7C s 18 …. 5.2.40C, 6.2.21C, 9.4.18C, 9.7.21C, 10.2.1 s 23 …. 8.3.65 s 23(2)(b) …. 5.2.20, 5.2.22, 5.2.25, 5.2.26 s 30 …. 1.2.37, 8.3.5, 8.3.10C s 30(2)(a) …. 2.11.26 s 30(a) …. 8.3.42, 8.3.45C, 8.5.3 s 30(c) …. 8.3.29 s 31 …. 8.3.33 s 32 …. 8.3.33 s 33 …. 8.7.14C s 34 …. 8.7.11

s 35 …. 8.7.10, 8.7.11 s 35(2) …. 8.7.13, 8.7.14C s 35A …. 8.7.10 s 35AA …. 8.7.11 s 38 …. 7.5.92, 8.3.25, 8.3.43, 8.5.1, 8.5.3 s 38(a) …. 8.3.25 s 38(b) …. 8.3.25 s 38(c) …. 8.3.25 s 38(d) …. 8.3.25 s 39 …. 7.5.92, 8.3.43, 8.5.1, 8.5.3, 8.5.6C, 8.5.17C s 39(1) …. 8.5.3, 8.5.6C s 39(2) …. 6.2.86C, 7.5.96, 8.3.29, 8.5.3, 8.5.5, 8.5.6C, 8.5.13C s 39(2)(a) …. 2.11.26, 8.3.26 s 39B …. 8.4.3, 8.5.2E s 39B(1A) …. 8.3.25 s 39B(c) …. 8.3.29 s 40 …. 1.6.4, 2.5.10, 6.1.22C, 6.1.41, 8.4.5C, 9.4.13C, 9.4.18C, 9.5.27C, 10.3.11C s 40(1) …. 6.1.76C, 10.2.1 s 40(3) …. 8.3.29 s 44 …. 8.3.25, 8.4.5C, 8.5.2E s 44(2) …. 8.3.25, 8.3.43 s 44(2A) …. 8.3.25 s 56 …. 7.5.95 ss 56-59 …. 7.5.91, 7.5.92 s 64 …. 6.2.79, 6.2.80, 6.2.82, 6.2.83, 6.2.84, 6.2.85, 6.2.86C, 6.2.87, 7.5.87, 7.5.91, 7.5.92, 7.5.93

ss 65-66 …. 7.5.91 s 67B …. 7.5.91 s 67E …. 7.5.91 s 68 …. 6.3.1, 8.5.1, 8.5.17C, 8.6.7, 10.4.9 s 68(2) …. 8.3.29, 8.6.4 s 68(4) …. 8.5.2E s 68(5) …. 8.5.2E s 68(5A) …. 8.5.2E s 68(5B) …. 8.5.2E s 68(5C) …. 8.5.2E s 68(6) …. 8.5.2E s 68(7) …. 8.5.2E s 68(8) …. 8.5.2E s 68(9) …. 8.5.2E s 68(10) …. 8.5.2E s 68(11) …. 8.5.2E s 78A …. 1.4.13, 8.3.14 s 78A(3) …. 8.3.13 s 78AA …. 1.4.13 s 78B …. 8.3.13 s 79 …. 6.2.67C, 6.2.68, 6.2.78, 6.2.81, 6.2.82, 6.2.85, 6.2.86C, 6.3.1, 7.5.89, 7.5.92, 7.5.96 s 80 …. 6.2.78, 6.2.82, 6.2.85, 6.2.86C, 7.5.89, 7.5.92, 8.5.2E Jurisdiction of Courts (Cross-vesting Act) 1987 …. 8.5.2E s 4 …. 8.5.1 s 5(1) …. 8.5.1, 8.5.7C s 5(2) …. 8.5.1

Land Tax Act 1910 …. 5.1.41 Legislative Instruments Act 2003 …. 7.5.2 Lemonthyme and Southern Forests (Commission of Inquiry) Act 1987 …. 4.3.30C Pt II …. 4.3.30C Pt III …. 4.3.30C s 16 …. 4.3.30C, 4.3.31, 4.3.33 s 16(1) …. 4.3.30C s 16(1)(a) …. 4.3.30C, 4.3.31 s 16(1)(b) …. 4.3.30C, 4.3.31 s 16(1)(c) …. 4.3.30C, 4.3.31 s 16(1)(d) …. 4.3.30C, 4.3.31 s 18(1) …. 4.3.30C Life Insurance Act 1945 …. 6.1.53, 6.1.54C s 4(1) …. 6.1.54C s 49K …. 6.1.53, 6.1.54C s 49K(1) …. 6.1.53, 6.1.54C s 67(7) …. 6.1.54C s 78 …. 6.1.54C s 81 …. 6.1.54C s 82 …. 6.1.54C s 83 …. 6.1.54C s 84 …. 6.1.54C s 85 …. 6.1.54C s 86 …. 6.1.54C s 94(7) …. 6.1.54C s 139A …. 6.1.54C

Maritime Powers Act 2013 …. 7.5.51, 7.5.52C s 3 …. 7.5.52C s 5 …. 7.5.52C Marriage Act 1961 …. 3.2.17, 6.1.91, 6.1.92C, 8.3.29 s 88EA …. 6.1.92C Marriage Equality (Same Sex) Act 2013 …. 6.1.91 s 28 …. 6.1.93 Maternity Allowance Act 1912 …. 5.4.11, 5.4.14 Matrimonial Causes Act 1959 …. 8.2.47, 8.5.4, 8.5.4 Migration Act 1958 …. 2.7.10, 5.1.6C, 7.5.48, 7.5.49C, 7.5.52C, 7.5.53, 7.5.70, 8.3.38, 8.4.3, 8.4.4, 10.4.21, 10.4.30 Pt 8 …. 8.4.3, 9.4.4, 8.4.5C s 7A …. 7.5.50 s 34A …. 5.1.6C, 5.1.7, 5.1.21, 5.1.21 s 34A(1) …. 5.1.6C s 54R …. 10.4.14C, 10.4.21 s 198(1) …. 10.4.23 s 198AHA …. 7.5.71 s 474 …. 8.3.38, 8.3.39C, 8.3.40 s 474(2) …. 8.3.40 s 476 …. 8.4.3 s 485) …. 8.4.3 s 486A …. 8.5.38C Migration Amendment Act 1987 …. 7.5.50 s 7 …. 5.1.6C Minerals Resource Rent Tax Act 2012 …. 6.4.20C Ministers of State Act 1952

s 4 …. 7.4.18 s 5 …. 7.4.18 s 7 …. 7.4.18 Mutual Recognition Act 1992 …. 1.4.17 National Parks and Wildlife Conservation Act 1975 …. 9.5.18, 9.5.19C s 7(2) …. 9.5.19C s 10(1A) …. 9.5.19C National Parks and Wildlife Conservation Act Regulations …. 9.5.18 National Parks and Wildlife Conservation Amendment Act 1987 …. 9.5.19C s 7 …. 9.5.19C National Security Act 1939 …. 6.2.69C, 8.2.39, 8.3.35, 8.3.39C, 8.3.35, 8.3.39C, 9.7.18C National Security (Coal Mining Industry Employment) Regulations 1941 reg 17 …. 8.3.35, 8.3.36C, 8.3.39C National Security (General) Regulations reg 54 …. 9.5.10C, 9.5.11 reg 60G …. 9.5.10C reg 60H …. 9.5.10C, 9.5.11 National Security (Subversive Associations) Regulations 1940 …. 4.5.17C, 9.7.18C reg 3 …. 4.5.17C reg 4 …. 4.5.17C reg 6A …. 4.5.17C regs 7–9 …. 4.5.17C

reg 11 …. 4.5.17C Native Title Act 1993 …. 4.4.22, 4.4.24, 4.4.27, 6.1.72 s 11 …. 6.1.72 s 11(1) …. 6.1.72 s 12 …. 4.4.22, 4.4.23C Nauru (High Court Appeals) Act 1976 …. 8.3.29 Navigation Act 1912 …. 1.3.7, 6.1.57, 8.3.9, 8.7.7C s 2 …. 6.1.24C s 329 …. 6.1.23, 6.1.24C, 6.1.25 Norfolk Island Act 1963 …. 2.1.9 s 31 …. 2.1.9 s 35 …. 2.1.9 Norfolk Island Act 1979 …. 2.1.9 Norfolk Island Legislation Amendment Act 2015 …. 2.1.9, 2.2.10 Northern Territory Acceptance Act 1920 s 7(3) …. 9.7.21C Northern Territory (Administration) Act 1910 s 4 …. 2.1.7 Northern Territory (Administration) Act 1920 …. 9.5.19C s 13 …. 9.7.21C Northern Territory Representation Act 1922 …. 2.2.21C Northern Territory Representation Act 1968 …. 2.2.21C Northern Territory (Self-Government) Act 1978 …. 1.4.1 Pt III …. 2.4.4 Div 2 …. 2.4.4 s 6 …. 2.1.11 s 7(2)(a) …. 2.1.11

s 7(2)(b)(iii) …. 2.1.11 s 8(1) …. 2.1.11 s 9 …. 2.1.11 s 12 …. 2.7.20 s 13(1) …. 2.1.7 s 13(2) …. 2.2.8 s 14 …. 2.1.7 s 17 …. 2.2.8 s 17(2) …. 2.3.8 s 20 …. 2.5.7, 2.2.8 s 21 …. 2.5.7 s 22 …. 2.3.14 s 35 …. 2.1.11 s 49 …. 9.4.31, 9.4.32, 9.4.33C, 9.4.34, 9.4.35, 9.4.40 s 50 …. 9.5.34C s 50(1) …. 9.5.34C, 9.5.41, 9.5.42C s 50(2) …. 9.5.19C, 9.5.34C Offshore Petroleum and Greenhouse Gas Storage Act 2006 …. 6.3.1 Parliamentary Contributory Superannuation Act 1948 …. 9.5.40C Parliamentary Papers Act 1908 …. 2.7.8 Parliamentary Privileges Act 1987 …. 2.7.4, 2.7.6, 2.7.8 s 3(3) …. 2.7.6, 2.7.7 s 3A …. 2.7.7 s 4 …. 2.7.6 s 5 …. 2.7.4 s 6 …. 2.7.6

s 7 …. 2.7.6 s 9 …. 2.7.6 s 12 …. 2.7.7 s 13 …. 2.7.7 s 16 …. 2.7.10, 2.7.19 s 16(3) …. 2.7.10 s 16(3)(b) …. 2.7.9 s 16(3)(c) …. 2.7.9 Parliamentary Proceedings Broadcasting Act 1946 …. 2.7.4 Payroll Tax Assessment Act 1941 …. 6.2.34, 6.2.67C s 3 …. 6.2.34 s 5 …. 6.2.50C Petroleum and Minerals Authority Act 1973 …. 2.10.24, 2.12.4 Petroleum (Submerged Lands) Act 1967 …. 9.5.30 Pharmaceutical Benefits Act 1944 …. 5.4.13, 5.4.14 Plant Breeder’s Rights Act 1994 …. 3.1.5C s 10(b) …. 3.1.5C Plant Variety Rights Act 1987 …. 3.1.5C s 5(a) …. 3.1.5C Political Broadcasts and Political Disclosures Act 1991 …. 10.3.4, 10.3.20C Post and Telegraph Act 1901 …. 6.2.74C, 9.5.36C Postal Services Act 1975 s 42 …. 6.1.46 s 51 …. 6.1.46 Prisoners Act 1967 s 4 …. 10.4.5

s 4(1) …. 10.4.2, 10.4.4, 10.4.5 Privy Council (Appeals from the High Court) 1975 …. 1.3.6, 2.8.11, 8.7.15, 8.7.16C Privy Council (Limitation of Appeals) Act 1968 …. 1.3.6, 8.7.15, 8.7.16C Public Accounts and Audit Committee Act 1951 s 10(1) …. 2.7.8 Public Service Act 1922 …. 8.2.53 Public Service Act 1999 …. 7.4.18 Public Works Committee Act 1969 s 20(1) …. 2.7.4 Publications Control Act 1989 …. 5.2.40C Racial Discrimination Act 1975 …. 4.3.18C, 4.4.15, 4.4.26, 4.4.27, 4.4.32, 4.4.35, 6.1.49, 6.1.72, 6.1.76C, 8.2.31, 8.2.32, 8.3.44 Pt II …. 4.4.33E s 6A …. 6.1.76C, 6.1.78 s 6A(1) …. 6.1.76C s 8(1) …. 4.4.33C, 4.4.36 s 9 …. 4.3.18C, 4.3.19, 4.4.16C s 9(1) …. 4.3.18C, 4.4.33C s 9(2) …. 4.3.18C, 4.4.33C s 10 …. 4.4.35, 4.4.36 s 10(1) …. 4.4.33C, 6.1.72 s 10(2) …. 4.4.33C s 12 …. 4.3.18C, 4.3.19, 4.4.16C s 12(1) …. 4.3.18C Racial Discrimination Amendment Act 1983 …. 6.1.76C, 6.1.77

Radio Communications Act 1983 …. 10.3.20C Radio Communications (Transitional Provisions and Consequential Amendments) Act 1983 s 4 …. 10.3.20C Re-establishment and Employment Act 1945 …. 6.1.70, 6.2.86C s 24(2) …. 6.1.70 s 27 …. 8.2.45 s 27(3) …. 8.2.45 s 27(4) …. 8.2.45, 8.2.46 s 28 …. 8.2.45, 8.2.46 s 28(3) …. 8.2.45 s 37(4) …. 8.2.45 Representation Act 1905 …. 2.6.4, 2.6.9, 2.6.17 s 1A …. 2.6.17 s 10 …. 2.6.9, 2.6.17 Representation Act 1948 s 2 …. 2.6.9, 2.6.10C s 3 …. 2.6.10C s 3(1) …. 2.6.9 s 4 …. 2.2.18, 2.6.10C s 4(1) …. 2.6.9 s 6 …. 2.6.10C s 9 …. 2.6.9 s 10(a) …. 2.6.17 s 10(b) …. 2.6.17 s 12 …. 2.6.10C s 12(a) …. 2.6.9, 2.6.12

s 12(b) …. 2.6.10C Representation Act 1964 …. 2.6.17 Representation Act 1973 …. 2.12.4 Representation Act 1983 s 4 …. 2.2.18 Restrictive Trade Practices Act 1971 …. 4.2.7, 4.2.8, 4.2.10 Royal Commissions Act 1902 s 6 …. 6.1.59 Royal Powers Act 1953 …. 7.2.22 Royal Style and Titles Act 1953 …. 7.2.6, 7.2.26 Royal Style and Titles Act 1973 …. 2.8.4, 7.2.24, 7.2.26 s 2 …. 7.2.6 Sales Tax Assessment Act (No 1) 1930 …. 5.1.26, 5.1.33, 6.2.67C, 6.2.74C s 297 …. 6.2.74C Seamen’s Compensation Act 1911 …. 1.5.14 Seas and Submerged Lands Act 1973 …. 1.6.4, 4.3.9 s 6 …. 1.6.4, 4.3.9 s 9 …. 4.3.10 s 11 …. 4.3.9 s 16 …. 1.6.4 Senate (Representation of Territories) Act 1973 …. 2.2.20, 2.2.21C, 2.2.22, 2.2.26, 2.10.32, 2.10.32, 2.12.4 s 4 …. 2.2.21C s 5 …. 2.2.21C s 7(2) …. 2.2.21C Service and Execution of Process Act 1901 …. 6.1.9, 6.3.11C

Sex Discrimination Act 1984 …. 8.3.13 Social Welfare Commission Act 1973 …. 5.4.17C Special Commissions of Inquiry Amendment Act 1997 …. 2.7.12 States Grants (Income Tax Reimbursement) Act 1942 …. 5.3.4C, 5.3.9C s 5 …. 5.3.9C s 11 …. 5.3.9C States Grants (Tax Reimbursement) Act 1946 …. 5.3.9C, 5.3.11 s 5 …. 5.3.9C s 6 …. 5.3.9C s 12 …. 5.3.9C Statute of Westminster Adoption Act 1942 …. 1.3.13E, 1.6.14 s 3 …. 1.3.13E Stevedoring Industry Act 1949 …. 4.1.6 Succession to the Crown Act 2015 …. 7.2.9 Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 …. 6.2.45C Superannuation Guarantee (Administration) Act 1992 …. 5.1.18C Pt 8 …. 5.1.18C ss 63A–71 …. 5.1.18C s 63A(1) …. 5.1.18C s 63B …. 5.1.18C Superannuation Guarantee Charge Act 1992 …. 5.1.18C Tax Bonus for Working Australians Act (No 2) 2009 …. 5.4.22, 7.5.63C s 5 …. 7.5.63C

s 6 …. 7.5.63C s 7 …. 7.5.63C s 8 …. 7.5.63C Taxation Administration Act 1953 s 16 …. 5.4.23C, 7.5.63C Taxation (Administration) Act 1987 …. 5.2.40C Taxation (Unpaid Company Tax) Assessment Act 1982 …. 5.1.28, 5.1.29 s 6(2) …. 5.1.29 s 23(1) …. 5.1.28 Taxation (Unpaid Company Tax — Promoters) Act 1982 …. 5.1.28 Taxation (Unpaid Company Tax — Vendors) Act 1982 …. 5.1.28 Telecommunications Act 1975 …. 9.5.36C Telecommunications Act 1991 …. 9.5.36C s 132(2)(b)(ii) …. 9.5.36C s 136(1)(a) …. 9.5.36C Telecommunications Act 1997 …. 9.5.36C Telecommunications Commissions (Transitional Provisions) Act 1975 …. 9.5.36C Telecommunications (Interception) Act 1979 …. 8.4.15C, 8.4.16C s 20 …. 8.4.14, 8.4.15C Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Act 2011 Sch 1 …. 2.1.11 Sch 2 …. 2.1.11 Tobacco Plain Packaging Act 2011 …. 9.5.20, 9.5.21C

Trade Marks Act 1905 Pt VII …. 6.2.13 Trade Practices Act 1965 …. 4.2.5C, 4.2.6, 4.2.39C, 8.2.25C, 8.3.49C, 8.3.50, 8.3.51, 8.3.52C, 8.3.53, 8.3.54 Pt II …. 8.2.25C Pt III …. 8.2.25C Pt IV …. 8.2.25C Pt V …. 4.2.6, 4.2.7 Pt VI …. 4.2.6, 4.2.7 Pt VII …. 8.2.25C s 5(1) …. 4.2.5C s 7 …. 4.2.5C, 4.2.6 s 7(2) …. 4.2.5C s 7(4) …. 4.2.5C, 4.2.6 s 8(1) …. 4.2.5C s 11 …. 8.2.25C s 35 …. 4.2.5C, 8.2.25C s 36 …. 8.2.25C s 42 …. 4.2.5C s 43 …. 4.2.5C s 47(1) …. 8.2.25C s 47(2) …. 8.2.25C s 49 …. 8.2.25C s 49 …. 8.2.25C, 8.2.26C s 49(1)(b) …. 8.2.25C s 50 …. 8.2.25C, 8.2.26C s 50(1) …. 8.2.25C

s 51 …. 8.2.25C s 52 …. 8.2.25C, 8.2.26C, 8.4.5C s 52(7) …. 8.2.25C s 54 …. 8.2.25C s 67 …. 8.2.25C s 68 …. 8.2.25C s 71 …. 8.2.25C s 86 …. 8.3.49C s 102 …. 8.2.25C s 102(2) …. 8.2.25C Trade Practices Act 1974 …. 4.2.8, 4.2.14, 6.1.74, 7.5.83, 8.3.17, 8.3.20, 8.3.48, 9.4.13C, 9.5.15C, 10.3.22 Pt V …. 4.2.8, 6.1.74 Pt XIC …. 9.5.36C s 4(1) …. 4.2.16C s 45 …. 4.2.11 s 45D …. 4.2.16C, 4.2.17 s 45D(1) …. 4.2.16C s 45D(1)(b)(i) …. 4.2.16C, 4.2.17, 4.2.18 s 45D(5) …. 4.2.16C, 4.2.17, 4.2.19 s 45D(6) …. 4.2.16C, 4.2.17 s 46 …. 7.5.86C s 47 …. 9.5.16C s 47(1) …. 4.2.12, 9.5.15C s 47(1)–(9) …. 9.5.16C s 47(8) …. 9.5.16C s 47(9) …. 9.5.16C

s 47(9)(a) …. 9.5.15C, 9.5.16C s 52(1) …. 4.2.20 s 75 …. 6.1.74 s 76 …. 9.5.15C, 9.5.38C s 76(1) …. 9.5.15C s 77 …. 9.5.15C s 80 …. 9.5.15C s 82(1) …. 4.2.20 s 86 …. 8.3.48 s 152AL …. 9.5.36C s 152AL(3) …. 9.5.36C s 152AR …. 9.5.36C s 152EB …. 9.5.36C Trading with the Enemy Act 1914 …. 9.6.13 Training Guarantee Act 1990 …. 5.1.22, 5.1.45 Training Guarantee (Administration) Act 1990 …. 5.1.22, 5.1.45 Transport Workers Act 1928–29 s 3 …. 1.8.8C Transport Workers (Seamen) Regulations 1935 …. 6.4.9C reg 5 …. 6.4.9C Treaty of Peace Act 1919 s 2 …. 1.8.8C Unemployment and Sickness Benefits Act 1944 …. 5.4.13, 5.4.15 War Crimes Act 1945 …. 4.3.44 War Service Land Settlement Agreements Act 1945 …. 9.5.5, 9.5.7 Water Act 2007 …. 1.4.17

Wheat Industry Assistance Act 1938 …. 5.3.18 s 5 …. 5.3.9C s 6 …. 5.3.9C s 6(1) …. 5.3.9C s 6(7) …. 5.3.9C s (7) …. 5.3.9C s 14 …. 5.3.19 Widows’ Pensions Act 1942 …. 5.4.13, 5.4.15 Wireless Telegraphy Act 1905 …. 10.3.20C Workplace Relations Act 1996 …. 4.2.28, 4.2.29C, 4.2.32, 6.1.33, 6.1.73 Pt 7 …. 4.2.29C Pt 7 Div 3 …. 4.2.29C Pt 7 Div 4 …. 4.2.29C Pt 7 Div 5 …. 4.2.29C Pt 7 Div 6 …. 4.2.29C Pt 8 …. 4.2.29C Pt 9 …. 4.2.29C Pt 10 …. 4.2.29C Pt 12 …. 4.2.29C Pt 12 Div 1 …. 4.2.29C Pt 12 Div 2 …. 4.2.29C Pt 15 …. 4.2.29C Pt 15 Div 5 …. 4.2.29C Pt 16 …. 4.2.29C Divs 3–8 …. 4.2.29C Div 4 Subdiv B …. 4.2.29C

Div 5 …. 4.2.29C s 5(1) …. 4.2.29C s 6(1) …. 4.2.29C s 6(1)(b)–(f) …. 4.2.29C s 365 …. 4.2.29C s 366 …. 4.2.29C s 756 …. 4.2.29C Sch 1 …. 4.2.29C Sch 1 Pt 2 Ch 2 …. 4.2.29C Workplace Relations Amendment (Work Choices) Act 2005 …. 4.2.29C, 6.1.73 s 16 …. 6.1.73 s 16(1) …. 6.1.73 s 16(4) …. 6.1.73 World Heritage Properties Conservation Act 1983 …. 4.2.22C, 4.3.15, 4.4.18 s 6 …. 4.3.22C s 6(2)(a)–(d) …. 4.3.22C s 6(3) …. 4.3.22C s 7 …. 4.2.22C, 4.2.23 s 9 …. 4.2.22C, 4.3.15, 4.3.22C s 9(1) …. 4.3.22C, 4.3.29 s 9(1)(a)–(g) …. 4.3.22C, 4.3.23 s 9(1)(h) …. 4.3.22C, 4.3.23, 4.3.29 s 9(2)(a)–(g) …. 4.3.22C s 10 …. 4.2.22C, 4.2.23 s 10(1) …. 4.2.23

s 10(2) …. 4.2.22C s 10(2)(m) …. 4.2.22C s 10(3) …. 4.2.22C s 10(4) …. 4.2.22C, 4.2.23, 4.2.25 s 11 …. 4.2.22C, 9.5.18 AUSTRALIAN CAPITAL TERRITORY Business Franchise (‘X’ Videos) Act 1990 …. 5.2.40C s 5 …. 5.2.40C s 21 …. 5.2.40C Companies Ordinance 1962 …. 7.5.59C Corporations Law …. 9.5.36C Court Procedures Act 2004 …. 7.5.88 Electoral Act 1992 Pt V …. 2.1.8 Pt VIII …. 2.3.9 Div 9.3 …. 2.3.9 s 34 …. 2.3.9 ss 34–56 …. 2.6.1 s 72 …. 2.5.7 s 100 …. 2.3.9 ss 252–275 …. 2.4.4 Marriage Equality (Same Sex) Act 2013 …. 3.2.17 Proportional Representation (Hare-Clark) Entrenchment Act 1994 s 4 …. 2.6.1

NEW SOUTH WALES Air Transport Act 1964 …. 4.1.18C Anti-Discrimination Act 1977 …. 6.1.49 Pt II …. 6.1.49, 6.1.76C, 6.1.77 Pt III …. 6.1.49 Pt IX …. 6.1.49 s 4(1) …. 6.1.53 s 25 …. 6.1.46 s 42 …. 6.1.46 s 113 …. 6.1.46 Business Franchise Licences (Tobacco) Act 1987 s 35 …. 5.2.43C s 36(1) …. 5.2.43C s 36(2) …. 5.2.43C s 36(2AA) …. 5.2.43C s 41(1) …. 5.2.43C s 41(1)(a) …. 5.2.43C s 41(1)(c) …. 5.2.43C s 41(3) …. 5.2.43C s 43 …. 5.2.43C s 45 …. 5.2.43C s 46 …. 5.2.43C s 47 …. 5.2.43C s 47(1) …. 5.2.43C Community Protection Act 1994 …. 8.5.16, 8.5.25C Companies Act 1899 …. 6.2.28 Companies Act 1936 …. 6.2.67C, 6.2.74C

s 282 …. 6.2.67C s 286 …. 6.2.67C s 297 …. 6.2.67C, 6.2.74C s 348 …. 6.2.67C Constitution Act 1855 (17 Vict No 4) …. 2.1.4, 2.11.15 Constitution Act 1902 …. 1.4.1, 2.3.2, 2.10.7E, 2.11.E, 2.11.9, 2.11.15, 7.3.40, 7.3.56, 7.5.38C Pt 4 …. 7.3.39E Pt 4 Div 2 …. 7.4.19E Pt 4 Div 3 …. 7.4.19E Pt 4A …. 7.4.19E Pt 6 …. 7.3.39E s 3 …. 2.2.2, 2.8.2 s 4 …. 2.11.15 s 5 …. 1.5.13, 1.5.15C, 1.5.16, 2.2.12, 2.9.8, 2.10.5, 2.10.8, 2.11.15, 6.2.67C s 5A …. 2.9.8 s 5A(1) …. 2.9.8 s 5B …. 2.8.5, 2.10.1, 2.10.8, 2.10.11, 2.10.12, 2.10.14, 2.10.16, 2.12.14 s 5B(2) …. 2.10.11 s 6 …. 2.10.8 s 7A …. 2.10.8, 2.10.8, 2.10.14, 2.11.5, 2.11.6, 2.11.9, 2.11.11, 2.11.12, 2.11.14, 2.11.17, 2.11.18, 2.11.13, 2.12.7, 2.12.11, 2.12.13 s 7A(2) …. 2.11.17 s 7A(3) …. 2.12.11

s 7A(6) …. 2.11.17, 2.11.33 s 7B …. 2.6.6, 2.11.6 s 7B(1)(b) …. 2.3.2 s 9 …. 2.11.15 s 9A …. 7.2.31 s 9B(6) …. 7.2.43 s 9H …. 7.2.31 s 9I …. 7.2.31 s 10 …. 2.3.14 s 10A …. 2.3.14, 2.3.16 s 10A(2) …. 2.3.16 s 11 …. 2.3.14 s 11B …. 2.11.6 s 12 …. 2.4.4 s 13 …. 2.4.4 s 13A …. 2.4.4 s 13B …. 2.4.4 s 13C …. 2.4.4 s 14 …. 2.4.4 s 17 …. 2.2.2 s 22 …. 2.5.7 s 22B(2) …. 2.3.2 s 22B(3) …. 2.3.2 s 23 …. 2.1.11 s 24 …. 2.3.2 s 24(5) …. 7.3.57E s 24(6) …. 7.3.57E

s 24B …. 2.1.11, 7.3.57E s 24B(1) …. 7.3.57E s 24B(2) …. 7.3.57E s 24B(2)–(4) …. 7.3.57E s 24B(3) …. 7.3.57E ss 25–28A …. 2.6.6 s 26 …. 2.11.6 s 27 …. 2.11.6 s 28 …. 2.11.6 s 29 …. 2.11.6 s 35A …. 7.3.57E s 35B …. 7.4.19E s 35C …. 7.4.19E s 35C(1) …. 7.4.19E s 35C(2) …. 7.4.19E s 35C(3) …. 7.4.19E s 35D …. 7.4.19E s 35D(1) …. 7.4.19E s 35D(3) …. 7.4.19E s 35E …. 7.4.19E s 35E(1) …. 7.4.19E s 35E(2) …. 7.4.19E s 38A …. 7.3.39E, 7.3.41E s 38A(1) …. 7.3.39E s 38B …. 7.4.19E s 38B(1) …. 7.4.19E s 38B(2) …. 7.4.19E

s 38C …. 7.4.19E s 38C(1) …. 7.4.19E s 38C(2) …. 7.4.19E s 38D …. 7.4.19E, 7.4.21E, 7.4.24E s 38E …. 7.4.19E s 38E(1) …. 7.4.19E s 38E(2) …. 7.4.19E s 46 …. 2.9.8 s 47 …. 7.3.39E, 7.3.40, 7.3.45, 7.4.16, 7.4.19E s 47(1) …. 7.3.39E s 47(2) …. 7.3.39E s 57 …. 2.10.1, 2.10.18 Sch 6 Pt 1 …. 2.2.2 Constitution Amendment Act 1987 …. 7.3.56, 7.3.57E Constitution (Fixed Term Parliaments) Special Provisions Act 1991 s 9 …. 2.11.6 Crimes Act 1900 s 93X …. 10.3.40 Crimes (Criminal Organisations Control) Act 2009 …. 8.5.59 Pt 2 …. 8.5.59, 8.5.61C Pt 3 …. 8.5.59, 8.5.61C s 9 …. 8.5.61C s 12 …. 8.5.61C s 13(2) …. 8.5.59 Criminal Asset Recovery Act 1990 …. 8.5.36 s 10 …. 8.5.37, 8.5.38C,, 8.5.48C

s 10(2) …. 8.5.36, 8.5.38C s 10(3) …. 8.5.36, 8.5.38C s 11(2) …. 8.5.38C Criminal Law Amendment Act 1883 s 54 …. 1.6.1 Crown Proceedings Act 1988 …. 7.5.88 Defamation Act 2005 s 22 …. 10.3.11C s 27 …. 2.7.11 Election Funding, Expenditure and Disclosures Act 1981 …. 10.3.38C, 10.3.41, 10.3.42C s 95G(6) …. 10.3.37, 10.3.38C s 96D …. 10.3.31, 10.3.37, 10.3.38C Environmental Planning and Assessment Act 1979 …. 6.1.50 Pt 5 …. 6.1.50 Environmental Planning and Assessment Regulation 1980 …. 6.1.50 Pt VII …. 6.1.50 Factories and Shops Act 1912 …. 6.1.38 s 41 …. 6.1.38 Flour Acquisition Act 1931 …. 5.1.9 Forty-Four Hours Week Act 1925 …. 6.1.16, 6.1.83 s 6(1)(a) …. 6.1.16 s 13 …. 6.1.16 Habitual Criminals Act 1905 …. 10.4.27 Imperial Acts Application Act 1969 s 6 …. 1.5.4

Income Tax (Management) Act 1912 …. 1.6.3 Income Tax (Management) Act 1928 …. 1.6.3 Jury Act 1977 …. 9.6.17 Legal Profession Amendment (Personal Injury Advertising) Regulation 2003 cl 139 …. 10.3.23C cl 139(1) …. 10.3.23C Legal Profession Regulation 2002 …. 9.4.41 Pt 14 …. 9.4.41 reg 139(1) …. 10.3.22 Limitation Act 1969 …. 6.2.83 s 14 …. 6.2.83 s 63 …. 6.2.83 Local Courts Act 1982 s 23 …. 6.3.10 Local Government Act 1919 …. 4.2.10, 4.2.22C Local Government Act 1993 …. 2.1.9 Marketing of Primary Products Act 1983 …. 9.4.16 Masters and Servants Act 1902 s 4 …. 6.1.22C Meat Industry Act 1978 …. 5.2.33 Mining Act 1992 …. 7.5.18 Moratorium Act 1930 …. 6.1.3 Motor Accidents Act 1988 …. 9.8.14C s 101 …. 9.8.14C Navigation Act 1901 …. 6.1.57 Occupational Health and Safety Act 1983 …. 8.5.55

Olympic Arrangements Act 2000 …. 7.5.88 Parliamentary Electorates and Elections Act 1912 Pt II …. 2.6.6 ss 20–21 …. 2.5.7 s 155 …. 2.4.4 s 156 …. 2.4.4 s 175B …. 2.4.4 Parliamentary Electorates and Elections (Amendment) Act 1970 s 2 …. 2.5.8 Parliamentary Evidence Act 1901 s 4 …. 2.7.11 s 10 …. 2.7.11 s 11 …. 2.7.11 s 12 …. 2.7.11 s 13 …. 2.7.11 Public Health Act 1991 s 59 …. 5.2.43C Public Works Act 1912 s 21 …. 2.7.11 Racing Administration Act 1998 …. 9.4.28, 9.4.29, 9.4.31, 9.4.33C, 9.4.34 s 33 …. 9.4.29 s 33A …. 9.4.29, 9.4.31, 9.4.32 s 33A(2) …. 9.4.29, 9.4.30C, 9.4.32 s 33A(2)(a) …. 9.4.29 Racing Administration Regulation 2005 …. 9.4.30C cl 14(1) …. 9.4.29

cl 16(2) …. 9.4.29 Residential Tenancies Act 1987 …. 6.1.47, 6.1.48, 6.2.86C s 24 …. 6.2.86C s 24(4) …. 6.2.86C s 80 …. 6.1.47 s 115 …. 6.2.86C s 125(1) …. 6.2.86C State Bank Act 1981 …. 6.2.55 s 17(1) …. 6.2.55 State Transport (Co-ordination) Act 1931 …. 4.1.18C s 6(3) …. 4.1.18C Succession to the Crown (Request) Act 2013 …. 7.2.9 Supreme Court Act 1970 …. 6.1.9 s 37 …. 8.5.30, 8.5.31C, 8.5.33, 8.5.34 Surveillance Devices Act 2007 s 11 …. 8.2.29C s 11(1) …. 8.2.29C Totalizator Act 1997 …. 9.4.32 Totalizator Agency Board Privatisation Act 1997 …. 9.4.32 Water Act 1912 …. 5.3.23 Water Management Act 2000 …. 5.3.23 Wheat Acquisition Act 1914 …. 8.2.3C Workers’ Compensation Act 1926 s 46 …. 1.5.14 NORTHERN TERRITORY Aboriginals Ordinance 1918 …. 9.6.3, 9.7.8, 9.7.21C, 9.7.24,

10.4.6 s 5(1) …. 9.7.21C s 6 …. 9.7.21C s 7 …. 9.7.21C s 16 …. 9.7.21C s 16(3) …. 9.7.21C s 67 …. 9.7.21C Aboriginals Ordinance 1939 …. 9.7.21C Criminal Code …. 9.6.19 Criminal Property Forfeiture Act 2002 …. 8.5.48C, 9.5.42C s 3 …. 9.5.42C s 10 …. 9.5.42C s 94 …. 8.5.48C s 94(1) …. 8.5.47, 9.5.41 Crown Proceedings Act 1993 …. 7.5.88 Electoral Act 2004 Div 3 …. 2.4.4 Juries Act 1962 s 37 …. 9.6.19 s 37A …. 9.6.19 Legislative Assembly (Powers and Privileges) Act …. 2.7.20 s 4 …. 2.7.20 s 6 …. 2.7.20 s 7 …. 2.7.20 s 8 …. 2.7.20 ss 9–12 …. 2.7.20 ss 15–17 …. 2.7.20

ss 18–21 …. 2.7.20 s 22 …. 2.7.20 s 24 …. 2.7.20 ss 25–26 …. 2.7.20 s 26 …. 2.7.20 Magistrates Act …. 8.5.20, 8.5.23, 8.6.7C, 8.6.9 Mining Act 1980 …. 9.5.19C Mining Ordinance 1939 …. 9.5.19C Misuse of Drugs Act 1990 …. 8.5.48C s 36A …. 8.5.47, 8.5.48C, 9.5.41 Police Administration Act …. 10.4.29 s 137(1) …. 10.4.29 Racing and Betting Act …. 9.4.31 Remuneration Tribunal Act …. 8.6.9 Work Health Act 1986 …. 9.5.34C Pt V …. 9.5.34C s 52 …. 9.5.34C s 53 …. 9.5.34C Work Health Amendment Act 2004 …. 9.5.34C QUEENSLAND Appeals and Special Reference Act 1973 …. 7.2.26 Commonwealth Aluminium Corporation Pty Ltd Agreement Act 1957 …. 2.11.28 s 4 …. 2.11.28, 2.11.32 Constitution Act 1867 …. 2.2.3, 2.10.13, 2.11.2 s 2 …. 1.5.13, 2.2.3, 2.8.2, 2.10.13, 2.11.22C, 2.11.28, 8.5.25C

s 2A(1) …. 2.2.3 s 9 …. 2.11.2, 2.11.2 s 11A …. 7.2.33 s 28 …. 2.2.3 s 30 …. 7.5.77E s 40 …. 7.5.77E s 53(5) …. 2.12.15 Constitution Act Amendment Act 1890 …. 2.3.3 s 2 …. 2.3.3 s 4 …. 2.3.3 Constitution Act Amendment Act 1922 …. 2.2.3 Constitution Act Amendment Act 1934 s 3 …. 2.11.6 s 4 …. 2.11.6 Constitution of Queensland Act 2001 …. 1.4.1, 7.3.58, 7.4.21E, 7.5.27 Ch 2 Pt 1 …. 2.2.3 Ch 2 Pt 4 Div 2 …. 7.4.21E Ch 3 Pt 1 …. 7.4.21E Ch 3 Pt 2 …. 7.3.42E Ch 3 Pt 3 …. 7.3.42E, 7.4.21E Ch 3 Pt 4 …. 7.4.21E s 6 …. 2.8.2 s 9 …. 2.7.14 ss 11–13 …. 2.2.3 s 15 …. 2.1.11 s 16 …. 2.3.3

s 18 …. 2.3.14 s 19 …. 2.3.14 s 21 …. 2.4.4 s 22 …. 2.4.4 s 24 …. 7.4.21E s 24(1) …. 7.4.21E s 24(2) …. 7.4.21E s 24(3) …. 7.4.21E s 25 …. 7.4.21E s 26 …. 7.4.21E, 7.4.24E s 27 …. 7.4.21E s 29 …. 7.2.35E s 29(1) …. 7.2.35E s 29(2) …. 7.2.35E s 32 …. 7.2.35E s 32(1) …. 7.2.35E s 32(2) …. 7.2.35E s 33 …. 7.2.35E s 34 …. 7.3.42E, 7.3.59E, 7.4.21E s 35 …. 7.4.21E s 35(1) …. 7.4.21E s 35(2) …. 7.4.21E s 36 …. 7.5.30 s 39 …. 2.1.11, 7.2.35E s 39(1) …. 7.2.35E s 39(2) …. 7.2.35E s 39(3) …. 7.2.35E

s 42 …. 7.3.42E s 42(1) …. 7.3.42E s 42(2) …. 7.3.42E s 43 …. 7.3.42E, 7.4.21E s 43(1) …. 7.4.21E s 43(2) …. 7.4.21E s 43(3) …. 7.4.21E s 43(4) …. 7.4.21E s 44 …. 7.4.13, 7.4.21E s 48 …. 7.4.21E s 48(1) …. 7.4.21E s 48(2) …. 7.4.21E s 49 …. 7.4.21E s 50 …. 7.4.21E s 50(1) …. 7.4.21E s 50(3) …. 7.4.21E Corrective Services Act 2006 …. 10.3.47 s 132(1)(a) …. 10.3.47 s 132(2)(d) …. 10.3.47 s 200(2) …. 10.3.47 s 200(3) …. 10.3.47 Criminal Code s 7 …. 10.3.47 s 469 …. 6.1.58 s 669A(2) …. 8.7.6, 8.7.7C s 669A(5) …. 8.7.7C Criminal Organisation Act 2009 …. 8.5.52

s 10 …. 8.5.52, 8.5.53C s 18 …. 8.5.41C s 63(1) …. 8.5.52 Crown Proceedings Act 1980 …. 7.5.88 Dangerous Prisoners (Sexual Offenders) Act 2003 …. 8.5.24 s 3(b) …. 10.4.26 s 13 …. 8.5.25C, 8.5.26 s 13(1) …. 8.5.24 s 13(2) …. 8.5.24 s 13(3) …. 8.5.24 s 13(4) …. 8.5.25C Elections Act 1915 s 11 …. 2.5.8 s 11A …. 2.5.8 Elections Act and the Criminal Code Amendment Act 1973 s 9 …. 2.5.8 Elections Acts Amendment Act 1965 s 3 …. 2.5.8 s 4 …. 2.5.8 Electoral Act 1992 ss 35–57 …. 2.6.6 s 64 …. 2.5.7 s 101 …. 2.5.7 Electricity Act 1976 s 9 …. 6.2.38C ss 101–103 …. 6.2.38C Judicial Review Act 1991 …. 10.3.48C

Land Act 1962 …. 4.3.18C Limitation of Actions Act 1974 …. 6.2.85 Liquor Act 1912 s 166 …. 6.1.15 Mining Royalties Act 1974 …. 2.11.28 s 3 …. 2.11.28 s 4 …. 2.11.28 Motor Vehicles Insurance Act 1936 s 16 …. 9.8.12 s 19 …. 9.8.12 s 20 …. 9.8.11C, 9.8.12 Offshore Minerals Act 1998 s 30 …. 6.3.2 Parliament of Queensland Act 2001 s 64 …. 2.4.4 ss 72–76 …. 2.4.4 Parliamentary Bills Referendum Act 1908 …. 2.10.12, 2.12.6 Queensland Rail Transit Authority Act 2013 …. 4.2.36C s 6(2) …. 4.2.36C Rules Relating to the Admission of Barristers of the Supreme Court of Queensland …. 9.8.5C Form 10 …. 9.8.5C Form 10(6) …. 9.8.5C Form 10(7) …. 9.8.5C r 15B …. 9.8.5C r 38(d) …. 9.8.5C State Transport Facilities Act 1938

s 22 …. 1.8.13 s 26 …. 1.8.13 Stock Act 1915 s 5A …. 5.2.22 s 7 …. 5.2.22 Subcontractors’ Charges Act 1974 …. 6.2.84 Succession to the Crown Act 2013 …. 7.2.9 Traffic Act 1949 s 16(1) …. 6.1.60 s 16(1)(a) …. 6.1.60 Vagrants, Gaming and Other Offences Act 1931 s 7(1)(d) …. 10.3.16, 10.3.17C, 10.3.18 s 7AA …. 10.3.16 SOUTH AUSTRALIA Age of Majority (Reduction) Act 1970–1971 …. 2.5.10 Beverage Container Act 1975 …. 9.4.22C s 5b …. 9.4.22C s 5b(2) …. 9.4.22 s 7 …. 9.4.22C Beverage Container Act Amendment Act 1986 …. 9.4.22C Beverage Container Regulations 1975 …. 9.4.22C reg 7(b) …. 9.4.22 reg 7(c) …. 9.4.22 reg 7(d) …. 9.4.22 Business Franchise (Petroleum) Act 1974 …. 5.2.28 Constitution Act 1856 (19 & 20 Vict No 2) …. 2.1.3

s 34 …. 2.10.14 Constitution Act 1934 …. 1.4.1, 2.5.10, 7.2.31, 7.2.39, 7.4.25 Pt III …. 7.3.43E, 7.4.22E Pt V …. 2.6.6 s 5 …. 1.5.13 s 6 …. 2.1.11, 2.3.14 s 7 …. 2.3.14 s 8 …. 2.1.11, 2.11.7 s 8A …. 2.1.11 s 10 …. 2.1.11 s 10A …. 2.11.6 s 10A(2) …. 2.12.15 s 10A(2)(d) …. 2.11.7 s 10A(7) …. 2.12.15, 2.12.16 s 11 …. 2.1.11, 2.2.4 s 14 …. 2.1.11, 2.3.4 s 19 …. 2.1.11, 2.2.4 s 20A …. 2.1.11 s 27 …. 2.1.11, 2.2.4 s 28 …. 2.3.4 s 28A …. 2.1.11 s 28A(1) …. 2.3.4 s 31 …. 2.4.4 s 32 …. 2.1.11 s 33 …. 2.2.4 s 38 …. 2.7.15 s 39 …. 2.7.15

s 41 …. 2.1.11, 2.3.4, 2.8.5 s 41(1)(i) …. 2.3.4 s 42 …. 2.4.4 s 43 …. 2.4.4 s 43A …. 2.4.4 s 44 …. 2.4.4 s 45 …. 2.4.4 s 46 …. 2.4.4 s 47 …. 2.4.4 s 48 …. 2.5.7 s 48A …. 2.4.4 s 56 …. 2.1.11 ss 59–64 …. 2.9.6 s 64 …. 2.1.11 s 65 …. 7.4.22E s 65(1) …. 7.4.22E s 65(2) …. 7.4.22E s 66 …. 7.3.43E, 7.4.22E s 66(1) …. 7.3.43E s 66(2) …. 7.4.22E s 67A …. 7.4.22E s 67A(1) …. 7.4.22E s 67A(2) …. 7.4.22E s 68 …. 7.3.43E, 7.3.45, 7.4.16 ss 73–73B …. 7.2.31 s 88 …. 2.1.11, 2.11.6, 2.12.16 s 88(5) …. 2.12.16

Constitution (Appointments) Act 2009 …. 7.2.43 Consumer Credit Act 1972 s 40 …. 6.1.74 Crown Proceedings Act 1992 …. 7.5.88 Electoral Act 1985 s 4 …. 2.5.7 s 29 …. 2.5.7 s 52 …. 2.4.4, 2.5.7 s 102 …. 2.4.4 s 103 …. 2.4.4 s 107 …. 2.4.4 s 132 …. 2.4.4 Electoral Act Amendment Act 1972 s 8 …. 2.5.8 Fisheries Act 1982 s 13 …. 1.6.10 s 14 …. 1.6.10 Industrial Conciliation and Arbitration Act 1972 s 15(1)(e) …. 6.1.39 Juries Act 1927 s 7(1) …. 9.6.11 s 57 …. 9.6.12 Liquor Licensing Act 1997 …. 8.5.53C s 8(2) …. 8.5.53C s 28A …. 8.5.53C s 59(1) …. 8.5.53C s 67 …. 8.5.53C

s 72(2) …. 8.5.53C Metropolitan and Export Abattoirs Act 1936 …. 4.1.12C s 52A …. 4.1.12C s 52A(1) …. 4.1.12C Real Property Act 1886 …. 2.11.20 s 6 …. 2.11.20, 2.11.21 Rules of Court Regulating the Admission of Practitioners 1955 r 27 …. 9.8.4 r 27(1) …. 9.8.4 Serious and Organised Crime (Control) Act 2008 Pt 2 …. 8.5.41C s 4(1) …. 8.5.41C s 10(1) …. 8.5.40 s 10(1)(b) …. 8.5.41C s 14(1) …. 8.5.40, 8.5.41C, 8.5.48C s 22 …. 8.5.41C Succession to the Crown (Request) Act 2014 …. 7.2.9 South Eastern Drainage Amendment Act 1900 s 14 …. 2.11.20, 2.11.21 Taxation (Motor Spirit Vendors) Act 1925 s 2(1) …. 5.2.8 West Lakes Development Act 1969 …. 2.11.30 s 3 …. 2.11.30 s 16 …. 2.11.30 s 16(4) …. 2.11.30 TASMANIA

Constitution Act 1855 (18 Vict No 17) …. 2.1.3 Constitution Act 1934 …. 1.4.1, 7.2.39, 7.4.25 Pt II …. 7.3.44E, 7.4.24E Pt IV …. 2.9.6 s 4 …. 2.7.18 s 6 …. 2.1.11 s 8 …. 2.7.18 s 8A …. 7.4.24E s 8B …. 7.3.44E s 8B(1) …. 7.3.44E s 8B(2) …. 7.3.44E s 8B(3) …. 7.3.44E s 8B(4) …. 7.3.44E s 8C …. 7.4.24E s 8C(1) …. 7.4.24E s 8C(2) …. 7.4.24E s 8F …. 7.3.44E, 7.4.24E s 8F(1) …. 7.3.44E s 8F(2) …. 7.3.44E s 8G …. 7.4.24E s 8G(1) …. 7.4.24E s 8G(2) …. 7.4.24E s 8H …. 7.4.24E s 9 …. 2.7.18 s 10 …. 2.7.18 s 11 …. 2.3.14 s 12 …. 2.1.11, 2.3.14

s 14 …. 2.4.4 s 18 …. 2.2.5 s 19 …. 2.3.5 s 19(3)(a) …. 2.3.5 s 19(3)(b) …. 2.3.5 s 22 …. 2.2.5 s 23 …. 2.1.11, 2.11.8 s 23(2) …. 2.3.5 s 28 …. 2.5.7 s 29 …. 2.5.7 s 30 …. 2.4.4 s 31 …. 2.4.4 s 32 …. 2.4.4 s 33 …. 2.4.4 s 34 …. 2.4.4 s 35 …. 2.4.4 s 38 …. 2.3.6 s 41A …. 2.11.8 ss 42–45 …. 2.9.6 s 46 …. 9.3.4 Constitution (Doubts Removal) Act 2009 …. 7.2.43 Criminal Code s 122 …. 8.3.19 s 122(a) …. 6.1.82 s 122(c) …. 6.1.82 s 123 …. 6.1.82, 8.3.19 Crown Proceedings Act 1993 …. 7.5.88

Defamation Act 2005 s 27 …. 2.7.16 Electoral Act 1973 s 6 …. 2.5.8 Electoral Act 1985 s 188(1)(d) …. 2.6.1 Sch 4 …. 2.6.1 Electoral Act 2004 s 10 …. 2.6.6 s 31 …. 2.5.7 s 75 …. 2.4.4 s 76 …. 2.4.4 s 202 …. 2.4.4 s 205 …. 2.4.4 s 220 …. 2.4.4 Fisheries Act 1959 …. 9.4.13C s 9 …. 9.4.13C Flour Tax Relief Act 1938 …. 5.3.18 Gordon River Hydro-Electric Power Development Act 1982 …. 4.2.22C, 4.3.22C Hydro-Electric Commission Act 1944 …. 4.2.22C s 15A …. 4.2.22C s 15B …. 4.2.22C s 15B(4) …. 4.2.22C s 15B(5) …. 4.2.22C s 15B(9) …. 4.2.22C Parliamentary Privilege Act 1858

s 1 …. 2.7.16 s 5 …. 2.7.16 s 6 …. 2.7.16 s 7 …. 2.7.16 Sea Fisheries Regulations 1962 reg 31(1)(d) …. 9.4.13C, 9.4.30C reg 31(1)(d)(ix) …. 9.4.13C reg 31(1)(d)(x) …. 9.4.13C Stamp Duties Amendment Act 1902 …. 6.2.41 Succession to the Crown (Request) Act 2013 …. 7.2.9 Tobacco Act 1972 Pt II …. 5.2.24C, 5.2.25, 5.2.26 Pt III …. 5.2.24C, 5.2.25 s 2(2) …. 5.2.24C s 3 …. 5.2.24C s 3(5) …. 5.2.24C s 4(1) …. 5.2.24C s 6(1) …. 5.2.24C s 11(3)(b) …. 5.2.24C Tobacco Regulations 1972 …. 5.2.24C reg 2(1) …. 5.2.24C reg 2(2) …. 5.2.24C reg 4 …. 5.2.24C World Heritage (Western Tasmania Wilderness) Regulations 1983 …. 4.3.22C VICTORIA

Acts Interpretation Act 1958 s 3 …. 5.2.13C Australia Acts (Request) Act 1985 …. 1.3.18 Australia Acts (Request) Act 1999 …. 7.2.44 Australian Grand Prix Act 1994 …. 7.5.88 Business Franchise (Tobacco) Act 1974 …. 5.2.34, 9.4.18C, 9.4.33C s 6 …. 5.2.35 s 10(1) …. 9.4.18C s 10(1)(c) …. 9.4.18C, 9.4.19, 9.4.20, 9.4.21 s 10(1)(d) …. 9.4.18C, 9.4.19, 9.4.20, 9.4.21 Charter of Human Rights and Responsibilities Act 2006 …. 8.5.42 s 13 …. 10.3.34 s 25(1) …. 8.5.43 s 32 …. 8.5.42 s 32(1) …. 8.5.42, 8.5.44, 10.3.34 s 32(2) …. 8.3.18 s 36 …. 8.5.42 s 36(2) …. 8.3.18, 8.5.42, 8.5.44, 8.5.45C s 36(3) …. 8.5.45C s 36(4) …. 8.5.45C s 36(5) …. 8.3.18, 8.5.42 s 36(6) …. 8.3.18, 8.5.42, 8.5.45C s 37 …. 8.3.18, 8.5.42 Companies Act 1938 …. 6.2.72 Conservation, Forests and Lands Act 1987 …. 10.3.13 Constitution Act 1855 …. 2.1.4

s 60 …. 2.10.14, 2.12.8 Constitution Act 1975 …. 1.4.1, 2.3.6, 2.6.8, 2.9.4E, 2.10.9E, 2.11.36, 7.3.40, 7.4.9, 7.4.10C Pt II Div 8 …. 7.3.41E Pt III …. 2.11.36 Pt IV …. 7.3.41E, 7.4.20E Pt VI …. 7.4.20E Pt VII …. 7.4.20E Div 9A …. 2.9.7, 2.10.10 s 6 …. 2.1.11, 7.2.30E s 6(1) …. 7.2.30E s 6(2) …. 7.2.30E s 8 …. 2.7.17 s 15 …. 2.2.6, 2.8.2 s 16 …. 1.5.13, 2.10.5 s 16A …. 7.3.1 s 16A(1) …. 7.3.1 s 16A(2) …. 7.3.1 s 18 …. 2.8.5, 2.11.36 s 18(1A) …. 2.11.7 s 18(1B) …. 2.10.10, 2.11.6 s 18(2) …. 2.11.7, 2.12.8 s 18(2A) …. 2.11.7 s 18(2AA) …. 2.11.7 s 19 …. 2.7.17 s 19(1) …. 2.7.1, 2.7.17 s 19A(2) …. 2.7.17

s 19A(3) …. 2.7.17 s 19A(6) …. 2.7.17 s 19A(7) …. 2.7.17 s 19A(8) …. 2.7.17 s 20 …. 2.1.11, 2.3.14 s 23 …. 2.4.4 s 26 …. 2.2.6 s 27 …. 2.2.6 s 28 …. 2.10.10 s 29 …. 2.4.4 s 36 …. 2.4.4 s 38 …. 2.3.14 s 41 …. 2.3.14 s 44 …. 2.4.4 s 44(d) …. 2.4.11 ss 45–50 …. 2.4.4 s 46 …. 2.11.37 s 48 …. 2.5.7 s 50 …. 7.3.41E s 50(1) …. 7.3.41E s 50(2) …. 7.3.41E s 50(3) …. 7.3.41E s 51 …. 7.3.41E s 53 …. 7.3.40, 7.3.41E s 53(1) …. 7.3.41E ss 54–60 …. 2.4.4 s 60 …. 2.11.1, 2.11.2

s 61 …. 2.4.4 s 61A …. 2.4.4, 2.4.11 ss 62–65 …. 2.9.6 s 65 …. 2.9.8 ss 65A–65G …. 2.8.5 s 85 …. 2.11.35, 2.11.36 s 85(1) …. 2.11.35 s 85(5) …. 2.11.35, 2.11.36, 2.11.37 s 85(5)(b) …. 2.11.37 s 87A …. 7.4.20E s 87B …. 7.4.20E s 87B(1) …. 7.4.20E s 87B(2) …. 7.4.20E s 87C …. 7.4.20E s 87C(1) …. 7.4.20E s 87C(2) …. 7.4.20E s 87C(3) …. 7.4.20E s 87C(4) …. 7.4.20E s 87E …. 7.3.41E s 88 …. 7.3.41E, 7.3.45, 7.4.16 s 94F …. 2.6.6, 2.6.8 s 94G …. 2.6.6, 2.6.8 s 95 …. 7.4.20E s 97 …. 7.4.20E Constitution Act Amendment Act 1973 s 4 …. 2.5.8 Constitution (Appointments) Act 2009 …. 7.2.43

Constitution (Parliamentary Reform) Act 2003 …. 2.3.6, 2.6.8, 2.9.7 s 8 …. 2.3.6 s 8A(1) …. 2.3.6 s 8A(2) …. 2.3.6 s 28 …. 2.3.6 s 28(1) …. 2.3.6 Construction Industry Long Service Leave Act 1997 …. 6.1.33 Crimes Act 1958 …. 6.1.62C, 6.2.60 s 71(2) …. 6.1.61 s 72(1) …. 6.1.61 s 321 …. 6.1.62C s 321(1) …. 6.1.61 Crimes (Confiscation of Profits) Act 1986 …. 9.5.40C Crown Proceedings Act 1958 …. 7.5.88 Discharged Servicemen’s Preference Act 1943 …. 6.1.70 Drugs, Poisons and Controlled Substances Act 1981 s 5 …. 8.5.43 s 71AC …. 6.1.64, 6.1.65, 8.5.43 Electoral Act 2002 …. 2.6.8 s 70 …. 2.4.4 s 114A …. 2.6.1 Electoral Boundaries Commission Act 1982 …. 2.6.6 Equal Opportunity Act 1977 …. 6.1.40, 6.4.41, 6.1.44, 6.1.45 s 18 …. 6.1.40 s 18(1) …. 6.1.42C s 18(2)(b) …. 6.1.42C

s 37 …. 6.1.40 Evidence Act 1958 …. 6.1.59 s 19 …. 6.1.59 Factories and Shops (Long Service Leave) Act 1953 …. 6.1.32 Imperial Acts Application Act 1980 s 3 …. 1.5.8 s 8 …. 1.5.8 Infertility Treatment Act 1995 …. 8.3.13 Inquiries Act 2014 …. 7.5.36 Juries Act 1967 …. 9.6.22 s 14(2) …. 9.6.19 s 46 …. 6.1.62C s 48A …. 9.6.19 Licensing Act 1958 …. 5.2.13C Pt XV …. 5.2.13C s 19(1)(a) …. 5.2.13C, 5.2.18, 5.2.27 s 19(1)(b) …. 5.2.13C, 5.2.14, 5.2.18, 5.2.27 s 19(3) …. 5.2.13C s 290 …. 5.2.13C Local Government Act 1928 …. 6.2.69C s 264(1) …. 6.2.69C s 265 …. 6.2.69C s 265(b) …. 6.2.69C Motor Traffic Act 1915 …. 6.2.59C s 4 …. 6.2.59C s 6 …. 6.2.59C s 6(1) …. 6.1.51C

Pipelines Act 1967 …. 5.2.30C s 25(1) …. 5.2.30C s 35 …. 5.2.30C s 35(1) …. 5.2.30C s 35(2) …. 5.2.30C, 5.2.31 s 35(3) …. 5.2.30C s 35(8) …. 5.2.30C Pipelines Fees Act 1981 …. 5.2.30C Prices Regulation Act 1948 …. 6.2.72 Public Prosecutions Act 1994 s 46 …. 2.11.37 Road Safety Act 1986 …. 9.8.14C s 9 …. 9.8.14C Road Safety (Vehicles) Regulations 1988 reg 203 …. 9.8.14C Serious Sex Offenders Monitoring Act 2005 …. 10.3.26, 10.3.27C, 10.3.34 s 42 …. 8.5.50, 10.3.26, 10.3.27C, 10.3.34 s 42(1) …. 10.3.26 s 42(3) …. 10.3.26, 10.3.27C, 10.3.34 s 43(1) …. 10.3.34 Stamps Act 1946 …. 6.2.63 Succession to the Crown (Request) Act 2013 …. 7.2.9 Superannuation Act 1925 …. 4.2.12 Superannuation Act 1958 …. 4.2.12 Supreme Court Act 1958 …. 2.11.36 Teaching Service Act 1981 …. 2.4.5

Transport Accident Act 1986 s 3 …. 9.8.14C s 27 …. 9.8.14C s 94 …. 9.8.14C s 104(1) …. 9.8.14C s 109 …. 9.8.14C s 109(1) …. 9.8.14C s 111 …. 9.8.14C Victoria Park Land Act 1992 …. 2.11.36 Wildlife Act 1975 …. 10.3.13 Wildlife (Game) (Hunting Season) Regulations 1994 reg 5 …. 10.3.13, 10.3.14, 10.3.20C reg 5(1) …. 10.3.13 reg 5(2) …. 10.3.13 WESTERN AUSTRALIA Aboriginal Heritage Act 1972 …. 7.5.82C s 16 …. 7.5.82C s 17 …. 7.5.82C s 18 …. 7.5.82C Administration Act 1903 s 86 …. 9.8.3 Constitution Act 1889 (52 Vict No 23) …. 1.4.1, 2.1.6, 2.6.16, 7.4.25, 10.3.9 s 2 …. 2.1.11, 2.2.7 s 2(1) …. 1.5.13 s 2(3) …. 2.1.11

s 3 …. 2.1.11, 2.3.14 s 4 …. 2.3.14 s 12 …. 2.1.11 s 13 …. 2.11.38 s 50 …. 7.2.32E s 50(1) …. 2.1.11, 7.2.23E s 50(2) …. 7.2.23E s 73 …. 2.10.14, 2.11.6, 2.11.26, 2.11.27 s 73(2) …. 7.2.32E s 73(6) …. 2.12.15 s 74 …. 7.3.45, 7.4.16 Constitution Acts Amendment Act 1899 …. 2.6.8 Pt II …. 7.4.23E s 5 …. 2.3.7 s 8 …. 2.3.7 s 21(1) …. 2.3.7 ss 32–41 …. 2.4.4 s 43 …. 7.4.23E s 43(1) …. 7.4.23E s 43(2) …. 7.4.23E s 43(3) …. 7.4.23E Corporations (Western Australia) Act 1990 …. 6.3.6C Pt 8 …. 6.3.6C Pt 8 Div 2 …. 6.3.6C s 7 …. 6.3.6C s 28(1) …. 6.3.6C s 28(1)(a) …. 6.3.6C

s 29 …. 6.3.6C s 29(1) …. 6.3.6C s 29(2) …. 6.3.6C s 31(1) …. 6.3.6C s 33 …. 6.3.6C Corruption and Crime Commission Act 2003 s 76(2) …. 8.5.53C Crown Suits Act 1947 …. 7.5.88 s 6 …. 7.5.96 Defamation Act 2005 s 27(1) …. 2.7.18 Electoral Act 1907 s 5B …. 2.6.6 s 16C …. 2.2.7 s 16G …. 2.6.6 s 16G(3) …. 2.2.7, 2.6.7 s 16H …. 2.2.7 s 16I …. 2.2.7 s 17 …. 2.5.7 s 18 …. 2.5.7 s 19(e) …. 2.5.8 s 157 …. 2.4.4 s 162 …. 2.4.4 s 164 …. 2.4.4 s 172 …. 2.4.4 Electoral Act Amendment Act 1962 s 3 …. 2.5.8

Electoral Act Amendment Act 1970 …. 2.5.8 Electoral Act Amendment Act (No 2) 1979 …. 2.11.26 Electoral Distribution Act 1947 …. 2.6.8 s 13 …. 2.11.38, 2.11.40 Fisheries Act 1905 s 24(1)(a) …. 1.6.4 s 35G …. 5.2.27 s 35G(2) …. 5.2.27 Land (Titles and Traditional Usage) Act 1993 …. 6.1.72 s 7(1) …. 6.1.72 s 7(1)(a) …. 6.1.72 s 7(1)(b) …. 6.1.72 Magistrates’ Court Act 2004 s 6 …. 6.3.10 Mining Act 1978 …. 7.5.79 s 9 …. 7.5.79 Parliamentary Privileges Act 1891 …. 2.7.18 s 1 …. 2.7.18 Stamp Act 1921 …. 5.2.21 s 101A …. 5.2.20 Succession to the Crown Act 2015 …. 7.2.9 UNITED KINGDOM 16 Car I c 10 1640 …. 7.5.35 Act of Settlement 1701 …. 7.2.8, 7.2.9 Australia Act 1986 …. 1.2.27C, 1.3.6, 1.3.17, 1.3.18, 1.3.24, 1.3.26, 1.3.26, 2.1.10, 8.7.15, 10.3.5C

s 2 …. 1.6.6, 1.6.7E, 1.6.8, 1.6.9 s 2(1) …. 1.6.8 s 2(2) …. 1.6.8 s 6 …. 2.11.19, 2.11.40 s 8 …. 2.8.12 s 15 …. 1.2.27C s 73(ii) …. 1.2.37 s 75(iv) …. 1.2.37 Australian Constitutions Act (No 1) 1842 (5 & 6 Vict c 76) …. 2.1.2 s 32 …. 2.8.12 Australian Constitutions Act (No 2) 1850 (13 & 14 Vict c 59) …. 1.7.1, 2.1.2, 2.1.4 s 14 …. 1.5.13 s 32 …. 2.10.14 Australian Courts Act 1828 (9 Geo IV c 83) …. 8.7.12 Bill of Rights 1689 (Will & Mary, Sess 2, c 2) …. 7.5.63C s 1 …. 1.5.8 s 4 …. 1.5.8 British North America Act 1867 …. 1.2.22, 1.5.15C, 7.1.5C, 7.2.20 Colonial Laws Validity Act 1865 …. 1.3.4, 1.3.22 s 2 …. 1.3.4, 1.3.5, 1.3.7, 2.11.42 s 3 …. 1.3.4 s 5 …. 2.2.11, 2.10.5, 2.10.12, 2.11.3, 2.11.11, 2.11.15, 2.11.19, 2.11.20, 2.11.21, 2.11.24, 2.11.28 Commonwealth of Australia Constitution Act 1900 …. 1.2.21E,

1.2.22, 1.2.23E, 1.2.26, 1.2.37, 1.3.15, 1.3.25, 2.11.47, 6.1.3E, 7.1.5C, 7.2.6, 7.3.27C, 7.5.65C, 10.3.42C, 10.3.46, 10.4.4 cl 2 …. 7.2.7E cl 5 …. 6.1.4, 6.1.76C cl 6 …. 7.5.65C Preamble …. 7.1.5C ss 1–8 …. 2.11.47 s 5 …. 1.2.20, 1.2.21E s 7 …. 10.3.46 s 24 …. 10.3.46 s 37 …. 7.3.27C s 47 …. 7.3.27C s 64 …. 10.3.46 s 116 …. 1.3.1 s 128 …. 10.3.5C, 10.3.46 Copyright Act 1911 …. 1.3.3, 1.3.12 Copyright Act 1956 …. 1.3.12 Criminal Evidence Act 1898 …. 10.4.14C Declaration of Abdication Act 1936 …. 7.2.12 Demise of the Crown Act 1901 …. 7.2.11 Evidence (Proceedings in Other Jurisdictions) Act 1975 …. 1.3.16 Foreign Tribunals Evidence Act 1856 …. 1.3.16 Government of Ireland Act 1920 s 5(1) …. 9.5.16C Magna Carta …. 1.5.4 Ch 29 …. 1.5.6 Merchant Shipping Act 1889 …. 2.8.9

Merchant Shipping Acts 1894 …. 1.3.7 s 503 …. 1.3.15 s 504 …. 1.3.15 s 509 …. 1.3.15 Merchant Shipping Acts 1906 …. 1.3.7 Naturalisation and Aliens Act 1914 …. 1.3.3 Naval Discipline (Dominion Naval Forces) Act 1911 …. 1.3.3 New South Wales Act 1823 (4 Geo IV c 96) …. 1.7.1 New South Wales Constitution Act 1855 (18 & 19 Vict c 54) …. 2.1.4 s 4 …. 2.10.14 s 7A …. 2.11.15 Parliament Act 1911 …. 1.2.50 Parliamentary Witnesses Oaths Act 1871 …. 2.7.17 Prevention of Crime Act 1908 Pt II …. 10.4.27 Slavery Abolition Act 1833 …. 1.3.3 South Africa Act 1909 s 152 …. 2.11.23 Statute of Westminster 1931 (22 Geo 5, c 4) …. 1.3.11E, 1.3.15, 1.3.24, 1.3.25, 1.3.26, 2.11.23, 7.2.20 s 1 …. 1.6.14 s 2 …. 1.3.10, 2.11.42 s 3 …. 1.3.10, 1.6.14, 1.6.15 s 4 …. 1.3.10, 1.3.18, 1.3.23, 1.3.24, 1.3.25 s 9(1) …. 1.6.15 s 10 …. 1.3.12, 1.6.14

Succession to the Crown Act 1707 …. 2.4.6C, 7.2.9 s 1 …. 7.2.9 s 2 …. 7.2.9 Victorian Constitution Act 1855 (18 & 19 Vict c 55) …. 2.1.4 s 4 …. 2.10.14 Western Australia Constitution Act 1890 (53 & 54 Vic c 26) …. 2.1.6 s 5 …. 2.11.27 CANADA Alien Labour Act 1897 …. 7.5.52C Canadian Charter of Rights and Freedoms art 11(f) …. 9.6.11 Constitution Act 1982 …. 1.2.19, 1.2.52C, 7.2.20 CEYLON Bribery Amendment Act 1958 …. 2.11.21 Ceylon (Constitution) Order-in-Council 1946 s 29(4) …. 2.11.21, 2.11.22C SOUTH AFRICA Constitution of the Republic of South Africa 1996 s 2 …. 1.2.19 s 172 …. 1.2.46 Separate Representation of Voters Act 1951 …. 2.11.23 UNITED STATES OF AMERICA

Bill of Rights 1791 …. 1.3.1, 9.2.1, 9.2.2, 9.2.3, 9.7.15 Constitution …. 1.2.40C, 1.3.1, 3.1.5C, 7.5.65C, 8.3.49C, 9.2.1, 9.2.2, 9.7.13C, 10.3.11C, 10.3.20C, 10.4.6 1st Amendment …. 9.7.3, 9.7.13C, 9.7.18C 5th Amendment …. 9.4.7 14th Amendment …. 9.2.2, 9.4.7, 9.8.2 Amendment XIV s 1 …. 4.4.5 Amendment XIV s 1 cl 4 …. 4.4.42 Amendment XIV s 2 …. 4.4.3 art I …. 2.6.10C art I s 1 …. 1.8.8C art I s 2 …. 2.6.10C art I s 8 cl 3 …. 4.1.26 art II s 1 …. 1.8.8C art III …. 1.2.39, 8.3.32 art III s 1 …. 1.8.8C art III s 1 cl 1 …. 1.2.36 art III s 2 cl 1 …. 1.2.36 art IV s 2 …. 9.8.2, 9.8.5C art VI …. 1.2.19 art VI s 3 …. 9.7.3 art VI cl 2 …. 6.1.12 Controlled Substances Act 1970 …. 4.1.27 National Labor Relations Act 1935 …. 4.1.26 Patient Protection and Affordable Care Act 2010 …. 4.1.27 Self-Government Act …. 6.1.87 s 6 …. 6.1.88C

Violence Against Women Act 1994 …. 4.1.27 INTERNATIONAL Family Responsibilities Convention art 1 …. 4.3.34C art 3 …. 4.3.34C art 4 …. 4.3.34C art 4(b) …. 4.3.34C art 7 …. 4.3.34C International Convention on the Elimination of All Forms of Racial Discrimination art 1 …. 4.4.34E art 2 …. 4.3.18C art 5 …. 4.3.18C, 4.4.34E, 8.3.45C art 9 …. 4.3.18C International Convention to Suppress the Slave Trade and Slavery (‘the 1926 Slavery Convention’) …. 4.3.41C art 1 …. 4.3.41C International Covenant on Civil and Political Rights art 17 …. 6.1.82, 8.3.19 Refugee Convention 1951 …. 7.5.49C Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices similar to Slavery 1956 art 7 …. 4.3.41C UNESCO Convention for the Protection of the World Cultural and Natural Heritage 1974 art 4 …. 4.3.22C

art 5 …. 4.3.22C art 6 …. 4.3.22C art 11 …. 4.3.22C art 34 …. 4.3.22C, 4.3.28

Content

Preface Acknowledgments Table of Cases Table of Statutes Chapter 1

An Introduction to Australian Constitutional Law Introduction The Nature, Forms and Enforcement of Constitutional Law Constitutions and ‘the rule of law’ Constitutions as ‘higher’ or ‘paramount’ laws State Constitution Acts are not ‘higher laws’ The common law in Australia Enforcement of constitutional law A mainly judicial function Judges and ‘counter-majoritarianism’

What Australian constitutions do and don’t say about their enforcement How (and why) the High Court of Australia became the final authority as to the constitutionality of legislation and government action Consequences of unconstitutionality Constitutional conventions Sources of Australian Constitutional Law The contribution of history The longevity of Imperial power in Australia Imperial power to legislate and the problem of ‘repugnancy’ of local laws Colonial Laws Validity Act 1865 Privy Council appeals Balfour Declaration 1926 and Statute of Westminster 1931 The Australia Acts Federalism A federal compact Co-operative federalism Parliamentary Government and Sovereignty Territorial Limits on Legislative Power State parliaments Commonwealth Parliament Representative and Responsible Government Responsible government Representative government

The Separation of Powers The political theory of a separation of powers Legislative and executive powers — the Commonwealth Legislative and executive powers — states Chapter 2

The Parliaments and Legislative Procedures Introduction Parliamentary government in the colonies Legislative assemblies in the territories The Structures New South Wales Queensland South Australia Tasmania Victoria Western Australia Northern Territory Australian Capital Territory Norfolk Island Restructuring parliaments Commonwealth Parliament The federal movement Duration of Parliament State parliaments New South Wales Queensland

South Australia Tasmania Victoria Western Australia Territory legislative assemblies Northern Territory Australian Capital Territory Commonwealth Parliament Adjournment, prorogation and dissolution Members of Parliament: Qualifications and Disqualifications Voting for Parliament: The Franchise Removal of income and property qualifications for men Enfranchising women The new Commonwealth’s first electoral act The Distribution of Seats Parliamentary Privileges Commonwealth Parliament State and territory parliaments New South Wales Queensland South Australia Tasmania Victoria Western Australia The territories

Standard Legislative Procedure Introduction The legislation Standing orders Royal assent Reservation Disallowance Special Procedures (Financial Legislation) State parliaments Commonwealth Parliament The Senate’s deferral of supply: 1975 Non-compliance with procedures and forms: ss 53, 54 and 56 Non-compliance with form: s 55 Alternative Procedures State parliaments The legislation Commonwealth Parliament Restrictive Procedures State parliaments The legislation Commonwealth Parliament Background: an inflexible Constitution Judicial Review of the Legislative Process Chapter 3

Constitutional Interpretation and Characterisation Introduction

Constitutional Interpretation Different approaches What approach has been adopted by the High Court? Judicial views on interpretive method Rejection of all-embracing theory Key dimensions of the court’s approach to constitutional interpretation The Engineers’ rules of interpretation The Jumbunna principle: interpreting provisions broadly The relationship of one Commonwealth power to another Meanings not tied to 1900 Use of history The influence of precedent and overruling earlier constitutional decisions Drawing implications Use of comparative and international law when interpreting the Constitution The political dimensions of constitutional interpretation Characterisation Characterising a law Sufficient connection Subject matter powers vs purposive powers

Core area vs incidental area of subject matter powers Establishing a sufficient connection Dual characterisation The relevance of legislative purpose to characterisation Proportionality and characterisation Chapter 4

Commonwealth Legislative Powers Trade and Commerce Power Corporations Power External Affairs Matters geographically external to Australia Implementation of international agreements Matters of international concern Relations with other countries The ‘Races’ Power The original s 51(xxvi) The 1967 referendum Proposals to replace s 51(xxvi) Judicial interpretation of s 51(xxvi) ‘[T]he people of any race’ ‘… for whom it is deemed necessary to make special laws’ Laws discriminating against Indigenous Australians Kartinyeri v Commonwealth Should the Constitution prohibit racially

discriminatory laws? Effect of the Commonwealth Racial Discrimination Act on the states and state laws Proposed constitutional reform Defence Power Anti-terrorism laws Discipline of defence force members Preparation for war The power during wartime Chapter 5

Commonwealth Financial Powers Taxation Power The general definition of a tax A compulsory exaction or charge Public authority Public purposes Fees for services and related payments Fines and penalties Taxes must not be arbitrary Non-compliance with form: s 55 Characterisation and s 51(ii) Excise Duties Commonwealth Grants The Uniform Tax cases Specific purpose grants Limitations on s 96 Commonwealth Power to Spend

Chapter 6

Federalism: The Legal Relations Inconsistency of Laws Federal supremacy Requirement of valid and operative laws What is a ‘law’ for the purposes of s 109? The common law is not ‘law’ for the purposes of s 109 ‘Inconsistent’ The orthodox tests Two added layers of complexity: operational inconsistency and the ‘vary, detract from or impair’ test There must be a ‘real conflict’ The tests applied Express intention to displace state law (or ‘cover the field’) Express intention to avoid inconsistency ‘Invalid’ Inconsistency between Commonwealth and territory laws Intergovernmental Immunities Foundation of intergovernmental immunities The ‘reserved powers’ doctrine Erosion of the two doctrines Commonwealth laws and state governments State laws and the Commonwealth State laws and Commonwealth places

Intergovernmental Co-Operation: Involvement of Officials Commonwealth–state ‘bucket’ schemes Commonwealth officials performing functions under state law Performance of functions under Commonwealth law by state officials Express Prohibitions On Commonwealth Discrimination against the States ‘Between States’ The meaning of discrimination and preference Chapter 7

The Executive Introduction The law and convention of ‘the Crown’ ‘The Crown’: a term with many meanings The Sovereign and her Australian Representatives The Queen and Commonwealth of Australia Sovereign, sovereignty and citizenship Elizabeth the Second, Queen of Australia The law of royal succession ‘Demise of the Crown’ The Queen, the Commonwealth and the Governor-General The Queen, the states and their Governors

Is there a Queen of Queensland (and of each other state)? The office of Governor since colonial times The Australia Acts and 1986 Letters Patent Responsible Government and the ‘Reserve Powers’ Responsible government Responsibility, mandate and representation Principles of responsible government and their limitations Conventional actors and institutions of responsible government Parliament’s ‘scrutiny function’ Reconciliation of competing conventions Constitutional acknowledgment of responsible government ‘Caretaker conventions’ Reserve powers of the Queen’s representatives Formation of a government where there is a ‘hung’ parliament Dismissing a First Minister who has lost the confidence of the house Refusing a dissolution of parliament Dismissing a government that acts illegally?

Sources of advice for a sovereign’s representative contemplating exercise of a ‘reserve power’ Constitutional provisions relating to the ‘reserve’ powers The Executive arm of Government What kind of legal creature is a government? The legal institutions of the executive Core executive institutions Constitutional provisions and Letters Patent Statutory authorities and governmentowned or controlled companies Outsourcing of government functions Executive Powers, Rights and Privileges Sources (or origins) Legislation Common law Constitutional instruments Executive powers State Commonwealth Constitutional mechanisms for control and accountability of executive action Executive rights and privileges Executive ‘immunities’ and ‘the rule of law’ Application of legislation and private law

to the executive Application of statutory regimes to the executive Liability of ‘the Crown’ to private law suits and judgment enforcement Crown servants, agents, contractors and others acting under government orders Chapter 8

The Australian Judicial System Introduction Separation of Commonwealth Judicial Power Establishing the separation of judicial power principles Defining judicial power Application of the separation of judicial power principles Only courts can exercise Commonwealth judicial power Courts cannot exercise non-incidental non-judicial power Exceptions to the separation rules Commonwealth Judicial Power and Federal Jurisdiction ‘Matters’ The heads of federal jurisdiction — ss 75 and 76 Section 75(iii) and (iv): government parties

Section 76(ii): arising under laws made by parliament Section 75(v): officer of the Commonwealth Section s 76(i) and the power of judicial review Section 75(i) — treaties Accrued jurisdiction The exclusivity of Ch III as a source of original jurisdiction — cross-vesting of state jurisdiction Federal Courts Power to define jurisdiction Exercise of federal jurisdiction by court officers other than judges Persona designata State Courts Exercising Federal Jurisdiction Investiture of federal jurisdiction The place of state courts in the federal system Parliament’s power over state courts Which members of a state court can exercise federal jurisdiction? Chapter III limitations on state legislative power The development of the Kable principles Kable refined Independence and impartiality

Procedural fairness New directions for the Kable principles Territory Courts The High Court’s Appellate Jurisdiction ‘Judgments, decrees, orders, and sentences’ ‘Exceptions’ and ‘regulations’ Appeals to the Privy Council Chapter 9

Express Rights and Freedoms Introduction ‘The Australian Reluctance about Rights’ Rights and Freedoms and the States Freedom of Interstate Trade, Commerce and Intercourse Trade and commerce A clash of visions Cole v Whitfield — a new start Section 92 and the modern economy An expanded operation for s 92 — national markets? Freedom of intercourse Acquisition of Property Section 51(xxxi): role and relationship to other Commonwealth powers What constitutes ‘property’? Acquisition where property interest taken by others

Acquisition vs regulation of property Resolving or adjusting competing claims Rights inherently susceptible to variation No acquisition where just terms incongruent Just terms Jury Trial ‘Law of the Commonwealth’ ‘Trial on indictment’ The elements of the ‘offence’ to be tried by jury Jury waiver The requirements of a s 80 jury trial Concluding observations Religious Freedom Introduction Relationship between ss 116 and 122 — does s 116 apply to laws made under the territories power? ‘Religion’ ‘Establishing any religion’ ‘Prohibiting the free exercise of any religion’ No religious test for any office under the Commonwealth Interstate Discrimination Introduction The High Court’s decision in Street Street applied in subsequent cases

Chapter 10

Implied Rights and Freedoms Introduction The Nature of Implied Rights and Freedoms Rights Implied from the System of Representative and Responsible Government Established by the Constitution The implied freedom of political communication: origins and derivation The implied freedom of political communication: expansion and disagreement The High Court’s unanimous acceptance of the implied freedom of political communication What is ‘political communication’ for purposes of the implied freedom of political communication? The first limb of the Lange test The second limb of the Lange test Reformation When is the end or purpose of a law not ‘legitimate’ in the relevant constitutional sense? The reasonably appropriate and adapted test and proportionality The implied freedom of political communication and the distinctive Australian conception of representative government

The implied freedom of political communication and discretionary power Freedom of movement and freedom of association Voting in federal elections Constitutionally required franchise — an implied right to vote in federal elections? Compulsory system of preferential voting Rights Derived from Chapter III of the Constitution Legal equality (as substantive due process) Due process Involuntary detention — the Lim principle Control orders, preventative detention and the courts Index

[page 1]

An Introduction to Australian Constitutional Law

CHAPTER 1

INTRODUCTION 1.1.1 The purpose of this chapter is to introduce Australian constitutional law. In it, we introduce a number of topics and principles, many of which we examine in detail in subsequent chapters: the nature, forms and enforcement of constitutional law; sources of Australian constitutional law; federalism; parliamentary government and sovereignty; territorial limits on legislative power; principles of representative and responsible government; and

the separation of powers.

THE NATURE, FORMS AND ENFORCEMENT OF CONSTITUTIONAL LAW Constitutions and ‘the rule of law’ 1.2.1 A constitution is the basic law of a State. It contains the fundamental rules that define the State and its institutions. As Justice John Basten has observed: [C]onstitutions are about the institutional arrangements for the exercise of governmental power. A constitution creates institutions, identifies their functions and confers powers on them. Inevitably, it provides the framework (whether by way of checks and balances, or by way of consultation and co-operation) by which they interact. (Constitutional Law in Federal and State Courts in 2014: The Judiciary and the Legislature’, Gilbert + Tobin Centre of Public Law Constitutional Law Conference, 13 February 2015.)

[page 2] 1.2.2 Australia’s legal system is inherited from Britain. A distinctive feature of that inheritance is said to be its emphasis on ‘the rule of law’, a concept described by the influential English jurist Albert Venn Dicey in the 19th century in the following terms.

1.2.3E

A V Dicey, Introduction to the Study of the Law of the Constitution, 10th ed, 1959, p 202

That ‘rule of law’, then, which forms a fundamental principle of the constitution, has three meanings, or may be regarded from three different points of view. It means, in the first place, the absolute supremacy or predominance of regular law as opposed to the influence of arbitrary power, and excludes the existence of arbitrariness, of prerogative, or even of wide discretionary authority on the part of the government. Englishmen are ruled by the law, and by the law alone; a man may with us be punished for a breach of law, but he can be punished for nothing else. It means, again, equality before the law, or the equal subjection of all classes to the ordinary law of the land administered by the ordinary law courts; the ‘rule of law’ in this sense excludes the idea of any exemption of officials or others from the duty of obedience to the law which governs other citizens or from the jurisdiction of the ordinary tribunals; there can be with us nothing really corresponding to the ‘administrative law’ (droit administratif) or the ‘administrative tribunals’ (tribunaux administratifs) of France. The notion which lies at the bottom of the ‘administrative law’ known to foreign countries is, that affairs or disputes in which the government or its servants are concerned are beyond the sphere of the civil courts and must be dealt with by special and more or less official bodies. This idea is utterly unknown to the law of England, and indeed is fundamentally inconsistent with our traditions and customs. The ‘rule of law’, lastly, may be used as a formula for expressing the fact that with us the law of the constitution, the rules which in foreign countries naturally form part of a constitutional code, are not the source but the consequence of the rights of individuals, as defined and enforced by the courts;

that, in short, the principles of private law have with us been by the action of the courts and Parliament so extended as to determine the position of the Crown and of its servants; thus the constitution is the result of the ordinary law of the land.

1.2.4 There is considerable debate about the content and practical significance of the ‘rule of law’ and its rhetorical role in justifying particular rules, institutional conduct or even breaches of its standards: see Bingham, 2010. Dicey’s observation that ‘the constitution’ is simply a manifestation of the ordinary law is true of the United Kingdom (which lacks a written constitution) rather than of Australia. However, the other principles identified by him, that: citizens are free to act except where the law precludes it; governments, on the other hand, require positive authority for their actions — in this sense, the law, rather than government, is supreme; and both are subject to the same laws, applied by the same courts, are core principles underlying Australian constitutional law. However, those principles do not provide a complete analysis, even of the English legal system, as Hogg et al point out. [page 3]

1.2.5E Hogg, Monahan and Wright, Liability of the

Crown, 4th ed, 2011, p 2 (footnotes and headings omitted) The leading feature of the British-derived law of governmental liability is that, with some exceptions, the same law is applied to the government and its officials as is applied to private citizens. For AV Dicey, whose influential book, The Law of the Constitution, was published in 1885, this ‘idea of equality’ was an important element of the ‘rule of law’ … [G]overnment ought to be under the law, and not just any law, but the same law as applies to everyone else … [so as to be] denied the special exemptions and privileges that could lead to tyranny. Moreover, the application of the law to government is placed in the hands of the ordinary courts, who are independent of government, and who can be relied upon to award an appropriate remedy to the citizen who has been injured by illegal government action. This is the rosy picture that led Dicey to … boast that ‘every official, from the Prime Minister down to a constable or collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen’ [Dicey 10th ed (1959) at 193]. Needless to say, Dicey abhorred the European legal systems, where there is typically a special regime of public law administered by special administrative courts. Students of these systems have not shared Dicey’s distaste [However] … Dicey captured a fundamental attitude towards government that is common to the [UK] and [its] former colonies … … [F]or the most part, the ‘ordinary’ law does work a satisfactory resolution of the conflicts between government and citizen. Indeed, the parts of the law that seem … most unsatisfactory are those where the courts have refused to apply the ordinary law to the Crown … [However] … [a]s Dicey’s critics have repeatedly pointed out, the State cannot be equal in all respects to its subjects ‘because it has to govern’ …

Dicey ignored the extensive immunities and privileges which the Crown enjoyed at the time when he wrote … [I]t is difficult to reconcile many of these advantages with the ‘idea of equality’, even if the need for effective government is admitted as an exception to the principle …

1.2.6 The persistence of executive government ‘immunities and privileges’ is taken up in Chapter 7. As discussed there, these ‘prerogatives’ are vestiges of the absolute power once enjoyed by the King, which in historical times even extended to making the law. 1.2.7 This brings us to another important qualification on the ‘rule of law’ which Dicey himself acknowledged: The sovereignty of Parliament is (from a legal point of view) the dominant characteristic of our political institutions … The principle of Parliamentary sovereignty means neither more nor less than this, namely that Parliament … has … ‘the right to make or unmake any law whatever; and, further, that no person or body is recognised by the law of England as having a right to override or set aside the legislation of Parliament …’ (Dicey, 1959, pp 39–40.)

This theory of ‘parliamentary sovereignty’ is discussed further at 1.5.1–1.5.18. 1.2.8 ‘Government under law’ requires that the law be capable of application independently of government: it should consist of clear and general standards capable of independent ascertainment and application to independently ascertainable facts. Dixon J pointed this out in a classic statement regarding the scope of the Commonwealth Parliament’s power under its

[page 4] ‘express incidental’ power (Commonwealth Constitution s 51(xxxix)), to make laws protecting federal authorities from ‘subversion’. As discussed in Chapter 4, the High Court’s fundamental objection was that parliament had, in a preamble to the challenged legislation, deemed the party, its members and other communists to constitute such a threat. 1.2.9E Communist Party Dissolution Act 1950 (Cth) 4.

5.

6.

And whereas the Australian Communist Party, in accordance with the basic theory of communism, as expounded by Marx and Lenin, engages in activities or operations designed to assist or accelerate the coming of a revolutionary situation, in which the Australian Communist Party, acting as a revolutionary minority, would be able to seize power and establish a dictatorship of the proletariat: And whereas the Australian Communist Party also engages in activities or operations designed to bring about the overthrow or dislocation of the established system of government of Australia and the attainment of economic industrial or political ends by force, violence, intimidation or fraudulent practices: And whereas the Australian Communist Party is an integral part of the world communist revolutionary movement, which, in the King’s dominions and elsewhere, engages in espionage and sabotage and in activities or operations of a treasonable or subversive nature and also engages in activities or operations similar to those, or having an object similar to the object

of those, referred to in the last two preceding paragraphs of this preamble …

1.2.10C

Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1

Dixon J: The … power is concerned primarily with the protection of Federal authority against action or utterance by which it may be overthrown, thwarted or undermined … Wide as may be the scope of such an ancillary or incidental power, I do not think it extends to legislation which is not addressed to suppressing violence or disorder or to some ascertained and existing condition of disturbance and yet does not take the course of forbidding descriptions of conduct or of establishing objective standards or tests of liability upon the subject, but proceeds directly against particular bodies or persons by name or classification or characterization, whether or not there be the intervention of an Executive discretion or determination, and does so not tentatively or provisionally but so as to affect adversely their status, rights and liabilities once for all … The power is ancillary or incidental to sustaining and carrying on government. Moreover, it is government under the Constitution and that is an instrument framed in accordance with many traditional conceptions, to some of which it gives effect, as, for example, in separating the judicial power from other functions of government, others of which are simply assumed. Among these I think that it may fairly be said that the rule of law forms an assumption. In such a system I think that it would be impossible to say of a law of the character described, which depends for its supposed connection with the power upon the conclusion of the legislature concerning the doings and the designs of the bodies or

person to be affected and affords no objective test of the applicability of the power, that it is a law upon a matter incidental to the [page 5] execution and maintenance of the Constitution and the laws of the Commonwealth. Indeed, upon the very matters upon which the question whether the bodies or persons have brought themselves within a possible exercise of the power depends, it may be said that the Act would have the effect of making the conclusion of the legislature final and so the measure of the operation of its own power …

1.2.11 If ‘the conclusion of the legislature … [as to] the measure of the operation of its own power’ is not to be final, whose job is it to ensure that the law is applied independently? Although the High Court has accepted that the rule of law is an assumption upon which the Commonwealth Constitution is based, it is not always clear what consequences flow from that constitutional assumption. 1.2.12 At the very least, it entails an independent judiciary reviewing the constitutional validity of legislation and the validity of executive (that is ‘governmental’) action. This aspect of the rule of law was emphasised by the High Court in its decision in Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 467. In that case, the court considered whether the Commonwealth Parliament, through the use of a ‘privative clause’ could prevent the High Court from reviewing the validity of the decisions of federal government officers. Section 75(v) of the Commonwealth

Constitution gives the High Court the authority to review the decisions of officers of the Commonwealth and to issue appropriate remedies (constitutional writs). These matters will be taken up further in Chapter 9. In the course of their judgment, Gaudron, McHugh, Gummow, Kirby and Hayne JJ made the following comments about this aspect of the rule of law. 1.2.13C Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 467 Gaudron, McHugh, Gummow, Kirby and Hayne JJ: The provision of the constitutional writs and the conferral upon this Court of an irremovable jurisdiction to issue them to an officer of the Commonwealth constitutes a textual reinforcement for what Dixon J said about the significance of the rule of law for the Constitution in Australian Communist Party v The Commonwealth [(1948) 76 CLR 1]. [Their honours then quoted from Dixon J’s judgment set out earlier, and continued:] The reservation to this Court by the Constitution of the jurisdiction in all matters in which the named constitutional writs or an injunction are sought against an officer of the Commonwealth is a means of assuring to all people affected that officers of the Commonwealth obey the law and neither exceed nor neglect any jurisdiction which the law confers on them. The centrality, and protective purpose, of the jurisdiction of this Court in that regard places significant barriers in the way of legislative attempts (by privative clauses or otherwise) to impair judicial review of administrative action. Such jurisdiction exists to maintain the federal compact by ensuring that propounded laws are constitutionally valid and ministerial or

other official action lawful and within jurisdiction. In any written constitution, where there are disputes over such matters, there must be an authoritative decision-maker. Under the Constitution of the Commonwealth the ultimate decision-maker in all matters where [page 6] there is a contest, is this Court. The Court must be obedient to its constitutional function. In the end, pursuant to s 75 of the Constitution, this limits the powers of the Parliament or of the Executive to avoid, or confine, judicial review.

1.2.14 The High Court has now extended these limitations to the state level, in Kirk v Industrial Relations Commission of NSW (2010) 239 CLR 531. These cases will be further discussed at 8.3.39C and 8.5.57C. The rule of law also assumes the existence of an independent court system with the availability of professional legal services. 1.2.15C APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 Gleeson CJ and Heydon J: … The rule of law is one of the assumptions upon which the Constitution is based [Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193 per Dixon J]. It is an assumption upon which the Constitution depends for its efficacy. Chapter III of the Constitution, which confers and denies judicial power, in accordance with its express

terms and its necessary implications, gives practical effect to that assumption [In re Judiciary and Navigation Acts (1921) 29 CLR 257]. The effective exercise of judicial power, and the maintenance of the rule of law, depend upon the providing of professional legal services so that citizens may know their rights and obligations, and have the capacity to invoke judicial power.

1.2.16 In more recent cases, High Court judges have referred to the rule of law as a foundational principle to support wellestablished presumptions of statutory construction which hold that the legislature does not intend to abrogate fundamental common law rights: this usage, which extends beyond constitutional law, is increasingly referred to as ‘the principle of legality’. 1.2.17C

Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252

French CJ, Gummow, Hayne, Crennan and Kiefel JJ: The presumption that it is highly improbable that Parliament would overthrow fundamental principles or depart from the general system of law, without expressing its intention with irresistible clearness [Potter v Minahan (1908) 7 CLR 277 at 304 per O’Connor J], derives from the principle of legality which, as Gleeson CJ observed in Electrolux Home Products Pty Ltd v Australian Workers’ Union [(2004) 221 CLR 309 at 329], ‘governs the relations between Parliament, the executive and the courts’, referring to R v Secretary of State for Home Department; Ex parte Pierson [1998] AC 539 at 587, 589]. His Honour said [221 CLR 309 at 329]: The presumption is not merely a common sense guide to

what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of the rule of law.

[page 7] 1.2.18 See also the judgment of Gageler and Keane JJ in Lee v New South Wales Crime Commission (2013) 251 CLR 196 at 307– 11 for a detailed account of the rationale and scope of the principle of legality, its relationship to the rule of law and how it ought to be applied in contemporary Australian law.

Constitutions as ‘higher’ or ‘paramount’ laws 1.2.19 A constitution enjoys paramount force — that is, is a form of ‘higher law’ — when it is supreme not only over people and governments, but also over other rules of the legal system. Some constitutions contain express ‘supremacy’ clauses such as in the Constitution Act 1982 (Canada), which states: (1) The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect.

A similar provision is found in s 2 of the Constitution of the Republic of South Africa 1996. The terms of the United States

provision in the Constitution of the United States of America are less definitive, although the effect is the same (art VI): … This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

1.2.20 The Commonwealth Constitution is a form of ‘higher law’: the laws made under it by the Commonwealth Parliament are paramount over state laws and the rules of the common law must conform to it as well. Sections 106, 107 and 108 of the Constitution preserve state constitutions, legislative powers and laws ‘subject to this Constitution’, and s 109 provides that state legislation is trumped by valid, inconsistent Commonwealth legislation. (Section 109 is discussed in Chapter 6.) Furthermore, s 5 of the British Act enacting the Commonwealth Constitution, now known as ‘covering cl 5’, also provides for the paramountcy of the Constitution and Commonwealth laws over state laws. 1.2.21E Commonwealth of Australia Constitution Act 1900

5 Operation of the Constitution and laws This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State; …

By making all components, institutions and people of the Australian federation subject to the Commonwealth Constitution and the laws made under it, covering cl 5 manifests one of the key assumptions upon which the document was framed — the rule of law. [page 8] 1.2.22 Unlike the British North America Act 1867, which provided for confederation in Canada, the Australian Constitution was put to the Australian people for their approval, as its preamble records. 1.2.23E Commonwealth of Australia Constitution Act 1900 Whereas the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, humbly relying on the blessing of Almighty God, have agreed to unite in one indissoluble Federal Commonwealth under the Crown of the United Kingdom of Great Britain and Ireland, and under the Constitution hereby established: And whereas it is expedient to provide for the admission into the Commonwealth of other Australasian Colonies and possessions of the Queen: … 3 Proclamation of Commonwealth It shall be lawful for the Queen, with the advice of the Privy

Council, to declare by proclamation that … the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, and also, if Her Majesty is satisfied that the people of Western Australia have agreed thereto, of Western Australia, shall be united in a Federal Commonwealth under the name of the Commonwealth of Australia.

1.2.24 This ‘agreement’ was forged in the 1890s by enactment of colonial legislation not simply enabling federation (as had occurred in Canada), but requiring referenda on the proposed Constitution (which, as in Canada, had been locally drafted). In Western Australia, the referendum step was taken after the Imperial Parliament enacted the Commonwealth of Australia Constitution Act, which explains the distinctive reference to Western Australia in covering cl 3. 1.2.25 The Commonwealth Constitution was largely drafted in two conventions (in 1891 and 1897–98) by a group of colonial politicians, notably Tasmanian Attorney-General (and later Supreme Court judge) Andrew Inglis Clark and former Queensland Premier and Chief Justice (later High Court Chief Justice) Samuel Griffith. Delegates to the 1891 National Australasian Convention (held in Sydney) were appointed by governments (seven from each Australian colony and three from New Zealand), while each of the Australian colonies except Queensland and Western Australia elected 10 delegates to the 1897–98 Australasian Federal Convention, which met in Adelaide, Sydney and Melbourne. (Queensland and New Zealand did not attend in 1897–98, and Western Australia’s delegates were chosen by its parliament.)

These processes, arguably, justify the Constitution’s supreme authority politically, even if: the conventions were hardly a representative slice of 1890s Australian life. Just under half of Australia’s then 3.7 million people were female, and a quarter were Roman Catholics. But there were no women at either convention and Roman Catholics were a tiny minority at both. The only ethnic ‘minority’ delegates were two Jews: Victorian AttorneyGeneral Isaac Isaacs, who later became Commonwealth Attorney-General, a High Court judge and the first Australian-born Governor-General, and the Northern Territory (of South Australia) MP and only Jewish person ever to head an Australian (SA) government, Louis Solomon. Everyone else was from a ‘white’ Protestant background. While the 1891 [page 9] Convention was entirely made up of colonial politicians, 1897–98 was not so different: only two delegates had not been members of parliament. As in the United States, large numbers of Australia’s ‘founding fathers’ were lawyers. Indeed, many who attended these conventions were surprisingly well educated, despite holding what now would be regarded as bigoted views (for example, as to the appropriateness of excluding Chinese migrants); colonial franchises for the referenda (and, in the case of the second convention, eligibility to stand for election) were far

from universal. Only one woman — South Australian author and suffragist Catherine Spence, whose image appears on the Centenary of Federation $5 note — stood, but was not elected. Women could not vote or stand in four states (although female suffragists were effective convention lobbyists); nor could large numbers of Aborigines and nonBritish migrants (although many United Kingdom-born men were delegates in 1897–98). The franchise was still restricted to the propertied in Tasmania, and granted in plurality to them for the Western Australian Parliament (Constitutional Centre of Western Australia, 2005), distorting those colonies’ convention representation. Finally, because voting was not compulsory, fewer than 585,000 people, or 60 per cent of those eligible, voted in the constitutional referenda, and about 160,000 of them voted against federation; even that degree of support (56 per cent) was obtained only by holding second referenda in four states, after the New South Wales vote came in too low under that colony’s Enabling Act. The draft Constitution was further amended at a ‘secret Premiers’ conference’ in Melbourne in 1899 to appease New South Wales (including by requiring the new national capital to be located ‘within territory … granted to or acquired by the Commonwealth … [with]in [the boundaries of] the State of New South Wales … distant not less than one hundred miles from Sydney’ (s 125); and the British Parliament still changed a provision of the approved draft, after lobbying from colonial judges including Griffith, before enacting it (s 74, by preserving a wider range of appeals from Australian courts to the Privy Council).

See generally La Nauze, 1972; Irving, 1997; Irving, 1999. A complete set of documents relating to the history of federation is contained in Williams, 2005. 1.2.26 On these bases, arguably the legal as well as the political authority of the Australian Constitution now rests on popular sovereignty: Lindell, 1986; compare Evans, 2004. This appears to have been recognised judicially, albeit with some qualification. 1.2.27C

McGinty v Western Australia (1996) 186 CLR 140

McHugh J: … The Constitution is contained in a statute of the United Kingdom Parliament. In the late twentieth century, it may not be palatable to many persons to think that the powers, authorities, immunities and obligations of the federal and State parliaments of Australia derive their legal authority from a statute enacted by the Imperial Parliament, but the enactment of that statute containing the terms of the Constitution is the instrument by which the Australian people have consented to be governed. Since the passing of the Australia Act (UK) in 1986, notwithstanding some considerable theoretical difficulties [See Zines, ‘The Sovereignty of the People’ (paper delivered at the Conference on The Constitution and [page 10] Australian Democracy, Canberra, 9–11 November 1995)], the political and legal sovereignty of Australia now resides in the people of Australia [Australian Capital Television (1992) 177 CLR 106 at 138 per Mason CJ]. But the only authority that the people

have given to the parliaments of the nation is to enact laws in accordance with the terms of the Constitution … … Lord Bryce asserted that, in a country governed by a rigid Constitution which limits the power of the legislature to certain subjects or forbids it to transgress certain fundamental doctrines, the sovereignty of the legislature is necessarily restricted. In that case, ultimate sovereignty resides in the body which made and can amend the Constitution. On that view, the sovereignty of Australia originally resided in the United Kingdom Parliament. Since the Australia Act 1986 (UK), however, the sovereignty of the Australian nation has ceased to reside in the Imperial Parliament and has become embedded in the Australian people. Only the people can now change the Constitution. They are the sovereign … Gummow J: … Sovereignty Given the special adaption of principles of representative government to federalism, where in such a case does ultimate sovereignty reside? Writing in 1901, Bryce put the view that, in such a case, ultimate sovereignty resides with the authority or body which, according to the constitution, may amend the constitution. In Australia, that ultimate authority, to change the Constitution itself, is reposed by s 128 in a combination of a majority of all the electors and a majority of the electors in a majority of States. But the initiative to place before the electors any proposed change is vested in the Parliament and a particular mechanism is provided in s 128 to resolve disagreement between the Houses as to the passage of a proposed law for the alteration of the Constitution. Special provision is made in the final paragraph of s 128 in respect of proposed alterations (i) diminishing the proportionate representation of any State in either House, or the minimum number of representatives of a State in the House of

Representatives, (ii) altering the limits of a State, or (iii) ‘in any manner’ affecting the provisions of the Constitution in relation to a State. In such cases, the proposed law effecting the change is not to become law unless approved by the majority of electors voting in the State concerned. It is to be observed that, in significant respects, s 128 does not provide for an equality of voting power at referendums. A negative power, in other words a power to reject changes, may be exercised by a minority of the total electors of the Commonwealth if that minority is geographically distributed such as to constitute a majority in a majority of States. Again, the electors in a particular State must approve a proposed law affecting that State in the ways outlined above. Thus, a majority of electors in that one State may resist a change otherwise approved by a majority of electors in a majority of States. In both cases the value of each elector’s vote is not equal in the sense for which the plaintiffs contend. Broad statements as to the reposition of ‘sovereignty’ in ‘the people’ of Australia, if they are to be given legal rather than popular or political meaning, must be understood in the light of the federal considerations contained in s 128. Those statements must also allow for the fact that none of the Australia Acts, Imperial, Commonwealth or State, followed approval at a referendum, in particular, any submission to the electors pursuant to s 128 of the Constitution. Moreover, in s 15 thereof, the Australia Acts provide their own mechanism for amendment or repeal by statute and without submission to the electors at State or Commonwealth level. …

[page 11]

State Constitution Acts are not ‘higher laws’

1.2.28 State constitutions consist of Constitution Acts, often in addition to other state legislation establishing or empowering organs of government (for example, Supreme Court Acts) or providing for their method of constitution; for example, Electoral Acts. None of this legislation is ‘supreme’ or ‘higher law’ in the same sense as the Commonwealth Constitution. 1.2.29 State constitutions originated in Imperial legislation, and they owe their ongoing existence after federation to s 106 of the Commonwealth Constitution: Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at [10] per Gaudron, McHugh, Gummow and Hayne JJ; [74] per Kirby J. Some state institutions (for example, their Supreme Courts) are entrenched by the Commonwealth Constitution: see 8.5.16–8.5.64. It is also possible that other state government institutions (state ‘Parliaments’ (ss 7, 9, 10, 15, 29, 123, 124 and 128), ‘Executives Governments’ (s 119) and ‘Governors’ (ss 12, 15, 110)) are also constitutionally entrenched because they are referred to in the Commonwealth Constitution: see, for example, McGinty v Western Australia (1996) 186 CLR 140 at 293 per Gummow J. However, these questions, and possible ramifications, have not yet been the subject of close judicial consideration: see Stellios, 2007. 1.2.30 Because state constitutions are not fully entrenched as the Commonwealth Constitution is, they owe most of their content to exercises of ordinary state legislative power. State constitutions have been compared to ‘Dog Acts’ because of the ease with which they may be repealed or amended. Indeed, it is rightly observed that state constitutions are, for the most part, ‘flexible and uncontrolled’. The default rule is that they may be amended by ordinary Acts of the state parliament passed by a simple majority.

And even where certain provisions are entrenched in a limited way by being subject to ‘higher law’ such as the Australia Act 1986 (Cth) (see 2.11.16E–2.11.40), because state constitutions tend to impose fewer restrictions than the Commonwealth Constitution imposes on the federal government there is much less scope under them for invalidation of legislation than there is under the Commonwealth Constitution. State legislation that is inconsistent with a state Constitution Act, rather than breaching it, may simply amend it. This does not mean that state governments may disregard their Constitution Acts — in the absence of legislative amendment, those Acts remain enforceable, particularly against the executive government. It is also arguable that some elements of state constitutional arrangements not protected by the Commonwealth Constitution (for example, the role of the Crown) are either entrenched by s 7 of the Australia Act 1986 (see 7.2.36–7.2.43) or, more radically, are so fundamental that they may not be repealed by state parliaments without Commonwealth assistance: see Taylor v Attorney-General (Qld) (1917) 23 CLR 457 at 473 and discussion of it in Twomey, 2004, at 275.

The common law in Australia 1.2.31 The High Court has accepted that there is one ‘common law of Australia’, rather than separate systems of common law within the federal system. The development of a single common law is overseen by the High Court: Mabo v Queensland (No 2) (1992) 175 CLR 1 at 15; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 563; Lipohar v The Queen

(1999) 200 CLR 485. Common law principles, being judge-made, are capable of flexible [page 12] development, including in a manner that responds to social change. Common law principles can also, of course, be amended or repealed by (valid) legislation. In 1997, the High Court in Lange v Australian Broadcasting Corporation held that the common law must conform to the Commonwealth Constitution. In doing so it also made important observations regarding the significance of covering cl 5 for the requirement that all Australia law — whether statutory or common — must be compatible with the Constitution. 1.2.32C Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ: … There is but one common law in Australia which is declared by this Court as the final court of appeal. In contrast to the position in the United States, the common law as it exists throughout the Australian States and Territories is not fragmented into different systems of jurisprudence, possessing different content and subject to different authoritative interpretations … … The Constitution displaced, or rendered inapplicable, the English common law doctrine of the general competence and unqualified supremacy of the legislature. It placed upon the federal judicature the responsibility of deciding the limits of the respective powers of State and Commonwealth governments [R v

Kirby; Ex parte Boilermakers’ Society of Australia … (1956) 94 CLR 254 at 267–8]. The Constitution, the federal, State and territorial laws, and the common law in Australia together constitute the law of this country and form ‘one system of jurisprudence’. Covering cl 5 of the Constitution renders the Constitution ‘binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State’. Within that single system of jurisprudence, the basic law of the Constitution provides the authority for the enactment of valid statute law and may have effect on the content of the common law. … Of necessity, the common law must conform with the Constitution. The development of the common law in Australia cannot run counter to constitutional imperatives. The common law and the requirements of the Constitution cannot be at odds.

Enforcement of constitutional law A mainly judicial function 1.2.33 If there are rules of constitutional law, who should enforce them? The executive government? The police, defence or security services? The legislature? What is the sphere of enforceability of constitutional decisions: if one institution interprets the Constitution in a particular way, should the others fall into line? Perhaps each institution should be allowed to interpret and apply the Constitution for its own purposes. Or perhaps the three main arms of government in our system — executive, parliament and judiciary — should police one another’s constitutional compliance. Perhaps the job should be left up to ‘the people’ (for example, via citizen-initiated referenda, as is the case for federal laws in Switzerland), or, in an increasingly inter-

connected world, discharged at least partly by the international community (as it is in some respects for member states of the European Union). The latter possibility presents complex questions for older extant constitutions like those of Australia or [page 13] the United States, which pre-date globalised law-making on good governance, ‘free’ trade and human rights by decades or even centuries, and have not always been amended to keep pace with it. 1.2.34 In Australia, as discussed at 1.2.1–1.2.18, the answer required by the ‘rule of law’ is that, ultimately, its enforcement is the function and duty of the courts, although constitutional conventions (customs) are enforced by other (usually political) institutions: see 1.2.48–1.2.54E. Relevantly, Chief Justice Gleeson observed in his 2000 Boyer Lectures: The rule of law depends upon the impartial administration of justice according to law. Citizens, in the last resort, look to courts to uphold their rights, and to enforce their lawful claims against other citizens, or against governments. Governments look to the courts to enforce obligations of citizens, and to restrain — and, where necessary, punish — unlawful behavior. In a nation with a written Constitution, the courts have an additional function, which is to uphold the Constitution. (The Rule of Law and the Constitution, ABC Books, Sydney, 2000, p 93.)

A related question concerns whether it is proper for the courts to offer the other arms of government guidance or advice about the future constitutionality of their actions. In the Anglo-Australian tradition, this question is sometimes reframed as a more general

one about whether the courts may give ‘advisory opinions’ to the political arms of government: see 8.3.10C.

Judges and ‘counter-majoritarianism’ 1.2.35 In the 21st century, ‘ever-accelerating reliance on courts and judicial means for addressing core moral predicaments, public policy questions, and political controversies’ is a feature of politics worldwide: Hirschl, 2006, at 721. While the scope for leaving such questions to the Australian courts may presently be limited by the relative antiquity and (at the federal level) stagnation of our constitutional arrangements, it is worth pausing to consider whether it is appropriate that those institutions, rather than more democratically-constituted ones like parliament, decide constitutional questions. In the language of legal philosophy, is judicial review of the constitutionality of legislation enacted by elected parliaments and its enforcement by elected governments ‘counter-majoritarian’?: see Bickel, 1986. In recent times, this argument — that courts, in well-functioning democracies, ought not to have the power to invalidate statutes — has been made forcefully by Professor Jeremy Waldron: see ‘The Core of the Case Against Judicial Review’ (2006) 115 Yale Law Journal 1346. Australian judges are appointed from among the ranks of legal practitioners by governments in the exercise of executive power, rather than being elected (as are most United States state judges), or career-trained in a specialist bureaucracy (as judges are in civil law systems). Whether judges are the best people to decide constitutional questions has become a pressing question in the context of proposals to introduce Bills or charters of human rights into Australian constitutions, but it also arises more generally.

What Australian constitutions do and don’t say about their enforcement 1.2.36 Some constitutions are silent or ambiguous on whose job it is to interpret, apply and enforce them; for example, it is often argued that art III § 1 cl 1 and § 2 cl 1 of the United States Constitution, which confer on the United States Supreme Court judicial [page 14] power to deal with ‘all Cases … arising under this Constitution’, did not necessarily give the Supreme Court the role of interpreting the Constitution, and measuring the conduct of the other arms of government against it, in a manner that was authoritatively binding on Congress and the executive as well as ‘the people’. On this view, the doctrine of constitutional review was invented by the Supreme Court itself (in particular by Chief Justice John Marshall) 27 years after United States independence, in Marbury v Madison (1803) 5 US 137 1.2.40C. 1.2.37 The odd thing about the Australian Constitution is that, while it guarantees the High Court some jurisdiction — for example, to hear appeals from state Supreme Courts (s 73(ii)) (appellate jurisdiction: see 8.7.1E–8.7.8), and original jurisdiction to adjudicate controversies between residents of different states (s 75(iv): see 8.3.25) — it does not entrench the High Court’s ‘original’ jurisdiction to determine matters under the Commonwealth Constitution generally. Some such jurisdiction, in

cases where the court is asked to grant writs of ‘Mandamus or prohibition or an injunction against an officer of the Commonwealth’ (s 75(v): see 8.3.30–8.3.40), is constitutionally guaranteed. However, the court’s more general constitutional review jurisdiction is made dependent on legislation enacted by parliament: s 76(i) (see 8.3.41–8.3.42). Parliament granted that jurisdiction in 1903 under s 30 of the Judiciary Act 1903 (Cth). The question of constitutional jurisdiction is often simpler at the state level, because the various state Constitution Acts are ordinary statutes that the state Supreme Courts are authorised on general principles to apply. 1.2.38 A former Chief Justice of the High Court noted that, although ‘the Constitution makes no specific provision for judicial review for constitutional validity … the framers plainly intended that the Court undertake this function’: Mason, 1986, at 3. For example, one of the delegates to the 1898 Convention, Isaac Isaacs (later Chief Justice of the High Court), observed that, despite the ‘infinite trouble’ being taken in the drafting of the Commonwealth Constitution, ‘the makers of the Constitution’ would include the judges who interpreted it and applied it to the resolution of real problems. In 1898, Isaac Isaacs told his fellow delegates to the Melbourne Constitutional Convention: We are taking infinite trouble to express what we mean in this Constitution; but as in America so it will be here, that the makers of the Constitution were not merely the Conventions who sat, but the judges of the Supreme Court (Convention Debates, Official Record of the Debates of the Australasian Federal Convention (Melbourne), 28 January 1898, p 283).

The point was expressed unequivocally by another framer, Alfred

Deakin, when speaking as Commonwealth Attorney-General on the 1902 Judiciary Bill: The Constitution is to be the supreme law, but it is the High Court which is to determine how far and between what boundaries it is supreme. The federation is constituted by distribution of powers, and it is this court which decides the orbit and boundary of every power (House of Representatives, Debates, 1902, p 10,967).

Importantly, such a role was also foreshadowed by colonial history, during which time Australian courts and the Privy Council ruled on the validity of colonial legislation. [page 15]

How (and why) the High Court of Australia became the final authority as to the constitutionality of legislation and government action 1.2.39 The Supreme Court of the United States established the legitimacy of judicial review early in its existence in the landmark decision Marbury v Madison 1 Cranch 137; 5 US 137 (1803). Marbury had been appointed to federal judicial office in the dying days of the presidency of John Adams. When President Jefferson took office he was furious about the Adams Government’s tactic of ‘stacking’ the federal judiciary with appointees whom he regarded as sympathisers with the previous administration. Jefferson’s Secretary of State, James Madison, refused to honour the judicial appointments and Marbury sought the remedy of mandamus in the Supreme Court to compel the new government to honour his commission. The question for the Supreme Court was whether the

federal statute conferring the power to issue mandamus in the court’s original jurisdiction was consistent with the provisions of art III of the United States Constitution; and if not, what were the legal consequences. 1.2.40C

Marbury v Madison 1 Cranch 137; 5 US 137 (1803)

Marshall CJ, for the court: The authority, therefore, given to the Supreme Court by the act establishing the judicial courts of the United States to issue writs of mandamus to public officers appears not to be warranted by the Constitution, and it becomes necessary to inquire whether a jurisdiction so conferred can be exercised. The question whether an act repugnant to the Constitution can become the law of the land is a question deeply interesting to the United States, but, happily, not of an intricacy proportioned to its interest. It seems only necessary to recognise certain principles, supposed to have been long and well established, to decide it. That the people have an original right to establish for their future government such principles as, in their opinion, shall most conduce to their own happiness is the basis on which the whole American fabric has been erected. The exercise of this original right is a very great exertion; nor can it nor ought it to be frequently repeated. The principles, therefore, so established are deemed fundamental. And as the authority from which they proceed, is supreme, and can seldom act, they are designed to be permanent. This original and supreme will organizes the government and assigns to different departments their respective powers. It may either stop here or establish certain limits not to be transcended by those departments. The Government of the United States is of the latter

description. The powers of the Legislature are defined and limited; and that those limits may not be mistaken or forgotten, the Constitution is written. To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may at any time be passed by those intended to be restrained? The distinction between a government with limited and unlimited powers is abolished if those limits do not confine the persons on whom they are imposed, and if acts prohibited and acts allowed are of equal obligation. It is a proposition too plain to be contested that the Constitution controls any legislative act repugnant to it, or that the Legislature may alter the Constitution by an ordinary act. Between these alternatives there is no middle ground. The Constitution is either a superior, paramount law, unchangeable by ordinary means, or it is on a level with ordinary legislative acts, and, like other acts, is alterable when the legislature shall please to alter it. [page 16] If the former part of the alternative be true, then a legislative act contrary to the Constitution is not law; if the latter part be true, then written Constitutions are absurd attempts on the part of the people to limit a power in its own nature illimitable. Certainly all those who have framed written Constitutions contemplate them as forming the fundamental and paramount law of the nation, and consequently the theory of every such government must be that an act of the Legislature repugnant to the Constitution is void. This theory is essentially attached to a written Constitution, and is consequently to be considered by this Court as one of the fundamental principles of our society. It is not, therefore, to be lost sight of in the further consideration of this subject. If an act of the Legislature repugnant to the Constitution is

void, does it, notwithstanding its invalidity, bind the Courts and oblige them to give it effect? Or, in other words, though it be not law, does it constitute a rule as operative as if it was a law? This would be to overthrow in fact what was established in theory, and would seem, at first view, an absurdity too gross to be insisted on. It shall, however, receive a more attentive consideration. It is emphatically the province and duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret that rule. If two laws conflict with each other, the Courts must decide on the operation of each. So, if a law be in opposition to the Constitution, if both the law and the Constitution apply to a particular case, so that the Court must either decide that case conformably to the law, disregarding the Constitution, or conformably to the Constitution, disregarding the law, the Court must determine which of these conflicting rules governs the case. This is of the very essence of judicial duty. If, then, the Courts are to regard the Constitution, and the Constitution is superior to any ordinary act of the Legislature, the Constitution, and not such ordinary act, must govern the case to which they both apply. Those, then, who controvert the principle that the Constitution is to be considered in court as a paramount law are reduced to the necessity of maintaining that courts must close their eyes on the Constitution, and see only the law. This doctrine would subvert the very foundation of all written Constitutions. It would declare that an act which, according to the principles and theory of our government, is entirely void, is yet, in practice, completely obligatory. It would declare that, if the Legislature shall do what is expressly forbidden, such act, notwithstanding the express prohibition, is in reality effectual. It would be giving to the Legislature a practical and real omnipotence with the same breath which professes to restrict

their powers within narrow limits. It is prescribing limits, and declaring that those limits may be passed at pleasure. That it thus reduces to nothing what we have deemed the greatest improvement on political institutions — a written Constitution, would of itself be sufficient, in America where written Constitutions have been viewed with so much reverence, for rejecting the construction. But the peculiar expressions of the Constitution of the United States furnish additional arguments in favour of its rejection. The judicial power of the United States is extended to all cases arising under the Constitution. Could it be the intention of those who gave this power to say that, in using it, the Constitution should not be looked into? That a case arising under the Constitution should be decided without examining the instrument under which it arises? This is too extravagant to be maintained.

[page 17] 1.2.41 Marbury v Madison has been referred to in a number of Australian cases, notably Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 1.2.10C. In emphasising that it was the role of the Judicature to determine constitutional facts upon which the validity of a law might depend, Fullagar J commented (83 CLR at 263): Such a law as the Communist Party Dissolution Act could clearly be passed by the Parliament of the United Kingdom or of any of the Australian States. It is only because the legislative power of the Commonwealth Parliament is limited by an instrument emanating from a superior authority that it arises in the case of the Commonwealth

Parliament. If the great case of Marbury v Madison … (1803) 1 Cr 137 had pronounced a different view, it might perhaps not arise even in the case of the Commonwealth Parliament; and there are those, even today, who disapprove of the doctrine of Marbury v Madison … and who do not see why the courts, rather than the legislature itself, should have the function of finally deciding whether an Act of a legislature in a Federal system is or is not within power. But in our system the principle of Marbury v Madison … is accepted as axiomatic, modified in varying degree in various cases (but never excluded) by the respect which the judicial organ must accord to opinions of the legislative and executive organs.

Consequences of unconstitutionality 1.2.42 Generally speaking, unconstitutionality renders legislation or executive government action invalid, which prevents the courts from enforcing it. When it comes to invalidity, technically, there is nothing special about the Australian Constitution’s status as paramount law. The consequences of its breach are similar to the consequences of breach of other public law standards (for example, where a decision-maker acts in the absence of statutory authority). Unconstitutional legislation or government action is treated as a nullity: ‘invalid’ ab initio or ‘from the beginning’. As French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ said in Haskins v Commonwealth (2011) 244 CLR 22 at 42 (quoting from Field J in Norton v Shelby County, 118 US 425, 442 (1886)): ‘An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed’. Constitutional invalidity means nothing more than that; contrary to the impression sometimes created by media commentary, unconstitutionality is not always legally complex or

morally dubious. Nor is it necessarily a barrier to similar legislative or government objectives being achieved by another, constitutionally valid, means; for example, intergovernmental cooperation: see 1.4.14–1.4.24. 1.2.43 Unlike in some private law fields (for example, contract, with its equitable shadow), there is no such thing as a voidable law or government action — with two exceptions, the consequence of unconstitutionality of a statute or executive government action is always invalidity ab initio. The exceptions are: s 109 of the Constitution causes state laws that are inconsistent with valid Commonwealth legislation to be inoperative for the duration of the inconsistency, but capable of taking effect if the inconsistency is removed (see Chapter 6); and the outcome of a constitutional challenge based on s 117 of the Constitution (see Chapter 9) may be a declaration that legislation has never been applicable to an out-of-state resident so as to discriminate against him or her; that is, that a particular person is immune from such a law. [page 18] 1.2.44 A decision that a particular Act or decision is unconstitutional ab initio often has implications for the past as well as the future. 1.2.45C

Ha v New South Wales

(1997) 189 CLR 465 Brennan CJ, McHugh, Gummow and Kirby JJ: … This Court has no power to overrule cases prospectively. A hallmark of the judicial process has long been the making of binding declarations of rights and obligations arising from the operation of the law upon past events or conduct. The adjudication of existing rights and obligations as distinct from the creation of rights and obligations distinguishes the judicial power from non-judicial power. Prospective overruling is thus inconsistent with judicial power on the simple ground that the new regime that would be ushered in when the overruling took effect would alter existing rights and obligations. If an earlier case is erroneous and it is necessary to overrule it, it would be a perversion of judicial power to maintain in force that which is acknowledged not to be the law. This would be especially so where, as here, non-compliance with a properly impugned statute exposes a person to criminal prosecution.

1.2.46 By contrast, s 172 of the South African Constitution 1996 allows that country’s constitutional court to limit the retrospective effect of a declaration of invalidity. 1.2.47 Constitutional issues can be raised by direct challenge to the validity of legislation or executive government action, but they may also be raised indirectly in proceedings under the general law (including in the High Court, which has jurisdiction over some such proceedings: see 8.3.41–8.3.42). For example, in Kruger v Commonwealth (1997) 190 CLR 1 9.7.21C, Aboriginal plaintiffs sued the Commonwealth in tort for their removal from their families as children. When the Commonwealth pleaded that the

Aboriginals Ordinance 1918 (NT) had provided lawful authority for the removals, the plaintiffs sought to overcome this defence by challenging the constitutionality of the Ordinance, or executive actions under it, on various grounds (for example, that it interfered with their freedom of religion).

Constitutional conventions 1.2.48 In the context of considering whether there really was such a thing as English constitutional law (with a written constitution this is a question that does not trouble Australians), Dicey drew attention to another aspect of that constitutional system that is relevant to Australia. 1.2.49E A V Dicey, Introduction to the Study of the Law of the Constitution, 10th ed, 1959, p 23 Constitutional law, as the term is used in England, appears to include all rules which directly or indirectly affect the distribution or the exercise of the sovereign power in the state. Hence it includes (among other things) all rules which define the members of the sovereign power, [page 19] all rules which regulate the relation of such members to each other, or which determine the mode in which the sovereign power, or the members thereof, exercise their authority. Its rules prescribe the order of succession to the throne … [and] determine the form of the legislature and its mode of election. These rules

also deal with Ministers, with their responsibility, with their spheres of action, define the territory over which the sovereignty of the state extends and settle who are to be deemed subjects or citizens. Observe the use of the word ‘rules’, not ‘laws’. This employment of terms is intentional. Its object is to call attention to the fact that the rules which make up constitutional law, as the term is used in England, include two sets of principles or maxims of a totally distinct character. The one set of rules are in the strictest sense ‘laws,’ since they are rules which (whether written or unwritten, whether enacted by statute or derived from the mass of custom, tradition, or judgemade maxims known as the common Law) are enforced by the courts; these rules constitute ‘constitutional law’ in the proper sense of that term, and may for the sake of distinction be called collectively ‘the law of the constitution’. The other set of rules consist of conventions, understandings, habits, or practices which, though they may regulate the conduct of the several members of the sovereign power, of the Ministry, or of other officials, are not in reality laws at all since they are not enforced by the Courts. This portion of constitutional law may, for the sake of distinction, be termed the ‘conventions of the constitution’, or constitutional morality. To put the same thing in a somewhat different shape, ‘constitutional law’, as the expression is used in England … consists of two elements. The one element, here called the ‘law of the constitution’, is a body of undoubted law; the other element, here called the ‘conventions of the constitution’, consists of maxims or practices which, though they regulate the ordinary conduct of the Crown, of Ministers, and of other persons under the constitution, are not in strictness laws at all …

1.2.50 Despite Dicey’s view that constitutional conventions ‘cannot be recorded in the statute-book’, some have been enacted in

Australian constitutional instruments. (Indeed, that is also the case in the United Kingdom, where the relationship between the Houses of Parliament was addressed by the Parliament Act 1911, which limited the powers of the House of Lords.) For example, the convention that the upper house will not initiate a money bill is contained in s 53 of the Commonwealth Constitution. However, as will be discussed in Chapter 2, because these provisions concern internal parliamentary relationships, the High Court still treats them as non-justiciable. Conventions supplement, or mitigate the starkness of, formal constitutional rules (sometimes to the point of neutralising their operation). In this way, they are rather like the equitable ‘shadow’ of common law rules. Perhaps the best-known example is the constitutional convention that, although executive power is formally vested in the sovereign or her representative, it will be exercised only on the advice of ministers who hold the confidence of the lower house of parliament. For a discussion of this convention of ‘responsible government’, see 7.3.1–7.3.47. It has, moreover, been suggested that conventions play a larger role in the countries that, like Australia, have written constitutions, as ‘the greater the degree of constitutional rigidity, the greater is the need for the benefits of informal adaptation which conventions bring’: Munro, 1975, p 219. 1.2.51 The relationship between constitutional law and constitutional convention is like the relationship between common law and equity in another way: written constitutions [page 20]

and other principles of constitutional law do not normally acknowledge the existence of constitutional conventions. If formal constitutional instruments do not recognise their existence and courts cannot enforce them through case law, how do we know whether or not a particular convention exists? Identifying a new convention can be particularly difficult for those outside of government, because to do so it is necessary to examine past constitutional practice, not all of which may be public. The courts do have a role in determining whether or not a convention exists where it is relevant to the outcome of an otherwise justiciable dispute. In Australia, the occasions for judicial pronouncements on constitutional conventions have been rare: see the discussion of Egan v Willis (1998) 195 CLR 424 and Egan v Chadwick (1999) 46 NSWLR 563 at 7.3.27C–7.3.31C. This is perhaps why one of the most prominent judicial statements on the nature and content of constitutional conventions is found in an advisory opinion of the Supreme Court of Canada. 1.2.52C

Re Constitution of Canada (1981) 125 DLR (3d) 1

Martland, Ritchie, Dickson, Beetz, Chouinard and Lamer JJ: … The nature of constitutional conventions [227] A substantial part of the rules of the Canadian Constitution are written … [228] Another part … consists of the rules of the common law … …

[231] Those parts of the Constitution of Canada which are composed of statutory rules and common law rules are generically referred to as the law of the Constitution. In cases of doubt or dispute, it is the function of the courts to declare what the law is and … whether it has … been breached … and, if so, to apply such sanctions as are contemplated by the law … [232] But many Canadians would perhaps be surprised to learn that important parts of the Constitution of Canada, with which they… are directly involved when they … vote at … elections, are nowhere to be found in the law of the Constitution. For instance it is a fundamental requirement of the Constitution that if the Opposition obtains the majority at the polls, the Government must tender its resignation forthwith. But fundamental as it is, this requirement of the Constitution does not form part of the law of the Constitution. [233] It is also a constitutional requirement that the person who is appointed Prime Minister or Premier by the Crown and who is the effective head of the government should have the support of the elected branch of the legislature; in practice this means in most cases the leader of the political party which has won a majority of seats at a general election. Other ministers are appointed by the Crown on the [Prime Minister’s or Premier’s] advice … when he forms or reshuffles his cabinet. Ministers must continuously have the confidence of the elected branch of the legislature [the lower house — the Canadian Senate being an appointed House], individually and collectively. Should they lose it, they must either resign or ask the Crown for a dissolution of the legislature and … general election. Most of the powers of the Crown under the prerogative are exercised only upon the advice of the Prime Minister or the Cabinet which means that they are effectively exercised by the latter, together with the innumerable statutory powers delegated to the Crown in council.

[page 21] [234] Yet none of these essential rules of the Constitution can be said to be a law of the Constitution. It was apparently Dicey who, in the first edition of his Law of the Constitution, in 1885, called them ‘the conventions of the constitution’, (W.S. Holdsworth, The conventions of the eighteenth century constitution (1932) 17 Iowa Law Rev 161) an expression which quickly became current. What Dicey described under these terms are the principles and rules of responsible government, several of which are stated above and which regulate the relations between the Crown, the Prime Minister, the Cabinet and the two Houses of Parliament. These rules developed in [the United Kingdom] by way of custom and precedent during the [19th] century and were exported to such British colonies as were granted self-government. [235] Dicey first gave the impression that constitutional conventions are a peculiarly British and modern phenomenon. But he recognized in later editions that different conventions are found in other constitutions. As Sir William Holdsworth wrote: In fact conventions must grow up at all times and in all places where the powers of government are vested in different persons or bodies — where in other words there is a mixed constitution. ‘The constituent parts of a state,’ said Burke, [[Reflections on the] French Revolution [1790], 28] ‘are we obliged to hold their public faith with each other, and with all those who derive any serious interest under their engagements, as much as the whole state is bound to keep its faith with separate communities.’ Necessarily conventional rules spring up to regulate the working of the [various parts of the constitution, their relations to one another, and to the subject. (WS Holdsworth, op cit p 162.) [236] Within the British Empire, powers of government were

vested in different bodies which provided a fertile ground for the growth of new constitutional conventions unknown to Dicey whereby self-governing colonies acquired equal and independent status within the Commonwealth. Many of these culminated in the Statute of Westminster 1931, 22 Geo 5, c 4. [237] A federal constitution provides for the distribution of powers between various legislatures and governments and may also constitute a fertile ground for the growth of constitutional conventions between those legislatures and governments. It is conceivable for instance that usage and practice might give birth to conventions in Canada relating to the holding of federalprovincial conferences, the appointment of lieutenant-governors, the reservation and disallowance of provincial legislation. It was to this possibility that Duff, CJC, alluded when he referred to ‘constitutional usage or constitutional practice’ in Reference re The Power of the Governor General in Council to disallow provincial legislation and the Power of Reservation of the Lieutenant-Governor of a Province [1938] SCR 71, at p 78. He had previously called them ‘recognized constitutional conventions’ in Wilson v Esquimalt and Nanaimo Ry Co, [1922] 1 AC 202, at p 210. [238] The main purpose of constitutional conventions is to ensure that the legal framework of the Constitution will be operated in accordance with the prevailing constitutional values or principles of the period. For example, the constitutional value which is the pivot of the conventions stated above … relating to responsible government is the democratic principle: the powers of the state must be exercised in accordance with the wishes of the electorate; and the constitutional value or principle which anchors the conventions regulating the relationship between the members of the Commonwealth is the independence of the former British colonies.

[page 22] [239] Being based on custom and precedent, constitutional conventions are usually unwritten rules. Some of them however may be reduced to writing and expressed in the proceedings and documents of imperial conferences, or in the preamble of statutes such as the Statute of Westminster 1931, or in the proceedings and documents of federal-provincial conferences. They are often referred to and recognized in statements made by members of governments. [240] The conventional rules of the Constitution present one striking peculiarity. In contradistinction to the laws of the Constitution, they are not enforced by the courts. One reason for this situation is that, unlike common law rules, conventions are not judge-made rules. They are not based on judicial precedents but on precedents established by the institutions of government themselves. Nor are they in the nature of statutory commands which it is the function and duty of the courts to obey and enforce. Furthermore, to enforce them would mean to administer some formal sanction when they are breached. But the legal system from which they are distinct does not contemplate formal sanctions for their breach. [241] Perhaps the main reason why conventional rules cannot be enforced by the courts is that they are generally in conflict with the legal rules which they postulate and the courts are bound to enforce the legal rules. The conflict is not of a type which would entail the commission of any illegality. It results from the fact that legal rules create wide powers, discretions and rights which conventions prescribe should be exercised only in a certain limited manner, if at all.

1.2.53 For further discussion of the impact of constitutional conventions, see Jennings, 1972; and Heard, 1991. If conventions are based on custom and past practice, how do you tell the difference between a convention and an erroneous practice? 1.2.54E

Twomey, ‘Changing the Leader — The Constitutional Conventions Concerning the Resignation of Prime Ministers and Premiers’ (2011) 39 Federal Law Review 329 at 360

Just because something has been done one way in the past, is not necessarily reason for doing it again in the same way in the future. The question should be whether the precedent or ‘convention’ is consistent with the fundamental constitutional principles of representative and responsible government, and how best to accommodate clashes between existing principles. In constitutional law, precedents … are useful because of what they reveal about the scope and application of fundamental constitutional principles. They help deepen our knowledge and understanding, but should never be applied rigidly or woodenly.

SOURCES OF AUSTRALIAN CONSTITUTIONAL LAW The contribution of history 1.3.1 To adapt the adage about history, we might say that constitutional law also belongs to the victors. Certainly, the

constitutional history of most nation states is too messy to organise itself into the kind of clear, uncontested narrative normally required of constitutional norms. The processes by which one authoritative version of a nation’s history comes to be legally [page 23] accepted over others, like any process of legal (and historical) interpretation, may involve considerable violence, whether in the form of other rights or claims rejected, people relocated or denied protection from one another, or past atrocities legitimised. Australian constitutional law exhibits a curious mixture of openness and obliviousness to its history. Australia is still treated for constitutional purposes like the ‘tract of territory practically unoccupied, without settled inhabitants or settled law, at the time when it was peacefully annexed to the British dominions’ described by the Privy Council in the late 19th century: Cooper v Stuart 14 App Cas 286. The law regarding the legitimacy of Australia’s foundation has not changed, despite the description of the Privy Council’s characterisation of pre-colonial inhabitants of Australia as ‘a discriminatory denigration of indigenous inhabitants, their social organization and customs’ in Mabo v Queensland (No 2) (1992) 175 CLR 1 at 40 per Brennan CJ. Several other episodes of violence in history that have contributed to Australian constitutional law are also underplayed or treated as overtaken by subsequent events. For example, the English Civil Wars of the mid-17th century, and the protestant republic and military ‘protectorate’ established as a result, killed hundreds of thousands of people: not just King Charles I, but

perhaps a quarter of Ireland’s population in an episode of religiously-motivated ethnic cleansing. Those events, and others like the expulsion of Catholic Acadians from Atlantic Canada by Protestant Britain, inform the concern of the Australian (and particularly the United States) Constitution to avoid ‘establishment’ of a state church: see s 116; compare Amendment I of the United States Constitution, adopted as part of the Bill of Rights in 1791. However, in Australian constitutional law we tend to regard the English Civil Wars and protectorate as overshadowed by the ‘Glorious’ or ‘Bloodless’ Revolution of 1688, which deposed James II (whose family were restored to the throne after the republic experiment went badly wrong) in favour of monarchs prepared to share power with parliament. Similarly, New South Wales’ status as a violent penal colony ruled by governors with absolute powers is usually overlooked in favour of the 1828 ‘confirmation’ that this group of involuntary ‘settlers’ were among those who managed to import the English common law and its right to parliamentary governance into the colony in the hulls of the ships of the First Fleet. 1.3.2 It can be tempting to think of Australia’s British legal heritage in particular as consisting of a set of rules or institutions of a single provenance and vintage that arose neatly out of deliberate, co-ordinated human action. Such a characterisation may have been inadvertently encouraged by political or legal theories dating from the European ‘Age of Enlightenment’ (the late 17th and 18th centuries) which sought to ground the authority of governments on ‘the consent of the governed’ or ‘popular sovereignty’. Whatever their contribution to our understanding or justification of contemporary constitutional arrangements, those theories do not explain how constitutional rules or institutions evolved historically,

not least because Enlightenment theory post-dates many of those developments. The law ‘received’ into Australia upon its colonisation (or, effectively, in 1828) was a product of a long and complex history. It had rid itself of some nasty doctrines and institutions (for example, of slavery, which had been permitted in Anglo-Saxon England, or villeinage, under which lesser humans were tied to a manor and its lord in mediaeval times), although oppressive labour conditions were sometimes still imposed by statute (for example, on the convicts transported to Australia under convict codes, or on the residents of other territorial possessions by territory-specific laws which would not be tolerated in Britain). Legal institutions that we [page 24] take for granted today (for example, the full capacity of women to own property after marriage) did not develop for another century. Only the common law and British statutes then in force attempted the journey to New South Wales and (later) Western Australia: other legal regimes (for example, ecclesiastical law (Colenso’s case (1864) 3 Moo PC NS 116)) stayed behind, along with obsolete tenures of English property law: Wik Peoples v Queensland (1996) 187 CLR 1 at 111–12 per Toohey J. Despite the common law’s reputation as a ‘law of the land’ (as opposed to the law of the church, or of the manor which prevailed in mediaeval times), the doctrine of parliamentary sovereignty was productive of many more arbitrary regimes. It is also worth remembering that Australia has led ‘the motherland’ with some constitutional innovations — notably,

‘universal’ male suffrage, which was achieved in Australia 60 years before it was finally introduced in Britain (albeit accompanied by the establishment of upper houses elected on more limited franchises with greater powers than the House of Lords), and female suffrage (as to which, see 2.5.2–2.5.4). Further, although much ‘American’ constitutional interpretation occurred in the 19th century, these processes have continued to develop since Australian federation.

The longevity of Imperial power in Australia Imperial power to legislate and the problem of ‘repugnancy’ of local laws 1.3.3 After representative institutions were established in the Australian colonies from the 1820s, the inherited English law was subject to modification in two ways. First, the United Kingdom Parliament might continue to legislate for the colonies; that is, pass new legislation intended to extend not only to the United Kingdom but also to the overseas territories of the Crown. Some important statutes of empire (for example, the Slavery Abolition Act 1833) laid down the law for the colonies as well as the United Kingdom. However, such legislation became less common after the colonies were granted responsible government from the 1850s. Second, local colonial legislatures might modify the inherited law to suit their circumstances. However, since the colonies were themselves creatures of United Kingdom statute, they could not repeal Imperial legislation extended to the colonies after their establishment, or legislate in a manner repugnant to it. (This rule still applies to the legislatures of the Australian self-governing

territories, which are creatures of Commonwealth statute.) The extent of the colonies’ power to modify the introduced law was a matter of considerable dispute. A number of colonial Acts were declared invalid by the cantankerous and under-qualified South Australian judge Benjamin Boothby. From his appointment to the bench in 1853 until his removal in 1867, Boothby J pursued a consistent policy of protecting English law (both statute and common law) against local legislative innovations. He declared invalid the Constitution Act, the Real Property Act, two Electoral Acts, legislation establishing the Court of Appeal and the appointment of the Chief Justice of the South Australian Supreme Court, on the ground that the local legislation was inconsistent with ‘fundamental’ principles of English common law: Castles, 1963–66, at 22–31. Even from its establishment in 1901, the Commonwealth of Australia was subject, just as the states were, to the legislative power of the United Kingdom Parliament. That parliament could legislate for, and extend its legislation to, the Commonwealth as a whole. Examples of this were the enactment of the Copyright Act 1911 (UK), discussed in Copyright Owners Reproduction Society Ltd v EMI (Aust) Pty Ltd (1958) 100 CLR 597, the Naval Discipline [page 25] (Dominion Naval Forces) Act 1911 (UK), considered by the High Court in R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452, and the formulation of citizenship rules for the entire empire under the Naturalisation and Aliens Act 1914 (UK).

Colonial Laws Validity Act 1865 1.3.4 The confusion generated by Boothby J’s erratic judicial behaviour was largely removed by an Imperial statute extended to the colonies: the Colonial Laws Validity Act 1865 (UK). Section 2 declared ‘absolutely void and inoperative’ any colonial law that was repugnant to the provisions of any United Kingdom legislation extending to the colony. Section 3 provided that, in the absence of such conflict, no colonial law could be impeached because of its ‘repugnancy to the Law of England’. The main purpose of the Act of 1865 was to free colonial legislatures from Boothbyism. Consequently, the critical section was s 3, a point emphasised in Union Steamship Co of New Zealand Ltd v Commonwealth (1925) 36 CLR 130 by Higgins J at 155–6: The object of the Act of 1865 was not so much to preserve the rights of the British Parliament against encroaching colonial legislatures, as to make it clear that a colonial legislature, acting for the colony in pursuance of the powers of legislation conferred, might act freely and without constraint from London, excepting only so far as a British Act, applying or extending to the Colony, definitely contradicted the colonial legislation … The colonial Act is to be valid except to the extent of any actual repugnancy or direct collision between the two sets of provisions. Such a concession on the part of the supreme Parliament marks a very high level of liberality, foresight, statesmanship.

1.3.5 However, the rules that the United Kingdom Parliament could still legislate for Australia and that the colonies (later states) could not repeal or amend United Kingdom legislation extended to them were not disturbed until the passage of the Australia Act 1986 (Cth). By 1986 the prime focus of attention on the Colonial Laws Validity Act was on s 2, which inhibited the legislative powers of state parliaments in a fashion that bore no relation to

their contemporary political status. The Australia Act was, essentially, a legal endorsement of that contemporary status: see Goldring, 1986, p 204. Its relevant provisions are extracted at 1.3.20E.

Privy Council appeals 1.3.6 Until the passage of the Australia Act 1986 (Cth), state courts were still part of the appellate court hierarchy of the empire, at the apex of which was the Privy Council. The Commonwealth Constitution provides for appeals to the Privy Council from decisions of the High Court on ‘question[s] … as to the limits inter se of the Constitutional powers of the Commonwealth and those of any State or States, or as to the limits inter se of the Constitutional powers of any two or more States’ if ‘the High Court shall certify that the Question is one which ought to be determined by Her Majesty in Council’: s 74. The High Court has not so certified for over a century. As Lane observed: In the whole history of the High Court only one such certificate has been granted, and that a limited one, as far back as the year 1912, in Colonial Sugar Refining Co Ltd v Attorney-General (Cth) (15 CLR 182), while on occasions the certificate has been refused, such refusal being accompanied by judicial comments reflecting an entirely non-receptive attitude on the part of the Court to future applications for certification (see Wynes, Legislative, Executive and

[page 26] Judicial Powers in Australia (5th ed, 1976), pp. 532–533). The judgments in the recent case of Viro v The Queen ((1978) 52 ALJR 418,

noted in 52 ALJR 345), where the High Court ruled that it would henceforth cease to be bound by Privy Council decisions made it clear beyond doubt that never again would any such certificate be granted. The result is that every one of the three paragraphs of s 74 of the Constitution is now a dead letter. In particular, the first two paragraphs as to appeals to the Privy Council on inter se questions could be effected only by Imperial Act or by amendment of the Constitution under s 128 thereof, such deletion is now really unnecessary. (Lane, (1978) Australian Law Journal at 533.)

As s 74 of the Constitution also allows, the Commonwealth Parliament had prevented appeals to the Privy Council from federal and territory courts, other than decisions of the High Court on questions within state jurisdiction in 1968 (Privy Council (Limitation of Appeals) Act 1968 (Cth)) and abolished all appeals from the High Court to the Privy Council in 1975: Privy Council (Appeals from the High Court) 1975 (Cth). However, appeals from state Supreme Courts to the Privy Council continued until the enactment of the Australia Acts 1986 (Cth and UK): see Stellios, 2010, Ch 2.

Balfour Declaration 1926 and Statute of Westminster 1931 1.3.7 In the period from 1901 until the adoption of the Statute of Westminster by the Commonwealth Parliament in 1942, the legislative power of the Commonwealth Parliament was subject to the same Imperial restrictions as those imposed on the states. That is, parliament was subject to s 2 of the Colonial Laws Validity Act 1865 (UK) and, therefore, incompetent to repeal or amend legislation of the United Kingdom Parliament extending to Australia.

This point was demonstrated in Union Steamship Co of New Zealand Ltd v Commonwealth (1925) 36 CLR 130. The High Court decided that provisions of the Navigation Act 1912 (Cth) were repugnant to the Merchant Shipping Acts 1894 and 1906 (UK), which extended to Australia. Isaacs J said that the United Kingdom Acts dealt with the subject of merchant shipping ‘from the standpoint of what is now recognised as the British Commonwealth of Nations [while the Navigation Act] treats the subject-matter from an all-Australian standpoint’: 36 CLR at 147. He likened repugnancy between United Kingdom and Commonwealth legislation under s 2 of the Colonial Laws Validity Act to inconsistency between Commonwealth and state legislation under s 109 of the Commonwealth Constitution. He said that the Commonwealth legislation was repugnant to the Merchant Shipping Acts because the two pieces of legislation could not ‘stand together’. They could only do this, Isaacs J said, if they were ‘identical; and not merely identical in terms but identical in obligation’: 36 CLR at 150. Imperial controls also continued to apply to the Commonwealth executive. In this early period, the Governor-General fulfilled a dual role as head of the Commonwealth of Australia and Australian representative of Her Majesty’s United Kingdom Government. His Imperial functions were exercised on the advice of United Kingdom ministers, who answered to the Imperial Parliament, not to the Commonwealth Parliament or its electors, and he was appointed on London’s advice. 1.3.8 In 1926, an Imperial Conference of prime ministers from the United Kingdom, Canada, Australia, New Zealand, Newfoundland and South Africa was called, on the request of Canadian Prime Minister Mackenzie King. King was concerned

over what he saw as British interference in a Canadian political crisis, and about the Privy Council’s decision in Nadan v R [1926] AC 482, which declared invalid Canadian legislation passed almost 40 years earlier to [page 27] abolish certain appeals to the Privy Council. As the Canadian Supreme Court recognised in Re Constitution of Canada (1981) 125 DLR (3d) 1 1.2.52C, these conferences were a source of constitutional convention on the proper relationships between the United Kingdom and the dominions, even before enactment of the Statute of Westminster 1931. The conference adopted the report of its Inter-Imperial Relations Committee as the following ‘Declaration’ (not to be confused with the 1917 letter signed by the same British politician supporting establishment of a Jewish homeland in Palestine). 1.3.9E

‘Balfour Declaration’ 1926 Report of Imperial Conference (1926) Cmd 2768

… II. STATUS OF GREAT BRITAIN AND THE DOMINIONS. There is … one most important element in [the British Empire] which, from a strictly constitutional point of view, has now, as regards all vital matters, reached its full development — we refer to the group of self-governing communities composed of Great Britain and the dominions. Their position and mutual relation may be readily defined. They are autonomous communities within the British Empire, equal in status, in no way subordinate one to

another in any aspect of their domestic or external affairs, though united by a common allegiance to the Crown, and freely associated as members of the British Commonwealth of Nations. … Equality of status, so far as Britain and the Dominions are concerned, is thus the root principle governing our Inter-Imperial Relations … IV. RELATIONS BETWEEN THE VARIOUS PARTS OF THE BRITISH EMPIRE … (b) Position of Governors-General … [T]he position held by the Governor-General as His Majesty’s representative in the Dominions … undoubtedly represents a development from an earlier stage when the Governor-General was appointed solely on the advice of His Majesty’s Ministers in London and acted also as their representative. In our opinion it is an essential consequence of the equality of status existing among the members of the British Commonwealth of Nations that the Governor-General of a Dominion is the representative of the Crown, holding in all essential respects the same position in relation to the administration of public affairs in the Dominion as is held by His Majesty the King in Great Britain, and that he is not the representative or agent of Majesty’s Government in Great Britain or of any Department of that Government. It seemed to us to follow that the practice whereby the Governor-General of a Dominion is the formal official channel of communication between His Majesty’s Government in Great Britain and His Governments in Dominions might be regarded as no longer wholly in accordance with the constitutional position of the Governor-General. It was thought that the recognised official channel of communication should be, in future, between Government and Government direct. The representatives of Great Britain readily recognised that the existing procedure might be

open to criticism and accepted the proposed change in principle in relation to any of the Dominions which desired it … … [I]t is the right of the Government of each Dominion to advise the Crown on all matters relating to its own affairs. Consequently, it would not be in accordance with constitutional practice for advice to be tendered to His Majesty by His Majesty’s Government … [on a Dominion matter] against the views of the Government of that Dominion.

[page 28] 1.3.10 The Balfour Report recommended appointment of a committee to review the legal relationship between the United Kingdom and its dominions. In 1929, another Imperial Conference on Dominion Legislation and Merchant Shipping Legislation recommended that the United Kingdom Parliament legislate to free the self-governing dominions from their position of legal subservience to Imperial legislation. This conference drafted, and recommended the enactment of, what are now ss 2, 3 and 4 of the Statute of Westminster 1931 (UK) 1.3.11E. In 1930, a further Imperial Conference of Dominion Prime Ministers endorsed the 1929 recommendations and proposed that, after resolutions had been passed by the various dominion parliaments (which occurred in Australia in 1931), the United Kingdom Parliament enact the Statute of Westminster. The Statute of Westminster 1931: set out in its preamble a number of conventions governing intra-empire relationships;

disapplied the Colonial Laws Validity Act ‘repugnancy’ rule to dominion parliaments; provided that the Imperial Parliament would enact new legislation in areas of dominion constitutional responsibility only with the ‘request and consent’ of their parliaments; confirmed dominion legislatures’ competence (see 1.6.1–1.6.15); and

extra-territorial

disapplied to dominions the Imperial Merchant Shipping Acts. 1.3.11E

Statute of Westminster 1931 (UK)

An Act to give effect to certain resolutions passed by Imperial conferences held in the years 1926 and 1930 Whereas the delegates of His Majesty’s Governments in the United Kingdom [and six Dominions] at Imperial conferences … in … 1926 and 1930 did concur in making the declarations and resolutions set forth in the reports of the said conferences. And whereas it is meet and proper to set out by way of preamble to this Act that … it would be in accord with the established constitutional position of all the members of the Commonwealth in relation to one another that any alteration in the law touching the Succession to the Throne or the Royal Style and Titles shall hereafter require the assent as well of the Parliaments of all the Dominions as of the [United Kingdom] Parliament … And whereas it is in accord with the established constitutional position that no law hereafter made by the [United Kingdom] Parliament … shall extend to any of the said Dominions as part of the law of that Dominion otherwise than at the request and with the consent of that Dominion.

And whereas it is necessary for the ratifying, confirming and establishing of certain of the said declarations and resolutions of the said conferences that a law be made and enacted in due form by authority of the [United Kingdom] Parliament … And whereas the [six Dominions] have severally requested and consented to the submission of a measure to the [United Kingdom] Parliament … for making such provision with regard to the matters aforesaid as is hereafter in this Act contained. Meaning of ‘Dominion’ in this Act 1 In this Act the expression ‘Dominion’ means any of the following Dominions, that is to say, the Dominion of Canada, the Commonwealth of Australia, the Dominion of New Zealand, the Union of South Africa, the Irish Free State and Newfoundland. [page 29] Validity of laws made by Parliament of a Dominion 2(1) The Colonial Laws Validity Act, 1865, shall not apply to any law made after the commencement of this Act by the Parliament of a Dominion. (2) No law and no provision of any law made after the commencement of this Act by the Parliament of a Dominion shall be void or inoperative on the ground that it is repugnant to the law of England, or to the provisions of any existing or future Act of Parliament of the United Kingdom, or to any order, rule or regulation made under any such Act, and the powers of the Parliament of a Dominion shall include the power to repeal or amend any such Act, order, rule or regulation in so far as the same is part of the law of the Dominion. Power of Parliament of Dominion to legislate extra-territorially

3

It is hereby declared and enacted that the Parliament of a Dominion has full power to make laws having extraterritorial operation.

[United Kingdom Parliament] not to legislate for Dominion except by consent 4 No Act of Parliament of the United Kingdom passed after the commencement of this Act shall extend, or be deemed to extend, to a Dominion as part of the law of that Dominion, unless it is expressly declared in that Act that that Dominion has requested, and consented to, the enactment thereof. Powers of Dominion Parliaments in relation to merchant shipping 5

6 7

Without prejudice to the generality of sections 1 to 3, sections 735 and 736 of the Merchant Shipping Act 1894, shall be construed as though reference therein to the legislature of a British possession did not include reference to the Parliament of a Dominion. … …

Saving for Constitution Acts of Australia and New Zealand 8 Nothing in this Act shall be deemed to confer any power to repeal or alter the Constitution or the Constitution Act of the Commonwealth of Australia or the Constitution Act of the Dominion of New Zealand otherwise than in accordance with the law existing before the commencement of this Act. Saving with respect to States of Australia 9(1) Nothing in this Act shall be deemed to authorize the Parliament of the Commonwealth of Australia to make laws on any matter within the authority of the States of

Australia, not being a matter within the authority of the Parliament or Government of the Commonwealth of Australia. (2) Nothing in this Act shall be deemed to require the concurrence of the Parliament or Government of the Commonwealth of Australia in any law made by the [United Kingdom] Parliament … with respect to any matter within the authority of the States of Australia, not being a matter within the authority of the Parliament or Government of the Commonwealth of Australia, in any case where it would have been in accordance with the constitutional practice existing before the commencement of this Act that the [United Kingdom] Parliament … should make that law without such concurrence. (3) In the application of this Act to the Commonwealth of Australia the request and consent referred to in section four shall mean the request and consent of the Parliament and Government of the Commonwealth. [page 30] Certain sections of Act not to apply to Australia, New Zealand or Newfoundland unless adopted 10 (1) None of the following sections of this Act, that is to say, sections two, three, four, five and six, shall extend to a Dominion to which this section applies as part of the law of that Dominion unless that section is adopted by the Parliament of the Dominion, and any Act of that Parliament adopting any section of this Act may provide that the adoption shall have effect either from the commencement of this Act or from such later date as is specified in the adopting Act. (2) The Parliament of any such Dominion as aforesaid may

at any time revoke the adoption of any section referred to in subsection (1) of this section. (3) The Dominions to which this section applies are the Commonwealth of Australia, the Dominion of New Zealand and Newfoundland. Meaning of colony in future Acts 11 Notwithstanding anything in the Interpretation Act, 1889, the expression ‘Colony’ shall not, in any Act of the Parliament of the United Kingdom passed after the commencement of this Act, include a Dominion or any Province or State forming part of a Dominion.

1.3.12 Some former British external territories were transferred to Australia after the enactment in Canberra of ‘request and consent’ Acts. The necessity for United Kingdom legislation, passed after the commencement of the Statute of Westminster and purporting to extend to the Commonwealth of Australia, to contain such a declaration was emphasised by the High Court in Copyright Owners Reproduction Society Ltd v EMI (Aust) Pty Ltd (1958) 100 CLR 597. The court decided that, although the Copyright Act 1911 (UK) had extended to Australia because it contained an express provision to that effect, the repeal of the 1911 Act by the Copyright Act 1956 (UK) did not affect the former Act’s operation in Australia. Antipodeans were slow to take up the independence offered by the Statute of Westminster. Partly because of the outbreak of World War II, and partly because of state resistance, Australia was among the last dominions to adopt it, as s 10 of the statute required — retrospectively from the date of the United Kingdom’s (and therefore Australia’s) declaration of hostilities in World War II.

1.3.13E Statute of Westminster Adoption Act 1942 (Cth) 3 Adoption of Statute of Westminster 1931 Sections 2 to 6 of the Imperial Act entitled the Statute of Westminster 1931 (which Act is set out in the schedule) are adopted and the adoption shall have effect from 3 September 1939.

1.3.14 The abolition of the Commonwealth’s colonial disabilities was a belated legal recognition of the political reality of Australia’s autonomy and its emergence as a de facto independent member of the international community. For an account of this emergence, see Zines, 1977, pp 22–35, 38–43. However, the Statute of Westminster said nothing about the [page 31] Australian states, so that, despite the unqualified fact of Australia’s political autonomy, state parliaments remained subject to the constitutional disabilities that flowed from their former colonial status.

The Australia Acts 1.3.15 Westminster’s continuing power to legislate for Australia was particularly felt in an area of historical importance to Britain as

a former maritime power. In the 1970s, in China Ocean Shipping Co v South Australia (1979) 145 CLR 172, the High Court concluded that ss 503 and 504 of the Merchant Shipping Act 1894 (UK) applied to a ship’s collision with a jetty in South Australia’s Spencer Gulf. The court pointed to s 509 of the Imperial Act, which declared that the relevant sections were to ‘extend to the whole of Her Majesty’s Dominions’, and to the 19th century orthodoxy that the United Kingdom Parliament had the paramount power to legislate for Australia. Neither the Commonwealth of Australia Constitution Act 1900 (UK) nor the Statute of Westminster 1931 (UK) removed that power, although each of them marked a significant step towards Australian independence from the United Kingdom. Stephen J conceded that the continuation of Imperial laws regulating merchant shipping in the Australian states had created an unsatisfactory situation ((1979) 145 CLR at 214): It is a situation which has remained substantially unaltered through the lives of many successive governments, Imperial law continuing to overlay what might be thought to be proper areas for the operation of Australian laws. It no doubt calls for radical reform but it is by legislative initiative, possible ever since the adoption of the Statute of Westminster, that it must be achieved and not, at least in my view, by the adoption of the defendant’s present submission [that the Imperial legislation was no longer in force in Australia].

1.3.16 The ongoing power of the Imperial Parliament to legislate for Australia created significant practical problems. What if the United Kingdom Parliament legislated for the whole empire in the 19th century, but only repealed the same measure for the United Kingdom in the 20th century? This is exactly the problem that confronted the Victorian Supreme Court in the 1970s. In Ukley v Ukley [1977] VR 121, the Full Court of the Victorian

Supreme Court exhibited real reluctance to accept that the Imperial repeal power had actually been exercised. It concluded that the Foreign Tribunals Evidence Act 1856 (UK), which applied in Victoria because the United Kingdom Parliament had extended it to Victoria, had not been repealed in Victoria by the Evidence (Proceedings in Other Jurisdictions) Act 1975 (UK). The latter Act contained no express reference to Victoria, or to any of the Australian states, though it was argued that, because the 1975 Act repealed the whole of the 1856 Act, it had the effect of repealing that Act in Victoria. The Full Court examined what it described as the ‘gradual change over the last hundred years’ in judicial and political attitudes towards United Kingdom legislation in overseas territories of the Crown. Notwithstanding that the Statute of Westminster failed to exempt the Australian states from the power of the United Kingdom Parliament, the court said ([1977] VR 130): [I]t cannot be doubted that in these times the Parliament at Westminster would not legislate so as to affect the law in operation in an Australian State except at the request of and with the consent of the State concerned.

[page 32] The court rejected an argument that a United Kingdom statute repealing an earlier Act that had applied to Victoria would automatically repeal the earlier Act in Victoria. ‘The strong and unbending convention’, that the Imperial Parliament would only legislate for a self-governing dominion with the consent of that dominion, told against such an argument: [1977] VR at 131.

1.3.17 In 1972, the New South Wales Law Reform Commission published a Working Paper on Legislative Powers in which it recommended that the United Kingdom Parliament be asked to legislate for the Australian states in terms similar to those used in the Statute of Westminster. In 1982, a conference of Commonwealth and state political leaders agreed to proceed along those lines. That agreement was refined at a second conference in 1984, when the process that led to the enactment of the Australia Act 1986 (Cth) and the Australia Act 1986 (UK) was settled. 1.3.18 By 1984, the Commonwealth and state governments had agreed that legislation should be enacted to terminate the relics of the states’ colonial pasts. Following further negotiations with the United Kingdom, a series of Acts was passed by the state, Commonwealth and United Kingdom parliaments. Each state parliament legislated to request the Commonwealth Parliament to enact the two Acts: see, for example, the Australia Acts (Request) Act 1985 (Vic). The Commonwealth Parliament then passed the two Acts at the end of 1985. The first and substantive Act was entitled the Australia Act 1986 (Cth). The second Act, the Australia (Request and Consent) Act 1985 (Cth), was a legislative request, directed to the United Kingdom Parliament, designed to remove the technical barrier to United Kingdom legislation operating in Australia as a whole: Statute of Westminster s 4. It requested of the United Kingdom Parliament that it complement the Commonwealth Parliament’s Australia Act by enacting a United Kingdom Australia Act. The United Kingdom Parliament responded to that request by passing the Australia Act 1986 (UK). So, at the end of this series of enactments, there were two substantially identical versions of the Australia Act, each one declared to come into operation on 3 March 1986, one passed by

the Commonwealth Parliament under s 51 (xxxviii) of the Commonwealth Constitution, the other passed by the United Kingdom Parliament in the exercise of its surviving Imperial authority, invoked by the Commonwealth Parliament’s request and consent. As Professor Zines explains, this series of legislation at three levels was used ‘to ensure that no argument could occur as to the validity of the arrangements’: Zines, 2008, p 421. For a detailed account of the enactment of the Australia Acts, see Twomey, 2010. 1.3.19 The High Court’s decision in Port MacDonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340 has put to rest any doubts as to the validity of the Australia Act 1986 (Cth). In the unanimous opinion of the court, s 51(xxxviii) of the Constitution should be given a broad interpretation reflecting its ‘national purpose of a fundamental kind’, which is that of ‘plugging gaps which might otherwise exist in the overall plenitude of the legislative powers exercisable by the Commonwealth and state parliaments under the Constitution’: 168 CLR 378, 379. [page 33]

1.3.20E

Australia Act 1986 (Cth)

WHEREAS the Prime Minister of the Commonwealth and the Premiers of the States at conferences held in Canberra on 24 and 25 June 1982 and 21 June 1984 agreed on the taking of certain measures to bring constitutional arrangements affecting the Commonwealth and the States into conformity with the status of

the Commonwealth of Australia as a sovereign, independent and federal nation: AND WHEREAS in pursuance of paragraph 51(xxxviii) of the Constitution the Parliaments of all the States have requested the Parliament of the Commonwealth to enact an Act in the terms of this Act: BE IT THEREFORE ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows: Termination of power of Parliament of United Kingdom to legislate for Australia 1 No Act of the Parliament of the United Kingdom passed after the commencement of this Act shall extend, or be deemed to extend, to the Commonwealth, to a State or to a Territory as part of the law of the Commonwealth, of the State or of the Territory. Legislative powers of Parliaments of States 2(1) It is hereby declared and enacted that the legislative powers of the Parliament of each State include full power to make laws for the peace, order and good government of that State that have extra-territorial operation. (2) It is hereby further declared and enacted that the legislative powers of the Parliament of each State include all legislative powers that the Parliament of the United Kingdom might have exercised before the commencement of this Act for the peace, order and good government of that State but nothing in this subsection confers on a State any capacity that the State did not have immediately before the commencement of this Act to engage in relations with countries outside Australia. Termination of restrictions on legislative powers of Parliaments of

States 3(1) The Act of the Parliament of the United Kingdom known as the Colonial Laws Validity Act 1865 shall not apply to any law made after the commencement of this Act by the Parliament of a State. (2) No law and no provision of any law made after the commencement of this Act by the Parliament of a State shall be void or inoperative on the ground that it is repugnant to the law of England, or to the provisions of any existing or future Act of the Parliament of the United Kingdom, or to any order, rule or regulation made under any such Act, and the powers of the Parliament of a State shall include the power to repeal or amend any such act, order, rule or regulation in so far as it is part of the law of the State. Powers of State Parliaments in relation to merchant shipping 4 Sections 735 and 736 of the Act of the Parliament of the UK known as the Merchant Shipping Act 1894, insofar as they are part of the law of a State, are hereby repealed. Commonwealth Constitution, Constitution Act and Statute of Westminster not affected 5 Sections 2 and 3(2) above — (a) are subject to the Commonwealth of Australia Constitution Act and to the Constitution of the Commonwealth; and [page 34] (b) do not operate so as to give any force or effect to a provision of an Act of the Parliament of a State that would repeal, amend or be repugnant to this Act, the

Commonwealth of Australia Constitution Act, the Constitution of the Commonwealth or the Statute of Westminster 1931 as amended and in force from time to time. … State laws not subject to disallowance or suspension of operation 8 An Act of the Parliament of a State that has been assented to by the Governor of the State shall not, after the commencement of this Act, be subject to disallowance by Her Majesty, nor shall its operation be suspended pending the signification of Her Majesty’s pleasure thereon. State laws not subject to withholding of assent or reservation 9(1) No law or instrument shall be of any force or effect in so far as it purports to require the Governor of a State to withhold assent from any Bill for an Act of the State that has been passed in such manner and form as may from time to time be required by a law made by the Parliament of the State. (2) No law or instrument shall be of any force or effect in so far as it purports to require the reservation of any Bill for an Act of a State for the signification of Her Majesty’s pleasure thereon. … Termination of appeals to Her Majesty in Council 11 (1) Subject to subsection (4) below, no appeal to Her Majesty in Council lies or shall be brought, whether by leave or special leave of any court or of Her Majesty in Council or otherwise, and whether by virtue of any Act of the Parliament of the United Kingdom, the Royal Prerogative or otherwise, from or in respect of any decision of an Australian court. … (4) Nothing in the foregoing provisions of this section —

(a) affects an appeal instituted before the commencement of this Act to Her Majesty in Council from or in respect of a decision of an Australian court; or (b) precludes the institution after that commencement of an appeal to Her Majesty in Council from or in respect of such a decision where the appeal is instituted — (i) pursuant to leave granted by an Australian court on an application made before that commencement; or (ii) pursuant to special leave granted by Her Majesty in Council on a petition presented before that commencement, but this subsection shall not be construed as permitting or enabling an appeal to Her Majesty in Council to be instituted or continued that could not have been instituted or continued if this section had not been enacted. Amendment of Statute of Westminster 12 Sections 4, 9(2) and (3) and 10(2) of the Statute of Westminster 1931, in so far as they are part of the law of the Commonwealth, of a State or of a Territory, are hereby repealed. … Method of repeal or amendment of this Act or Statute of Westminster 15 (1) This Act or the Statute of Westminster 1931, as amended and in force from time to time, in so far as it is part of the law of the Commonwealth, of a State or of a Territory, may be repealed or amended by an Act of the Parliament of the Commonwealth passed [page 35]

at the request or with the concurrence of the Parliaments of all the States and, subject to subsection (3) below, only in that manner. (2) For the purposes of subsection (1) above, an Act of the Parliament of the Commonwealth that is repugnant to this Act or the Statute of Westminster 1931, as amended and in force from time to time, or to any provision of this Act or of that Statute as so amended and in force, shall, to the extent of the repugnancy, be deemed an Act to repeal or amend the Act, Statute or provision to which it is repugnant. (3) Nothing in subsection (1) above limits or prevents the exercise by the Parliament of the Commonwealth of any powers that may be conferred upon that Parliament by any alteration to the Constitution of the Commonwealth made in accordance with section 128 of the Constitution of the Commonwealth after the commencement of this Act.

1.3.21 Section 1 of the Australia Act is prospective. It terminates the capacity of the United Kingdom to extend its legislation to Australia ‘after the commencement of this Act’; that is, 3 March 1986, the date fixed for its commencement in Commonwealth Gazette No S85, 2 March 1986. However, the section will not prevent United Kingdom legislation enacted prior to that date being found to extend to Australia, so that the problems posed for judicial solution in the China Ocean Shipping case (1979) 145 CLR 172 (see 1.3.15) and Ukley v Ukley [1977] VR 121 (see 1.3.16) have not been totally eliminated. 1.3.22

Section 3 of the Australia Act is also prospective. It

liberates state parliaments from the constraints of the Colonial Laws Validity Act 1865 (UK) and, to remove any possible doubts over the powers of state parliaments, authorises each state parliament to repeal or amend any United Kingdom legislation that extends to the state. These effects are limited to any state law made ‘after the commencement of this Act’; that is, 3 March 1986. It follows that state legislation passed before that date is still at risk of being invalidated if found to be ‘repugnant’ to United Kingdom legislation. 1.3.23 Section 1 of the Australia Act 1986 appears to have put an end to the possibility, left open by s 4 of the Statute of Westminster, of the United Kingdom Parliament legislating for the Commonwealth of Australia. No doubt, as with the states there remains the possibility of United Kingdom legislation passed before 3 March 1986 being found to extend to Australia. However, the requirement, specified in s 4 of the Statute of Westminster, that such legislation declare that the Commonwealth has requested and consented to its enactment, must render that possibility remote: see Copyright Owners Reproduction Society Ltd v EMI (Aust) Pty Ltd (1958) 100 CLR 597 (see 1.3.12). 1.3.24 It might also be said that there remains the possibility that the United Kingdom Parliament could repeal both the Statute of Westminster and the Australia Act. In British Coal Corporation v R [1935] AC 500, Lord Sankey LC said at 520: It is doubtless true that the power of the Imperial Parliament to pass on its own initiative any legislation that it thought fit extending to Canada remains unimpaired; indeed, the Imperial Parliament could, as a matter of abstract law, repeal or disregard s 4 of the Statute. But that is theory and has no relation to realities.

[page 36] Even ‘as a matter of abstract law’, it is most unlikely that Australian courts would recognise such an unsolicited repeal as part of the law of Australia. The growth of Australian autonomy since the 1930s, and the more recent recognition by the High Court that popular sovereignty underpins the political (and possibly legal) authority of the Commonwealth Constitution, must be regarded as having entrenched both the Statute of Westminster and the Australia Act as elements in Australia’s grundnorm. On this point, see Stellios, 2015, p 461. 1.3.25 The Australia Act 1986 marks a complete break between Australian and United Kingdom institutions (unless the Queen of Australia is regarded as a United Kingdom institution). Section 1 terminates the power of the United Kingdom Parliament to legislate for Australia (replacing, for this purpose, s 4 of the Statute of Westminster, which is repealed in its application to Australia by s 12 of the Australia Act). Section 3 gives state parliaments the power to repeal or amend the remnants of United Kingdom legislation extending to the states, other than the Commonwealth of Australia Constitution Act (UK) or the Statute of Westminster (exempted by s 5) or the Australia Act (exempted by s 11). Section 9 terminated the obligation to reserve some state legislation for the Crown’s assent. Section 2 gave state parliaments extra-territorial legislative power. So far as the executive government is concerned, s 10 declared that the United Kingdom ‘shall have no responsibility for the government of any State’. The powers of the Crown in relation to a state, apart from the power of appointing and removing a

Governor, are exercisable only by the state’s Governor, except when the Crown is personally present in the state. The Crown is to act on the advice of the Premier of the state: s 7. Section 11 of the Australia Act abolishes appeals to the Privy Council from Australian courts, other than the High Court, from which such appeals are effectively impossible, because they now require a certificate from the High Court, a certificate that the court has indicated it will never issue: Kirmani v Captain Cook Cruises Pty Ltd (No 1) (1985) 159 CLR 351. 1.3.26 The Australia Acts are given constitutional status, as well as performing a constitutional function, by s 15, which provides that the Statute of Westminster and the Australia Act are not to be repealed or amended except in accordance with the alteration procedure in s 128 of the Commonwealth Constitution or by legislation passed under s 51(xxxviii) of the Constitution; that is, at the request or with the concurrence of all the state parliaments. The prospect of any parliament seeking deliberately to legislate inconsistently with the Australia Act is more than remote, as Professor Zines points out (Stellios, 2015, p 460): The Act is a statute which liberates the States from their former colonial restrictions and brings to an end United Kingdom legislative and governmental responsibility. It is not in the field of practical politics to suggest that the Commonwealth or the States would attempt to have restored the earlier limitations on power, appeals to the Privy Council or the supremacy of the British Parliament.

The practical point of s 15 is to ensure that, in the case of inadvertent conflict between any of the provisions of the Australia Act and later Australian legislation passed through the normal legislative process, the Australia Act will be seen as of fundamental

or ‘organic’ status and will prevail over that legislation. For a detailed account of the events leading to the enactment of the Australia Acts, see Twomey, 2010. [page 37] 1.3.27 Despite the de facto legal and political independence of the Commonwealth and the states, Australia remains, formally, a constitutional monarchy, or, as it is expressed in the preamble to the Constitution, ‘an indissoluble federal Commonwealth under the Crown’. While the Queen and her vice-regal representative, the Governor-General, exercise only ceremonial power, the potential for the Vice-Regal to exercise his or her powers without the advice of the government plainly exists, as the constitutional crisis of 1975 demonstrated (although there are serious doubts as to the legality of such an exercise of power). For a discussion of this crisis see. In February 1998, the Australian Government held a constitutional convention that comprised of elected and appointed delegates to resolve the question whether Australia should become a republic. The convention resolved to support a method of appointment of a new head of state that consisted of formal ratification by two-thirds of the Commonwealth Parliament in conjunction with community consultation. In November 1999, a referendum was held on the question of whether Australia should become a republic with the Queen and Governor-General being replaced by a President appointed by a two-thirds majority of the members of the Commonwealth Parliament. The referendum failed nationally and failed in each state (it passed in the Australian

Capital Territory, though not in the Northern Territory): for further analysis, see Kirby, 2000. 1.3.28 The termination of the vestigial remnants of the United Kingdom’s powers in Australia by the Australia Acts has given rise to reconsideration of the ultimate authority of our constitutional arrangements. Geoffrey Lindell has made the point that, in 1901, the legal paramountcy of the Commonwealth Constitution was seen as an inevitable consequence of its enactment by the United Kingdom Parliament: Lindell, 1986, at 32–3. In Sir Owen Dixon’s words, the Constitution did not claim to be binding because of ‘the direct expression of a people’s inherent authority to constitute a government’ but because it was ‘a statute of the British Parliament enacted in the exercise of its legal sovereignty over the law everywhere in the King’s Dominions’: Dixon, 1935, at 597. Lindell argued that the attainment of Australian constitutional independence was an evolutionary process, which was certainly completed with the passage of the Australia Act 1986. That view attracted judicial support in Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106 at 138 10.3.5C, where Mason CJ said that the Australia Act 1986 (UK) ‘marked the end of the legal sovereignty of the Imperial Parliament and recognised that ultimate sovereignty resided in the Australian people’. That independence need not affect the original rationalisation for the paramountcy of the Commonwealth Constitution: ‘[N]othing has happened to change the pre-existing inability of the [Australian] Parliaments … to legislate inconsistently with the Constitution’: Lindell, 1986, at 37. But Lindell acknowledged that a reference to the authoritative source discounted by Dixon would conform more closely to social and political reality (at 37): ‘In short, that explanation can be found in the words in the preamble to the

Constitution Act namely, the agreement of the people to federate, supported by the role given to them in approving proposals for constitutional alteration under s 128 of the Constitution, as well as their acquiescence in the continued operation of the Constitution as a fundamental law’. To like effect, Blackshield has observed that after the passage of the Australia Acts, ‘with any continued “sovereignty” of the British Parliament now extinguished, the present source of validity of the Constitution must be found within Australia’: Blackshield, 1994, p 26. [page 38]

FEDERALISM Conceptualising federalism is contentious and difficult. The conventional approach, particularly among constitutional lawyers and students of comparative government, states that the defining feature of a federal system is the existence of a ‘division of power’ between central and regional governments. The basic idea is that of a political system in which governmental power is divided between two territorially defined levels of government, guaranteed by a written constitution and arbitrated by an institution independent of the two spheres of government, usually a court of final jurisdiction. (N Aroney, The Constitution of a Federal Commonwealth, Cambridge University Press, UK, 2009, p 17.)

A federal compact 1.4.1 The Australian national government, the Commonwealth of Australia, presently shares power with six states (formerly colonies of the United Kingdom) and two self-governing

territories. Each of the states has a constitution, currently the Constitution Act 1902 (NSW), the Constitution of Queensland 2001, the Constitution Act 1934 (SA), the Constitution Act 1934 (Tas), the Constitution Act 1975 (Vic) and the Constitution Act 1889 (WA). The territories, which have had self-government conferred on them by the Commonwealth, are governed by legislative assemblies taking their power from the Northern Territory (Self-Government) Act 1978 (Cth) and the Australian Capital Territory (Self-Government) Act 1988 (Cth). Local governments in Australia have no constitutions. They are set up under ordinary statutes of the state and territory legislatures and can be abolished at any time through the standard legislative procedure. 1.4.2 The intention of the people who wrote the Commonwealth Constitution was that power should be shared between the Commonwealth and the states. The Commonwealth would have power over a number of matters (principally, but not entirely, set out in s 51 of the Constitution) and the states would share power in the areas that were not given exclusively to the Commonwealth in respect of their local geographical areas, with a limited amount of extra-territorial power. Federalism is reflected in the Commonwealth ‘bicameral’ system of government, with legislative power being held by two Houses of Parliament, the House of Representatives and the Senate. The House of Representatives is based on a national franchise pursuant to s 24 of the Constitution, and the people of each state elect an equal number of senators (currently 12) pursuant to s 7 of the Constitution. Section 53 indicates that apart from the power to initiate Bills that appropriate money (a power reserved to the

House), ‘the Senate shall have equal power with the House of Representatives in respect of all proposed laws’. The preamble to the Constitution sets out the agreement of the colonies ‘to unite in one indissoluble Federal Commonwealth’ and there are no fewer than 240 references to the words ‘federal’, ‘State’ or ‘states’ in the Constitution. Professor Harrison Moore defined ‘federal government’ in the following terms: A ‘federal government’ exists where, in a political community, the powers of government are distributed between two classes of organization — a central government affecting the whole territory and population of the Sovereignty, and a number of local governments affecting particular areas and the persons and things therein — which are so far independent of each

[page 39] other that the one cannot destroy the other or limit the powers of the other, or encroach upon the sphere of the other. (Moore, 1902, p 68.)

In Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at 274, Brennan, Deane and Toohey JJ said: The Constitution was enacted to give effect to the agreement reached by the people of New South Wales, Victoria, South Australia, Queensland, Tasmania, and Western Australia to unite ‘in one indissoluble Federal Commonwealth’. The Constitution is no ordinary statute: it is the instrument to fulfil the objectives of the federal compact.

1.4.3 The distribution of legislative powers in the federal compact is in large measure described in Pt V of Ch I of the Constitution. There are, broadly speaking, two types of legislative

power: concurrent powers and exclusive powers. Concurrent powers are listed in s 51 and are enjoyed by both the Commonwealth and state parliaments. Although Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 (Engineers’ case) 3.2.22C confirmed the legislative supremacy of the Commonwealth, the Commonwealth’s concurrent powers do not operate automatically to reserve any topics of legislation to the Commonwealth. 1.4.4 However, in respect of a number of topics, the Commonwealth enjoys exclusive power that gives it special immunity from the operation of state laws. These powers include s 52 (the Commonwealth has exclusive power to regulate its public service, the seat of government, and Commonwealth public places), s 90 (the Commonwealth has exclusive power to levy customs duties and excise duties: see further Chapter 5), s 114 (the Commonwealth can enjoy exclusive power to regulate defence: see further Chapter 4) and s 115 (the states shall not coin money, making the currency power (s 51(xii)) an exclusive power). 1.4.5 Moreover, the language of some of the Commonwealth’s notionally concurrent legislative powers (in s 51) indicates that the power over the given topic is, for all intents and purposes, exclusive. A number of powers might fall into this category, including ss 51(iv) (‘Borrowing money on the public credit of the Commonwealth’); (xix) (‘Naturalisation and aliens’); (xxx) (‘The relations of the Commonwealth with the islands of the Pacific’); (xxxi) (‘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’); (xxxvi) (‘Matters in respect of which this

Constitution makes provision until the Parliament otherwise provides’) and (xxxix) (‘Matters incidental to the execution of any power vested by this Constitution in the Parliament or in either House thereof, or in the government of the Commonwealth, or in the Federal Judicature, or in any department or officer of the Commonwealth’). 1.4.6 A number of Commonwealth legislative powers contain implied limitations on the Commonwealth’s power to regulate matters within states. So, for example, s 51(i), the trade and commerce power, refers to trade and commerce ‘with other countries and among the States’. The sub-section does not confer a general power to regulate trade and commerce, although it might regulate intrastate trade and commerce if incidental to s 51(i). Additionally, the Commonwealth might use some other power, such as s 51(xx), to the same end: see further Chapter 4. So the Commonwealth could regulate the purely intrastate trading activities of a s 51(xx) corporation, but would not have power under s 51(xx) to regulate the intrastate trading activities of an individual, partnership or other non-corporate entity unless those activities touched and concerned a s 51(xx) corporation. Sections 51(iii), 90 and 91 condition [page 40] the Commonwealth’s power to grant bounties: s 51(x) appears to limit the geographical scope of the Commonwealth’s power with respect to regulating fisheries. Sections 51(xiii) and (xiv) limit the Commonwealth’s power with respect to state banking and state insurance. The High Court’s present approach to s 51(xx) is that it

limits the Commonwealth’s power to incorporate trading or financial corporations, as s 51(xx) refers to ‘formed’ corporations; that is, corporations already formed within the Commonwealth or within the states. And the Commonwealth’s power to prevent and settle industrial disputes by way of conciliation and arbitration in s 51(xxxv) is limited to disputes extending beyond the limits of any one state, giving rise to an implication that the Commonwealth has no direct power to regulate purely intrastate industrial disputes. 1.4.7 A number of state powers are subject to a Commonwealth right of veto. So, a state shall not raise or maintain a naval or military force without the consent of the Commonwealth: s 114. The states may levy charges on imports and exports necessary for the execution of state inspection laws, but the revenue derived from these charges is for the use of the Commonwealth and the Commonwealth may annul these inspection laws: s 112. In other areas, the states have power to reserve consent to Commonwealth regulation. Not surprisingly, the states have power to consent (or withhold consent) to the increase, diminution or alteration of the limits of the state (s 123) and the states retain the power to consent to the formation of a new state formed from the territory of that state: s 124. The states also retain the power to consent to Commonwealth acquisition of railways and the construction of railways: ss 51(xxxiii) and (xxxiv), respectively. 1.4.8 The intention of the delegates at the constitutional conventions was to limit federal power, and ‘to put the preservation of state rights beyond the possibility of doubt’: Crommelin, 1992, quoting Alfred Deakin in 1891. However, the High Court’s interpretation of Commonwealth powers has been broad, producing a federalism that is characterised by Commonwealth

domination. To understand the dynamics of the relationship between the Commonwealth and the states it is necessary to consider the way the High Court’s decisions have achieved this result. The landmark case is the Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 (Engineers’ case). The case, and the significant centralisation of legislative power that it has occasioned, will be considered in detail at 3.2.22C. 1.4.9 Since the Engineers’ case was decided, a number of judges and scholars have noted the expansion of the power of the Commonwealth and the diminished power of the states: see, for example, Gibbs, 1994; Perry, 2012. As James Allan and Nicholas Aroney have observed (2008): None of the Constitution’s framers would ever have imagined, back in the 1890s or in 1901, that a century or so later the Australian States would be as emasculated as they are today: that they would be so dependent upon the Commonwealth for their governmental finances; and that their policy-making capacities would be so contingent upon political decisions taken by the Federal Government. More specifically, none of the framers would have anticipated that the ‘corporations’ power (s 51(xx)) would be held to allow the Commonwealth to take over the field of industrial relations; that the ‘external affairs’ power (s 51(xxix)) would be deemed to enable the Commonwealth to enact far-reaching environmental, human rights and industrial relations laws; or that the States could be cajoled into abjuring income tax powers, not least because four federal statutes — passed at the same time (during the Second World War) and consecutively numbered — were assessed or judged individually (and, of

[page 41]

course, held to be valid) and not as part of a package. And this is merely to highlight some of the better known ways in which the competencies of the Commonwealth have waxed while those of the States have waned. Nothing in the language of the Australian Constitution, or its structure, or the process that was used to adopt it, or the basis upon which its approval by the voters was promoted, or the likely original understandings of most of those voters, or anything else at the time would have suggested that the States would become the enfeebled, emasculated creatures they have become. Put slightly differently, no one, or almost no one, would have guessed or predicted that virtually all of the important division of powers cases would eventually go the Commonwealth’s way (references omitted).

1.4.10 We explore the claims and counter-claims about the dynamics of Australian federalism in subsequent chapters (particularly Chapters 3, 5 and 6) in more detail. But it is worth emphasising at this introductory stage that an expansive approach to the Commonwealth’s defence and taxation powers (ss 51(vi) and 51(ii) respectively) in the Uniform Tax cases (South Australia v Commonwealth (1942) 65 CLR 373 and Victoria v Commonwealth (1957) 99 CLR 575) and in the excise cases (particularly Ha v New South Wales (1997) 189 CLR 465) has certainly reinforced the inferior position of the subjection of the states in the Australian federation. In the Uniform Tax cases the Commonwealth effectively covered the field in income taxation, severely limiting the revenue raising options of the states. Commonwealth dominance in the revenue-raising field has placed the states in a very difficult financial position. For many years the states have earned a minority of total government revenue in Australia but have borne a majority of total government expenditures. This has had a significant consequence: it has maximised the fiscal leverage of the Commonwealth, which enjoys relatively unfettered powers

to grant money to the states (s 96), a power that is used commonly to control state policy despite the High Court’s insistence that the expression ‘grant’ in s 96 denotes a voluntary arrangement between the Commonwealth and states (that the overall condition of state revenue is such that states rarely enjoy the luxury of resisting a Commonwealth proposal funded in this way). 1.4.11 The Australian federal system has, in general, exhibited a strongly centralising orientation. But the High Court has recognised a principle in Melbourne Corporation v Commonwealth (1947) 74 CLR 31 that provides a measure of protection to the states from Commonwealth (legislative) power. The High Court recognised an implication arising from the federal structure of government contemplated by the Constitution that the Commonwealth may not impose special burdens or disabilities on a state or states or destroy or curtail the continued existence of the states or their capacity to function as autonomous governments. 1.4.12 The Melbourne Corporation principle was applied in Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192, reformulated in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188, and has since been applied in Victoria v Commonwealth (1996) 187 CLR 416 at 498, Austin v Commonwealth (2003) 215 CLR 185 and Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272: see Chapter 6. 1.4.13 The High Court’s jurisprudence of Australian federalism is clearly not a jurisprudence of states’ rights. However, it would be wrong to jump to the conclusion that federal principles are irrelevant in Australia: federal principles can and do operate in

many parts of Australian constitutional jurisprudence. Questions can and do arise about the ambit of restrictions on [page 42] Commonwealth power designed to protect the states and state citizens, such as ss 51(ii), 51(xiii) or 114. The states (and territories) also have a statutory right of intervention in constitutional cases (pursuant to ss 78A and 78AA of the Judiciary Act 1903 (Cth)) that they can invoke to protect their interests from ‘federal trespass’ (this expression comes from Australian Railways Union v Victorian Railway Commissioners (1930) 44 CLR 319 at 330).

Co-operative federalism 1.4.14 There are various ways within the constitutional framework for the Commonwealth and states to co-operate on the development and implementation of public policy through Commonwealth and state legislation and the administration of the legislation by the Commonwealth and state executive governments. First, the states can refer power to the Commonwealth, which then triggers the power in s 51(xxxvii). 1.4.15E

Commonwealth Constitution

51 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: …

(xxxvii) matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law; …

1.4.16 Section 51(xxxvii) allows the Commonwealth to enact legislation applicable to some states (referring states) but not others, although non-referring states may (and often do) later adopt the Commonwealth law enacted on the basis of the referral. By contrast, the power conferred by s 51(xxxviii) is exercisable only where all states request or concur in the exercise of a previously Imperial power. Both provisions require that the relevant referral, request or concurrence be expressed by the state legislature. 1.4.17 Commonwealth Acts that depend in part for their constitutionality on a referral of state powers under s 51(xxxvii) include: the Corporations Act 2001 and legislation establishing the corporate regulator (Australian Securities and Investments Commission Act 2001 (Cth)) (following the High Court’s decisions in Re Wakim; Ex parte McNally (1999) 198 CLR 511 and R v Hughes (2000) 202 CLR 535 which largely dismantled the previous co-operative corporations scheme); the Fair Work Act 2009 as it applies to workers whose employers are not corporations under s 51(xx) of the Constitution (on s 51(xx), see Chapter 4); terrorism offences in the Criminal Code 1995 (see Thomas v Mowbray (2007) 233 CLR 307);

Family Law Act 1975 provisions relating to the breakdown of de facto marriages; the Mutual Recognition Act 1992, which aims to facilitate ‘freedom of movement of goods and service providers in a national market’; [page 43] parts of the Water Act 2007 relating to the Murray-Darling Basin; and national transport, consumer credit, vocational education and personal property securities legislation. Some older, state-specific referrals relating to air transportation, meat inspection, poultry processing and the former Victorian state bank also remain in force. For a list of referrals, see note 11 to the Commonwealth Constitution. 1.4.18 In the past, states referred to the Commonwealth topics of legislative power; for example, this was the case for 1986 referrals of power over the children of de facto parents. By contrast, most contemporary referrals authorise enactment of specific text — an approach once described by the High Court as ‘absurd’: R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 — although a power to amend the text by making laws on its particular topic may also be referred. Referrals are sometimes temporary, as was the case when at least three states referred a broad range of powers, including those over ‘employment and unemployment’, ‘organised

marketing of commodities’, ‘production and distribution of goods’, ‘prices and profiteering’ and ‘the people of the aboriginal race’, to the Commonwealth during World War II. Indeed, referrals cannot be permanent, and do not deprive the state of power to legislate on the same subject. In this regard, as Williams J remarked in Graham v Paterson (1950) 81 CLR 1 at 25: ‘A more appropriate word than “referred” might perhaps have been chosen’. 1.4.19C

Graham v Paterson (1950) 81 CLR 1

Latham CJ (with whom Menzies, Williams, Webb and Fullagar JJ agreed): … It has sometimes been suggested that a reference under s 51 (xxxvii) must be an irrevocable reference for all time — that while the matter referred must necessarily be described by reference to its attributes or qualities, yet the reference cannot be limited by reference to a quality or attribute of a temporal character. Such a contention would involve the proposition that a State Parliament can pass an unrepealable statute, or at least that any attempt to repeal an Act referring a matter under s 51 (xxxvii) would necessarily produce no result. The result … would be that one State Parliament could bind all subsequent Parliaments of that State by referring powers to the Commonwealth Parliament … This analogy is not in my opinion applicable. Section 51 confers powers upon the Commonwealth Parliament to make laws with respect to the matters set forth in the section. These powers are not declared to be exclusive powers of the Commonwealth Parliament … Section 51 (xxxvii) does not provide that any power of the Parliament of … a State should become exclusively vested in the Commonwealth Parliament or be withdrawn from the Parliament of the State … … When a State Parliament [refers] a matter to the Commonwealth Parliament it produces the result of adding to the

paragraphs of s 51 a further paragraph specifying the matter referred … [T]he reference … does not deprive the State Parliament of any power. It results in the creation of an additional power in the Commonwealth Parliament. If the Commonwealth Parliament exercises such a power, s 109 of the Constitution may become applicable, with the result that if a law of the State with respect to a matter referred was inconsistent with a law of the Commonwealth, the Commonwealth law would prevail and the State law to [page 44] the extent of the inconsistency would be invalid. But unless the Commonwealth Parliament exercises the power to legislate with respect to the matter referred, no effect whatever is produced in relation to the operation of State laws.

1.4.20 For further discussion of s 51(xxxvii) referrals, see Thomas v Mowbray (2007) 233 CLR 307 at 374–84 per Kirby J; 460–2 per Hayne J; 605 per Callinan J. See also Lynch, 2010 and 2011; French, 2003. 1.4.21 Referrals are not the only way in which the Commonwealth and states can co-operate. The Commonwealth and the states can agree to pass complementary legislation or make co-operative administrative arrangements, provided constitutional limitations are not infringed. In the 20th century, the Financial Agreement of 1927 subsequently authorised by s 105A of the Commonwealth Constitution was a notable example of Commonwealth/state co-operation, as were major public works schemes such as the Snowy Mountains Hydro-Electric Scheme

and co-operative schemes relating to the marketing of primary products. The Commonwealth and the states can agree to enact complementary or identical legislation or make co-operative administrative arrangements. A number of uniform ‘National Laws’ or ‘Codes’ have recently been enacted by the parliaments of all or most states and territories, sometimes simultaneously and sometimes by the mechanism of a ‘lead state’ or territory enacting the relevant law and other jurisdictions adopting it. Legislation in this category includes the national Competition Code and the forthcoming National Energy Retail Law. 1.4.22 An important step in federal/state co-operative relations was the creation of the Council of Australian Governments (COAG). Membership of COAG consists of the Prime Minister, state and territory premiers and chief ministers and the President of the Australian Local Government Association, and meets to discuss public policy issues facing all levels of government. It was created in 1992 and ‘has evolved to be the peak intergovernmental institution in Australia. Key national reforms are initiated, developed and monitored by COAG, and the COAG process provides an important institutional framework for ongoing policy and fiscal co-operation between the Commonwealth, state and territory governments’: Gallop, 2012. Kildea and Lynch have assessed COAG as having ‘assumed a fundamental importance as an institutional structure through which the Australian governments may address shared problems and collaborative solutions’: 2011, p 104. For further reading on the role and impact of COAG, see Gallop, 2012; Kildea and Lynch, 2011. 1.4.23

However, when the Commonwealth and states enact co-

operative laws, prevailing constitutional requirements must still be observed. In R v Hughes (2000) 202 CLR 535, for example, the High Court was asked to consider whether it was unconstitutional for the Commonwealth Director of Public Prosecutions to exercise state powers in prosecuting offences against state Corporations Law. Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ held that cross-vesting of executive functions could be validly done through co-operative state and federal laws, so long as the federal parliament could point to a relevant head of power to support the law concerned. In this case, the Commonwealth law, in as much as it concerned overseas financial transactions by a trading corporation, could be supported by ss 51(i), (xx) and (xxix): 202 CLR at 556. But a state could not unilaterally vest functions in officers of the Commonwealth, whose offices are created by Commonwealth law and [page 45] who have powers vested in them by that law: Re Cram; Ex parte New South Wales Colliery Proprietors’ Association Ltd (1987) 163 CLR 117 at 127–8; Bond v The Queen (2000) 201 CLR 213 at 219–20 per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby and Hayne JJ. It follows that if a Commonwealth law prescribes the power and authority of an officer of the Commonwealth to perform a function under state law under a co-operative arrangement, a state law that grants some wider power or authority to that officer would be to that extent inconsistent with the Commonwealth law and invalid under s 109 of the Constitution. For consideration of legislation dealing with the deficiency identified in Bond, see Macleod v Australian Securities and Investments Commission (2002)

211 CLR 287 at 297–8. For fuller discussion of these issues, see 6.3.1–6.3.12. 1.4.24 A number of constitutional provisions require the states and the Commonwealth to assist each other. The states shall make provision for custody of offenders against Commonwealth laws: Constitution s 120; see further Leeth v Commonwealth (1992) 174 CLR 455 at 477–81 per Brennan J. In addition, the Commonwealth must assist the states by protecting them against invasion and domestic violence: see s 119, coupled with s 51(vi). A number of constitutional provisions contemplate that the state will co-operate in respect to certain matters or ensure equality of treatment of the residents of the states. So, the states may not discriminate against the subjects of other states on the basis of residence: s 117 (see further Chapter 9). The Commonwealth Parliament (unlike the United States Congress) has specific power to vest federal jurisdiction in state courts: see Constitution s 77. The inclusion of state courts in Ch III limits their capacity to exercise powers and functions incompatible with an exercise of judicial power. For a discussion of these principles, see Chapter 8.

PARLIAMENTARY GOVERNMENT AND SOVEREIGNTY 1.5.1 We dedicate the next chapter in this book to parliaments and their legislative procedures. However, it is useful to provide a thumbnail sketch of the origins of parliamentary government at this point, and then to explain the doctrine of parliamentary sovereignty. Doing so will aid your understanding of the materials

to follow regarding the history, nature and scope of legislative power possessed by the parliaments of the Commonwealth, states and territories. 1.5.2 In The Annotated Constitution of the Commonwealth of Australia, John Quick and Robert Garran (p 383) note the emergence of the term ‘parliament’ in 1272 and define the origin and precursors of the term and institution in the following terms: Origin — This word, which Bagehot says, is descriptive of the greatest inquiring, discussing, and legislative machine the world has ever known, ‘the greate engine of popular instruction and political controversy’, is derived from the Old English Parlement; French, Parlement, Parler, to speak; Low Latin, Parliamentum — a parleying, a discussion, a conference; hence a formal conference on public affairs; an assembly of representatives of a nation …. Precursors and prototypes — The Parliament of the Commonwealth is not an original invention in any of its leading principles. It has its roots deep in the past. It has been built on lines suggested by the best available models of its kind. Its framers did not venture to indulge in any new fangled experiments; they resisted every temptation to leave the beaten tract of precedent and experience; or to hanker after revolutionary ideals. In constructing a legislative machine for the new community they believed that they would most successfully perform

[page 46] their work by utilizing and adapting the materials to be found in the British, American and Canadian Constitutions, with such developments and improvements as might be justified by reason and expediency.

Since the Australian, Canadian and United States legislative

traditions post-date the British tradition we touch briefly on its history first, isolating the emergence of parliamentary fundamentals. 1.5.3 The foundations of English parliamentary government were laid in 1215 when nobles forced a ‘Great Charter’ (Magna Carta) on ‘Bad King John’. Twelve years later, John’s son, Henry III, invited representatives to Westminster, the location of the present English Parliament. By the early 17th century, the courts, led by Sir Edward Coke, had declared, in The Case of Proclamations (1611) 12 Co Rep 74; 77 ER 1352, that the new, authoritarian Stuart king, James I, could not legislate without parliament. (At the same time, the courts were engaged in a parallel power struggle of their own with the monarch, declaring in The Case of Prohibitions (1607) 12 Co Rep 63; 77 ER 1342 that he couldn’t judge cases without them.) 1.5.4 Magna Carta, confirmed by several later ‘needy sovereigns’ and enacted by parliament under John’s grandson Edward I, in 1297, has become a powerful symbol of constitutionalism and the origins of the rule of law: Clark, 2000. This is because King John, by affixing his seal to Magna Carta, formally conceded that his (royal) power was not absolute but limited by law. Moreover, the document contained the great principles that ‘To no man will we deny justice’, ‘Justice delayed is justice denied’ and ‘No free man shall be imprisoned … except by lawful judgment of his peers’. By s 6 of the Imperial Acts Application Act 1969 (NSW), Magna Carta still applies in New South Wales (to the extent that it has not been superseded by New South Wales legislation) and similar provisions operate in every other state and territory.

1.5.5 In 1258, seven barons, led by Simon de Montfort, the Earl of Leicester, forced Henry III to swear an oath to the Provisions of Oxford. This charter was significant because it further challenged the absolute power of the monarchy and conferred some executive powers on a council. What was later called ‘the Oxford Parliament’ was established and was required to meet three times per year to monitor the progress of the council. The Oxford Parliament met six times. In 1262, Henry III gained a papal exemption from his oath to the Provisions of Oxford, and both he and Montfort began to raise armies, leading to the Battle of Lewes on 14th May 1264, at which Henry was defeated and captured. The capture of the King led other nobles who had originally supported Montfort to rise against him, so in 1264 Montfort, for the first time in English history, called together the parliament without royal assent. The parliament was formed of representatives from each borough, and it is believed that the process to select the representatives involved a type of democratic election. The parliament had a bicameral arrangement, in which the upper house (the House of Lords) was for nobility, while the lower house (House of Commons) was for those representing smaller constituencies (the boroughs). Critically, the King could not initiate a law or a tax without the consent of parliament. Some of the most significant fundamentals of parliamentary government — the summoning of parliament by a monarch acting on advice, parliamentary control over legislative power, and the exercise of executive power by representatives of the populace and bicameralism — had emerged. [page 47] 1.5.6

Over the course of succeeding centuries, the parliament

grew in power and influence, despite continuing to struggle against monarchs who believed that they ruled by ‘divine right’. The Petition of Right 1628, which helped to precipitate the English Civil War and Charles’ downfall in favour of a republic, was also the work of Coke. It expressly prohibited the raising of taxes without parliamentary authority (something Charles had continued to assert a ‘prerogative’ right to do) and the billeting of soldiers in private homes. It affirmed ch 29 of Magna Carta and associated it with a requirement of ‘due process of law’ for imprisonment and seizure of property, and banned the use of martial law. The ultimate triumph of parliamentary government in England can be traced to the ‘Glorious Revolution’ of 1688. While the causes of the revolution are various and contested (Stone, 1972, Ch 3), it is widely agreed that the political precondition was the disastrous reign of Charles II (1660–84). Despite having been restored to the throne by parliament, Charles often ignored that institution, and pardoned Roman Catholics who had broken the law. His successor, James II, took a similar approach, issuing a ‘Declaration of Indulgence’ to similar effect in 1687 that gave rise to protests. In April of 1688 he ordered a second ‘Declaration of Indulgence’ to be read from every stage on two Sundays in a row, in response to which the Archbishop of Canterbury and six other Bishops protested the Sunday readings and were put on trial for seditious libel. Later in 1688, a bishop and six well-known politicians of both Whig (supporters of constitutional monarchism) and Tory (strong monarchist tendencies and supporters of the Church of England) persuasions wrote to Princess of Royal England Mary, who was the daughter of James II, and her husband, Dutch William III, the Prince of Orange, Stadholder of Netherlands. The letter asked William III and Mary to raise an army to bring to England against

James II. On the 5th of November 1688, William’s army landed on English ground and made a slow advance towards London, enabling James II’s army to flee. With his flight, parliamentary government was guaranteed to England when William III and Mary acquiesced in parliament’s request to summon it. In 1689, on January 22nd, the Convention Parliament summoned by William III met for the first time, determining that James II’s flight amounted to an abdication of the throne, and offering the crown to William III and Mary jointly, with conditions. These conditions, one of which granted succession to Anne, Mary’s sister, if Mary defaulted, were contained within the Declaration of Right, and later, the English Bill of Rights. 1.5.7E

Bill of Rights 1689 (Will & Mary, Sess 2 c 2)

Whereas the said late King James II having abdicated the government, and the throne being thereby vacant, his Highness the prince of Orange (whom it hath pleased Almighty God to make the glorious instrument of delivering this kingdom from popery and arbitrary power) did (by the advice of the lords spiritual and temporal, and diverse principal persons of the Commons) cause letters to be written to the lords spiritual and temporal, being Protestants, and other letters to the several counties, cities, universities, boroughs, and Cinque Ports, for the choosing of such persons to represent them, as were of right to be sent to parliament, to meet and sit at Westminster upon the two and twentieth day of January, in this year 1689, in order to such an establishment as that their religion, laws, and liberties might not again be in danger of being subverted; upon which letters elections have been accordingly made.

[page 48] And thereupon the said lords spiritual and temporal and Commons, pursuant to their respective letters and elections, being new assembled in a full and free representation of this nation, taking into their most serious consideration the best means for attaining the ends aforesaid, do in the first place (as their ancestors in like case have usually done), for the vindication and assertion of their ancient rights and liberties, declare: 1.

2.

3.

4.

5.

6.

7.

8.

That the pretended Power of suspending of Laws, or the Execution of Laws, by regal Authority, without consent of Parliament, is illegal. That the pretended Power of dispensing with Laws, or the Execution of Laws, by regal Authority, as it hath been assumed and exercised of late, is illegal. That the Commission for erecting the late Court of Commissioners for Ecclesiastical Causes, and all other Commissions and Courts of like nature are illegal and pernicious. That levying Money for or to the Use of the Crown, by Pretence of Prerogative, without Grant of Parliament, for longer Time, or in other Manner than the same is or shall be granted, is illegal. That it is the Right of the Subjects to petition the King, and all Commitments and Prosecutions for such petitioning is illegal. That the raising or keeping a standing Army within the Kingdom in Time of Peace, unless it be with Consent of Parliament, is against Law. That the Subjects which are Protestants, may have Arms for their Defence suitable to their conditions, and as allowed by Law. That Election of Members of Parliament ought to be

9.

10.

11.

12. 13.

free. That the Freedom of speech, and Debates or Proceedings in Parliament, ought not to be impeached or questioned in any Court or Place of Parliament. That excessive Bail ought not to be required, nor excessive Fines imposed; nor cruel and unusual Punishments inflicted. That Jurors ought to be duly impanelled and returned, and Jurors which pass upon Men in Trials for High Treason ought to be Freeholders. That all Grants and Promises of Fines and Forfeitures of particular Persons before Conviction, are illegal and void. And that for Redress of all Grievances, and for the amending, strengthening and preserving of the Laws, Parliaments ought to be held frequently.

1.5.8 In the case of Port of Portland Authority v Victoria (2010) 242 CLR 328 at 349 the High Court made the following important observation regarding the preservation of the Bill of Rights in contemporary Australian law: It is settled constitutional principle in Australia and an aspect of the rule of law, reinforced by provisions such as ss 3 and 8 of the Imperial Acts Application Act 1980 (Vic) which preserve in Victoria the operation of the Bill of Rights 1688 (1 Will & Mary Sess 2 c 2), that there is no power of executive dispensation of statute law. Such a power is absent from the constitutions of the States which are identified in s 106 of the Commonwealth Constitution.

In doing so, the court made clear that the fundamental principle stated in s 1 of the Bill of Rights remains operative in Australia. Moreover, s 4 of the Bill of Rights has been enshrined in s 81 of

the Commonwealth Constitution, which prevents appropriation of the Consolidated Revenue Fund except by legislation. [page 49] 1.5.9 The sovereignty of parliament is said to be ‘the most fundamental rule’ of English constitutional law: de Smith, 1981, p 73. The rule is expressed by de Smith in the following terms (p 73): The Queen in Parliament is competent, according to United Kingdom law, to make or unmake any law whatsoever or any matter whatsoever; and no United Kingdom court is competent to question the validity of an Act of Parliament.

So, it is said, no Act of Parliament (consisting of Crown, Lords and Commons) can be invalid since parliament has the right to make or unmake any law whatever; and, as a corollary, no person or body of persons has the right to override or derogate from an Act of Parliament. So stated, the rule of parliamentary sovereignty is a rule about the legal authority of English Parliament. It is a rule about its legislative supreme power, that no law enacted by parliament can be invalidated by reason of conflict with any other law, including laws of its own making. 1.5.10 The doctrine of parliamentary sovereignty expresses the attitude adopted by the courts and other senior public officials towards parliamentary legislation — that what the Queen in Parliament enacts is law which no court (or other authority) has the power to question or invalidate. Relevantly, Lord Bingham has observed of the United Kingdom that ‘there is no recorded case in

which the courts, without the authority of Parliament, have invalidated or struck down a statute. This point is not to be discounted by pointing out, although this is true, that the question has never arisen for decision, since that is itself significant.’: Bingham, 2010. The most explicit judicial support comes from such cases as British Railways Board v Pickin [1974] AC 765, where the House of Lords rejected an attack on legislation passed by the United Kingdom Parliament, an attack supported by the claim that parliament had not followed its internally established procedures when enacting the legislation. One can certainly find, scattered through the speeches in the case, unequivocal assertions that the courts could not inquire into the validity of an Act of Parliament, such as that of Lord Morris ([1974] AC at 789): In the courts there may be argument as to the correct interpretation of the enactment: there must be none as to whether it should be on the statute books at all.

And, Lord Wilberforce (at 793): The remedy for a parliamentary wrong, if one has been committed, must be sought from Parliament, and cannot be gained from the courts.

And, Lord Simon (at 798): [Parliamentary democracy’s] peculiar feature in constitutional law is the sovereignty of parliament. This involves that, contrary to what was sometimes asserted before the eighteenth century; and in contradiction to some other democratic systems, the courts in this country have no power to declare enacted law to be invalid.

1.5.11 It has, however, been argued that the doctrine of parliamentary sovereignty is a common law rule: see Allan, 1993, p

10; Laws, 1995, at 87. If so, then is it not possible that the doctrine might be altered or qualified by the courts or statute? This point has been raised by some judges and academic lawyers, most notably by Sir Robin Cooke when he was President of the New Zealand Court of Appeal, in Taylor v New Zealand Poultry Board [1984] [page 50] 1 NZLR 394 at 398: ‘Some common law rights presumably lie so deep that even Parliament could not override them.’ Ivor Jennings argued that the rule means only that any law made by parliament is a valid law, and that this includes a law altering this basic rule: Jennings, 1959, Ch IV. Parliament could, according to Jennings, alter this basic rule by enacting a statute that transfers legislative authority in respect of any number of matters to a different legislative body of its own creation. Such a law would mean that parliament, consisting of the Crown, Lords and Commons would no longer have the legislative power to enact statutes on those matters. Jennings’ basic argument may be put another way. The rule of parliamentary sovereignty makes parliament all-powerful, but parliament itself is a creature of law. Logically, prior to a proposition about the power of parliament must be the rules that identify and define parliament. Therefore, it is possible for parliament to enact a statute altering the laws identifying and defining the legislative body; and it can alter this law in relation to all legislation or in relation to legislation with respect to particular subject matters. On the other hand, it has been argued that the rule of

parliamentary sovereignty cannot be altered by statute. For example, H W R Wade argued that the rule of parliamentary sovereignty is an ultimate rule of the legal system and so beyond the reach of statute: Wade, 1955. It is itself the source of the authority of statute and, just as no statute can establish it, no statute can alter it. Ultimate rules of a legal system are accepted, not derived. Implicit in Wade’s argument is the proposition that the law identifying and defining parliament is also an ultimate rule which cannot be altered by statute. Wade argued that the legal system does not authorise parliament to fetter its future legislative action. Jeffrey Goldsworthy has also argued, convincingly in our view, that the doctrine of parliamentary sovereignty is neither a common law rule nor derived from statute. The constitutional reality of the doctrine is more nuanced and rooted in the consistent historical practice of the courts and the political arms of government. If it provides the parliament with authority to enact statutes, then parliamentary sovereignty cannot itself be a creature of statute: see Goldsworthy, 1999, p 244. And while the common law courts certainly recognise the sovereignty of parliament, by accepting as valid law whatever the Queen in Parliament enacts, the doctrine itself was not created by judges in the manner of an ordinary common law rule. As George Winterton rightly observed, the doctrine of parliamentary sovereignty ‘is, in fact, sui generis, a unique hybrid of law and political fact deriving its authority from acceptance by the people and by the principal institutions of the state, especially parliament and the judiciary’: Winterton, 1996, p 136. For a detailed account of the history and philosophy of the sovereignty of parliament, see Goldsworthy, 1999. For further reading on parliamentary sovereignty, see also Gray, 1953;

Marshall, 1957; Dicey, 1959, pp xxxiv–xcvi; Heuston, 1964; de Smith, 1981, pp 73–101; Allan, 1985. 1.5.12 The legislatures of the Australian states, in contrast to the English Parliament and its successor, the United Kingdom Parliament, are established by statute and have their legislative powers defined by statute. There is thus no controversy as to the source of legislative authority, and absolute legislative power is denied. However, the English rule about parliamentary sovereignty is not without influence, for the interpretation of those provisions of the state Constitution Acts conferring legislative power has been influenced by principles that operate in England as part of the law of parliamentary sovereignty. For example, in R v Burah (1878) 3 App Cas 889, the Privy Council said of the Indian legislature (and the same was regarded as true of the Australian legislatures: Powell v Appollo Candle Co (1885) 10 App Cas 282) that, [page 51] when acting within the limits that circumscribe its powers, it had plenary powers of legislation as large, and of the same nature, as those of the Imperial Parliament itself: 3 App Cas at 905. The same point was made by the Privy Council in McCawley v R [1920] AC 619, where it was said that state Constitution Acts were uncontrolled, and that ‘it would be almost impossible to use wider or less restrictive language’ than the terms used to define the states’ legislative powers: [1920] AC at 712. 1.5.13 Subject to the Constitution and any express or implied restrictions on state power, and in the absence of Commonwealth

legislation overriding state law via s 109 or the exercise of Commonwealth exclusive power, the states enjoy general legislative power to make laws for the ‘peace, welfare and good government’ or ‘peace, order and good government’ of the respective state: Constitution Act 1902 (NSW) s 5; Constitution Act 1867 (Qld) s 2; Constitution Act 1975 (Vic) s 16 (‘in and for Victoria in all cases whatsoever’); Constitution Act 1889 (WA) s 2(1) (‘for the peace, order, and good government of the colony of Western Australia’); Constitution Act 1934 (SA) s 5, in conjunction with the Australian Constitutions Act (No 2) 1850 (UK) s 14; and in Tasmania through s 14 of the Australian Constitutions Act (No 2) 1850 (Imp). The content of the power, whether it is described as a power for peace, welfare and good government or peace, order and good government, is ‘indistinguishable’: Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 9. 1.5.14 The meaning of the phrase ‘peace, order and good government’ was considered in Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1. In that case, the New South Wales Compensation Court made an order under s 46 of the Workers’ Compensation Act 1926 (NSW) awarding King, an employee of Union Steamship on a ship registered in New South Wales, compensation for boilermaker’s deafness. Union Steamship challenged the award on two grounds in the High Court — that s 46 was not a valid law for the peace, welfare and good government of New South Wales, and that the provisions of the state law were inconsistent with the Seamen’s Compensation Act 1911 (Cth), thus rendering the state law invalid to the extent of its inconsistency by virtue of s 109 of the Constitution. The High Court considered the meaning of the phrase ‘peace, order and good government’ and confirmed, unanimously, that the power it

describes is plenary. The word ‘plenary’ means ‘not subject to limitation or exceptions’. 1.5.15C

Union Steamship Co Ltd v King (1988) 166 CLR 1

The court: The scope and content of the power conferred by s 5 of the Constitution Act 1902 (NSW) to make laws ‘for the peace, welfare, and good government of New South Wales’ is still a topic of current debate: see BLF v Minister for Industrial Relations (1986) 7 NSWLR 372. This may seem somewhat surprising. The explanation is historical and it is to be found in the evolving relationships between the United Kingdom and its colonies, especially the relationships with the Australian colonies and, after federation, with the Commonwealth of Australia and the Australian states. The power to make laws ‘for the peace, welfare, and good government’ of a territory is indistinguishable from the power to make laws ‘for the peace, order and good government’ of a territory. Such a power is a plenary power and it was so recognized, even in an era [page 52] when emphasis was given to the character of colonial legislatures as subordinate law-making bodies. The plenary nature of the power was established in the series of historic Privy Council decisions at the close of the nineteenth century: Reg v Burah (1878) 3 App Cas 889; Hodge v The Queen (1883) 9 App Cas 117; Powell v Apollo Candle Company (1885) 10 App Cas 282; Riel v The Queen (1885) 10 App Cas 675. They decided that

colonial legislatures were not mere agents or delegates of the Imperial Parliament. Lord Selborne, speaking for the Judicial Committee in Burah, said (at p 904) that the Indian Legislature ‘has, and was intended to have, plenary powers of legislation, as large, and of the same nature, as those of Parliament itself’. Later, Sir Barnes Peacock in Hodge, speaking for the Judicial Committee, stated (at p 132) that the legislature of Ontario enjoyed by virtue of the British North America Act 1867 (Imp.): … authority as plenary and as ample within the limits prescribed by sect.92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and area the local legislature is supreme, and has the same authority as the Imperial Parliament … In Riel Lord Halsbury LC, delivering the opinion of the Judicial Committee, rejected (at p 678) the contention that a statute was invalid if a court concluded that it was not calculated as a matter of fact and policy to secure the peace, order and good government of the territory. His Lordship went on to say (at p 678) that such a power was ‘apt to authorize the utmost discretion of enactment for the attainment of the objects pointed to’. In Chenard and Co v Joachim Arissol (1949) AC 127, Lord Reid, delivering the opinion of the Judicial Committee, cited (at p 132) Riel and the comments of Lord Halsbury LC with evident approval. More recently Viscount Radcliffe, speaking for the Judicial Committee, described a power to make laws for the peace, order and good government of a territory as ‘connot(ing), in British constitutional language, the widest law-making powers appropriate to a Sovereign’: Ibralebbe v The Queen (1964) AC 900, at p 923. These decisions and statements of high authority demonstrate that, within the limits of the grant, a power to make laws for the

peace, order and good government of a territory is as ample and plenary as the power possessed by the Imperial Parliament itself. That is, the words ‘for the peace, order and good government’ are not words of limitation. They did not confer on the courts of a colony, just as they do not confer on the courts of a state, jurisdiction to strike down legislation on the ground that, in the opinion of a court, the legislation does not promote or secure the peace, order and good government of the colony. Just as the courts of the United Kingdom cannot invalidate laws made by the Parliament of the United Kingdom on the ground that they do not secure the welfare and the public interest, so the exercise of its legislative power by the Parliament of New South Wales is not susceptible to judicial review on that score. Whether the exercise of that legislative power is subject to some restraints by reference to rights deeply rooted in our democratic system of government and the common law (see Drivers v Road Carriers (1982) 1 NZLR 374, at p 390; Fraser v State Services Commission (1984) 1 NZLR 116, at p 121; Taylor v New Zealand Poultry Board (1984) 1 NZLR 394, at p 398), a view which Lord Reid firmly rejected in Pickin v British Railways Board [1974] UKHL 1; (1974) AC 765, at p 782, is another question which we need not explore.

1.5.16 The High Court based its interpretation of the phrase ‘peace, order and good government’ on the doctrine of parliamentary sovereignty which has informed its historical [page 53] interpretation in the United Kingdom and throughout the Commonwealth. The measure of Imperial parliamentary sovereignty power was described by A V Dicey as ‘the right to

make or unmake any law whatever’: Dicey, 1959. Previously, in Building Construction Employees and Builders’ Labourers Federation v Minister for Industrial Relations (NSW) (BLF case) (1986) 7 NSWLR 372, two members of the New South Wales Court of Appeal suggested that there might be substantive limits to the sovereignty of the New South Wales Parliament. Street CJ declined to accept as authoritative an observation by the Privy Council in Ibralebbe v R [1964] AC 900 at 923 that the words ‘peace, order and government’ referred to ‘the widest lawmaking powers appropriate to a Sovereign’: 7 NSWLR at 385. His Honour said that the equivalent phrase in s 5 of the Constitution Act 1902 (NSW), ‘peace, welfare and good government’, could be seen (7 NSWLR at 387): … as the source of power in the courts to exercise an ultimate authority to protect our parliamentary democracy, not only against tyrannous excesses on the part of a legislature that may have fallen under extremist control, but also in a general sense as limiting the power of Parliament. … [L]aws inimical to, or which do not serve, the peace, welfare and good government of our parliamentary democracy … will be struck down by the courts as unconstitutional.

This view was supported by Priestley JA (7 NSWLR at 421–2), and disputed by Mahoney JA: 7 NSWLR at 413. Kirby P also disputed Street CJ’s view as inconsistent with British Railways Board v Pickin [1974] AC 765 and with (7 NSWLR at 405): … years of unbroken constitutional law and tradition in Australia and, beforehand, in the United Kingdom [which] has repeatedly reinforced and ultimately respected the democratic will of the people as expressed in Parliament.

1.5.17

In Union Steamship Co of Australia Pty Ltd v King (1988)

166 CLR 1, the High Court took the opportunity, in a unanimous judgment, of refuting the views of Street CJ in the BLF case (1986) 7 NSWLR 372, which Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ described as ‘somewhat surprising’: 166 CLR at 9. In Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51, several members of the court scotched the possibility. Dawson J, with whom Brennan CJ and McHugh J agreed on this point, said (189 CLR at 75–6): … in Union Steamship Co of Australia Pty Ltd v King this Court reserved the question whether the exercise of that legislative power is subject to restraints to be found in fundamental principle. This case throws up the question reserved … and it should now be answered by saying that no non-territorial restraints upon parliamentary supremacy arise from the nature of a power to make laws for peace, order (or welfare), and good government or from the notion that there are fundamental rights which must prevail against the will of the legislature. The doctrine of parliamentary supremacy is a doctrine as deeply rooted as any in the common law. It is of its essence that a court, once it has ascertained the true scope and effect of an Act of Parliament, should give unquestioned effect to it accordingly.

See also Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399. 1.5.18 This does not mean, of course, that state parliamentary supremacy may not be limited by federal constitutional limitations on power. So, in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 8.5.17C, a majority of the High Court (Toohey, Gaudron, [page 54]

McHugh and Gummow JJ; Brennan CJ and Dawson J dissenting) recognised that the state parliaments could not abolish state courts, and could not vest powers in state courts that were incompatible with their character and ‘institutional integrity’ as courts in which Ch III jurisdiction could be vested pursuant to s 77 of the Constitution. See further 8.5.16–8.6.10.

TERRITORIAL LIMITS ON LEGISLATIVE POWER State parliaments 1.6.1 From the beginning of self-government in the Australian colonies, the legislative power of their parliaments was assumed to be subject to a territorial limit; they should not legislate so as to regulate, control, penalise or attach legal consequences to events or persons outside their territory. The judicial endorsement of the extra-territorial incompetence of colonial and state parliaments is generally traced to the Privy Council’s decision in Macleod v Attorney-General (NSW) [1891] AC 455. The Privy Council held that it was not a crime, punishable in New South Wales under s 54 of the Criminal Law Amendment Act 1883 (NSW), for a resident of the colony to enter into a bigamous marriage in the United States of America. Section 54 was drafted in wide terms. It declared that a bigamous marriage was a crime, ‘wheresoever such second marriage takes place’. 1.6.2 The Privy Council said that to read s 54 as it stood would make any person who committed bigamy ‘anywhere in the

habitable globe … amenable to the criminal jurisdiction of New South Wales’. This was held to be ‘an impossible construction’ because it would be ‘inconsistent with the powers committed to a colony, and, indeed, inconsistent with the most familiar principles of international law’: [1891] AC at 457. 1.6.3 However, in the 1930s the High Court began to develop a more liberal approach to the issue of territorial limits on state legislative competence. For example, in Broken Hill South Ltd v Commissioner of Taxation (NSW) (1937) 56 CLR 337 the High Court rejected a challenge to the validity of the Income Tax (Management) Acts 1912 and 1928 (NSW), which levied income tax on persons who received income ‘derived from any source in the State’ and provided that, where property in New South Wales was mortgaged as security for any loan, the interest paid on that loan was income ‘derived from any source in the state’. In the course of his judgment, Dixon J expressed the following general principle (56 CLR at 375): The power to make laws for peace, order and good government of a State does not enable the State Parliament to impose by reference to some act, matter or thing occurring outside the State a liability upon a person unconnected with the State whether by domicile, residence or otherwise. But it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability. It is also within the competence of the legislature to base the imposition of liability on no more than the relation of the person to the territory. The relation may consist in presence within the territory, residence, domicile, carrying on business there, or even remoter connections. If a connection exists, it is for the legislature to decide how far it should go in the exercise of its powers.

[page 55] Here, the connection between the subject matter of the legislation and the state lay in the fact that property in New South Wales was secured, under the law of New South Wales, to ensure the payment of money to the taxpayer. The liability to pay a tax was related to that payment. 1.6.4 In Pearce v Florenca (1976) 135 CLR 507, the court had another opportunity to consider the issue of extra-territorial legislative competence. Here, the Seas and Submerged Lands Act 1973 (Cth) included the following provisions: 6 It is by this Act declared and enacted that the sovereignty in respect of the territorial sea, and in respect of the airspace over it and in respect of its bed and subsoil, is vested in and exercisable by the Crown in right of the Commonwealth. … 16 … The preceding provisions of this Part — … (b) do not limit or exclude the operation of any law of a State in force at the date of commencement of this Act or coming into force after that date, except in so far as the law is expressed to vest or make exercisable any sovereignty or sovereign rights otherwise than as provided by the preceding provisions of this Part.

In New South Wales v Commonwealth (Seas and Submerged Lands case) (1975) 135 CLR 337 the High Court of Australia held that this Act was valid. Florenca was a professional fisherman and a resident of Western Australia. He had been charged before a Western Australia magistrate with an offence under s 24(1)(a) of the Fisheries Act 1905 (WA). The section made it an offence for any person to have in his or her possession any undersized fish ‘whether taken within Western Australian waters or elsewhere’. He

was prosecuted for having undersized fish in his possession at a point within 1.5 miles of the Western Australian coast. The magistrate dismissed the charges against the respondent on the ground that the Seas and Submerged Lands Act 1973 (Cth) had rendered the Fisheries Act inoperative in any area below the lowwater mark of the coast of Western Australia by virtue of s 109 of the Commonwealth Constitution. The prosecutor applied to the Supreme Court of Western Australia for an order to review the magistrate’s decision. The matter was then removed to the High Court under s 40 of the Judiciary Act 1903 (Cth). 1.6.5C

Pearce v Florenca (1976) 135 CLR 507

Gibbs J: [I]t is now often said that the test of validity of a State statute is simply whether it is legislation for the peace, order and good government of the State (R v Foster; Ex parte Eastern and Australian Steamship Co Ltd (at 307)), and that no additional restriction placed upon mere territorial considerations should be placed upon the constitutional powers of a State: Australasian Scale Co Ltd v Commissioner of Taxes (Qld) (1935) 53 CLR 534 at 561–2. However, the test whether a law is one for peace, order and good government of the State is, as so stated, exceedingly vague and imprecise, and a rather more specific test has been adopted; it has become settled that a law is valid if it is connected, not too remotely, with the State which enacted it, or, in other words, if it operates on some circumstance which really appertains to the State. The rule was expressed in that way in Commissioner of Stamp Duties (NSW) v Millar (1932) 48 CLR 618 at 632–3, and Broken Hill South Ltd v Commissioner

[page 56] of Taxation (NSW) (1937) 56 CLR 337 at 375, the judgments in which were approved by the Judicial Committee in Johnson v Commissioner of Stamp Duties (NSW) [1956] AC 331 at 353 … Even in its modern form, the rule requiring a relevant connexion between the persons or circumstances on which the legislation operates and the State is still capable of giving rise to that practical inconvenience and uncertainty to which the report of the 1929 Conference on the Operation of Dominion Legislation alluded (see the passage cited by Evatt J in Trustees Executors and Agency Co Ltd v Federal Commissioner of Taxation (1933) 49 CLR 220 at 233–4). For that reason it is obviously in the public interest that the test should be liberally applied, and that legislation should be held valid if there is any real connexion — even a remote or general connexion — between the subject matter of the legislation and the State. And it has been established by a series of well-known decisions, which are collected in Cobb & Co Ltd v Kropp [1967] 1 AC 141 at 154–6, that within their limits the legislatures of the States have powers ‘as plenary and as ample’ as those of the Imperial Legislature itself. It would seem anomalous and unfitting that the enactments of such a legislature should be held invalid on narrow or technical grounds. … I would, with respect, accept the view expressed by Mason J in the Seas and Submerged Lands case [New South Wales v Commonwealth (1975) 135 CLR 337] at 468–9, that the power to make laws for the peace, order and good government of the colony was large enough to enable the colonial legislatures to enact legislation which applied to the off-shore waters. The same is true now of State legislatures. The very fact that the waters are the off-shore waters of the State provides the nexus necessary to render valid a law operating within those waters. There is an intimate connexion between the land territory of a

State and its off-shore waters. Those waters have been popularly regarded as the waters of the State, and as vital to its trade. The people of the State have traditionally exploited the resources of the off-shore waters and used them for recreation. The enforcement of the laws of the State would be gravely impeded if a person could escape from the reach of the laws and the authority of the State by going below low-water mark … The principle that legislation enacted by a State and operating outside its territory must be connected in some relevant way with the State if it is to be valid may have been appropriate to the socalled dependent and inferior legislatures of colonial times, but its only modern justification is that it may avoid conflicts with other rules of law applicable to the area in which the legislation is intended to operate. In this way the principle may fulfil a useful purpose in providing a touch-stone for the validity of a law enacted by one State and intended to take effect within the territory of another. But no rational purpose is served by holding that a law of a State cannot validly operate within its off-shore waters. It has now been held that those waters form part of the territory of the Commonwealth, but the Constitution itself sufficiently provides for the resolution of any conflict that may arise between a law of the Commonwealth and a law of a State: by virtue of s 109 the former will prevail … … from the point of view of the States, every consideration of practical convenience requires that the power of a State to legislate in respect of its offshore waters should be as ample as its power to legislate for its land territories. The history of the exercise of State powers in the past, the present public interest, and the reason on which the principle requiring a territorial nexus seems to rest all combine to lead to the conclusion that the fact that the persons, things or events to which the legislation of a State applies occur within the off-shore waters provides sufficient connexion with the State to render the legislation valid. [page 57]

… A law to regulate fishing within off-shore waters has a close connexion with the State and can truly be described as a law for the peace, order and good government of the State. Such a law is within the competence of a State legislature.

1.6.6 In 1986, the Commonwealth and the United Kingdom Parliaments enacted the Australia Acts 1986. Section 2 of those Acts provide as follows. 1.6.7E 2

Australia Act 1986 (Cth and UK) (1) It is hereby declared and enacted that the legislative powers of the Parliament of each State include full power to make laws for the peace, order and good government of that State that have extraterritorial operation. (2) It is hereby further declared and enacted that the legislative powers of the Parliament of each State include all legislative powers that the Parliament of the United Kingdom might have exercised before the commencement of this Act for the peace, order and good government of that State but nothing in this subsection confers on a State any capacity that the State did not have immediately before the commencement of this Act to engage in relations with countries outside Australia.

1.6.8 There was debate as to the effect of this section. The use of the phrase ‘declared and enacted’ might be read as indicating that s 2(1) was not intended to achieve any enlargement of state

legislative power. Such a reading would be reinforced by the inclusion in s 2(1) of the possibly limiting words ‘for the peace, order and good government of that state’. (The analogy with the legislative powers of the United Kingdom Parliament, developed in s 2(2), could be said to be similarly limited.) This view of s 2 is developed, in a closely-argued essay, by Gilbert, who concludes that ‘State law-making powers are to be understood in the Dixonian or common-law sense that validity always requires a sufficient relationship between the law and the territorially based interest of the enacting State’: Gilbert, 1987, at 42. 1.6.9 The contrary view, that s 2 of the Australia Act has enlarged the legislative capacity of the Australian states, is developed in a strongly argued paper by Mark Moshinsky. He sees s 2 as extending an unfettered power to legislate extra-territorially to the Australian states. The previous requirement of a connection with the state no longer applies: Moshinsky, 1987, at 785. It is part of this argument that the phrase ‘peace, order and good government of the State’ does not import a territorial limitation, but provides ‘a safeguard against unjust and capricious law-making, which would be of no relevance to the peace, order and good government of the State’: Moshinsky, 1987, at 782. 1.6.10 In Port Macdonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340, the High Court, in a unanimous judgment, indicated the continuing vitality of the ‘territorial connection’ criterion of validity. Section 13 of the Fisheries Act 1982 (SA) authorised South Australia to enter into an arrangement with the Commonwealth for the management by South Australia of fisheries outside South Australia. Section 14 of the Act provided that the regulatory

provisions of the Act extended to any area in respect of which an arrangement had been made under s 13. An arrangement was then made between South Australia and the Commonwealth, under [page 58] which South Australia was to control rock lobster fishing in an area extending up to 200 nautical miles from the state’s coast. The validity of these provisions was challenged. The court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) noted that Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 had given effect to a rule ‘that what is essential to the extra-territorial operation of a State law is a connection between the enacting State and the extraterritorial persons, things or events on which the law operates’: 168 CLR at 372. The court referred to the comments of Gibbs J in Pearce v Florenca (1976) 135 CLR 507 at 518, that the requirement for a relevant connection ‘should be liberally applied’, and continued (168 CLR at 372–3, 374): It follows that the limitation on the extra-territorial operation of the State Fisheries Act depends not on the distance of the arrangement area from the sea boundary of the State’s territory but on the existence and nature of a connexion between South Australia and the activities which constitute the fishery in the assigned area. The circumstances in this case … demonstrate a real and substantial connexion. The fishery described in the arrangement is a finite resource available for exploitation and exploited by South Australian residents; it is a significant source of South Australian trade and employment. Since the area of water referred to in the second arrangement is to be construed as confined to waters on the South Australian side of lines of

equidistance, the land territory of South Australia is the closest land territory to the fishery. A law for the management of the fishery is a law for the peace, welfare and good government of South Australia. Significantly, in the light of the federal considerations referred to in the Union Steamship case, the court noted that the South Australian legislation did not claim to extend into waters with which Victoria might have an equal or stronger connection.

See also Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1.

Commonwealth Parliament 1.6.11 Because the Commonwealth Parliament is authorised ‘to make laws … with respect to … trade and commerce with other countries’ (s 51(i)) or ‘external affairs’ (s 51(xxix)) one would expect those specific grants of power to carry an authority to legislate extra-territorially. The necessary implication, in such provisions as these, of some extra-territorial competence was emphasised by the High Court in Crowe v Commonwealth (1935) 54 CLR 69, where s 51(i) was held to authorise the Commonwealth legislative control of the sale and distribution outside Australia of Australian dried fruits. Starke J said ((1935) 54 CLR at 85–6): The power of self-governing dominions to make laws having extraterritorial operation was considered by the Judicial Committee in Croft v Dunphy [1933] AC 156. Once it is found, as I gather from that case, that the particular topic of legislation is with respect to one of its powers enumerated in s 51 of the Constitution upon which the Commonwealth Parliament may competently legislate for the peace, order and good government of the Commonwealth, then no reason exists for restricting the permitted scope of such legislation by any other consideration than is applicable to the legislation of a fully sovereign State. Export, transport and sale, are all parts of that class of relation which constitutes trade and

commerce. The subjects of legislation in the present case are the control of the export of Australian dried fruits, and the sale and disposition of such fruits after export. But those subjects are part of the concept of trade and commerce with other countries. The restrictions imposed by the Act and Regulations are all connected with the exportation of dried fruits from Australia

[page 59] (Act s 15; reg No 30 of 1935, cl 9). The legislative authority of the Commonwealth is thus attracted, and the legislation falls within the power to make laws for the peace, order and good government of the Commonwealth with respect to trade and commerce among other countries.

1.6.12 However, other legislative powers of the Commonwealth are not expressed in a form that implies extra-territorial power. The High Court was initially reluctant to concede extra-territorial power to the Commonwealth Parliament. In a series of cases, culminating in Merchant Service Guild of Australasia v Commonwealth Steamship Owners’ Association (No 3) (1920) 28 CLR 495, the High Court insisted that s 51(xxxv) did not authorise the Commonwealth Parliament to make laws for the settlement of industrial disputes over conditions of employment outside Australia. Section 51(xxxv) gave the Commonwealth Parliament power to make laws with respect to ‘conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State’. Knox CJ, Isaacs, Rich and Starke JJ said at 503: We think that sub-s xxxv of s 51, on its proper judicial construction, is

intended to secure, so far as possible by conciliation and arbitration, uninterrupted industrial services to the people of the Commonwealth, and therefore the term ‘industrial disputes’ in that sub-s unextended by covering s v means disputes as to the terms and conditions of industrial operations in Australia only.

Perhaps this was a surprising result given that the power extends to disputes ‘beyond the limits of any one State’. 1.6.13 In 1926, an Imperial Conference of dominion Prime Ministers, meeting in London, formally recognised the equality in status of Great Britain and the self-governing dominions: see 1.3.9C. In 1929, an Imperial Conference reported that the subject of territorial limitations on dominion legislation was ‘full of obscurity’’ and that the dominions had been obliged to resort to indirect methods of reaching conduct which, because of the limitations, might lie beyond their direct power but which they regarded as essential to control as part of their self-government. The 1929 conference recommended that legislation should be passed by the United Kingdom Parliament making it clear that the limitation does not exist. 1.6.14 In 1931, the United Kingdom Parliament passed the Statute of Westminster, the provisions of which were drafted at an Imperial Conference of 1930 which had confirmed the 1929 report quoted above. The immediately relevant provision was s 3: It is hereby declared and enacted that the Parliament of a Dominion has full power to make laws having extra-territorial operation.

Section 1 defined ‘Dominion’ to include the Commonwealth of Australia. Section 10 provided that s 3 should not extend to

Australia until adopted by legislation of the Commonwealth Parliament. In 1942, the Commonwealth Parliament adopted s 3 (and other substantive provisions of the Statute of Westminster) by the Statute of Westminster Adoption Act 1942 (Cth). The adoption was declared to have effect from 3 September 1939. It was then inevitable that Merchant Service Guild of Australasia v Commonwealth Steamship Owners’ Association (No 3) (1920) 28 CLR 495 would be reopened. [page 60] 1.6.15 In R v Foster; Ex parte Eastern and Australian Steamship Co Ltd (1959) 103 CLR 256, the High Court held that s 72(a) and (b) of the Conciliation and Arbitration Act 1904 (Cth) authorised the Conciliation and Arbitration Commission to settle an industrial dispute extending outside Australia and that the section was within the power given to the Commonwealth Parliament by s 51(xxxv) of the Constitution. Responding to an argument that the parliament’s power was territorially limited, Dixon CJ (with whose reasons Fullagar and Kitto JJ agreed) said (103 CLR at 267–8): It cannot be invalid for extra-territoriality; for s 3 of the Statute of Westminster declares and enacts that the Parliament of a Dominion has full power to make laws having an extra-territorial operation. Since the adoption of the Statute of Westminster by Act No 56 of 1942 it can be no objection to the validity of a law of the Commonwealth that it purports to operate outside Australia. The result may be an enlargement of federal power, but it is not an enlargement against which s 9(1) of the Statute of Westminster can have anything to say.

Windeyer J said (103 CLR at 308):

So far as the Commonwealth is concerned, it is now for Parliament alone to judge whether a measure in respect of any topic on which it has power to legislate is in fact for the peace order and good government of the Commonwealth.

We will explore in detail the capacity of the Commonwealth to legislate extra-territorially pursuant to the external affairs power (s 51(xxix)) in Chapter 4.

REPRESENTATIVE AND RESPONSIBLE GOVERNMENT 1.7.1 In 1823, an Act of the Imperial Parliament (4 Geo IV c 96) created the Supreme Court of New South Wales and established a Legislative Council. Laws could be passed by the council for the ‘peace, order and good government’ of New South Wales. This formula was traditionally regarded as providing the widest law-making authority, and it still has that denotation: see 1.5.15C However, the Legislative Council’s laws could only be initiated by the Governor. In 1842, provision was made for representative government. The Imperial Parliament established a Legislative Council with two-thirds of its members to be elected on a restricted, property-based franchise. The remaining third of the members were to be appointed by the Crown (the Governor). At this stage, the council had no control over the government budget. In 1850, 13 & 14 Vict c 59, the Australian Constitutions Act (No 2) (UK) authorised New South Wales to amend its own Constitution. The New South Wales Constitution Act that followed established a bicameral legislature with a Legislative Assembly elected on the basis of a property and income-based franchise and a Legislative Council with members nominated by the Governor on the advice of an Executive Council comprising ministers drawn predominantly from the assembly. Importantly, the new Constitution also created a system of responsible government: ministers were to retire if they lost the confidence of the parliament and parliament took control of government expenditure, with taxation and appropriation bills to be initiated in the assembly.

For further details regarding the emergence of representative and responsible government in the other states (and later the territories), see Chapters 2 and 7. [page 61] 1.7.2 The constitutional system of representative and responsible government at the Commonwealth level was summarised by the unanimous High Court in Lange v Australian Broadcasting Corporation. The facts are set out in the extract at 10.3.11C. 1.7.3C Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 (references omitted) Representative and responsible government Sections 7 and 24 of the Constitution, read in context, require the members of the Senate and the House of Representatives to be directly chosen at periodic elections by the people of the States and of the Commonwealth respectively. This requirement embraces all that is necessary to effectuate the free election of representatives at periodic elections. What is involved in the people directly choosing their representatives at periodic elections, however, can be understood only by reference to the system of representative and responsible government to which ss 7 and 24 and other sections of the Constitution give effect. That the Constitution intended to provide for the institutions of representative and responsible government is made clear both by the Convention Debates and by the terms of the Constitution itself. Thus, at the Second Australasian Convention held in

Adelaide in 1897, the Convention, on the motion of Mr Edmund Barton, resolved that the purpose of the Constitution was ‘to enlarge the powers of self-government of the people of Australia’. Sections 1, 7, 8, 13, 24, 25, 28 and 30 of the Constitution give effect to the purpose of self-government by providing for the fundamental features of representative government. As Isaacs J put it: ‘[T]he Constitution is for the advancement of representative government’. Section 1 of the Constitution vests the legislative power of the Commonwealth in a Parliament ‘which shall consist of the Queen, a Senate, and a House of Representatives’. Sections 7 and 24 relevantly provide: 7 The Senate shall be composed of senators for each State, directly chosen by the people of the State, voting, until the Parliament otherwise provides, as one electorate. … 24 The House of Representatives shall be composed of members directly chosen by the people of the Commonwealth, and the number of such members shall be, as nearly as practicable, twice the number of the senators. Section 24 does not expressly refer to elections, but s 25 makes it plain that the House of Representatives is to be directly chosen by the people of the Commonwealth voting at elections. Other provisions of the Constitution ensure that there shall be periodic elections. Thus, under s 13, six years is the longest term that a senator can serve before his or her place becomes vacant. Similarly, by s 28, every House of Representatives is to continue for three years from the first meeting of the House and no longer. Sections 8 and 30 ensure that, in choosing senators and members of the House of Representatives, each elector shall vote only once. The effect of ss 1, 7, 8, 13, 24, 25, 28 and 30 therefore is to ensure that the

Parliament of the Commonwealth will be representative of the people of the Commonwealth. Other sections of the Constitution establish a formal relationship between the Executive Government and the Parliament and provide for a system of responsible ministerial government, a system of government which, ‘prior to the establishment of the Commonwealth of Australia in 1901 … had become one of the central characteristics of our polity’. [page 62] Thus, s 6 of the Constitution requires that there be a session of the Parliament at least once in every year, so that 12 months shall not intervene between the last sitting in one session and the first sitting in the next. Section 83 ensures that the legislature controls supply. It does so by requiring parliamentary authority for the expenditure by the Executive Government of any fund or sum of money standing to the credit of the Crown in right of the Commonwealth, irrespective of source. Sections 62 and 64 of the Constitution combine to provide for the executive power of the Commonwealth, which is vested in the Queen and exercisable by the Governor-General, to be exercised ‘on the initiative and advice’ of Ministers and limit to three months the period in which a Minister of State may hold office without being or becoming a senator or member of the House of Representatives. Section 49 of the Constitution, in dealing with the powers, privileges and immunities of the Senate and of the House of Representatives, secures the freedom of speech in debate which, in England, historically was a potent instrument by which the House of Commons defended its right to consider and express opinions on the conduct of affairs of State by the Sovereign and the Ministers, advisers and servants of the Crown. Section 49 also provides the source of coercive authority for each chamber of the

Parliament to summon witnesses, or to require the production of documents, under pain of punishment for contempt. The requirement that the Parliament meet at least annually, the provision for control of supply by the legislature, the requirement that Ministers be members of the legislature, the privilege of freedom of speech in debate, and the power to coerce the provision of information provide the means for enforcing the responsibility of the Executive to the organs of representative government. In his Notes on Australian Federation: Its Nature and Probable Effects, Sir Samuel Griffith pointed out that the effect of responsible government ‘is that the actual government of the State is conducted by officers who enjoy the confidence of the people’. That confidence is ultimately expressed or denied by the operation of the electoral process, and the attitudes of electors to the conduct of the Executive may be a significant determinant of the contemporary practice of responsible government.

Responsible government 1.7.4 Important aspects of the Australian system of government, particularly principles of responsible government, are not stated in formal written rules. In particular, the relationship between the legal head of each executive government (state and Commonwealth) and the political head of that government is only alluded to in the formal rules, as in ss 62, 63 and 64 of the Commonwealth Constitution. That relationship, which is commonly labelled as ‘responsible government’, depends for its content and application on constitutional conventions, rules that are not enforced by the courts but that depend on a variety of political and financial considerations for their legitimacy and authority. This is discussed in more detail in Chapter 7. For a

discussion of the impact of constitutional conventions, see Jennings, 1972. 1.7.5 The most basic of these conventional rules is that a state Governor, or the Commonwealth Governor-General, will exercise the significant legal powers vested in that office on the advice of the parliamentary leader of the political party that controls the lower house of parliament (or, in the case of Queensland, the only house of parliament). So, when making appointments to public offices or dissolving parliament, the Governor acts in accordance with the advice given by the Premier, and the Governor-General acts [page 63] in accordance with the advice given by the Prime Minister. The political leaders are thus ‘responsible’ for the acts formally taken by the Governor or Governor-General. This convention depends for its strength on the fact that the business of government cannot be carried on without access to finance, access that is legally controlled by parliament (taxes cannot be imposed, and government funds cannot be spent, without express parliamentary authorisation). In dealing with financial legislation, the lower house is dominant. The party that politically controls the lower house will control the government’s access to essential finance, hence, the leader of that party can control the exercise of the government’s legal powers. 1.7.6 A second convention, which is the corollary of the first, is that the political situation in the lower house of parliament

determines the choice of the leader of the government (state Premier or Prime Minister) and the composition of the ministry. Although the Governor-General, for example, is given the power to appoint ministers to administer the ‘Departments of State’ by s 64 of the Commonwealth Constitution, it has never been supposed that this choice was in any sense free. Similarly, it has always been accepted that the right of the current ministry to control the exercise of the Governor’s or Governor-General’s powers would evaporate as soon as that ministry lost the support of the lower house of parliament. 1.7.7 These propositions about the links between the formal head of government, the political head of government and parliament depend for their enforcement on political and financial sanctions. They are not enforced by the courts, except indirectly through the courts’ insistence that taxation revenues cannot be collected and government funds cannot be expended without parliamentary authorisation: Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421; Commonwealth v Burns [1971] VR 825. However, the proposition that state Governors and the Governor-General act on ministerial advice has been recognised and endorsed in many judicial decisions. The nature and justification of constitutional conventions is explored in Chapter 7.

Representative government 1.7.8 In Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 10.3.11C the High Court identified the sections of the Constitution that establish the Australian system of representative

government. We provide details about the structure of the Commonwealth, state and territory legislatures in Chapter 2, where we also outline the federal movement in the last quarter of the 19th century and parliamentary adjournment, prorogation and dissolution. We also consider the topic of qualifications for (and disqualifications of) members of parliament. The franchise is also considered, followed by the distribution of parliamentary seats; parliamentary privileges; standard legislative procedures; special procedures applied to some financial legislation; alternative procedures (to resolve deadlocks) and restrictive procedures, such as ‘manner and form’ procedures. Judicial review of the legislative process is also considered. The system of representative government prescribed by the Constitution gives rise to a number of necessary implications. So, it is necessary in a system of representative government to have freedom to discuss political and governmental affairs: Lange v Australian Broadcasting Corporation (1997) 189 CLR 520. We consider the implications derived from our constitutional system of representative and responsible government in Chapter 10. 1.7.9 However, while implications drawn from the system of representative government are said to be restricted to those that are necessarily drawn from its text and structure, there is room [page 64] for reasonable disagreement as to the existence and scope of these implications. There are, in particular, limits to the extent to which that system of ‘representative government’ guarantees a broader

vision of ‘representative democracy’. The Commonwealth Constitution reserves key powers relating to the conditions of the Australian electoral system to the parliament itself. Sections 7, 10, 22, 24, 30, 31, 34, 39, 46–48 and 51(xxxvi) of the Constitution give the parliament considerable discretion to alter the form of electoral laws, and consequently the type of ‘representative government’ that might exist: McGinty v Western Australia (1996) 186 CLR 140 1.2.27C. In Mulholland v Australian Electoral Commission (2004) 220 CLR 181, Gleeson CJ at 188–91 outlined how the Commonwealth Constitution provides the framework for Australia’s system of representative (and responsible) government but leaves much of its content and detail to the legislative judgment of the Commonwealth Parliament. 1.7.10C

Mulholland v Australian Electoral Commission (2004) 220 CLR 181 (references omitted)

Gleeson CJ: Legislative power A notable feature of our system of representative and responsible government is how little of the detail of that system is to be found in the Constitution, and how much is left to be filled in by Parliament. In Lange v Australian Broadcasting Corporation, this Court said that, in ss 1, 7, 8, 13, 25, 28 and 30, the Constitution provides for ‘the fundamental features of representative government’. In other cases, such as AttorneyGeneral (Cth); Ex rel McKinlay v The Commonwealth, and McGinty v Western Australia, it was pointed out that

representative democracy takes many forms, and that the terms of the Constitution are silent on many matters that are important to the form taken by representative democracy in Australia, at a federal or State level, from time to time. For example, while, in common with most democracies, Australia now has universal adult suffrage, this was not always so. At the time of the Constitution, most women in Australia did not have the right to vote. Aboriginal Australians have only comprehensively had the vote since 1962. Unlike most democracies, Australia now has a system of compulsory voting, but this did not exist at Federation. Members of the House of Representatives are now elected by a system of preferential voting. In the United Kingdom, as in the House of Representatives in the United States, and the House of Commons in Canada, members of the House of Commons are elected on a first-past-the-post system. One of the most striking examples of the power given to Parliament to alter, by legislation, the form of our democracy concerns the composition of the Senate. There was a major change in the method of electing senators in 1948. For many years before then, the political party that dominated the House of Representatives usually controlled the Senate. With the introduction of proportional representation in 1948, there came to be a much larger non-government representation in the Senate. Furthermore, a legislative change in 1984, increasing the number of senators from 10 per State to 12 per State, when combined with the system of proportional representation, produced the result that it is now unusual for a major party to control the Senate. This is of large political and practical significance. It was the result of legislative, not constitutional, change. In McKinlay, Barwick CJ, contrasting the Constitutions of Australia and the United States, said that the Australian colonies, at Federation, ‘committed themselves to what the Parliament … might do in relation to the franchise and the electoral distribution of the States, building

[page 65] in the safeguard of the equality of legislative power with one exception, in the two Houses.’ He explained the reason for this: Further, it must always be borne in mind that the American colonies had not only made unilateral declarations of independence but had done so in revolt against British institutions and methods of government. The concepts of the sovereignty of Parliament and of ministerial responsibility were rejected in the formation of the American Constitution. Thus, not only does the American Constitution provide for a presidential system, but it provides for checks and balances based on the denial of complete confidence in any single arm of government. In high contradistinction, the Australian Constitution was developed not in antagonism to British methods of government but in co-operation with and, to a great extent, with the encouragement of the British Government. The Constitution itself is an Act of the Imperial Parliament which, except for a significant modification of the terms of s 74, is in the terms proposed by the Australian colonists and accepted by the British Government. Because that Constitution was federal in nature, there was necessarily a distribution of governmental powers as between the Commonwealth and the constituent States with consequential limitation on the sovereignty of the Parliament and of that of the legislatures of the States. All were subject to the Constitution. But otherwise there was no antipathy amongst the colonists to the notion of the sovereignty of Parliament in the scheme of government. That is a useful reminder of historical facts that explain not only what the Constitution says, but also what it does not say. The

silence of the Constitution on many matters affecting our system of representative democracy and responsible government has some positive consequences. For example, if then current ideas as to the electoral franchise had been written into the Constitution in 1901, our system might now be at odds with our notions of democracy. The Constitution is, and was meant to be, difficult to amend. Leaving it to Parliament, subject to certain fundamental requirements, to alter the electoral system in response to changing community standards of democracy is a democratic solution to the problem of reconciling the need for basic values with the requirement of flexibility. As to responsible government, the deliberate lack of specificity on the part of the framers of the Constitution concerning the functioning of the Executive was seen, in Re Patterson; Ex parte Taylor, as an advantage. Constitutional arrangements on such matters need to be capable of development and adaptability. Concepts such as representative democracy and responsible government no doubt have an irreducible minimum content, but community standards as to their most appropriate forms of expression change over time, and vary from place to place. It is only necessary to consider the differences in the present electoral systems of New South Wales, Tasmania and New Zealand, all of which would be regarded as democratic, to see the point. The system in New South Wales is preferential voting of a kind that is orthodox in Australia. Tasmania has the Hare-Clark electoral system, which is unlike any other State system. New Zealand has changed from a first-past-the-post system to a system under which the Parliament has a number of members elected in singleseat constituencies, and a number elected by proportional representation from the lists of those parties obtaining a sufficient percentage of the national vote. Federalism itself influenced the form of our government in ways that might be thought by some to depart from ‘pure democracy’, if there is such a thing. Equal State representation

[page 66] in the Senate may be thought, and at the time of Federation was thought by some, to be inconsistent with a concept of voting equality throughout the Commonwealth. Voters in the smallest State (in terms of population) elect the same number of senators as voters in the largest State. In this respect, the ‘value’ of votes is unequal. That inequality is one aspect of Australian democracy which, exceptionally, is enshrined in the Constitution. Where the Constitution contains an express provision for one form of inequality in the value of votes, it dictates at least some caution in formulating a general implication of equality on that subject. Section 7 of the Constitution provides that the Senate shall be composed of senators for each State, directly chosen by the people of the State, voting, until the Parliament otherwise provides, as one electorate. The section goes on to deal with some further matters relating to Senate elections, until the Parliament otherwise provides. Section 9 provides that the Parliament of the Commonwealth may make laws prescribing the method of choosing senators, but so that the method shall be uniform for all the States. Section 24 of the Constitution provides that the House of Representatives shall be composed of members directly chosen by the people of the Commonwealth, and goes on to specify the method of election, until the Parliament otherwise provides. Section 51(xxxvi) empowers the Parliament, subject to the Constitution, to make laws with respect to matters in respect of which the Constitution makes provision until the Parliament otherwise provides. That includes the matters referred to in ss 7 and 24. The expression ‘subject to this Constitution’ picks up, among other things, the overriding requirement that senators and members of the House of Representatives are to be ‘directly chosen by the people’. As appears from what has been said above, that qualification imposes a basic condition of

democratic process, but leaves substantial room for parliamentary choice, and for change from time to time. The methods by which the present senators, and members of the House of Representatives, of the Australian Parliament are chosen are significantly different from the methods by which those in earlier Australian parliaments were chosen. Judicial opinion has been divided on the presently irrelevant question as to whether the Constitution guarantees universal suffrage. No one doubts, however, that Parliament had the power, as it did, to prescribe a minimum voting age, and, later, to reduce that age from 21 to 18. Whether Parliament would have the power to fix a maximum voting age is a question that has not yet arisen.

THE SEPARATION OF POWERS The political theory of a separation of powers 1.8.1 In his review of English constitutional law and its overseas progeny, de Smith referred to ‘the doctrine of the separation of powers’ as one that is usually regarded as desirable in a system of government, although enthusiasm for the doctrine’s virtues is not unanimous: de Smith and Brazier, 1989, p 19. As de Smith explains, the doctrine of the separation of powers asserts that governmental functions can be divided into three categories: legislative, executive and judicial; that the institutions of government should be similarly divided; and that each function of government should be exercised only by the relevant institution of government, so that the functions and institutions of government are kept strictly separate: see de Smith and Brazier, 1989, pp 19– 20.

[page 67] 1.8.2 The modern principle of separation of legislative, executive and judicial powers is widely attributed to the French philosopher, Charles-Louis de Secondat, Baron De Montesquieu, who wrote his classic work, The Spirit of Laws, in 1748. John Locke had earlier written about a separation of power; however, Locke’s account did not differentiate between judicial and executive power: see Ratnapala, 1993. Montesquieu’s ideas had a significant impact on the writing of William Blackstone (Vile, 1967, p 105) who, in his Commentaries on the Laws of England (1765), adapted the theory to a British common law tradition of judicial independence and the separation of judicial power. The writings of Montesquieu also influenced the drafters of the United States Constitution, with James Madison and Alexander Hamilton both proclaiming the virtues of a separation of powers when supporting the federal movement in that country: Federalist Papers, Nos 47, 51 and 78 (1788). 1.8.3 Two immediate difficulties are presented by this doctrine, one theoretical or conceptual, the other practical. The conceptual difficulty lies in the assumption that the functions of government can be neatly divided into three categories. However, the business of contemporary government has such complex characteristics that this neat division is frequently impossible. This difficulty is amply demonstrated in the Australian context by the divisions of judicial opinion over the correct classification (judicial or executive? judicial or legislative?) of such functions as reviewing taxation assessments, cancelling the registration of trade unions and investigating restrictive trade practices. For a detailed account of the

disagreements and of the complexities, see Stellios, 2015, pp 221– 331. From the practical perspective, a rigorous separation of governmental functions (assuming that the functions can be separately identified) could totally disrupt the affairs of government. Even in the United States, whose Constitution was drafted to incorporate the doctrine, a substantial exercise of legislative functions by the executive branch has been accepted as consistent with the Constitution. Certainly, the doctrine would be inconsistent with the system of responsible government that was developed in Britain in the 18th century, adopted in the Australian colonies in the mid-19th century and endorsed in the Commonwealth Constitution, a system that requires the executive branch to be directed by ministers who are members of, and politically supported by, the legislature. Although the separation of powers has a long and strong tradition in political theory, to what extent is it reflected in our constitutional systems of government in Australia? 1.8.4 The drafting of the Commonwealth Constitution appears to reflect the separation of powers doctrine. Three chapters deal separately with three institutions of government: Ch I: parliament; Ch II: the executive; and Ch III: the judicature. Three sections of the Constitution ‘vest’ each of the functions of government in one of these institutions: 1 The legislative power of the Commonwealth shall be vested in a

Federal Parliament, which shall consist of the Queen, a Senate, and a House of Representatives, and which is hereinafter called ‘The Parliament,’ or ‘The Parliament of the Commonwealth.’ … 61 The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen’s representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth. …

[page 68] 71 The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. The High Court shall consist of a Chief Justice, and so many other Justices, not less than two, as the Parliament prescribes.

1.8.5 The extent to which the drafters of the Commonwealth Constitution intended to incorporate a separation of powers is unclear. Certainly, there are clear indications within the convention debates that the framers of the Constitution intended to create an independent judiciary: Finnis, 1968; Wheeler, 1996. However, as Sawer observed: ‘There is no evidence that the Federal Fathers in general had the slightest desire to imitate the French theory of separation of powers, which was based upon a misrepresentation of English practice, nor the American theory which was based upon a misrepresentation of the French’ (Sawer, 1967, p 152), although the drafters probably regarded the separation of powers ‘to be in some degree connected with federal ideas’: Sawer, 1967, p 153. Furthermore, the Commonwealth Constitution incorporates responsible government, in which the legislature and the executive

are effectively united. This incorporation is reflected in ss 44, 62 and 64 of the Constitution. Sawer has also pointed to some incomplete aspects of Ch III of the Constitution (the absence of any prescribed qualifications for membership of the High Court, of any prescribed duration for membership of the court or, indeed, of any obligation to make appointments to the court) and has observed that ‘[t]he historical probabilities are that only a very limited separation of powers was intended’: Sawer, 1967, p 154. 1.8.6 As we will see in Chapter 8, the High Court has recognised that a relatively strict separation of judicial power from the political arms of government (parliament and the executive) was established by Ch III of the Commonwealth Constitution. In doing so, it has developed two separation of judicial power principles that operate to limit the Commonwealth Parliament: first, that Commonwealth judicial power can only be exercised by courts referred to in Ch III of the Constitution; and, second, courts exercising Commonwealth judicial power can only exercise judicial power and incidental non-judicial power. Although these implied limitations do not directly apply to state parliaments in their dealings with state judicial systems, we will also see in Chapter 8 that the High Court has developed principles from Ch III of the Constitution that limit what state parliaments can do with their courts. But, what about a separation of legislative and executive powers at the Commonwealth and state levels?

Legislative and executive powers — the Commonwealth

1.8.7 The Commonwealth Constitution, as noted above, recognises the principle of responsible government: see 1.7.4–1.7.7. It is said that this effectively unites the parliament and the executive as a consequence. But s 1 of the Constitution vests legislative power in the parliament and s 61 vests the executive power of the Commonwealth in the Queen (exercisable by the Governor-General as the Queen’s representative). Does this arrangement pose a constitutional problem for delegated or secondary legislation? — that is, when parliament seeks to delegate its legislative power by statute to the executive or another body (such as a court or local council). It was this critical issue that the High Court considered in Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan. [page 69]

1.8.8C

Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73

Dixon J: Section 3 of the Transport Workers Act 1928–29 provides that the Governor-General may make Regulations, not inconsistent with that Act, which, notwithstanding anything in any other Act but subject to the Acts Interpretation Act 1901–1918 and the Acts Interpretation Act 1904–1916, shall have the force of law, with respect to the employment of transport workers, and in particular for regulating the engagement, service and discharge of transport workers, and for regulating or prohibiting the employment of unlicensed persons as transport workers, and for the protection of transport workers … Section 3 of the Transport

Workers Act assumes to commit to the executive government an extensive power to make regulations which, notwithstanding anything in any other Act of Parliament, shall have the force of law. The validity of this provision is now attacked upon the ground that it is an attempt to grant to the executive a portion of the legislative power vested by the Constitution in the Parliament, which is inconsistent with the distribution made by the Constitution of legislative, executive and judicial powers. Section 1 of the Constitution provides that the legislative power of the Commonwealth shall be vested in a Federal Parliament which shall consist of the Sovereign, a Senate, and a House of Representatives; s 61, that the executive power of the Commonwealth is vested in the Sovereign and is exercisable by the Governor-General as the Sovereign’s representative and extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth; s 71, that the judicial power of the Commonwealth shall be vested in a Federal Supreme Court to be called the High Court of Australia and in such other Federal courts as the Parliament creates and in such other courts as it invests with Federal jurisdiction. These provisions, both in substance and in arrangement, closely follow the American model upon which they were framed. The Constitution of the United States provides — Art I s 1: ‘All legislative powers herein granted shall be vested in a Congress of the United States which shall consist of a Senate and House of Representatives,’ Art II s 1: ‘The executive power shall be vested in a President of the United States’; s 3: ‘he shall take care that the laws be faithfully executed.’ Art III s 1: ‘The judicial power of the United States shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish.’ In adopting this division of the functions of government, the members of the Convention of 1787 meant that the theory of the separation of powers should be embodied in the fundamental law which they were framing …

[A]lthough it may be true that the formulation of enforceable rules of conduct for the subject or the citizen, because they are considered expedient, is the very characteristic of law-making, yet it has always been found difficult or impossible to deny to the executive, as a proper incident of its functions, authority to require the subject or the citizens to pursue a course of action which has been determined for him by the exercise of an administrative discretion. But in what does the distinction lie between a law of Congress requiring compliance with directions upon some specified subject which the administration thinks proper to give, and a law investing the administration with authority to legislate upon the same subject? [Dixon J referred to the earlier decisions New South Wales v Commonwealth (the Wheat case) (1915) 20 CLR 54, Waterside Workers’ Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434, and Re Judiciary and Navigation Acts (1921) 29 CLR 257, in which Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ said (29 CLR at 264): ‘The Constitution [page 70] of the Commonwealth is based upon a separation of the functions of government, and the powers which it confers are divided into three classes — legislative, executive and judicial: New South Wales v Commonwealth 20 CLR at 88. In each case the Constitution first grants the power and then delimits the scope of its operation’.] From these authorities it appears that, because of the distribution of the functions of governments and of the manner in which the Constitution describes the tribunals to be invested with the judicial power of the Commonwealth, and defines the judicial power to be invested in them, the Parliament is restrained both from reposing any power essentially judicial in any other organ or body and from reposing any other than that

judicial power in such tribunals. The same or analogous considerations apply to the provisions which vest the legislative power of the Commonwealth in the Parliament, describe the constitution of the legislature and define the legislative power. Does it follow that in the exercise of that power the Parliament is restrained from reposing any power essentially legislative in another organ or body? [Dixon J noted that, in Baxter v Ah Way (1909) 8 CLR 626, legislation delegating to the executive authority to proclaim the inclusion of goods in the category of prohibited imports was upheld, rejecting an argument based on the maxim delegatus non potest delegare, and emphasising the plenary nature of the legislative power. The separation of powers was not expressly mentioned. He referred to Roche v Kronheimer (1921) 29 CLR 329, where the High Court upheld the validity of s 2 of the Treaty of Peace Act 1919 (Cth), which empowered the executive to make such regulations as appeared to it to be necessary for carrying out or giving effect to the economic clauses of the Treaty of Versailles.] When, at the beginning of this year, a regulation made under s 3 of the Transport Workers Act came before us in Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492, the attack upon the validity of the section was based rather upon the scope of the commerce power, and but little reliance was placed upon the legislative character of the power conferred upon the executive. But in the judgments of Starke J and of Evatt J and in my own judgment, with which Rich J expressed his agreement, the question was stated whether it was within the power of the Parliament to make a law which, in the language of Starke J (44 CLR at 506) ‘prescribes no rule in relation to such employment: it remits the whole matter to the regulation of the Governor-inCouncil’; and the answer given by each of us was that Roche v Kronheimer decided that it is within the power of Parliament to do so. A reconsideration of the matter has confirmed by opinion that the judgment of the court in that case does so mean to decide … I think the judgment really meant that the time had

passed for assigning to the constitutional distribution of powers among the separate organs of government, an operation which confined the legislative power to the Parliament so as to restrain it from reposing in the executive an authority of an essentially legislative character. I, therefore, retain the opinion which I expressed in the earlier case that Roche v Kronheimer did decide that a statute conferring upon the executive a power to legislate upon some matter contained within one of the subjects of the legislative power of the Parliament is a law with respect to that subject, and that the distribution of legislative, executive and judicial powers in the Constitution does not operate to restrain the power of the Parliament to make such a law. This does not mean that a law confiding authority to the executive will be valid, however extensive or vague the subject matter may be, if it does not fall outside the boundaries of Federal power. There may be such a width or such an uncertainty of the subject matter to be handed over that the enactment attempting it is not a law with respect to any particular head or heads of legislative power. [page 71] [Gavan Duffy CJ and Starke J concurred in a joint judgment. Rich and Evatt JJ concurred in separate judgments. Only Evatt J considered the separation of powers doctrine.] Evatt J: It is very difficult to maintain the view that the Commonwealth Parliament has no power, in the exercise of its legislative power, to vest executive or other authorities with some power to pass regulations, statutory rules and by-laws which, when passed, shall have full force and effect. Unless the legislative power of the Parliament extends this far effective government would be impossible … In truth the full theory of ‘Separation of Powers’ cannot

apply under our Constitution. Take the case of an enactment of the Commonwealth Parliament which gives to a subordinate authority other than the executive, a power to make by-laws. To such an instance the theory of a hard and fast division and subdivision of powers between and among the three authorities of government cannot apply without absurd results. It is clear that the regulation making power conferred in such a case upon the subordinate authority is not judicial power. If it is a ‘power’ of the Commonwealth at all, it must, according to the theory, be either legislative or executive power. But, if the former, the statute granting power would be invalid because the legislature itself was not exercising the power; and if the latter, the statute would be bad because an authority other than the executive government of the Commonwealth was vested with executive power in defiance of s 61 of the Constitution. It is no longer disputed that if Parliament passes a law within its powers, it may, as part of its legislation, endow a subordinate body, not necessarily the executive government, with power to make regulations for the carrying out of the scheme described in the statute. Does the Constitution impliedly prohibit Parliament from enlarging the extent of the powers to be conferred on subordinate authorities? In my opinion every grant by the Commonwealth Parliament of authority to make rules and regulations, whether the grantee is the executive government or some other authority, is itself a grant of legislative power. The true nature and quality of the legislative power of the Commonwealth Parliament involves, as part of its content, power to confer law-making powers upon authorities other than Parliament itself. If such power to issue binding commands may lawfully be granted by Parliament to the executive or other agencies, an increase in the extent of such power cannot of itself invalidate the grant. It is true that the extent of the power granted will often be a very material circumstance in the examination of the validity of the legislation conferring the grant. But this is for a reason quite different and distinct from the

absolute restriction upon parliamentary action which is supposed to result from the theory of separation of powers. The matter may be illustrated by an example. Assume that the Commonwealth Parliament passes an enactment to the following effect: ‘The executive government may make regulations having the force of law upon the subject of trade and commerce with other countries or among the States’. Such a law would confer part of the legislative power of the Commonwealth upon the executive government, and those who adhere to the strict doctrine of separation of powers, would contend that the law was ultra vires because of the implied prohibition contained in ss 1, 61 and 71 of the Constitution. For the reasons mentioned such a view cannot be accepted. At the same time, I think that in ordinary circumstances a law in the terms described would be held to be beyond the competence of the Commonwealth Parliament. The nature of the legislative power of the Commonwealth authority is plenary, but it must be possible to predicate of every law passed by the Parliament that it is a law with respect to one or other of the specific subject matters mentioned in ss 51 and 52 of the Constitution. The only ground [page 72] upon which the validity of such a law as I have stated could be affirmed, is that it is a law with respect to trade and commerce with other countries or among the States. But it is, in substance and operation, not such a law, but a law with respect to the legislative power to deal with the subject of trade and commerce with other countries or among the States. Thus, s 51(i) of the Constitution operates as a grant of power to the Commonwealth Parliament to regulate the subject of inter-State trade and commerce, but the grant itself would not be truly described as being a law with respect to inter-State trade and

commerce. Section 51(i) is, however, correctly described as a law with respect to the powers of Parliament, and it finds its proper and natural place in a Constitution Act … On final analysis therefore, the Parliament of the Commonwealth is not competent to ‘abdicate’ its powers of legislation. This is not because Parliament is bound to perform any or all of its legislative powers or functions, for it may elect not to do so; and not because the doctrine of separation of powers prevents Parliament from granting authority to other bodies to make laws or by-laws and thereby exercise legislative power, for it does so in almost every statute; but because each and every one of the laws passed by Parliament must answer the description of a law upon one or more of the subject matters stated in the Constitution. A law by which Parliament gave all its law-making authority to another body would be bad merely because it would fail to pass the test last mentioned.

1.8.9 In Attorney-General (Cth) v R; Ex parte Australian Boilermakers’ Society (1957) 95 CLR 529 8.2.9C, the Privy Council held that Ch III of the Constitution was an exclusive and exhaustive statement about the judicial power and judicial tribunals of the Commonwealth, with the result that that judicial power could be vested only in Ch III courts and that non-judicial power could not be vested by the Commonwealth Parliament in those courts. In its judgment, the Privy Council relied heavily on a threefold separation of powers as one that was demanded by a literal interpretation of the Constitution. ‘But first and last, the question is one of construction and they doubt whether, had Locke and Montesquieu never lived nor the Constitution of the United States never been framed, a different interpretation of the Constitution could validly have been reached’: 95 CLR at 540.

Nevertheless, the Privy Council did affirm Dignan’s case and said that it did not wish to be understood as casting doubt ‘on the line of authorities where the union of legislative and executive power has been considered’: 95 CLR at 545. 1.8.10 The point made by Evatt J in Dignan’s case (1931) 46 CLR 73 at 119–20, that a wholesale delegation of the Commonwealth’s legislative power would amount to an invalid abdication by the parliament, was affirmed by some members of the High Court in Giris Pty Ltd v Commissioner of Taxation (1969) 119 CLR 365, when considering the validity of s 99A of the Income Tax Assessment Act 1936 (Cth). Section 99A(4) provided for assessment of the amount of tax payable by the trustee of an estate. Section 99A(2) provided that the section was not to apply (with the result that a different method of assessing the tax payable, prescribed in s 99, would be used), where ‘the Commissioner is of the opinion that it would be unreasonable that this section should apply in relation to that trust estate in relation to that year of income’. According to s 99A(3), the commissioner was to take account of several specified matters and ‘such other matters, if any, as he thinks fit’. [page 73] All members of the High Court decided that s 99A was valid, largely because the courts would import some limits on the commissioner’s discretion, and provide an opportunity for judicial review of excessive exercises of that discretion. (Windeyer J supported this reasoning with a 17th century quotation from Chief Justice Coke: ‘[R]easonableness in these cases belongeth to the

knowledge of the law and therefore to be decided by the justices’: 119 CLR at 384.) However, Barwick CJ observed that ‘whilst Parliament may delegate legislative power it may not abdicate it’. In the end, he saw s 99A as no more than a delegation of a legislative function: 119 CLR at 373–4. Kitto J noted that the operation of a taxation law could validly be made to depend upon the formation of an administrative discretion as to some fact (119 CLR at 379): But it may conceivably be that the position is different where a provision purports to authorise an administrative officer to exclude from the application of the law any case in which he disapproves of its application. If sub-s (2) had the effect of setting the Commissioner free, in choosing between s 99A and s 99, to do what he thought fit within the limits of the powers of the Parliament, possibly it should be held invalid as an attempt to invest an officer of the executive government with part of the legislative power of the Commonwealth.

Menzies J also acknowledged that ‘at some point … the shifting of responsibility from parliament to the commissioner would require consideration of the constitutionality of the delegation’: 119 CLR at 381. Windeyer J said that, on the whole, s 99A was not beyond the bounds of constitutional validity, though it was ‘very close to the boundary, and … would be questionable as a precedent for legislation of a similar character’: 119 CLR at 385.

Legislative and executive powers — states 1.8.11 Unlike the Commonwealth Constitution, the constitutions of the Australian states do not recognise a formal separation of powers. Consequently, the constitutional issue considered by the High Court in Dignan’s case 1.8.8C regarding

delegated legislation does not arise. State parliaments are free to delegate by statute their law-making power to the executive or another body (such as a court or local council). However, delegatus non potest delegare remains an important interpretive principle. That is, a person or body to whom legislative powers have been delegated cannot delegate them to another. 1.8.12 The application of the general proposition that a legislature is free to delegate its lawmaking power to an executive agency of the Australian states was confirmed by the Privy Council in Cobb & Co Ltd v Kropp [1967] 1 AC 141. At the same time, the Privy Council preserved the possibility, alluded to in Re Initiative and Referendum Act [1919] AC 935 that state legislation might be invalid if it abdicated legislative power. The issue in Cobb & Co Ltd v Kropp concerned the validity of the State Transport Facilities Acts 1946 to 1955 and 1946 to 1959 (Qld), which authorised the Commissioner for Transport to license services for the carriage of passengers and goods and to determine the amount of the licensing fee to be paid by each licensee. The appellant argued that the Acts were invalid because they set up the Commissioner for Transport as a new legislative power and abrogated to the Commissioner the Queensland Parliament’s power to impose taxation. On behalf of the Privy Council, Lord Morris noted that the Queensland Parliament was authorised to make laws for the ‘peace, welfare and good government’ of the State of Queensland, a phrase that was ‘habitually employed to denote the plenitude of sovereign legislative power, [page 74]

even though that power be confined to certain subjects or within certain reservations’: McCawley v R [1920] AC 691. Within certain limits, the power was full and plenary. For that reason, the attack on the Queensland State Transport Facilities Acts, Lord Morris said, ‘wholly fails’. It could not ‘rationally be said that there was any abandonment or abdication of power in favour of a newly created legislative authority’: [1967] 1 AC at 154. Lord Morris referred to R v Burah (1878) 3 App Cas 889; Hodge v R (1883) 9 App Cas 117; and Powell v Appollo Candle Co (1885) 10 App Cas 282, and said ([1967] 1 AC at 155–7): [N]othing comparable with ‘a new legislative power’ armed with ‘general legislative authority’ has been created by the passing by the Queensland legislature of the various Transport Acts. The circumstance that the commissioner was endowed with certain powers of decision and measures of discretion does not in any realistic sense support the contention that the Queensland legislature exceeded its plenary and ample powers. [T]he Queensland legislature were fully warranted in legislating in the terms of the Transport Acts now being considered. They preserved their own capacity intact and they retained perfect control over the commissioner for transport inasmuch as they could at any time repeal the legislation and withdraw such authority and discretion as they had vested in him. It cannot be asserted that there was a levying of money by pretence of prerogative without grant of Parliament or without parliamentary warrant. The legislature were entitled to use any agent or any subordinate agency or any machinery that they considered appropriate for carrying out the objects and purposes that they had in mind and which they designated. They were entitled to use the commissioner for transport as their instrument to fix and recover the licence and permit fees. They were not abrogating their power to levy taxes and were not transferring that power to the commissioner. What they created by the passing of the

Transport Acts could not reasonably be described as a new legislative power or separate legislative body armed with general legislative authority: see R v Burah 3 App Cas 889. Nor did the Queensland legislature ‘create and endow with its own capacity a new legislative power not created by the Act to which it owes its own existence’: see Re The Initiative and Referendum Act [1919] AC 935 at 945; 35 TLR 630 (PC). In no sense did the Queensland legislature assign or transfer or abrogate their powers or renounce or abdicate their responsibilities. They did not give away or relinquish their taxing powers. All that was done was done under and by reason of their authority. It was by virtue of their will that licence and permit fees became payable.

1.8.13 In Dean v Attorney-General (Qld) [1971] St R Qd 391, the plaintiff sought a declaration that a state of emergency proclaimed under s 22 of the State Transport Facilities Act 1938 (Qld) was void. One of the arguments raised was that s 22 was invalid because it provided for the establishment of another legislative body in addition to the Legislative Assembly. Section 22 provided that ‘where at any time it appears to the Governor-inCouncil that any circumstances exist … whether by fire, flood, storm, tempest, act of God, or by reason of any other cause or circumstance whatsoever whereby the peace, welfare, order, good government, or the public safety of the State … is imperilled, the Governor-in-Council may, by Proclamation … declare that a state of emergency exists’. The same section provided that when any such proclamation of emergency was in force the Governor-inCouncil might by Order-in-Council give such directions and prescribe such matters as he or she should deem necessary or desirable to secure the peace, welfare, order, good government, and/or public safety of the state. The argument was rejected by Stable J, who said ([1971] St R Qd at 402):

[page 75] [Section 22] is headed ‘Emergency powers’ and, with the very greatest respect to Parliament I say that it appears to me to have been passed in the realisation that from time to time sudden situations may arise with which a deliberative body is not geared immediately to deal. And it is noted that by s 26 of The State Transport Acts all proclamations and Orders-in-Council, which themselves are only temporary, must be laid before the Legislative Assembly within fourteen days after publication in the Gazette if Parliament is in session, and if not, then within fourteen days after the commencement of the next session. Parliament may thereafter pass a resolution disallowing the proclamation and Order-inCouncil. Thus Parliament has in effect said to the Governor-in-Council, ‘When an emergency within the meaning of s 22 arises you may act. We prescribe the manner in which you may act — by a proclamation of emergency followed by executive action to be set out in an Order-inCouncil. Your orders and directions shall be obeyed. But we, the Parliament, require that what you proclaim and order to be laid before us when we are available to consider it, and we may disallow it’. On the face of it this is not the constitution of a second legislative body. It is a provision which realises that in the State situations may arise in the nature of an emergency which require swift and flexible action of an executive rather than of a deliberative character. I would dare say that the categories of emergency, like the categories of negligence, are never closed. Thus I regard s 22 as properly providing a framework within which the Governor-in-Council may act when it appears to him that a situation within s 22 has arisen or is likely to arise. In my view such considerations as those to which I referred in Cobb & Co Ltd v Kropp [1965] Qd R 285 at 292, and which were accepted by the Privy Council in Cobb & Co Ltd v Kropp [1967] AC 141 at 157, have application in this case.

1.8.14

The argument and the judgment in Cobb & Co Ltd v

Kropp [1967] AC 141 (see 1.8.12) confirm the general proposition that the abdication by a legislature of its power is constitutionally objectionable. How, then, can we distinguish abdication from delegation? It would appear that so long as the terms of the delegation permit the relevant parliament to take back legislatively what it has delegated — even if that delegation is in broad and expansive terms — this will not constitute an impermissible abdication of legislative power.

Chapter references Articles and book chapters Allan, ‘The Limits of Parliamentary Sovereignty’ (1985) Public Law 614 Allan and Aroney, ‘An Uncommon Court: How the High Court of Australia has Undermined Federalism’ (2008) 30 Sydney Law Review 245 Blackshield, ‘Reinterpreting the Constitution’ in Brett, Gillspie and Goot (eds), Developments in Australian Politics, MacMillan Education Australia, 1994 Castles, ‘Reception and Status of English Law in Australia’ (1963–66) 2 Adelaide Law Review 1 Clark, ‘The Icon of Liberty: The Status and Role of Magna Carta in Australian and New Zealand Law’ (2000) 24 Melbourne University Law Review 866 Dixon, ‘The Law and the Constitution’ (1935) 51 Law Quarterly Review 590 [page 76]

Evans, ‘Why is Australia’s Constitution Binding? Authority, Obligation and the Role of the People’ (2004) 25 Adelaide Law Review 103 Finnis, ‘Separation of Powers in the Australian Constitution’ (1968) 3 Adelaide Law Review 159 French, ‘The Referral of State Powers’ (2003) 31 University of Western Australia Law Review 19 Gallop, ‘The COAG Reform Council: A View from the Inside’ in Kildea, Lynch and Williams (eds), Tomorrow’s Federation: Reforming Australian Government, Federation Press, 2012, p 43 Gibbs, ‘The Decline of Federalism?’ (1994) 18(1) University of Queensland Law Journal 1 Gilbert, ‘Extraterritorial State Laws and the Australia Acts’ (1987) 17 Federal Law Review 25 Goldring, ‘The Australia Act 1986’ (1986) Public Law 192 Gray, ‘The Sovereignty of Parliament Today’ (1953–54) 10 University of Toronto Law Journal 54 Hirschl, ‘The New Constitutionalism and the Judicialization of Pure Politics Worldwide’ (2006) 75 Fordham Law Review 721 Irving, ‘The Making of the Australian Constitution’ in K Laster (ed), Law as Culture, Federation Press, 1997 Kildea and Lynch, ‘Entrenching “Cooperative Federalism”: Is it Time to Formalise COAG’s Place in the Australian Federation?’ (2012) 39 Federal Law Review 103 Kirby, ‘The Australian Referendum on a Republic: Ten Lessons’ (2000) 46 Australian Journal of Politics and History 510

Laws, ‘Law and Democracy’ (1995) Public Law 72 Lindell, ‘Why is Australia’s Constitution Binding? — The Reasons in 1900 and Now, and the Effect of Independence’ (1986) 16 Federal Law Review 29 Lynch, ‘After a Referral: The Amendment and Termination of Commonwealth Laws Relying on s 51(xxxvii)’ (2010) 32 Sydney Law Review 363 Lynch, ‘The Fair Work Act and the Referrals Power — Keeping the States in the Game’ (2011) 24 Australian Journal of Labour Law 1 Mason, ‘The Role of a Constitutional Court in a Federation: A Comparison of the Australian and United States Experience’ (1986) 16 Federal Law Review 1 McDonald, ‘The Entrenched Minimum Provision of Judicial Review and the Rule of Law’ (2010) 21 Public Law Review 14 Moshinsky, ‘State Extraterritorial Legislation and the Australia Acts 1986’ (1987) 61 Australian Law Journal 779 Perry, ‘The High Court and Dynamic Federalism’ in Kildea, Lynch and Williams (eds), Tomorrow’s Federation: Reforming Australian Government, Federation Press, 2012, p 172 [page 77] Ratnapala, ‘John Locke’s Doctrine of the Separation of Powers: A Re-Evaluation’ (1993) 38 American Journal of Jurisprudence 189

Raz, ‘The Rule of Law and its Virtue’ (1977) 93 Law Quarterly Review 195 at 198 Saunders and Le Roy, ‘Perspectives on the Rule of Law’ in Saunders and Le Roy (eds), The Rule of Law, Federation Press, 2003 Stellios, ‘Using Federalism to Protect Political Communication: Implications from Federal Representative Government’ (2007) 31 Melbourne University Law Review 239 Stewart, ‘The Rule of Law and the Tinkerbell Effect: Theoretical Considerations, Criticisms and Justifications for the Rule of Law’ (2004) 4 Macquarie Law Journal 135 Stone, ‘Disagreement and an Australian Bill of Rights’ (2002) 26 Melbourne University Law Review 478 Thomson, ‘Altering the Constitution: Some Aspects of Section 128’ (1983) 13 Federal Law Review 323 Twomey, ‘Manner and Form Limitations on the Power to Amend State Constitutions’ (2004) 15 Public Law Review 182 Wade, ‘The Basis for Legal Sovereignty’ (1955) 13 Cambridge Law Journal 172 Waldron, ‘The Core of the Case Against Judicial Review’ (2006) 115 Yale Law Journal 1346 Wheeler, ‘Original Intent and the Doctrine of the Separation of Powers in Australia’ (1996) 7 Public Law Review 96 Wright, ‘Sovereignty of the People — The New

Constitutional Grundnorm’ (1998) 26 Federal Law Review 165 Books and texts Allan, Law, Liberty and Justice: The Legal Foundations of British Constitutionalism, Oxford University Press, 1993 Aroney, The Constitution of a Federal Commonwealth, Cambridge University Press, 2009 Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics, Bobbs-Merrill, 1962 Bingham, The Rule of Law, Penguin, 2010 Crommelin, The Federal Model: Australian Federation: Towards the Second Century (Craven (ed)), Melbourne University Press, 1992, pp 33–48 de Smith and Brazier, Constitutional and Administrative Law, 4th ed, Penguin Books, 1981 Dicey, Introduction to the Study of the Constitution, 10th ed, Macmillan, 1959 Gleeson, The Rule of Law and the Constitution, ABC Books, 2000 Goldsworthy, The Sovereignty of Parliament: History and Philosophy, Clarendon Press, 1999 Hamilton, Jay and Madison, The Federalist Papers, J & A McLean, 1788 [page 78] Heard, Canadian Constitutional Conventions: The Marriage of Law and Politics, Oxford University Press, 1991

Heuston, Essays in Constitutional Law, 2nd ed, Stevens, 1964 Hogg, Monahan and Wright, Liability of the Crown, 4th ed, Carswell, 2011 Irving, To Constitute a Nation: A Cultural History of Australia’s Constitution, Cambridge University Press, 1999 Jennings, The Law and the Constitution, 4th ed, University of London Press, 1959; 5th ed, University of London Press, 1972 La Nauze, The Making of the Australian Constitution, Melbourne University Press, 1972 Marshall, Parliamentary Sovereignty and the Commonwealth, Clarendon Press, 1957 Marshall and Moodie, Some Problems of the Constitution, 4th ed, Hutchinson, 1967 Sawer, Australian Federalism in the Courts, Melbourne University Press, 1967 Stellios, The Federal Judicature: Chapter III of the Constitution, LexisNexis Butterworths, 2010 Stone, The Causes of the English Revolution, 1529–1642, Routledge and Kegan Paul, 1972 Twomey, The Australia Acts 1986: Australia’s Statutes of Independence, Federation Press, 2010 Vile, Constitutionalism and the Separation of Powers, 2nd ed, Liberty Fund, 1967 Williams, The Australian Constitution: A Documentary History, Melbourne University Press, 2005 Zines (ed), Commentaries on the Australian Constitution: A

Tribute to Geoffrey Sawer, Butterworths, 1977 Zines, The High Court and the Constitution, Federation Press, 2008 Papers and reports Bennett and Brennan, ‘Constitutional Referenda in Australia’, Research Paper, Department of the Parliamentary Library, Information and Research Services, No 2, 1999–2000, Australia

[page 79]

The Parliaments and Legislative Procedures

CHAPTER 2

INTRODUCTION Parliamentary government in the colonies 2.1.1 By the time Arthur Phillip arrived in Australia with the First, Fleet the Imperial Parliament at Westminster was the sole source of legislative authority. The new colony of New South Wales was governed by executive fiat and representative and responsible government emerged over the course of the early 19th century. Before the creation of the Commonwealth Parliament and the establishment of our federal system on 1 January 1901, each of the six Australian colonies had its own parliament, and the structure of those parliaments was left largely unregulated by the new Commonwealth Constitution. To find the legal rules that define the state parliaments we must look to state legislation, or to pre-1901 colonial legislation, and to Imperial statutes passed by the United Kingdom Parliament. 2.1.2

The first representative legislature established in Australia

was the New South Wales Legislative Council, set up by the Australian Constitutions Act (No 1) 1842 (UK) 5 & 6 Vict c 76. That Act authorised the Governor of the colony with the advice and consent of the Legislative Council to ‘make laws for the peace, welfare and good government of the colony’. Eight years later, other Legislative Councils with similar powers were set up in Victoria, Van Diemen’s Land, South Australia and Western Australia by the Australian Constitution Act 1850 (UK) 13 & 14 Vict c 59. This Act invited each of the Legislative Councils (including that of New South Wales) to draft and pass its own Constitution Act. The introduction of the doctrine of responsible government in New South Wales (and ultimately in all of the states, the Commonwealth and the self-governing territories) is discussed further in Chapter 7. 2.1.3 Tasmania (as Van Diemen’s Land was renamed) and South Australia accepted the invitation and the limitations imposed by the 1850 Act: Constitution Act 1856 (SA) 19 & 20 Vict No 2; Constitution Act 1855 (Tas) 18 Vict No 17. Colonial legislation established bicameral legislatures that, with the Governor, had the power to legislate for the peace, welfare and good government of the colonies. 2.1.4 The New South Wales and Victorian bills went further than the 1850 Act had permitted and further Imperial legislation was passed in 1855 to authorise the Queen to assent to the bills [page 80] passed in the two colonies: New South Wales Constitution Act

1855 (UK) 18 & 19 Vict c 54 with Constitution Act 1855 (NSW) 17 Vict No 4; Victorian Constitution Act 1855 (UK) 18 & 19 Vict c 55 with Constitution Act 1855 (Vic). That 1855 legislation also authorised the Queen-in-Council to establish the northern part of New South Wales as a separate colony, and this was effected in 1859 when an Order-in-Council established the colony of Queensland with a system of government substantially the same as that of New South Wales: Order-in-Council Empowering the Governor of Queensland to Make Laws of 6 June 1859. 2.1.5 In each of those five colonies (New South Wales, Queensland, South Australia, Tasmania and Victoria), a bicameral legislature was set up with general legislative power. Members of the upper houses (called the Legislative Council) were elected on a property franchise (South Australia, Tasmania and Victoria) or nominated for life by the Governor (New South Wales and Queensland). Members of the lower houses (called the Legislative Assembly or, in South Australia and Tasmania, the House of Assembly) were elected on a less restricted property or educational franchise. Although these restricted franchises seem quaint by contemporary standards, Dean Jaensch (2011) has pointed out that within the space of a few decades, the colonies went from being ruled autocratically from London to being the most democratic systems in the British Empire. 2.1.6 In 1890, Western Australia was allowed a similar form of parliamentary government: Western Australia Constitution Act 1890 (UK) 53 & 54 Vic c 26 with Constitution Act 1889 (WA) 52 Vict No 23. As in New South Wales and Queensland, positions in the Legislative Council were filled by nominees of the Governor (although this was converted in 1893 to election on a restricted property franchise). The Legislative Assembly was elected on a

property-based franchise, and the legislature was given broad powers to ‘make laws for the peace, order and good government of the colony’.

Legislative assemblies in the territories 2.1.7 In 1947, the Commonwealth Parliament established a Legislative Council for the Northern Territory, with a minority of elected members: Northern Territory (Administration) Act 1910 (Cth) s 4. In 1974, the Legislative Council was replaced by a fullyelected Legislative Assembly. The Legislative Assembly continued after the grant of self-government to the Northern Territory in 1978: Northern Territory (Self-Government) Act 1978 (Cth) s 13(1). A person who is qualified to vote at an election for a member of the Commonwealth House of Representatives for the Northern Territory under the Commonwealth Electoral Act 1918 (Cth) is qualified to vote in elections for the Northern Territory Legislative Assembly: s 14. 2.1.8 In 1988, the Commonwealth Parliament established the Australian Capital Territory Legislative Assembly at the time of the grant of self-government: Australian Capital Territory SelfGovernment Act 1988 (Cth) s 8(1). A person is qualified to vote for the assembly if he or she is entitled to vote at an election for a member of the House of Representatives for the territory and is on the electoral roll: s 67C; see also Electoral Act 1992 (ACT) Pt V. 2.1.9 Norfolk Island was erected as a separate colony in 1856 and was governed from 1856 to 1897 by ordinance authorised by the Governor of New South Wales, who was also the Governor of Norfolk Island. From 1913, the Governor-General could make

Ordinances subject to parliamentary disallowance, first on the advice of a partly-elected Executive Council [page 81] established by New South Wales, and after 1935 in response to suggestions by an elected Advisory Council. Executive authority was exercised by an administrator who was advised by the council. After unsuccessfully petitioning the Queen for self-government in 1955, Australia proposed a new model which was rejected by the Norfolk Islanders in 1960. After minor changes made by the Norfolk Island Act 1963 (Cth) the Commonwealth enacted the Norfolk Island Act 1979, which set up a nine-member Legislative Assembly: ss 31, 35. However, in May 2015 the Australian Parliament passed the Norfolk Island Legislation Amendment Act 2015 (Cth). This legislation effects sweeping changes to the island’s legal and governance arrangements. An interim transition period commenced on 18 June 2015 when the Norfolk Island Legislative Assembly and Executive Council ceased to operate and legislative power was conferred upon the Governor-General. During this transition period (which officially ended on 1 July 2016) Norfolk Island moved to an elected Norfolk Island Regional Council model within the framework of the Local Government Act 1993 (NSW). On 1 July 2016, the Australian Government integrated Norfolk Island with the mainland tax and social security systems and, from this date, the law of New South Wales was applied to Norfolk Island as Commonwealth law. The Member for Canberra (in the Australian Capital Territory) became the federal representative for

Norfolk Island with Canberra the relevant electorate. In doing so there can be little doubt that the Norfolk Island Legislation Amendment Act 2015 (Cth), by moving the island from a selfgoverning territory to a local government-type authority, has significantly diluted the island’s legal and political independence. 2.1.10 The establishment of the colonial (later, state) and Commonwealth parliaments was sanctioned by the United Kingdom Parliament. In 1901 that was regarded as of prime legal importance, for the Parliament at Westminster was seen as the ultimate source of government power; it was sovereign and its legislative pronouncements were seen by Australian judges, lawyers and most politicians as superior to local (colonial) legislation. That superiority was assumed by Australian courts well into the 20th century, as the judgments in Bistricic v Rokov (1976) 135 CLR 552 and Ukley v Ukley [1977] VR 121 demonstrate. In each case, the judges (with the exception of Murphy J in the former case) assumed that the United Kingdom Parliament could legislate for New South Wales or Victoria and override state legislative authority, ‘although it may seem to many to be anachronistic’: Bistricic v Rokov (1976) 135 CLR 552 at 651. It was only with the passage of the Australia Act 1986 (Cth and UK) 1.3.20E that Australian parliaments were fully liberated from this subservient status. 2.1.11 Lingering questions about the authority of the Queen of Australia, Queen Elizabeth II, and ‘vice-regal’ representatives within the Commonwealth Government are discussed in Chapter 7, ‘The Executive’. The references in the various definitions of state parliaments to ‘the King’ or ‘the Queen’ underline the fact that Australia is, formally at least, a constitutional monarchy. Remnants

of monarchical power are retained by s 7 of the Australia Act 1986 (Cth) which states: Powers and functions of Her Majesty and Governors in respect of States (1) Her Majesty’s representative in each State shall be the Governor. (2) Subject to subsections (3) and (4) below, all powers and functions of Her Majesty in respect of a State are exercisable only by the Governor of the State.

[page 82] (3) Subsection (2) above does not apply in relation to the power to appoint, and the power to terminate the appointment of, the Governor of a State. (4) While Her Majesty is personally present in a State, Her Majesty is not precluded from exercising any of Her powers and functions in respect of the State that are the subject of subsection (2) above. (5) The advice to Her Majesty in relation to the exercise of the powers and functions of Her Majesty in respect of a State shall be tendered by the Premier of the State.

The representative status of governors is expressly or impliedly recognised in other provisions, including the Constitution of Queensland 2001 s 39; Constitution Act 1934 (SA) ss 8A, 10; Constitution Act 1934 (Tas) s 6; Constitution Act 1975 (Vic) s 6; Constitution Act 1889 (WA) ss 2, 50(1). However, as a matter of historical practice, the Queen does not summon or dissolve parliament, nor does she assent to bills passed by the Houses of Parliament. Where 4-year terms do not apply, those functions are performed by state governors in whom state legislation vests certain

powers; see Constitution Act 1902 (NSW) ss 23, 24B; Constitution of Queensland 2001 s 15; Constitution Act 1934 (SA) ss 6, 14, 28A, 41; Constitution Act 1934 (Tas) ss 12, 23; Constitution Act 1975 (Vic) s 20; Constitution Act 1889 (WA) ss 2(3), 3, 12. Governors retain a ceremonial role in respect of some types of legislation: see Constitution Act 1934 (SA) ss 8, 11, 14, 19, 20A, 27, 32, 56, 64, 88. Greg Taylor has reviewed occasions on which royal assent has been refused, and argues that a governor should refuse assent if advised to do so by ministers: Taylor, 2007. Anne Twomey argues that although there is an underlying discretion to decline assent, convention would prevent that discretion being exercised for mere policy reasons: Twomey, 2006. Twomey writes: … the history of the exercise of the power to grant Royal Assent, both in its colonial context in Australia, and as part of the royal prerogative in the United Kingdom, suggests that an underlying discretion may continue to exist, albeit one that is heavily circumscribed by constitutional convention. It is conceivable that there may be circumstances where ministers might legitimately advise the refusal of assent, although the better course is always the democratic one of repealing or amending the law (or Bill, if the grant of assent is deferred). It is also conceivable that in extreme circumstances a discretion might be exercised by the Queen or her representative to refuse Royal Assent. However, convention would prohibit such a discretion being exercised on policy grounds alone. It could only be legitimately exercised to uphold fundamental constitutional principles such as representative and responsible government, and then, only in circumstances where the matter could not be dealt with by the courts.

The position in the self-governing territories is different. In the Northern Territory, the ceremonial functions of a state governor are performed by an ‘Administrator’. Laws passed by the

Legislative Assembly require either the assent of the Administrator or the Commonwealth Governor-General to be effective: Northern Territory Self-Government Act 1978 (Cth) s 6. The Administrator’s assent is required for laws dealing with matters transferred to the territory under the self-government legislation: ss 7(2)(a), 35. In relation to non-transferred matters, the Administrator has the option of reserving a proposed law for the assent of the Governor-General: s 7(2)(b)(iii). The GovernorGeneral’s assent to the proposed law is then required for the law to take effect: s 8(1). However, the Governor-General’s formerly held power of disallowance of Northern Territory laws under s 9 has been abolished by Sch 2 of the Territories Self-Government Legislation Amendment (Disallowance and Amendment of Laws) Act 2011. [page 83] The Australian Capital Territory is a body politic established ‘under the Crown’: Australian Capital Territory (Self-Government) Act 1988 (Cth) s 7. In the Australian Capital Territory, though, the Commonwealth Governor-General is vested with power to dissolve the Australian Capital Territory Legislative Assembly (s 16), and to appoint a commissioner to exercise the powers of the Australian Capital Territory Executive (ss 36–38) in accordance with his or her instructions: s 16(2) and (4). The power of the Governor-General to disallow Australian Capital Territory enactments within 6 months after their making, formerly vested by s 35 of the Act, was abolished by Sch 1 of the Territories SelfGovernment Legislation Amendment (Disallowance and Amendment of Laws) Act 2011. The powers of the Governor-

General are exercisable on the advice of Commonwealth ministers: see Acts Interpretation Act 1901 (Cth) s 16A. See further Lindell, 1992. 2.1.12 We explain the relationship between Commonwealth and state institutions in Chapter 6. The six state parliaments and the Commonwealth Parliament are legally autonomous: none of them is answerable to any other. Constitutional rules define and limit the respective powers of each parliament. The two territory legislative assemblies stand in a special category because they were created by, and remain under the direct legal control of, the Commonwealth Parliament. They are completely subject to the Commonwealth Parliament and may be altered or abolished by the Commonwealth Parliament at any time: Berwick Ltd v Gray (1976) 133 CLR 603; Northern Land Council v Commonwealth (1986) 161 CLR 1. We now turn to consider the structures of the Australian legislatures.

THE STRUCTURES 2.2.1 At the time of its establishment, each of the new colonial parliaments was authorised ‘to make laws altering all or any of the provisions’ of its Constitution Act and, for the most part, the provisions dealing with the structure of each state parliament are to be found in relatively modern replacements of the colonial legislation.

New South Wales

2.2.2 ‘The Legislature’ of New South Wales is defined to mean ‘the King with the advice and consent of the Legislative Council and Legislative Assembly’. The assembly consists of 93 members, elected to represent single-member electorates. The council consists of 42 members, one-half of whom are elected at a time, on the basis of a state-wide constituency: Constitution Act 1902 (NSW) ss 3, 17, Sch 6 Pt 1. Until 1933, the members of the New South Wales Legislative Council were appointed by the Governor for life. The transition of the Legislative Council from an appointed body through an indirectly elected body to a body elected by the state’s electors started in 1934 when one-quarter of the members were elected (with the other three-quarters staying put until the next election). It became a directly elected chamber in 1978. Further details are provided by Kirby P in Bignold v Dickson (1991) 23 NSWLR 683 at 687–9.

Queensland 2.2.3 The Constitution Act 1867 (Qld) vests legislative power in ‘Her Majesty … by and with the advice and consent of the assembly to make laws for the peace welfare and good [page 84] government of the colony in all cases whatsoever’ (s 2), defines the parliament as consisting of the Crown and the Legislative Assembly (s 2A(1)), and affirms that the assembly is an elected

body: s 28. See also the Constitution of Queensland 2001 Ch 2, Pt 1. The Queensland Legislative Assembly consists of 89 members, each of whom is elected to represent a single-member constituency: Constitution of Queensland 2001 ss 11–13. Until 1922, the Queensland Parliament consisted of an elected Legislative Assembly and a Legislative Council, whose members were appointed for life. In that year, the parliament enacted the Constitution Act Amendment Act 1922, which abolished the council. The council had been swamped by recently appointed members pledged to vote for its abolition; the ‘suicide squad’, as Morrison described them: Morrison, 1960, p 269. As a consequence, Queensland is the only state with a unicameral legislature.

South Australia 2.2.4 In South Australia, the parliament is defined as the Legislative Council and the House of Assembly. The council has 22 members elected by the entire state: Constitution Act 1934 (SA) ss 11, 19. The House has 47 members elected to represent single-member electorates: ss 27, 33.

Tasmania 2.2.5 The Tasmanian Parliament consists of the Governor, representing the Crown, the Legislative Council and the House of Assembly. The council consists of 15 members, each of whom is elected to represent a single-member electorate. The assembly

consists of 25 members, representing five electorates (each returning five members): Constitution Act 1934 (Tas) ss 18, 22.

Victoria 2.2.6 In Victoria, legislative power is vested in a parliament consisting of the Crown, the Legislative Council and the Legislative Assembly: Constitution Act 1975 (Vic) s 15. The 88 members of the assembly represent single-member electorates. The 40 members of the council come from eight regions each of which returns five members: Constitution Act 1975 (Vic) ss 15, 26, 27.

Western Australia 2.2.7 The Western Australian constitution defines the parliament as consisting of the Queen, the Legislative Council and the Legislative Assembly: Constitution Act 1889 (WA) s 2. The Legislative Assembly has 59 members elected to represent singlemember electorates: Electoral Act 1907 s 16C. However, the Western Australian electoral system does not meet the ‘one vote one value’ standard required in most democracies: it contemplates weighting of non-metropolitan votes. If an electoral district has an area of 100,000 square kilometres or more, then it can have 20 per cent fewer electors than the average electorate: s 16G(3). Rural vote weighting is also evidenced in the upper house of the Western Australian Parliament, the Legislative Council. It has 36 members elected for 4-year terms from six multi-member constituencies: three are rural constituencies and three are urban constituencies: s 16H.

[page 85] In making the division of the state into regions and districts, it is said that the Electoral Commissioners give consideration to (a) community of interest; (b) land use patterns; (c) means of communication and distance from the capital; (d) physical features; (e) existing boundaries of regions and districts; (f) existing local government boundaries; and (g) the trend of demographic changes: s 16I.

Northern Territory 2.2.8 The Northern Territory Legislative Assembly has 25 members, including eight ministers. The number of members is set by Northern Territory enactment: Northern Territory (SelfGovernment) Act s 13(2). A maximum term (4 years) for each assembly is prescribed: s 17. Candidates must be Australian citizens qualified to vote in House of Representatives elections who have resided for at least 6 months in the Commonwealth, and 3 months in the Northern Territory: s 20. Voting is preferential in singlemember electorates of about 8000 people each. The Northern Territory is the only jurisdiction to require a candidate’s photograph to appear on the ballot form.

Australian Capital Territory 2.2.9 Of the 17 members of the first Australian Capital Territory Legislative Assembly, a number of them represented parties explicitly opposed to self-government, including the Abolish Self Government Party (Australian Capital Territory

Legislative Assembly, 2002). Nonetheless, the newly-elected representatives quickly grew accustomed to power, and representation along familiar party lines eventually emerged (although virtually all Australian Capital Territory Governments have been minority governments reliant on minor parties for passage of legislation): Bennett, 2002. Voting is done by the HareClark method of proportional representation in multi-member electorates.

Norfolk Island 2.2.10 The Norfolk Island Legislative Assembly ceased to exist and operate on 18 June 2015: see 2.1.9. The Norfolk Island Legislation Amendment Act 2015 (Cth) moved the island from a self-governing territory to a modern local government-type authority.

Restructuring parliaments 2.2.11 The flexibility of the structure of state legislatures has been affirmed by the High Court on a number of occasions. In Taylor v Attorney-General (Qld) (1917) 23 CLR 457 (see 2.10.12), the High Court held that the Queensland Parliament could legislate to abolish the Legislative Council. The basis for this legislative power was s 5 of the Colonial Laws Validity Act 1865 (UK) which declared that ‘every representative legislature shall … have … full power to make laws respecting the constitution powers and procedures of such legislature’. However, some limits on this power to restructure state parliaments were suggested. Isaacs J declared that ‘the Crown is not included in the ambit of such a

power’ and that ‘probably the “representative” character of the legislature is a basic condition of the power relied on’: 23 CLR at 474. [page 86] 2.2.12 In Clayton v Heffron (1960) 105 CLR 214 2.10.15C, the High Court came to a similar general conclusion; namely, that the New South Wales Parliament could legislate to abolish the council. A majority of the court proposed that the basis for such legislation lay in the general legislative power of the parliament to make laws for the peace, welfare and good government of the state: Constitution Act 1902 (NSW) s 5. Again, some (pre-Australia Act) reservations were expressed. Dixon CJ, McTiernan, Taylor and Windeyer JJ declared that ‘there are many reasons for assuming that the assent of the Crown must always remain necessary’: 105 CLR at 251. 2.2.13 On its commencement in 1901, the Commonwealth Constitution left the structure of the former colonial, now state, parliaments undisturbed. Section 106 of the Commonwealth Constitution continued the constitution of each state as it was at the establishment of the Commonwealth, until altered in accordance with the constitution of the state. Section 107 declares that state parliaments are to retain all their legislative powers except for those powers expressly withdrawn from the state parliaments by the new Commonwealth Constitution. The territory legislatures, being creatures of Commonwealth statute, can be altered or abolished by valid legislation authorised by s 122 of the Constitution: see, for example, Bennett v Commonwealth (2007)

231 CLR 91 at 106 per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ.

Commonwealth Parliament The federal movement 2.2.14 When, during the last quarter of the 19th century, Australians began to talk seriously about a single national government, a number of pressures pushed them towards a federal system; that is, a system that would graft new, national, political institutions onto the existing and separate colonial structures. Few people believed that a single, central government was practicable because Australia was vast, her population was thinly distributed, and communication systems were not well developed. There were other strong pressures for a federal system. The residents of small colonies distrusted the large urban centres of Sydney and Melbourne. The larger, more industrialised colonies were reluctant to submit all aspects of their economies and societies to a central, perhaps more conservative, administration. The adoption of a federal system was naturally suggested by the models of the United States, Canada and Switzerland, although the first of those was the most persuasive model. 2.2.15 Federal preoccupations were reflected in the structure proposed for the new Commonwealth Parliament. Sir Samuel Griffiths’s 1891 draft set the pattern, proposing a parliament of the Queen, a Senate with equal membership (eight) for each state and elected by each state’s parliament, and a House of Representatives consisting of members directly elected in each state according to the state’s population (with a minimum of four per state).

By the time the draft had been through the conventions of 1897 and 1898, approved by the voters in the various colonies and finally enacted by the United Kingdom Parliament, some changes had been effected. Senators, for instance, were to be directly elected, but the essential features remained: a three-part legislature consisting of the Crown, Senate and House of Representatives, the last intended to reflect the popular will throughout Australia, the second to reflect the concerns of the states as separate entities and to advance or protect their separate [page 87] interests in the parliament. Some of the implications of this federal role for the Senate are discussed in Western Australia v Commonwealth (1975) 134 CLR 201 2.2.21C. 2.2.16E

Commonwealth Constitution

1 The legislative power of the Commonwealth shall be vested in a Federal Parliament, which shall consist of the Queen, a Senate and a House of Representatives, and which is hereinafter called ‘The Parliament’, or ‘The Parliament of the Commonwealth’ … 7 The Senate shall be composed of senators for each State, directly chosen by the people of the State, voting, until the Parliament otherwise provides, as one electorate. But until the Parliament of the Commonwealth otherwise provides, the Parliament of the State of Queensland, if that State be an Original State, may make laws dividing the State into divisions and determining the number of senators to be chosen

for each division, and in the absence of such provision the State shall be one electorate. Until the Parliament otherwise provides there shall be six senators of each Original State. The Parliament may make laws increasing or diminishing the number of senators for each State, but so that equal representation of the several Original States shall be maintained and that no Original State shall have less than six senators. The senators shall be chosen for a term of six years, and the names of the senators chosen for each State shall be certified by the Governor to the Governor-General … 24 The House of Representatives shall be composed of members directly chosen by the people of the Commonwealth, and the number of such members shall be, as nearly as practicable, twice the number of the senators. The number of members chosen in the several States shall be in proportion to the respective numbers of their people, and shall, until the Parliament otherwise provides, be determined whenever necessary, in the following manner: (i)

A quota shall be ascertained by dividing the number of the people of the Commonwealth as shown by the latest statistics of the Commonwealth, by twice the number of the senators; (ii) The number of members to be chosen in each State shall be determined by dividing the number of the people of the State, as shown by the latest statistics of the Commonwealth, by the quota; and if on such division there is a remainder greater than one-half of the quota, one more member shall be chosen in the State. But notwithstanding anything in this section, five members at least shall be chosen in each Original State.

2.2.17 For all practical purposes, the powers of the Queen under the Commonwealth Constitution are exercised by a GovernorGeneral. That person is described in s 2 of the Constitution as ‘Her Majesty’s representative in the Commonwealth’, capable of exercising those powers which the ‘Queen may be pleased to assign to him’. The need for any such assignment is doubtful, as many powers are expressly vested in the Governor-General by the Commonwealth Constitution; see, for example, ss 5 (summoning, proroguing and dissolving parliament), 56 (recommending money bills to parliament), 57 (dissolving both houses in a deadlock situation), 58 (assenting to legislation). Additionally, s 61 declares, in very general [page 88] terms, that ‘the executive power of the Commonwealth … is exercisable by the Governor-General as the Queen’s representative’. There are some functions that only the Queen may exercise, such as the formal appointment of the Governor-General (s 2), the ‘disallowance’ of legislation passed by the Commonwealth Parliament (s 59) and the giving of assent to legislation that must, under the Constitution, be ‘reserved for the Queen’s pleasure’: s 60. The last category covers a very small class of legislation. Apart from those exceptions (and they have very little practical significance for, in each case, the Queen would only act on the advice of her Australian ministers), it is the Governor-General who discharges the important functions of the Crown under the Commonwealth Constitution. This point was succinctly stated by the Queen’s official secretary in 1975 when he indicated that the

Queen would not intervene in the constitutional crisis immediately after the dismissal of the Whitlam Government by the GovernorGeneral on 11 November 1975: As we understand the situation here, the Australian Constitution firmly places the prerogative powers of the Crown in the hands of the Governor-General as the representative of the Queen in Australia. (Sawer, 1977, p 211.)

2.2.18 The Commonwealth Constitution fixed the size of both the Senate and the House of Representatives. The former was to consist of 36 senators (s 7); the latter to have, as nearly as practicable, twice as many members: s 24. The limits imposed by this ratio were explored in Attorney-General (NSW) (Ex rel McKellar) v Commonwealth (1977) 139 CLR 527: see 2.6.17. Parliament was authorised to alter the number of senators for each state, so long as the House of Representatives continued to have, as nearly as practicable, twice as many members as the Senate and each original state retained equality of representation (s 7) and to alter the size of the House of Representatives (s 27) so long as each original state retained at least five members: s 24. Such an alteration was effected by the Representation Act 1948 (Cth) s 4, which increased to 10 the number of senators for each state, and by the Representation Act 1983 (Cth) s 4, which increased to 12 the number of senators for each state. For further discussion, see McGinty v Western Australia (1996) 186 CLR 140 at 275–84. 2.2.19 The system for determining the size of the House of Representatives is spelt out in the Commonwealth Electoral Act 1918 (Cth) ss 45–48. Earlier versions of this system were examined by the High Court in Attorney-General (Cth) (Ex rel McKinlay) v Commonwealth (1975) 135 CLR 1 2.6.10C and Attorney-General

(NSW) (Ex rel McKellar) v Commonwealth (1977) 139 CLR 527. For the moment, we should note that the system is subject to the following constitutional restraints: the House of Representatives shall ‘as nearly as practicable’ be twice the size of the Senate; members of the house are chosen in each state (members cannot be shared between two or more states); the number of members allocated to each state shall be in proportion to their respective numbers of people; but each original state must have at least five members in the house. For further discussion, see McGinty v Western Australia (1996) 186 CLR 140 at 275–84. 2.2.20 Sections 7 and 24 of the Commonwealth Constitution (and a number of associated provisions) appear to assume that senators and members of the house represent the states or [page 89] the people of the states. However, in 1922 legislation gave to the Northern Territory a non-voting member of the House of Representatives. That member was given a limited vote in 1936, and a similar representation was allowed to the Australian Capital Territory in 1948. The two members’ voting rights were enlarged in 1959 and extended to full voting rights in 1966 (for the Australian Capital Territory) and 1968 (for the Northern

Territory). In 1973, the Australian Capital Territory was given a second member and, in 1974, legislation was passed through the double dissolution procedure (that is, despite the opposition of the Senate) giving each territory two senators with full voting rights. The legislation was, however, challenged by the states of Western Australia, New South Wales and Queensland, which sought a declaration that it was beyond the legislative power of the Commonwealth Parliament. They did so as the Senate (Representation of Territories) Act 1973 (Cth) would operate to dilute their proportionate representation in the Senate. In addition, the Whitlam Government did not control the Senate. The successful passage of the legislation (providing four new senators from the territories) would give the Whitlam Government an outside chance of doing so if they were to prevail in those Senate elections. 2.2.21C

Western Australia v Commonwealth (Territorial Senators’ case) (1975) 134 CLR 201

[The Senate (Representation of Territories) Act 1973 (Cth) was enacted at a joint sitting of the Commonwealth Parliament and received the royal assent on 7 August 1974. The Act provided that the Australian Capital Territory and the Northern Territory should each be represented in the Senate by two senators (s 4), that each senator was to have all the powers, immunities and privileges of a state senator, in particular, the senator could vote on all questions arising in the Senate (s 5), and that each senator was to serve only until the next general election of Members for the House of Representatives: s 7(2). The states of Western Australia and New South Wales brought actions in the High Court, seeking declarations that the Act had not been properly enacted. The state of Queensland also brought an action,

seeking a declaration that the Act was invalid because the substance of the Act was inconsistent with the Commonwealth Constitution. These actions were heard and decided together.] Stephen J (in dissent): By s 7, the first section of Pt II Ch I of the Constitution, the Senate is to be ‘composed of senators for each State, directly chosen by the people of the State, voting … as one electorate’ and each original State is initially to have an irreducible minimum of six senators, that equal representation to be maintained should the number of senators for each State subsequently be altered. Every successive section of Pt II serves only to confirm the effect of s 7, that the Senate is to be a chamber composed of senators for each State. These senators are to be elected by qualified electors in each State: s 8; they are to be chosen according to the laws of each State by a Commonwealth law providing for a method uniform for all the States: ss 9 and 10; the failure of a State to provide its representation in the Senate is not to delay the despatch of business by the Senate: s 11; it is the Governor of the State who issues writs for the election of senators for the State (s 12) and he must be notified of a casual vacancy in the representation of his State: s 21 … Sections 15 and 23 are especially notable; the former confers upon the Parliament or executive government ‘of the State for which he was chosen’ the function of filling the place [page 90] of a senator which becomes vacant before the expiration of his term of service; the latter gives one vote to each senator including the President, thus maintaining the policy of equal representation enunciated in s 7. The effect of this brief survey of Pt II may be summarised by the description given to the Senate by Quick and Garran when

they said, at 414 of their Annotated Constitution of the Australian Commonwealth: ‘It is the chamber in which the States, considered as separate entities, and corporate parts of the Commonwealth, are represented’. The framers of the Constitution had to make provision for the possibility of new States and the sections comprised in Ch VI, other than s 122, are devoted to that subject; by s 121 Parliament is empowered to determine the extent of representation of such a new State in either House of the Parliament. Once admitted or established as a State that new polity becomes a ‘State’ as defined in covering cl 6 of the Constitution Act and the sections of Pt II will then, without more, apply to it, other than those parts of s 7 which confer special rights upon the original States. Thus the admission of new States will leave undisturbed the character of the Senate as a States’ house. Such then being the constitutional structure of the Senate it is, to my mind, apparent that ‘representation’ in s 122 must bear a meaning which accords with that structure. Such a meaning cannot extend to the creation of senators of Territories, taking their places in the Senate on an equal footing with senators of States nor indeed to the creation of any office carrying with it the power to affect by vote the deliberations of the Senate. To give to ‘representation’ any such meaning is wholly to distort the intended character of the Senate as a chamber ‘composed of senators for each State’. It is this very type of distortion which the Senate (Representation of Territories) Act 1973 would, if valid, effect. I accordingly regard the Act as invalid; it is not authorized by the power conferred upon Parliament by s 122 … That there is nothing inappropriate in using the word ‘representation’ to describe the function of a person having in a legislative chamber no voting power is apparent from a reading of the original Northern Territory Representation Act 1922. It provided for the representation of that Territory in the Parliament of the Commonwealth by means of a member of the House of Representatives elected by Northern Territory electors but having

no vote on any question and who was not to be taken into account for quorum or special majority purposes, although he otherwise had all the powers, immunities and privileges of a member … Such a concept can hardly be supposed to have been unfamiliar to some at least of those responsible for the framing of our Constitution; Lord Bryce’s American Commonwealth, 2nd ed (revsd) (1889) was at that time a standard guide to that great federal Constitution upon which so much of our own Constitution is based and in a chapter devoted to the Territories of the United States the learned author discusses the system whereby, although denied representation by elected senators or representatives, the citizens of a Territory might send delegates to sit and speak, but not to vote, in Congress: vol I p 555, and see vol II p 414 … When s 122 refers to the allowance of representation ‘to the extent and on the terms’ which Parliament thinks fit, it contemplates not only the imposition of terms, for instance perhaps a term that the representative be elected by residents of the Territory qualified in such manner as Parliament may specify, but also the possible limitation of the subject matter of representation as, for instance, by restriction to matters directly affecting the Territory, the representatives’ right to speak in debate being limited accordingly. I have, in what I have said above, treated ‘composed’ in s 7 of the Constitution as meaning ‘exclusively comprised of’. This accords, I think, with the primary meaning of ‘compose’ as describing the act of putting together from parts or elements, the whole being constituted by the collection of those parts … [page 91] [Mason J summarised the provisions of the Senate (Representation of Territories) Act 1973, and continued:]

Mason J: A senator for the Territory is then in all important respects equal to a senator for a State. Therein lies the principal objection to the validity of this Act. The question is whether s 122 does allow the Parliament to provide for the election of senators for a Territory having full voting rights in the House … With respect to representation of a Territory in either House of the Commonwealth Parliament the Parliament has, by virtue of s 122, power to determine (a) the extent of the representation and (b) the terms of that representation … The inclusion in s 122 of a specific power to allow representation upon any terms which the Parliament thinks fit makes it plain that the Parliament may confer on representatives of a Territory rights and privileges identical or inferior to those enjoyed by a member of either House … It has not been suggested that s 122, viewed in isolation, is an insufficient source of legislative power to sustain the law now in question. But it has been asserted in accordance with received doctrine that s 122 cannot be read as though it was a segregated head of power disconnected from the rest of the provisions of the Constitution. One must ‘treat the Constitution as one coherent instrument for the government of the federation, and not as two constitutions, one for the federation and the other for its territories’: see per Kitto J in Lamshed v Lake (1958) 99 CLR 132 at 154. It was then submitted that when s 122 is read in the light of Ch I of the Constitution the conclusion is inescapable that s 122 does not confer power upon the Parliament to allow the representation of the Territories in the Senate by members having the right to vote, at least on matters not directly affecting the Territories. It was urged that s 7 of the Constitution exhaustively defines the composition of the Senate in providing that it ‘shall be composed of senators for each State, directly chosen by the people of the State’, each of whom shall have one vote (s 23) and serve for a term of six years. Attention was drawn to other provisions in Pt II of Ch I of the Constitution which were said to

conflict with, or to be incapable of application to, a senator representing a Territory, thereby reinforcing the notion that the Senate is a States’ house and that a senator is necessarily a senator from a State. But for the presence of s 122 these arguments would have overwhelming force — not only is the composition of the Senate limited by s 7 to senators from the States but the conception of a senator as the representative of a State pervades the provisions of Pt II of Ch 1. Thus s 11 provides that the Senate may proceed to the despatch of business notwithstanding the failure of any State to provide for its representation. Section 15 provides for the filling of a casual vacancy by the Parliament of a State or the Governor of a State, and s 21 provides that notification of a vacancy shall be given to the Governor of the State in the representation of which the vacancy has occurred. A similar problem arises in relation to representation of the Territories in the House of Representatives. Section 24 of the Constitution provides that the House ‘shall be composed of members directly chosen by the people of the Commonwealth’. If the expression ‘people of the Commonwealth’ signifies the people of the federated States, then in terms the section excludes from the composition of the House the elected representatives of the Territories save perhaps the Australian Capital Territory, and so there arises once again an apparent conflict between the provisions of Ch I and s 122. Just as s 122 requires to be read with Ch I so also account must be taken of s 122 in the interpretation of ss 7 and 24. If they are to be read as limiting the composition of each House for all time to representatives of the States, it follows that the power given to [page 92] Parliament by s 122 to ‘allow the representation of such Territory

in either House of Parliament to the extent and on the terms which it thinks fit’ must be confined to a power to provide for the appointment of representatives of the Territories who are voteless, if not voiceless. To so construe the power is to deprive it of significant content, notwithstanding the wide and general words by which it is conferred. The section would then admit only of representation by a person who was not a member of the House and who did not enjoy the rights of a member to vote. The attribution of such a restricted concept of ‘representation’ to s 122 would stand in stark contrast with the concept of ‘representation’ in the complete sense of membership which is evident in s 121. The apparent opposition which arises from the reference to representation of the Territories in s 122 and the absence of any such reference in ss 7 and 24 is irreconcilable only if it be assumed that Ch I in making provision for the composition of the Senate and the House is necessarily speaking for all time. To my mind this assumption is misconceived. Sections 7 and 24 should be regarded as making provision for the composition of each House which nevertheless, in the shape of s 122, takes account of the prospective possibility that Parliament might deem it expedient, having regard to the stage which a Territory might reach in the course of its future development, to give it representation in either House by allowing it to elect members of that House. To the framers of the Constitution in 1900 the existing condition of the Territories was not such as to suggest the immediate likelihood of their securing representation in either House, but the possibility of such a development occurring in the future was undeniable. The prospect of its occurrence was foreseen and in my view it found expression in s 122. Understood in this light, ss 7 and 24 make exhaustive provision for the composition of each House until such time as Parliament might see fit to allow representation to a Territory under s 122. This interpretation not only gives full scope to the language of that section but it supports and gives authority to the course of

constitutional development by which in recent years Parliament might see fit to allow representation to a Territory in the House of Representatives, first by a member without voting rights, then by a member with qualified voting rights and finally by a member with unqualified voting rights, see the Northern Territory Representation Act 1922, the Northern Territory Representation Act 1959, the Northern Territory Representation Act 1968 … Two matters remain to be mentioned. The first is the grim spectre conjured up by the plaintiffs of a Parliament swamping the Senate with senators from the Territories, thereby reducing the representation of the States disproportionately to that of an ineffective minority in the chamber. This exercise in imagination assumes the willing participation of the senators representing the States in such an enterprise, notwithstanding that it would hasten their journey into political oblivion. It disregards the assumption which the framers of the Constitution made, and which we should now make, that Parliament will act responsibly in the exercise of its powers. Furthermore, such significance as the plaintiff’s argument may have is diminished when it is appreciated that the Constitution provides no safeguard against the pursuit by Parliament of a similar course at the expense of the original States in allowing for the representation of new States in the Senate. Although s 7 provides that equal representation of the original States shall be maintained in that chamber, neither the section nor the remaining provisions of Pt II of Ch I place any restriction on the number of senators which Parliament may accord to a new State as its representation in the Senate. Here, again, the assumption is that Parliament will act responsibly.

[page 93]

2.2.22 McTiernan J adopted the reasons of Mason J. In separate judgments Jacobs and Murphy JJ held that the Senate (Representation of Territories) Act 1973 (Cth) was adequately supported by s 122 of the Constitution. The dissenting judgments of Barwick CJ and Gibbs J were to substantially the same effect as that of Stephen J. 2.2.23 Writing of this aspect of the decision in Western Australia v Commonwealth, Geoffrey Sawer remarked that the 4:3 split on the court was ‘surprising having regard to the weakness of the case against the majority decision’: Sawer, 1977, p 54. What was that case? That the conflict between ss 7 and 122 was to be resolved by allowing a proposition implicit in s 7 of the Constitution to dominate s 122; namely, that ‘the central and dominant purpose of the Constitution was to create an indissoluble federal Commonwealth’: 134 CLR at 226 per Barwick CJ. The Senate was to be and remain a states’ house. There is no doubt that those who debated and drafted the Constitution at the Conventions of 1891, 1897 and 1898 meant to establish a chamber that would represent and protect the interests of each state. The 1891 draft provided that senators were to be appointed by the state parliaments. At the 1897–98 conventions this system was replaced by direct election, but casual vacancies were still to be filled by a joint sitting of the relevant state Houses of Parliament. But one, at least, of the convention delegates made the prescient point that the Senate could not function as a states’ house. Speaking at the Sydney Convention, Alfred Deakin said: The men returned as radicals would vote as radicals; the men returned as conservatives would vote as conservatives. The contest will not be, never has been, and cannot be, between States and States. It must be and will

be between the representatives of the States according to the different political principles upon which they are returned. (Convention Debates, Sydney, 1897, p 584.)

Events justified that prediction. Geoffrey Sawer observed that the Senate ‘is in fact, and hopelessly, made up mainly of representatives from the major political parties whose chief loyalty is to their respective party organisations’: Sawer, 1977, p 128. It seems that it is only when a senator resigns from their political party to sit on the ‘cross benches’ as an independent that they are inclined to promote the interests of their home state when it clashes with the interests of the party that sponsored their candidature: see also Carney, 2000. 2.2.24 Given that reality, the decision in Western Australia v Commonwealth did not sanction any fundamental change in the nature of the Senate. The decision allowed the Senate to grow from 60 to 64 senators at the elections of 13 December 1975; of the four newly-created places, two were won by the new government and two by the opposition. The Whitlam Government still failed to control the Senate. This political fact was central to the events that led to the Whitlam Government’s dismissal by the GovernorGeneral Sir John Kerr on 11 November 1975: see 2.9.13–2.9.18. Since 1975, the territory senators have been evenly divided between the two major political groups, Labor and Conservative. The legislation is now consolidated in the Commonwealth Electoral Act 1918 (Cth) ss 40–44 (representation of territories in the Senate) and ss 51–54 (representation of territories in the House of Representatives). 2.2.25 Nonetheless, there may be long-term implications in the decision. Might a future parliament enact legislation enlarging the

representation of one or both territories so as to distort the character and political complexion of the Senate? Is there anything in the Constitution, as interpreted in this case, that would prevent parliament adding to the Senate 100 senators [page 94] from the Australian Capital Territory? Is it consistent with this decision, as Stephen J argued in Attorney-General (NSW) (Ex rel McKellar) v Commonwealth (1977) 139 CLR 527 at 561–2 (see 2.6.17–2.6.18), that parliament could provide that the territory senators be appointed by the Executive Council? The upshot of the decision in Western Australia v Commonwealth is that if such extreme legislation were to be enacted by the Australian Parliament the remedy available is not judicial (through review by the courts) but political (at the ballot box). The judgments in the Territorial Senators’ case provide a clear illustration of the creative, value-dominated nature of the judicial process, and of the inadequacy of Gibbs J’s claim that the function of the court ‘is to consider not what the Constitution might best provide but what, upon its proper construction, it does provide’: 134 CLR at 249. Michael Coper made the point, writing of this decision, ‘that linguistic or textual considerations were quite inconclusive; for each argument which led to one conclusion, a respectable principle of interpretation could be invoked to point to the opposite conclusion’: Coper, 1977, p 209. The minority, for example, said that s 7 of the Constitution provided that the Senate should be composed of (not merely include) senators from each state. That

positive statement had a negative corollary: the Senate representation allowed to the territories by s 122 should not include voting rights. But the majority said that the word ‘representation’ should have the same meaning in s 122 as it did in other sections, and its meaning in other provisions clearly included voting rights. Similarly, both the majority and the minority made use of arguments based on the historical purposes of the provisions, on the possible abuse of constitutional power and on the state of the United States Constitution in 1900. Their use of these same tools of interpretation led to diametrically opposed results. The case illustrated, as Leslie Zines has observed, that ‘textual considerations were not decisive’ and that the ‘favoured interpretation, while bolstered by textual arguments, rested on broader grounds, namely the importance of the Senate as a States’ House’: Stellios, 2015, p 679. 2.2.26 In 1977, the states of Queensland and Western Australia sought to reopen the decision in the Territorial Senators’ case. The two states again sought to challenge the validity of the legislation providing for territory representation in both the Senate and the House of Representatives. That challenge was rejected by a majority of the court in Queensland v Commonwealth (1977) 139 CLR 585. Mason, Jacobs and Murphy JJ adhered to their opinion as expressed in the Territorial Senators’ case; namely, that s 122 was unlimited in its terms and prevailed over any narrow implications drawn from ss 7 and 24. Gibbs and Stephen JJ again considered that the better view was that the Senate (Representation of Territories) Act 1973 was invalid, but thought it proper that the very recent decision in the Territorial Senators’ case be followed as a matter of precedent.

Stephen J recognised that the reconciliation of ss 7 and 122 of the Constitution was complex and an issue on ‘which different minds might reach different conclusions, no one view being inherently entitled to any pre-eminence’, and said that to describe the decision in that case as ‘plainly wrong’ was ‘merely pejorative’: 139 CLR at 603. He accepted that the extent of the territories’ representation in the Senate was now ‘a matter for the Parliament’: 139 CLR at 604. Gibbs J said that the change in the composition of the High Court since the decision in the Territorial Senators’ case could not ‘justify the review of an earlier decision’: 139 CLR at 600. Even though the High Court is not formally bound by its earlier decisions as a matter of precedent, it is accepted that the institutional respect of and for the court requires that a previous decision be [page 95] reconsidered only with great caution and for compelling reasons. Gibbs J, however, indicated that he would not support an extension of the current territorial representation, ‘having regard to the very great importance, in preserving the federal balance of the Constitution, which attaches to Part II of Ch I of the Constitution’: 139 CLR at 600–1. Barwick CJ and Aickin J (who was appointed to the High Court after the Territorial Senators’ case) dissented, declaring that s 122 should not be read as justifying voting membership in the Houses of Parliament for territory representatives. They saw no compelling reason for following the Territorial Senators’ case, which was, in their opinion, wrongly decided and inconsistent with the fundamental federal structure of the Constitution.

DURATION OF PARLIAMENT 2.3.1 Each of the Australian parliaments has a limited life. That is, the period during which it may legitimately function without facing the electorate is fixed by legislation and, in the case of some parliaments, there are built-in guarantees of regular elections — guarantees that cannot be overridden by ordinary legislation.

State parliaments New South Wales 2.3.2 The New South Wales Legislative Assembly is given a maximum duration of 4 years, measured from the return of the election writs from the last general election, subject to its earlier dissolution by the Governor. That period may only be extended by legislation approved by a majority of voters at a referendum: Constitution Act 1902 (NSW) ss 7B(1)(b), 24. The New South Wales Legislative Council is a perpetual institution, one-half of whose members retire on each expiry or dissolution of the assembly. This means that each member of the council holds her or his seat until the second general election of the assembly after her or his election to the council, when she or he will be eligible to stand for re-election: Constitution Act 1902 (NSW) s 22B(2). Conversely, the term of service of a long-term continuing member expires after the third general election of the Legislative Assembly after election to the Legislative Council: s 22B(3).

Queensland 2.3.3

In Queensland, where the Council was abolished by

legislation in 1922, the duration of the Assembly is limited to 3 years from the return of the writs after a general election, subject to earlier dissolution by the Governor. The extension of this period can only be effected by legislation that has been approved by a majority of voters at a referendum: Constitution Act Amendment Act 1890 (Qld) ss 2, 4; see Constitution of Queensland 2001 s 16. A referendum on that question was defeated in 1991. In April 2008, Premier Anna Bligh rejected calls for a referendum on this question. [page 96]

South Australia 2.3.4 The South Australian House of Assembly has a maximum duration of 4 years, measured from its first meeting after a general election. The Governor may dissolve the assembly but only if (Constitution Act 1934 (SA) ss 28, 28A(1)): a motion of no confidence in the government is passed in the House of Assembly; or a motion of confidence is defeated in the House of Assembly; or ‘a Bill of special importance passed by the House of Assembly is rejected by the Legislative Council’; or the Governor simultaneously dissolves the two houses under s 41(1)(i) of the Constitution Act 1934 (SA), where the houses are deadlocked over proposed legislation.

Apart from the exceptional power of the Governor to dissolve both houses under the Constitution Act 1934 (SA) s 41, the state’s Legislative Council is a perpetual institution, with members holding their seats for a minimum of 6 years, and half the members retiring at each general election for the House of Assembly, provided that at least 6 years have elapsed since those members were elected: Constitution Act 1934 (SA) s 14.

Tasmania 2.3.5 The Tasmanian House of Assembly has a maximum duration of 4 years, measured from the return of the writs at the last general election, subject to earlier dissolution by the Governor: Constitution Act 1934 (Tas) s 23(2). The Legislative Council is a perpetual institution, with members holding their seats for 6 years: Constitution Act 1934 (Tas) s 19. Periodical elections of members of the council are held every year with 2 members retiring every alternate periodical election and 3 members retiring at every other periodical election: s 19(3)(a), (b).

Victoria 2.3.6 In Victoria, the Legislative Assembly expires on the Tuesday that is 25 days before the last Saturday in November that is nearest to the fourth anniversary of the election day on which it was elected: s 38. The Governor of Victoria may by proclamation or otherwise fix such places within Victoria and, subject to the Constitution Act 1975 (Vic), such times for holding every session of the council and assembly and may vary and alter the same respectively in such manner as he or she thinks fit: s 8(1). The

Governor may, if he or she thinks fit, by proclamation or otherwise from time to time (s 8(2)): prorogue the council, the assembly, or both the council and the assembly; or dissolve the assembly. However, the Governor may not dissolve the assembly (including the assembly last elected before the Constitution (Parliamentary Reform) Act 2003 (Vic) receives the royal assent) unless (s 8): the assembly is dissolved in accordance with prescribed procedures; or the Premier has given advice to the Governor under a prescribed provision. [page 97] The assembly may be dissolved if (s 8A(1)): a motion of no confidence in the Premier and the other Ministers of State for the State of Victoria is passed by the assembly; and during the period commencing on the day of the passage of the motion of no confidence and ending 8 clear days after that day, the assembly has not passed a motion of confidence in the then Premier and the other ministers of state for the State of Victoria.

Notice of a proposed motion of no confidence must be given at least 3 clear days before it is moved: s 8A(2). After a motion of no confidence is passed, unless a motion of confidence is passed, the assembly may not be (s 28): prorogued before the end of the 8-day period; or adjourned for a period extending beyond the 8-day period. The Victorian Legislative Council that is in existence immediately before the Constitution (Parliamentary Reform) Act 2003 (Vic) receives the royal assent shall exist and continue until the dissolution or other lawful determination of the assembly last elected before that royal assent is received: s 28(1). The council (other than the council to which the preceding rule applies) shall exist and continue until the dissolution or other lawful determination of the assembly: s 28.

Western Australia 2.3.7 The Western Australian Legislative Assembly is given a maximum duration of 4 years from the assembly’s first meeting following the last general election; subject to earlier dissolution by the Governor: Constitution Acts Amendment Act 1899 (WA) s 21(1). Unlike the Senate, the state’s Legislative Council consists of 36 members elected every 4 years for fixed 4-year terms. That is, the terms in the upper house are not staggered with all members of the Legislative Council facing election every 4 years: Constitution Acts Amendment Act 1899 (WA) ss 5, 8.

Territory legislative assemblies Northern Territory 2.3.8 The Legislative Assembly of the Northern Territory has a maximum duration of 4 years, beginning from the date of the first meeting of the Legislative Assembly after a general election: Northern Territory (Self-Government) Act 1978 (Cth) s 17(2).

Australian Capital Territory 2.3.9 The Australian Capital Territory (Self-Government) Act 1988 (Cth) s 67B provides that the times of elections are to be provided by enactment. The timing of elections is dealt with in Pt VIII of the Electoral Act 1992 (ACT). General elections are held on the third Saturday in October in the fourth year after the year in which the last ordinary election was held: Electoral Act 1992 (ACT) s 100. Voting is by the (Tasmanian) Hare-Clark proportional representation method of multi-member electorates, introduced after a referendum in 1992 and entrenched after another in 1995: s 34. Members will hold office for 4-year terms: s 100. In 2001, the Australian Capital Territory was the first Australian jurisdiction to permit electronic voting: Div 9.3. [page 98]

Commonwealth Parliament 2.3.10E

Commonwealth Constitution

13 As soon as may be after the Senate first meets, and after each first meeting of the Senate following a dissolution thereof, the Senate shall divide the senators chosen for each State into two classes, as nearly equal in number as practicable; and the places of the senators of the first class shall become vacant at the expiration of three years, and the places of those of the second class at the expiration of six years, from the beginning of their term of service; and afterwards the places of senators shall become vacant at the expiration of six years from the beginning of their term of service. The election to fill vacant places shall be made within one year before the places are to become vacant. For the purposes of this section the terms of service of a senator shall be taken to begin on the first day of July following the day of his election, except in the cases of the first election and of the election next after any dissolution of the Senate, when it shall be taken to begin on the first day of July preceding the day of his election. … 28 Every House of Representatives shall continue for three years from the first meeting of the House, and no longer, but may be sooner dissolved by the Governor-General.

2.3.11 The Australian Greens and the Australian Labor Party entered into an agreement on 1 September 2010, after the 2010 federal election, that included a clause that stated that the ‘parties’ agree ‘that this Parliament should serve its full term and further agree to investigate legislative proposals, which are within the terms of the Constitution, and give greater certainty to the Australian people about the Parliament serving full three year terms’: cl 3(g). It would appear that s 28 of the Constitution would

need to be amended to ensure that the federal parliament would always serve three year terms. Section 57 of the Commonwealth Constitution allows for the dissolution of the Senate where a deadlock has persisted between the two houses for at least 3 months. There have been seven such double dissolutions (for the House of Representatives is dissolved at the same time): 1914, 1951, 1974, 1975, 1983, 1987 and 2016. Accordingly, the Senate has been obliged on eight occasions (including its first meeting in 1901) to ‘divide the senators chosen for each State into two classes’, the short-term (3 year) and the long-term (6 year) senators. On each occasion that division has been made on the basis of the votes polled by each senator at his or her election: the first three senators (1901 and 1914), the first five senators (1951, 1974, 1975 and 1983) or the first six senators (1987 and 2016) elected in each state were declared to be the long-term senators. This practice rests upon a formal resolution of the Senate adopted at its first meeting in 1901, a resolution that can be revoked by the Senate.

Adjournment, prorogation and dissolution 2.3.12 The Houses of Parliament, once elected, meet in formal session. There is a wide range of business transacted in parliament: questions to government ministers, debates on issues of policy and administration, tabling of official reports, and motions of no confidence in the government. All of these are reported in Hansard and their more formal aspects recorded in [page 99]

the journals of the houses. How are the houses brought together? Who decides how long parliament shall sit, or when it should face a general election? 2.3.13E

Commonwealth Constitution

5 The Governor-General may appoint such times for holding the sessions of the Parliament as he thinks fit, and may also from time to time, by Proclamation or otherwise, prorogue the Parliament, and may in like manner dissolve the House of Representatives. After any general election the Parliament shall be summoned to meet not later than thirty days after the day appointed for the return of the writs. The Parliament shall be summoned to meet not later than six months after the establishment of the Commonwealth. 6 There shall be a session of the Parliament once at least in every year, so that twelve months shall not intervene between the last sitting of the Parliament in one session and its first sitting in the next session.

2.3.14 There are equivalent provisions in the state constitutions, though most states do not have provisions similar to s 5 (second paragraph) of the Commonwealth Constitution; for example, see Constitution Act 1902 (NSW) ss 10, 10A, 11; Constitution of Queensland 2001 ss 18, 19; Constitution Act 1934 (SA) ss 6, 7; Constitution Act 1934 (Tas) ss 11, 12; Constitution Act 1975 (Vic) ss 20, 38, 41; Constitution Act 1889 (WA) ss 3, 4. For the territories, see Northern Territory Self-Government Act 1978

(Cth) s 22; Australian Capital Territory Self-Government Act 1988 (Cth) s 17. 2.3.15 The power to call parliament together (‘fixing the time and place for holding the sessions of Parliament’) and to send the lower house to a general election (‘dissolving the lower House’) is vested in the Governor-General (for the Commonwealth and for the Australian Capital Territory), the governors of the states, and the Administrator in the Northern Territory. The degree of their independent discretion is significantly circumscribed by the principle of responsible government. The Governor-General and governors also have the power to ‘prorogue’ parliament, that is, to terminate a session of parliament. Each of these functions (summoning, proroguing and dissolving) is an Australian remnant of prerogative powers of the Crown in relation to the United Kingdom Parliament and each of them has a distinct purpose and function, distinctions that are still clearly drawn: The summoning of parliament is the means of convening a sitting of a newly-elected parliament or a parliament, perhaps several years old, that has been prorogued by the Crown. The proroguing of parliament is the means by which a parliament is dismissed from further sitting, pending its reconvening, without going so far as to dissolve that parliament. This process must be distinguished from that of adjournment, a less formal procedure in the hands of each house of parliament, by which its deliberations are suspended for a relatively short period. When parliament is prorogued its official business lapses and bills under

consideration, for example, must be reintroduced in the next session. But bills that have been passed by both houses before prorogation can be presented for royal [page 100] assent: Attorney-General (WA) v Marquet (2003) 217 CLR 545 at [85] per Gleeson CJ, Gummow, Hayne and Heydon JJ. The dissolution of parliament is the formal step by which a parliament is irrevocably destroyed, and a new parliament can only be formed after a general election. 2.3.16 Prorogation was seldom used in Australia for most of the 20th century. Between 1961 and 1993 a political practice was adopted of allowing the one session of parliament to continue from its first meeting after one general election to its dissolution before the next general election. Generally, when the parliament is not sitting, this will be because each house has adjourned and not because the Governor-General has prorogued it. It could be argued that the adoption of this practice is inconsistent with s 6 of the Commonwealth Constitution. That point was raised in the Senate in 1919, and the answer given then seems to be generally accepted; namely, that s 6 does not require a distinct session (terminated by prorogation) in every year but requires that 12 months should not pass without a sitting of parliament: Sawer, 1956, p 179; Odgers, 1976, pp 619–20; Lumb, 1986, p 42. In March 2016, Prime Minister Malcolm Turnbull advised the Governor-General to prorogue (and then immediately recall) both

the House of Representatives and the Senate pursuant to the s 5 of the Constitution. This was a surprise tactical move by the Prime Minister to force the Senate to consider two bills that sought to reestablish the Australian Building and Construction Commission in order to have (if the Senate rejected or failed to pass them) the relevant legislative trigger to call a double dissolution election pursuant to s 57. If, however, the legal effect of the prorogation of the parliament is that all business (including bills) before it lapses, then is the Turnbull Government prevented from using these (lapsed) bills as s 57 double dissolution triggers? Gibbs J considered this important constitutional point of procedure regarding prorogation and s 57 in Western Australia v Commonwealth (1975) 134 CLR 201 (Territorial Senators’ case) when he made the following observations (134 CLR at [7]–[8]): The fact that the Parliament was prorogued, after the Senate had rejected the proposed laws for the second time but before his Excellency had issued his proclamation dissolving both Houses, seems to me, with all respect, to have nothing to do with the matter. The right to prorogue the Parliament is given to his Excellency by s. 5 of the Constitution. At the time when the Constitution was enacted the effect of a prorogation was well recognized. In Hatsell, Precedents of Proceedings in the House of Commons (1818), vol. 2, at pp. 335–336, it was said that a prorogation concludes a session and (subject to some immaterial exceptions) has the effect that ‘all Bills, or other proceedings, depending in either House of Parliament, in whatever state they are, are entirely put an end to, and must, in the next session be instituted again, as if they had never been’. This is still the rule of parliamentary procedure in England: Erskine May’s Parliamentary Practice, 18th ed. (1971), pp. 255–256; Halsbury’s Laws of England, 3rd ed., vol. 28, p. 372. The rule is not immutable; it is competent for a legislature to provide by statute, or for a legislative chamber to provide by its standing orders, that after a prorogation consideration of a bill may be resumed as if no prorogation

had taken place. In fact Standing Orders 243 and 264 of the Standing Orders of the Senate and of the House of Representatives respectively do make provision for the resumption of proceedings on bills which have lapsed by reason of prorogation, although their provisions are not applicable to the circumstances of the present case. However, this general rule of practice, even if unmodified by statute or standing order, does not affect the operation of s. 57 when the conditions specified in the first paragraph of that section have been complied with. A prorogation does not

[page 101] obliterate all that the Parliament has done. It remains true to say of a bill that the House of Representatives has passed it, and that the Senate has rejected it, notwithstanding that the Parliament is subsequently prorogued. Although the prorogation causes the pending bill to lapse, that does not mean that the previous passage and rejection of the bill have never occurred. The Court is not obliged to act upon a fiction and to hold that the conditions upon which his Excellency may dissolve the two Houses of the Parliament have not been satisfied, when it is shown that in truth they were satisfied. It is in England the practice to prorogue the Parliament before dissolving it (May, op. cit., 18th ed., p.255; Halsbury, op. cit., p. 373). This practice of course existed before 1901 (see Erskine May’s Parliamentary Practice, 10th ed. (1893), pp. 46-47) and it was followed in relation to the Parliament of the Commonwealth until and including the dissolution of the Ninth Parliament in 1925, although the practice appears to have been discontinued since that time (Australian Parliamentary Handbook, 18th ed. (1973), pp. 268–269). It would therefore have been thought natural, when s. 57 was framed, that the Parliament should be prorogued before a double dissolution took place, and it could not have been intended that a prorogation, made with a view to a double dissolution, should have the result of making

impossible the very double dissolution contemplated when the Parliament was prorogued. This supports the conclusion that the fact that the Parliament was prorogued at some time after the proposed law was first passed by the House of Representatives does not prevent his Excellency from dissolving both Houses of the Parliament.

However, prorogation might affect the availability of parliamentary privilege for committees meeting after prorogation to conduct parliamentary inquiries. In 2011, the Premier of New South Wales Kristina Keneally prorogued the New South Wales Parliament in order to halt an inquiry by the Legislative Council into the sale of electricity assets. The Premier said that because parliament had been prorogued, people who participated in the inquiry would not be protected by parliamentary privilege. The Clerk of the Legislative Council, Lynn Lovelock, had previously advised a member of the Legislative Council that the council could continue with an inquiry after parliament had been prorogued. The Premier received legal advice that parliamentary privilege would not be available. The Opposition Leader received legal advice that parliamentary privilege would be available. Following the state election in March 2011 the O’Farrell Government introduced s 10A of the Constitution Act (NSW) to ensure that the Houses of Parliament would have the opportunity to continue to run inquiries in the run-up to an election. Section 10A(2) now states: (2) The Premier or Executive Council may not advise the Governor to prorogue the Legislative Council and Assembly on a date that is before 26 January in the calendar year in which the Legislative Assembly is due to expire and that is after the fourth Saturday in the preceding September.

MEMBERS OF PARLIAMENT:

QUALIFICATIONS AND DISQUALIFICATIONS 2.4.1 At Commonwealth, state and territory level, legislation specifies: those people who may seek election to parliament; those who are not eligible; [page 102] those who (even though eligible when elected) may lose their seats through some misconduct; and the procedures for settling disputes on such issues. The legislative provisions specifying qualifications and disqualifications for election to the Commonwealth Parliament are typical (although simpler than some of their state and territory counterparts). 2.4.2E

Commonwealth Constitution

16 The qualifications of a senator shall be the same as those of a member of the House of Representatives … 34 Until the Parliament otherwise provides, the qualifications of a member of the House of Representatives shall be as follows: (i)

He must be of the full age of twenty-one years, and must

be an elector entitled to vote at the election of members of the House of Representatives, or a person qualified to become such elector, and must have been for three years at the least a resident within the limits of the Commonwealth as existing at the time when he is chosen: (ii) He must be a subject of the Queen, either natural-born or for at least five years naturalized under the law of the United Kingdom, or of a Colony which has become or becomes a State, or of the Commonwealth, or of a State … 42 Every senator and every member of the House of Representatives shall before taking his seat make and subscribe before the Governor-General, or some person authorised by him, an oath or affirmation of allegiance in the form set forth in the schedule to this Constitution. 43 A member of either House of the Parliament shall be incapable of being chosen or of sitting as a member of the other House. 44 Any person who — (i) Is under any acknowledgment of allegiance, obedience, or adherence to a foreign power, or is a subject or a citizen or entitled to the rights or privileges of a subject or a citizen of a foreign power: or (ii) Is attainted of treason, or has been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer: or (iii) Is an undischarged bankrupt or insolvent: or (iv) Holds any office of profit under the Crown, or any pension payable during the pleasure of the Crown out of any of the revenue of the Commonwealth: or

(v) Has any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons: shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives. [page 103] But sub-section (iv) does not apply to the office of any of the Queen’s Ministers of State for the Commonwealth, or any of the Queen’s Ministers for a State, or to the receipt of pay, half-pay, or a pension by any person as an officer or member of the Queen’s navy or army, or to the receipt of pay as an officer or member of the naval or military forces of the Commonwealth by any person whose services are not wholly employed by the Commonwealth. 45 If a senator or member of the House of Representatives — (i)

Becomes subject to any of the disabilities mentioned in the last preceding section: or (ii) Takes the benefit, whether by assignment, composition, or otherwise, of any law relating to bankrupt or insolvent debtors: or (iv) Directly or indirectly takes or agrees to take any fee or honorarium for services rendered to the Commonwealth, or for services rendered in the Parliament to any person or State: his place shall thereupon become vacant. 46 Until the Parliament otherwise provides, any person declared by this Constitution to be incapable of sitting as a senator or as a

member of the House of Representatives shall, for every day on which he so sits, be liable to pay the sum of one hundred pounds to any person who sues for it in any court of competent jurisdiction. 47 Until the Parliament otherwise provides, any question respecting the qualification of a senator or of a member of the House of Representatives, or respecting a vacancy in either House of Parliament, and any question of a disputed election to either House, shall be determined by the House in which the question arises.

2.4.3 The Commonwealth has, by statute, modified the effect of some of these constitutional provisions, in particular ss 34, 46 and 47. The power to alter these provisions of the Constitution comes from s 51(xxxvi), which gives the parliament the power to make laws with respect to ‘matters in respect of which this Constitution makes provision until the Parliament otherwise provides’. Section 163 of the Commonwealth Electoral Act 1918 (Cth) fixes the qualifications of a member of the House of Representatives or the Senate. To qualify, a person must be of the full age of 18 years, an Australian citizen and either an elector entitled to vote at a House of Representatives election or a person qualified to become such an elector. Section 353(1) provides that ‘the validity of any election or return may be disputed by petition addressed to the Court of Disputed Returns and not otherwise’. Section 354(1) declares that ‘the High Court shall be the Court of Disputed Returns’. Section 376 provides that either House of Parliament may refer to the Court of Disputed Returns ‘any question respecting the qualifications of a Senator or of a Member of the House of

Representatives or respecting a vacancy in either House of Parliament’. 2.4.4 In each of the states and territories, legislation in broadly similar terms specifies the qualifications for membership of parliament, the factors that can disqualify a person from membership and the procedure for settling disputes on these matters. The principal qualifications are a minimum age, a minimum period of residence in the state, and nationality. Disqualifications extend to those who are public servants, members of the Commonwealth Parliament, bankrupts, Crown contractors, those convicted of serious criminal offences [page 104] (the extent of these disqualifications varies between the various states and territories) and for failing to attend the parliament without excuse: Pryles, 1982. Jurisdiction to resolve disputes over qualifications is vested in the respective Houses of Parliament or in the state Supreme Courts sitting as Courts of Disputed Returns: Constitution Act 1902 (NSW) ss 12, 13, 13A, 13B, 13C, 14; Parliamentary Electorates and Elections Act 1912 (NSW) ss 155, 156, 175B; Constitution of Queensland 2001 (Qld) ss 21, 22; Parliament of Queensland Act 2001 (Qld) ss 64, 72–76; Constitution Act 1934 (SA) ss 31, 42, 43, 43A, 44, 45, 46, 47, 48A; Electoral Act 1985 (SA) ss 52, 102, 103, 107, 132; Constitution Act 1934 (Tas) ss 14, 30, 31, 32, 33, 34, 35;

Electoral Act 2004 (Tas) ss 75, 76, 202, 205, 220; Constitution Act 1975 (Vic) ss 23, 29, 36, 44, 45–50, 54– 60, 61, 61A; Electoral Act 2002 (Vic) s 70; Constitution Acts Amendment Act 1899 (WA) ss 32–41; Electoral Act 1907 (WA) ss 157, 162, 164, 172; Northern Territory Self-Government Act 1978 (Cth) Pt III, Div 2; Electoral Act 2004 (NT) Div 3; Australian Capital Territory Self-Government Act 1988 (Cth) ss 14, 67; Electoral Act 1992 (ACT) ss 252–275; 2.4.5 In Re Wood (1988) 167 CLR 145, three questions were referred to the High Court by resolution of the Senate under s 376 of the Commonwealth Electoral Act 1918 (Cth). The questions asked whether there was a vacancy in the Senate for the place for which Senator Wood had been returned and, if so, how that vacancy was to be filled. Wood, who had been elected to the Senate as a candidate for the Nuclear Disarmament Party in New South Wales, was a British subject who had not taken out Australian citizenship before his election. The court found that Wood was not entitled to be nominated for election as a senator, nor could he meet the constitutional requirement for a senator referred to in s 16 of the Commonwealth Constitution. Although Wood had become an Australian citizen after his election, his election was void because ‘the election and return of such an unqualified candidate is wholly ineffective to fill a vacant Senate place’: 167 CLR at 164. A subsidiary issue raised in Re Wood related to the effect that s 44(i) of the Commonwealth Constitution might have on the election of persons with dual citizenship, including Australian and United Kingdom citizenship. The court left this issue unexplored.

That issue was raised for decision in Sykes v Cleary (1992) 176 CLR 77, which focused on two disqualification provisions, s 44(i) and (iv) 2.4.2E. Subsection (iv) of s 44 does not apply to the office of any of the Queen’s Ministers of State for the Commonwealth, or of any of the Queen’s Ministers for a State, or to the receipt of pay, half-pay, or a pension, by any person as an officer or member of the Queen’s navy or army, or to the receipt of pay as an officer or member of the naval or military forces of the Commonwealth by any person whose services are not wholly employed by the Commonwealth. Sykes v Cleary involved a challenge to the results of a by-election held for the House of Representatives seat of Wills on 11 April 1992. There were 22 candidates. Philip Cleary was declared elected on [page 105] 22 April 1992. At the time of his nomination as a candidate, and at the time of the taking of the poll on 11 April 1992, Cleary held a permanent appointment as a teacher under the Teaching Service Act 1981 (Vic), although he was on leave without pay from that position. Immediately before the declaration of the poll, Cleary resigned his appointment. Following Cleary’s election, another candidate, Ian Sykes, petitioned the High Court, sitting as the Court of Disputed Returns, to declare the result of the election void. Sykes claimed that Cleary was disqualified from being chosen as a member of parliament by s 44(iv) of the Constitution, in that he had held an office of profit under the Crown at the time of being chosen. Sykes also claimed that two other candidates, John Delacretaz and Bill

Kardamitis (who had filled third and second places in the poll), were disqualified from being chosen as a member of parliament by s 44(i), because they were entitled to the rights or privileges of subjects or citizens of foreign powers. 2.4.6C

Sykes v Cleary (No 2) (1992) 176 CLR 77

Mason CJ, Toohey and McHugh JJ: Interpretation of s 44(iv) The disqualification of a person who holds an office of profit under the Crown has its origins in the law which developed in England in relation to disqualification of the members of the House of Commons. Section 44(iv) is modelled on a provision of the Act of Settlement 1701, which was repealed and replaced by provisions of the Succession to the Crown Act 1707. It has been said that the English provisions give effect to three main considerations or policies. They are: (1) the incompatibility of certain non-ministerial offices under the Crown with membership in the House of Commons (here, membership must be taken to cover questions of a member’s relations with, and duties to, his or her constituents); (2) the need to limit the control or influence of the executive government over the House by means of an undue proportion of office-holders being members of the House; and (3) the essential condition of a certain number of ministers being members of the House for the purpose of ensuring control of the executive by Parliament … The exclusion of permanent officers of the executive government from the House was a recognition of the incompatibility of a person at the one time holding such an office and being a member of the House. There are three factors that

give rise to that incompatibility. First, performance by a public servant of his or her public service duties would impair his or her capacity to attend to the duties of a member of the House. Secondly, there is a very considerable risk that a public servant would share the political opinions of the minister of his or her department and would not bring to bear as a member of the House a free and independent judgment. Thirdly, membership of the House would detract from the performance of the relevant public service duty … Although a teacher is not an instance of the archetypical public servant at whom the disqualification was primarily aimed, a permanent public servant who is a teacher falls within the categories of public servants whose public service duties are incompatible, on the three grounds mentioned previously, with the duties of a member of the House of Representatives or of a senator … [page 106] The taking of leave without pay by a person who holds an office of profit under the Crown does not alter the character of the office which he or she holds. The person remains the holder of an office, notwithstanding that he or she is not in receipt of pay during the period of leave. [Mason CJ, Toohey and McHugh JJ held that s 44(iv)’s reference to ‘any office of profit under the Crown’ included an office of profit under the Crown in right of a state:] The long-standing reasons for disqualifying Commonwealth public servants from membership of the Houses of Parliament have similar force in relation to State public servants. The risk of a conflict between their obligations to their State and their duties as members of the House to which they belong is a further

incident of the incompatibility of being, at the same time, a State public servant and a member of the Parliament. It follows that the first respondent, as the holder of an office of profit under the Crown, fell within s 44(iv) until he resigned that office on 16 April 1992. [Mason CJ, Toohey and McHugh JJ held that the disqualification expressed in s 44(iv) operated at each stage of the process of being chosen as a member of parliament, including nomination as a candidate: 176 CLR at 99–100. Mason CJ, Toohey and McHugh JJ decided that the election should be declared void. They then turned to the question whether the second and third respondents (Delacretaz and Kardamitis) had been qualified to be chosen at the by-election. They found the following facts:] Delacretaz was born in Switzerland in 1923 and was, from the time of his birth, a Swiss citizen. He migrated to Australia in 1951 and became an Australian citizen in 1960, renouncing allegiance to any state of which he was a citizen. Under the law of Switzerland, a person will be released from citizenship upon his or her demand if he or she has no residence in Switzerland and has acquired another nationality. Delacretaz had made no application to the government of Switzerland to renounce or terminate his Swiss citizenship. Kardamitis was born in Greece in 1952 and was, from the time of his birth, a Greek citizen. He migrated to Australia in 1969 and became an Australian citizen in 1975, renouncing all other allegiance. Since then, he had been active in public affairs in Australia. Under the law of Greece, a Greek national may have his or her nationality discharged if he or she has acquired another nationality and then obtains the approval of the appropriate Greek Minister. Interpretation of s 44(i) … The common law recognises the concept of dual nationality, so that, for example, it may regard a person as being at the same time a citizen or national of both Australia and Germany. At

common law, the question of whether a person is a citizen national of a particular foreign State is determined according the law of that foreign State. This latter principle is, part, a recognition of the principle of international law, restated the Nottebohm case Liechtenstein v Guatemala 1955 ICJ 4 20, that:

or to in in at

… it is for every sovereign State … to settle by its own legislation the rules relating to the acquisition of its nationality, and to confer that nationality by naturalization granted by its own organs in accordance with that legislation. … But, there is no reason why s 44(i) should be read as if it were intended to give unqualified effect to that rule of international law. To do so might well result in the disqualification of Australian citizens on whom there was imposed involuntarily by operation of foreign law a continuing foreign nationality, notwithstanding that they had taken reasonable [page 107] steps to renounce that foreign nationality. It would be wrong to interpret the constitutional provision in such a way as to disbar an Australian citizen who had taken all reasonable steps to divest himself or herself of any conflicting allegiance. It has been said that the provision was designed to ensure: ‘that members of Parliament did not have a split allegiance and were not, as far as possible, subject to any improper influence from foreign governments.’ What is more, s 44(i) finds its place in a Constitution which was enacted at a time, like the present, when a high proportion of Australians, though born overseas, had adopted this country as their home. In that setting, it could scarcely have been intended to disqualify an Australian citizen for election to Parliament on account of his or her continuing to

possess a foreign nationality, notwithstanding that he or she had taken reasonable steps to renounce that nationality. In this respect it is significant that s 42 of the Constitution requires a member of Parliament to take an oath or affirmation of allegiance in the form set out in the schedule to the Constitution. What amounts to the taking of reasonable steps to renounce foreign nationality must depend upon the circumstances of the particular case. What is reasonable will turn on the situation of the individual, the requirements of the foreign law and the extent of the connection between the individual and the foreign State of which he or she is alleged to be a subject or citizen. And it is relevant to bear in mind that a person who has participated in an Australian naturalisation ceremony in which he or she has expressly renounced his or her foreign allegiance may well believe that, by becoming an Australian citizen, he or she has effectively renounced any foreign nationality. [Mason CJ, Toohey and McHugh JJ found that, although Delacretaz and Kardamitis were Australian citizens, Delacratz had not demanded release from Swiss citizenship and Kardamitis had not sought the approval of the appropriate Greek minister for discharge of his Greek nationality. It could not be said that either of them had taken reasonable steps to divest himself of foreign citizenship and the rights and privileges of such a citizen. Thus, that they were disqualified by s 44(i) of the Constitution.]

2.4.7 Brennan J agreed with Mason CJ, Toohey and McHugh JJ that s 44(iv) rendered Cleary incapable of being chosen as a Member of the House of Representatives. He held that, because neither Delacretaz nor Kardamitis had taken ‘steps reasonably open under the relevant laws of his native country — Switzerland in one case, Greece in the other — to renounce his status as a citizen of that country and to obtain his release from the duties of allegiance

and obedience imposed on citizens by the laws of that country’, neither of them was capable of being chosen as a Member of the House of Representatives: 176 CLR at 114. Deane J held that Cleary’s appointment as a teacher in the Victorian teaching service was an office of profit under the Crown, but that the disqualification effected by s 44(iv) did not operate until the declaration of the poll; so that Cleary was not disqualified by s 44(iv). Deane J held that both Delacretaz and Kardamitis had done all that could reasonably be expected of them to extinguish any relationship with their former countries, and, accordingly, were not disqualified by s 44(i). Dawson J agreed with Mason CJ, Toohey and McHugh JJ. Gaudron J agreed with Mason CJ, Toohey and McHugh JJ that s 44(iv) rendered Cleary incapable of being chosen as a Member of the House of Representatives. However, Gaudron J held that both Delacretaz and Kardamitis had, upon taking out Australian citizenship, effectively renounced their former nationalities, and so they were not disqualified by s 44(i). [page 108] 2.4.8 In Sue v Hill (1999) 199 CLR 462, the High Court considered the validity of the election of the Queensland ‘One Nation’ Senate candidate, Heather Hill, who was born in the United Kingdom in 1960 and migrated to Australia in 1971. She applied for and was granted Australian citizenship in 1998. Henry Sue petitioned the High Court, sitting as the Court of Disputed Returns, that Hill was incapable of being chosen as a Senator because she was under an acknowledgment of allegiance,

obedience, or adherence to a foreign power, within the meaning of s 44(i) of the Constitution. Gaudron J observed (199 CLR at 505): At the time Mrs Hill was granted Australian citizenship, the Australian Citizenship Act 1948 (Cth) contained no requirement for the renunciation of foreign citizenship. Nor, apparently, was there any practice whereby citizenship was renounced, the recipient of Australian citizenship being required only to pledge his or her ‘loyalty to Australia and its people, whose democratic beliefs I share, whose rights and liberties I respect, and whose laws I will uphold and obey’.

However, the High Court concluded that the denial of efficacy to the statutes of the United Kingdom Parliament effected by the Australia Acts (see further 1.3.20E) provided a conclusive answer to the question raised — the United Kingdom was a foreign power and Hill was a subject of a foreign power for the purposes of s 44(i) of the Constitution: 199 CLR 462 at 492 per Gleeson CJ, Gummow and Hayne JJ; 528 per Gaudron J. The decision in Sue v Hill was significant and fascinating. Consider that at the time of federation the United Kingdom, by definition, was not a foreign power. Indeed, as the preamble to the Australian Constitution makes clear ‘the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, humbly relying on the blessing of Almighty God, have agreed to unite in one indissoluble Federal Commonwealth under the Crown of the United Kingdom of Great Britain and Ireland’. What does this suggest about the nature and scope of the Australian Constitution and the capacity for its meaning to change over time? 2.4.9 In Re Webster (1975) 132 CLR 270, the High Court had the opportunity to consider s 44(v) of the Constitution. The High

Court (constituted by Barwick CJ) considered two questions referred to it by the Senate: first, whether Senator Webster was incapable of being chosen or of sitting as a senator; and, second, whether Senator Webster had become incapable of sitting as a senator. Webster was managing director, secretary, manager and one of nine shareholders of a company that regularly sold goods to a Commonwealth government department. Barwick CJ said the historical background to s 44(v) indicated that it was intended to protect the independence of parliament against undue influence exerted by the Crown, not to avoid possible conflicts of interest on the part of Members of Parliament. It followed, Barwick CJ said, that s 44(v) was confined to those contracts that gave the Crown an opportunity to influence the contractor; that is, a continuing contract under which something remained to be done. The contract, he said, must hold out ‘the possibility of financial gain by the existence or the performance of the agreement so that the person could conceivably be influenced by the Crown in relation to parliamentary affairs’: 132 CLR at 280. According to Barwick CJ, in the present case there was no continuing agreement, merely a series of separate agreements between the company and the department. In any event, he said, Senator Webster, as a shareholder of the company, had no pecuniary interest in the transactions of the company ‘under the general law and there is good reason to conclude that the same is [page 109] true in relation to s 44(v)’: 132 CLR at 287. The Chief Justice

accordingly concluded that Senator Webster was not disqualified from election to or membership of the Senate. For a different view of the question whether a shareholder would be caught by s 44(v), see Evans, 1975, at 469. The narrow approach of Barwick CJ to the purpose and scope of s 44(v) has attracted strong criticism: see Hanks, 1977, pp 196–7. 2.4.10 In 1998, it was claimed that the Parliamentary Secretary to the Minister for Defence, Warren Entsch, was a director of a company that supplied concrete to the Defence Department. The government used its control of the House of Representatives to exonerate Entsch, by determining (pursuant to s 47 of the Constitution) that Entsch was not disqualified by s 44(v) of the Constitution. The question was not referred to the High Court by the House of Representatives, as the Senate had done in the Webster case. 2.4.11 At the state level, disqualifying provisions can be altered by legislation. Indeed, it could be said that disqualifications are unlikely to be applied against any member of parliament who can invoke the support of the government. Under s 61A of the Constitution Act 1975 (Vic), each of the houses of the Victorian Parliament has the power to exempt any person from the effect of the disqualifying provisions where the house is satisfied that the matter leading to the disqualification: has ceased to have effect; was in all the circumstances of a trifling nature; and occurred or arose without the actual knowledge or consent of the person or was accidental or due to inadvertence.

This exemption is to be effected by a resolution of the relevant house: Constitution Act 1975 (Vic) s 61A. The operation of this provision was demonstrated in 1984: The session commenced on an embarrassing note for the government. It appeared that the Labour MLA for Morwell, Val Callister, had breached s 44(d) of the Constitution Act 1975, by virtue of her acceptance, as an MP, of an ‘office for profit under the Crown’, namely membership of the Environment Council. Her seat had technically become vacant, but the Speaker had deferred the issue of a writ, pending consideration of the case by the House. The government moved that Callister’s acceptance ‘had ceased to have effect, was in all the circumstances of a trifling nature and was accidental or due to inadvertence’. The government further moved that, in accordance with s 61A of the Constitution Act 1975, ‘the said appointment be deemed never to have occurred’ (VPD (A), 4 September 1984). The opposition, while not opposing Callister’s reinstatement, sought to amend the motion to express ‘deep concern’ at the government’s handling of the situation. The amendment was defeated, the motion was carried, and the electorate of Morwell regained its (technically lost) representation. ((1984) 31 Australian J of Politics and History at 319.)

VOTING FOR PARLIAMENT: THE FRANCHISE Removal of income and property qualifications for men 2.5.1 The principles and practices of representative government emerged over time in colonial Australia. The franchise was initially limited to white men with income or property. In 1843,

[page 110] men in the colony of New South Wales were eligible to vote in elections for the Legislative Council so long as they had either freehold land to the value of £200, or an annual household income of £20. In 1850, these requirements were reduced by half. In addition, men could vote if they either held a 3-year lease of £10 annual value, or a depasturing licence: Sawer, 2000. Over the balance of the 19th century increasing numbers of men won the franchise. First in the colony of South Australia in 1851, then in the colony of Victoria in 1857, all men over the age of 21 were granted the right to vote for the Legislative Assembly irrespective of their landholder status. New South Wales followed in 1858, as did Queensland in 1872, Western Australia in 1893, and Tasmania in 1896: Dudgeon and Hincks, 2007.

Enfranchising women 2.5.2 In 1858, the celebrated English political philosopher John Stuart Mill wrote to the Attorney-General of Victoria in support of women’s suffrage, asking him to ‘get rid of the Toryism of sex’: Sawer, 2001. Many women in colonial Australia saw the franchise (the legal right to vote) as the linchpin of equal rights, and women’s suffrage movements participated in publishing leaflets, organising debates, organising public meetings, initiating letter-writing campaigns and arranging deputations to members of their colonial parliaments: Wilson and McKeown, 2003. In 1888, Mary Lee and the Social Purity League created the South Australian Women’s Suffrage League (SAWSF). Lee, speaking in July 1888, argued that the franchise would allow women ‘to re-dress women’s wrongs —

moral, social, industrial and educational’: Mansutti, 1994. In 1894, the colony of South Australia became the first state (and common law jurisdiction in the world) to allow women both to vote and to stand for parliament. Western Australia followed in 1899. In 1895, in the colony of South Australia, women first began to be appointed to public and political roles previously only available to men. The first of these appointments was that of Augusta Zadow to the position of a factory inspector, and Catherine Helen Spence (who is commemorated on the $5 bill) was appointed as a Destitute Board Member of the Commission of Enquiry into the Adelaide Hospital, an appointment that lasted 2 years. However, the women allowed to participate in the Bathurst People’s Federal Convention in November 1896 were confined to the public gallery: Macintyre, 1998. Australia-wide women’s suffrage was debated at the Second National Constitutional Convention in March 1897, to which suffragettes in other colonies were encouraged to send petitions for suffrage, though these petitions failed: Official Report of the National Australasian Convention Debates (First Session): Adelaide 1897, pp 715–31. Although women were largely excluded from the official movement towards federation, Helen Irving argues persuasively (p 15) that ‘by the end of the 1890s the women could no longer be overlooked’ and that the influence of women, particularly through Christian temperance groups, was reflected in the preamble and in s 113 of the Constitution. Irving also writes (p 16) that ‘it is above all in s 41, that the presence of women is most clearly identified and it is here that the contribution of women can be recognised … The very fact of Federation being referred to popular election and ratification … had raised quite starkly the question of why women were not permitted to vote’: Irving, 1996.

The new Commonwealth’s first electoral act

2.5.3 When the first Commonwealth Parliament was elected by the voters in 1901, one of their first tasks was to determine who could vote. The Senate fought to continue to allow [page 111] voting by ‘aboriginal natives’, however the House of Representatives rejected this: Stretton and Finnimore, 1993. Women’s suffrage was opposed, though ultimately by only a handful of the new members, on the basis that it was ‘an attempt to throw a portion of the white man’s burden upon the white woman’ and would ‘vulgarise’ women (Pulsford, Parliamentary Debates, Senate, 1902, p 11464); that women themselves regarded the initiative to be unsafe and that women might ‘be influenced by the clergy, by good-looking candidates, and by young men’ (Glassey, Parliamentary Debates, Senate, 1902, p 11474); that the call for women’s suffrage was a ‘bewildering … craze’ and that women have a ‘range of duties’ but that men and women should ‘each find his own place in his own level [sic]’ (Braddon, Parliamentary Debates, House of Representatives, 1902, p 11937); and because the proposal ran ‘counter to the intentions and to the design of the Great Creator, and we are reversing those conditions of life to which woman was ordained’: Knox, Parliamentary Debates, House of Representatives, 1902, p 11941. Supporters pointed out that ‘the result will be infinitely to strengthen the means by which we shall get a true record of the real opinions of Australia upon all the different questions that will come up for settlement’ (O’Connor, Parliamentary Debates, Senate, 1902, pp 11451–2); that it would reward women with property who had been denied the franchise (Downer, Parliamentary Debates, Senate, 1902, p 11481); that it

had improved the tone of politics in South Australia (Poynton, Parliamentary Debates, House of Representatives, 1902, p 11939); and that it was ‘a simple act of justice that has been withheld from women for many years’. Senator Stewart remarked: ‘The very men who say that giving a woman a vote would degrade her, have not the slightest compunction about making her a drudge. They do not regard it as degrading for a woman to black a man’s boots. Oh, no! It is not degrading for her to scrub a floor or to be turned into a stuffy kitchen to cook for a man, or to be put into a factory where she will have to work nine or ten hours a day for a wretched pittance. None of these things will degrade a woman, but to give her a voice in the government of the country will degrade her! That is what the opponents of female suffrage tell us.’ 2.5.4 The Sydney Morning Herald reported that women thronged the galleries during the second reading speech for the first electoral bill in the Australian Parliament: 10 April 1902, p 7. The Age supported extension of the franchise, criticising the ‘fine old crusted conservatives’ and ‘primeval fossils’ in the Senate. The Argus was not supportive, describing it as ‘an instance of the Government’s readiness, in the hope of winning support from the smallest of the three parties in Parliament, to force on non-urgent legislation. Despite convenient assertions to the contrary, there is not the slightest evidence of dissatisfaction with the present franchise and electoral arrangements, or of demand for Commonwealth uniformity, on the part of the very large majority of the people’: The Argus, 10 April 1902, p 4. Ultimately, The Age reported that: [The] Senate yesterday passed the second reading of the Franchise Bill on the voices, the small, but very demonstrative, minority antagonistic to the enfranchisement of women, finding discretion the better part of

valour, not daring to expose their weakness by calling for a division. Considering that female ratepayers are entitled to vote in municipal elections, and have been exercising their right for a good many years without a voice being raised either in deprecation of the principle or in censure of the practice, it does seem rather absurd, not to say illogical, to oppose the bestowal of the same privilege upon the sex at Parliamentary elections. (The Age, 11 April 1902, p 4.)

[page 112] The Age later editorialised that: The social conditions which make it necessary for so many women to earn their own livelihood, and to earn it under industrial laws, make it also highly desirable that women should have a voice in the formulation of those laws. It is an infringement of the inherent rights, which under a free democracy belong alike to men and women, that any individual should have the conditions under which he lives and works regulated by others without any reference to him whatever. Such a disability tends to the degradation of the individual, and it is one under which myriads of woman workers have to labour in communities where men are still the sole arbiters as to the nature of the industrial legislation which shall regulate the employment of the people. As far as electoral rights and privileges are concerned there can be no logical justification for making sex a ground of disability. (The Age, 25 April 1902, p 4.)

In the event, the Commonwealth’s first electoral bill was enacted in 1902: Commonwealth Electoral Act 1902 (Cth). ‘The announcement in the House of Representatives this afternoon that the royal assent had been given to the Franchise Bill was received with cheers’: Sydney Morning Herald, 13 June 1902, p 7. In doing so, Australia became the first country in the world to give women

both the right to vote in federal elections and to be elected to parliament. 2.5.5E

Commonwealth Constitution

8 The qualification of electors of senators shall be in each State that which is prescribed by this Constitution, or by the Parliament, as the qualification for electors of members of the House of Representatives; but in the choosing of senators each selector shall vote only once … 30 Until the Parliament otherwise provides, the qualification of electors of members of the House of Representatives shall be in each State that which is prescribed by the law of the State as the qualification of electors of the more numerous House of Parliament of the State, but in the choosing of members each elector shall vote only once … 41 No adult person who has or acquires a right to vote at elections for the more numerous House of Parliament of a State shall, while the right continues, be prevented by any law of the Commonwealth from voting at elections for either House of the Parliament of the Commonwealth …

2.5.6 Sections 8 and 30 of the Constitution contemplate that the Commonwealth Parliament can adjust the franchise subject to the constraint expressed in the Constitution s 41. That power has been exercised in the Commonwealth Electoral Act 1918 (Cth). Section 93(1) provides that, to be qualified to vote, a person must have attained 18 years of age, and be an Australian citizen or a British subject who was enrolled to vote immediately before 26

January 1984. Section 93(6) provides that, to be entitled to vote, an elector must have ‘his real place of living … at some time within the three months immediately preceding polling day for that election, within the relevant electorate’. Several categories of persons are precluded from voting by s 93(7) and (8), including: holders of temporary entry permits; prohibited non-citizens; persons of unsound mind; [page 113] persons convicted and under sentence for an offence punishable by imprisonment for 3 years or longer; and persons convicted of treason or treachery. 2.5.7 In each of the states and territories, legislation defines the franchise for elections to both assembly and council in substantially identical terms. The common requirements are that the voter: is an Australian citizen (or a British subject already enrolled to vote on a nominated date); has reached 18 years of age; and has resided in the state for a minimum period (which varies from 3 to 6 months). In each state some classes of people are disqualified from voting.

These disqualifications are considerably narrower than those for membership of parliament and are likely to become even narrower. South Australia removed (in 1976) the disqualification, common to all Australian electoral systems, of persons attainted of treason or serving a sentence of imprisonment. Victoria removed (in 1980) the disqualification of persons serving a sentence of imprisonment but retained conviction of treason as a disqualification. The relevant provisions can be found in the following legislation: Constitution Act 1902 (NSW) s 22; Parliamentary Electorates and Elections Act 1912 (NSW) ss 20–21; Electoral Act 1992 (Qld) ss 64, 101; Constitution Act 1934 (SA) s 48; Electoral Act 1985 (SA) ss 4, 29, 52; Constitution Act 1934 (Tas) ss 28, 29; Electoral Act 2004 (Tas) s 31; Constitution Act 1975 (Vic) s 48; Electoral Act 1907 (WA) ss 17, 18. Each of the self-governing territories incorporate the voter qualifications adopted by the Commonwealth under the Commonwealth Electoral Act (1918): Electoral Act 1992 (ACT) s 72; Northern Territory (Self-Government) Act 1978 (Cth) ss 20, 21. 2.5.8 The achievement of a relatively uniform and nondiscriminatory franchise throughout Australia is recent. From

1908, when women were given the right to vote in Victoria, it might have been said that Australian parliaments were elected on the basis of adult suffrage. However, state upper houses continued to be elected on a property franchise until 1950 (Victoria), 1963 (Western Australia), 1968 (Tasmania) and 1973 (South Australia). The New South Wales Legislative Council was until 1933 a nominated chamber. Between 1933 and 1978 it was elected on a rotation system by the Members of the Legislative Assembly and the non-retiring Members of the Council, an electorate of about 140 voters. From 1978, the council has been elected by adult suffrage. Another gap in the universality of Australia’s adult suffrage was the denial of voting rights to Aboriginal people until the 1960s: see further Galligan and Chesterman, 1997. The Queensland and Western Australian legislation disqualified different categories of Aboriginal people (Elections Act 1915 (Qld) ss 11, 11A; Electoral Act 1907 (WA) s 19(e)), and, because [page 114] of s 39(5) of the Commonwealth Electoral Act 1918 (Cth), Aboriginal people resident in those states could not vote in Commonwealth elections, unless they had been members of the defence forces. In 1962, the Commonwealth and Western Australian disqualifications were removed: Commonwealth Electoral Act 1962 (Cth) ss 2, 3; Electoral Act Amendment Act 1962 (WA) s 3. Queensland followed suit in 1965: Elections Acts Amendment Act 1965 (Qld) ss 3, 4. However, enrolment was not rendered

compulsory for Aboriginal people (as it was for all other persons qualified to vote) until 1971 in Queensland, and 1983 in Western Australia, when their enrolment was also made compulsory for the Commonwealth electoral roll. The reduction of the minimum voting age from 21 to 18 was achieved with more speed and uniformity. New South Wales and Western Australia led the way in 1970, followed by South Australia in 1971 and Queensland, Victoria, Tasmania and the Commonwealth in 1973: Commonwealth Electoral Act 1973 (Cth) s 3; Parliamentary Electorates and Elections (Amendment) Act 1970 (NSW) s 2; Elections Act and The Criminal Code Amendment Act 1973 (Qld) s 9; Electoral Act Amendment Act 1972 (SA) s 8; Electoral Act 1973 (Tas) s 6; Constitution Act Amendment Act 1973 (Vic) s 4; Electoral Act Amendment Act 1970 (WA). 2.5.9 A fundamental question is whether a minimum franchise is established and so entrenched by the Australian Constitution? In 1901, when the first federal election was held, the franchise was determined in accordance with s 41 of the Constitution. Section 41 was championed by Constitutional Convention delegates from South Australia who sought to guarantee the right of women to vote if the new Commonwealth Parliament failed to support adult franchise: Stretton and Finnimore 2002; Norberry and Williams, 2002. However, there have been sharply divergent approaches to

the interpretation of s 41 since federation: Twomey, 2000. In a series of cases commencing with King v Jones (1972) 128 CLR 221, the High Court has adopted a ‘narrow’ approach to s 41. 2.5.10 In 1972, the Commonwealth Electoral Act 1918 (Cth) fixed the age of 21 years as the minimum voting age for Commonwealth elections. A 1971 amendment to the Constitution Act 1934 (SA) fixed the age of 18 years as the minimum voting age for South Australian elections. The Age of Majority (Reduction) Act 1970–1971 (SA), passed at the same time, declared that every ‘person of and above the age of eighteen years shall be sui juris and of full age or capacity’. Susan King, who had attained the age of 18 but had not yet turned 21, was refused enrolment on the Commonwealth electoral register. She applied to the Magistrate’s Court in Adelaide, under s 58 of the Commonwealth Electoral Act, for an order directing that she be enrolled; the matter was removed to the High Court under s 40 of the Judiciary Act 1903 (Cth). King’s argument, that she was entitled to enrol for and vote at Commonwealth elections, was based on s 41 of the Commonwealth Constitution 2.5.5E. In King v Jones (1972) 128 CLR 221, that argument was rejected by the High Court on the basis that, whatever might be the nature of the right conferred by s 41 of the Constitution, it extended only to an ‘adult person’, a term that carried the meaning that it had in 1900; namely, a person who had attained the age of 21 years. [page 115] The status (or otherwise) of s 41 as providing some form of constitutional right to vote was determined by the High Court in R

v Pearson; Ex parte Sipka (1983) 152 CLR 254. On 4 February 1983, both houses of the Commonwealth Parliament were dissolved by the Governor-General under s 57 of the Constitution and an election for both houses was announced. On the same day, writs were issued for the election, nominating 5 March 1983 as the polling day. Section 43 of the Commonwealth Electoral Act 1918 (Cth) had the effect of closing the electoral roll from 6 pm on 4 February 1984: 43 Notwithstanding anything contained in either of the last two preceding sections — (a) claims for enrolment or transfer of enrolment which are received by the Registrar after six o’clock in the afternoon of the day of issue of the writ for an election shall not be registered until after the close of the polling at the election …

Four persons, who were otherwise entitled to be enrolled under the Commonwealth Electoral Act and who were entitled to be enrolled as electors for the New South Wales Parliament, lodged forms claiming both Commonwealth and state enrolments with Divisional Returning Officers. (These officers administered both the Commonwealth and the state electoral rolls, by arrangement between the Commonwealth and New South Wales.) The four were placed on the roll of electors for New South Wales but their claims for enrolment on the roll of Commonwealth electors were deferred until after 5 March 1983. The four then applied to the High Court of Australia for a writ of mandamus, requiring the Chief Australian Electoral Officer and other officials to add their names to the Commonwealth roll of electors and to permit them to vote at the forthcoming election. The High Court’s decision was handed down on 24 February 1983.

2.5.11C

R v Pearson; Ex parte Sipka (1983) 152 CLR 254

Murphy J (in dissent): … Section 41 is one of the few guarantees of the rights of persons in the Australian Constitution. It should be given the purposive interpretation which accords with its plain words, with its context of other provisions of unlimited duration, and its contrast with transitional provisions. Constitutions are to be read broadly and not pedantically. Guarantees of personal rights should not be read narrowly. A right to vote is so precious that it should not read out of the Constitution by implication. Rather every reasonable presumption and interpretation should be adopted which favours the right of people to participate in the elections of those who represent them. Plain meaning. The purpose conveyed by its plain words is a constitutional guarantee that every adult person who has a right to vote at State elections shall not be prevented by any Commonwealth law from voting at Federal elections. The only sensible meaning is that the persons described are entitled to vote in Federal elections. The respondents contend that s 41 does not confer any right to vote at Federal elections; it merely says that no Commonwealth laws shall prevent the persons described from voting in Federal elections and that the right to vote must be found elsewhere. This ridicules the constitutional guarantee. Such a pedantic interpretation should not be adopted to nullify this important personal right. Further, like other constitutional statutory provisions s 41 is presumed to be prospective, ambulatory and constantly speaking. Its words are not transitional. [page 116]

[Murphy J referred to the context of s 41 (none of its associated provisions was of limited duration) and contrasted it with various transitional provisions. He noted that, before 1901, the immediate concern was that without s 41, women in South Australia might be denied the vote in federal elections and that Aborigines entitled to vote in some states might also be disenfranchised. He noted that a Parliamentary Select Committee on the Voting Rights of Aboriginals had received advice in 1961, from the Solicitor-General, Kenneth Bailey, and from Professor Geoffrey Sawer that s 41 should be read as having a prospective operation and was not limited to voters who were qualified at the date when the first Commonwealth Franchise Act came into operation. He continued:] Following the Report of the Select Committee the disqualification of Australian Aborigines was removed in 1962 by amendment of the Commonwealth Electoral Act No 31 of 1962 (s 2). Until then, the only right of Australian Aboriginals to vote in Federal elections was derived from the guarantee in s 41 … The history of discrimination against Aboriginal voting rights repudiates the argument that giving the s 41 guarantee the full scope of its plain meaning would be an undesirable departure from the allegedly ‘Uniform Federal Franchise’ introduced in 1902. If the respondents’ view of s 41 is adopted, it has been, and is open to the Federal Parliament to restrict the Federal franchise in other ways so as to deprive persons with a State franchise from voting at Federal elections … Parliament could disqualify persons in receipt of unemployment benefits or other social services. Section 41 protects those with a right to vote in State elections from any such disfranchisement … Brennan, Deane and Dawson JJ: … Though it is right to see s 41 as a constitutional guarantee of the right to vote, the means by which that guarantee is secured is itself definitive of the extent of the guarantee. Voting, that is, the exercise of an existing right

to vote, at elections of the Commonwealth Parliament cannot ‘be prevented by any law of the Commonwealth’. But s 41 does not in terms confer a right to vote. If a right to vote is claimed by an elector in reliance upon the statutory franchise now prescribed by the laws of the Commonwealth, those laws are definitive of the right and s 41 has no work to do. But if and so long as a right to vote was claimed by an elector in reliance upon the constitutional franchise — whether existing at the establishment of the Commonwealth or the result of a later modification before the prescription of a statutory franchise by the Commonwealth Parliament — s 41 precluded any law of the Commonwealth from preventing the exercise of that voting right. In other words, those who, by State laws, were able to acquire a right to vote at elections of the more numerous House of the State and who, by reason of ss 30 and 8, thereby acquired the right to vote at elections of the Parliament of the Commonwealth, were entitled to continue voting at the latter elections so long as they continued to be entitled to vote at elections of the more numerous House of the State Parliament. They could not be prevented by any law of the Commonwealth from doing so. The applicants seek to extend the operation of s 41 beyond this point by converting the prohibition against preventing a person from voting at a Federal election into a source of a right to vote at such an election. If s 41 were given this operation, the power conferred upon the Parliament to legislate for a uniform franchise would be destroyed. A Parliament of a State would be empowered to give the Federal franchise to those whom the Commonwealth Parliament has excluded or disqualified; for example, property owners who do not live in the State, aliens, prohibited immigrants or convicts under sentence for more serious offences. [page 117] If that operation were accorded to s 41, the Parliament of a

State would be empowered to increase the number of its electors for the purposes of s 128 beyond the number entitled under the uniform franchise … But that operation is wholly unsupported by the terms of s 41 … The right to vote to which s 41 relates is the constitutional franchise conferred by ss 30 and 8. The purpose of s 41 is clear from its constitutional context: it was to ensure that those who enjoyed the constitutional franchise should not lose it when the statutory franchise was enacted. The statute was to govern the subsequent acquisition of the right to vote at Federal elections. The persons to whom s 41 applies are the persons who acquired the right to vote pursuant to ss 30 and 8. After the Parliament enacted the Commonwealth Franchise Act 1902, which was entitled ‘An Act to provide for a Uniform Federal Franchise’, no person could acquire the right to vote at Federal elections save in accordance with its terms. It follows, of course, that the practical effect of s 41 is spent. Most of the electors who acquired a right to vote at Federal elections under ss 30 and 8 of the Constitution would have died. Since 12 June 1902, when the Commonwealth Franchise Act came into force, no person has acquired a right to vote the exercise of which is protected by s 41. None of the present applicants is a person to whom s 41 applies. None of them is therefore entitled to enrol or to vote by reason of s 39B of the Act. The applications must be dismissed with costs. [Gibbs CJ, Mason and Wilson JJ delivered a joint judgment in similar terms to the judgment of Brennan, Deane and Dawson JJ.]

2.5.12 Consequently, the majority held that s 41 does not in terms confer a right to vote’ (152 CLR at 260 per Gibbs CJ, Mason and Wilson JJ; 278 per Brennan, Deane and Dawson JJ) but only ‘prevents the Commonwealth Parliament from taking

away a right to vote’: 152 CLR at 260 per Gibbs CJ, Mason and Wilson JJ. But the reading of s 41 preferred by Murphy J, that every adult person entitled to vote at state elections was entitled to vote in Commonwealth elections, is not obviously a misinterpretation of the words of the section. John Quick and Robert Garran, whose opinion on the reading of s 41 was cited by the majority (152 CLR at 262 per Gibbs CJ, Mason and Wilson JJ) made the point that this reading required words such as ‘acquires’ and ‘prevented’ to be read in quite a narrow way: Quick and Garran, 1901, p 487. Moreover, as Murphy J pointed out (152 CLR at 271–2), the history of s 41 is inconsistent with this reading. A proposal to alter the draft of s 41 so as to confine its protection to those persons with a state franchise, acquired before the introduction of the Commonwealth franchise, was not adopted during the drafting process. In addition, Murphy J’s reading had the support of such eminent constitutional scholars as Bailey, Lane and Sawer: 152 CLR at 270, 273. 2.5.13 The strongest justification for the majority’s reading of s 41 lies in their references to the historical context in which the section was drafted and to the policy implications of allowing the section to function as a continuing guarantee of the right to vote. For the majority, it was those historical and policy considerations that justified their narrow interpretation of the text of s 41. The history to which they referred was the marked variation in voting rights between the various colonies in 1901. The most substantial difference was that women had equal voting rights in South Australia and Western Australia, but in no other part of Australia. This history

[page 118] indicated, they said, that s 41 was intended to ensure that the more liberal voting rights of South Australian and Western Australian women, which were transferred into the Commonwealth sphere by ss 8 and 30 of the Commonwealth Constitution, would not be denied when a uniform federal franchise was introduced, as foreshadowed by s 30. There were two policy considerations, according to the majority. First, to read s 41 as a continuing guarantee would allow state parliaments to undermine the uniformity of the federal franchise. Second, a state parliament could manipulate the federal franchise so as to increase the number of electors in that state who could vote in a constitutional referendum under s 128. 2.5.14 In 1988, the Constitutional Commission rightly observed of this decision that ‘for practical purposes section 41 is now a dead letter and the Constitution does not effectively guarantee anyone a right to vote’: Constitutional Commission, 1988, p 129. The commission’s concluding assertion paid no regard to the possibility that s 24 of the Commonwealth Constitution guarantees a minimum franchise. If s 41 were a constitutional guarantee of the right to vote (as Murphy J argued), it would be a rather unbalanced and elastic guarantee. Any person’s constitutionally-protected right to vote in Commonwealth elections would depend upon that person retaining the right to vote for the lower house of state parliament in his or her state of residence. If the right to vote in state elections were withdrawn by a state parliament, that protection would disappear, and the way would be opened for the Commonwealth Parliament

to remove the federal franchise. Territory residents would, of course, have no constitutional protection. The Constitutional Commission expressed the view that ‘the right to vote in elections of legislatures is … a basic democratic right and one which merits constitutional protection’: Constitutional Commission, 1988, p 140. The commission proposed that the Commonwealth Constitution should be altered to ensure that the right to vote in Commonwealth, territory and state elections was available to all Australian citizens who had attained the age of 18 years, subject to compliance with reasonable conditions, prescribed by legislation, relating to residence and enrolment, and subject to possible legislative disqualification on two grounds: current imprisonment for an offence; and incapacity to understand the nature and significance of enrolment and voting because of unsoundness of mind: Constitutional Commission, 1988, pp 128–9. In June 1988, the House of Representatives and the Senate passed the Constitution Alteration Fair Elections Act 1988, which would have, inter alia, given effect to the commission’s recommendation by inserting a s 124G into the Commonwealth Constitution. At a referendum held on 3 September 1988, this proposal was rejected by the voters. The High Court approved R v Pearson; Ex parte Sipka 2.5.11C in Snowdon v Dondas (1996) 188 CLR 48 at 71–2. 2.5.15 The Australian Constitution does, however, require that the Members of the House of Representatives shall be ‘directly chosen by the people of the Commonwealth’ (s 24) and that the Senate shall be ‘directly chosen by the people of the State’: s 7. Would, then, a literacy test, or a property test, or the denial of the vote to people under the age of 25 be consistent with those

constitutional requirements? Those important questions, and the more general issue as to whether a right to vote might be impliedly guaranteed by ss 7 and 24 of the Australian Constitution, will be considered in detail in Chapter 10. [page 119]

THE DISTRIBUTION OF SEATS 2.6.1 With the exception of the Tasmanian House of Assembly, where each of the five electorates returns five members on the basis of proportional representation, the lower houses of the Commonwealth and state parliaments are elected on the basis of single-member electorates. In the Tasmanian Legislative Assembly (the lower house), in the Victorian Legislative Council (the upper house) and in the Australian Capital Territory, the ‘Hare-Clark’ method of proportional representation is adopted: see Electoral Act 1985 (Tas) s 188(1)(d), Sch 4; Electoral Act 2002 (Vic) s 114A; Proportional Representation (Hare-Clark) Entrenchment Act 1994 (ACT) s 4; Electoral Act 1992 (ACT) ss 34–56. The division of the total electorate into separate constituencies is a vital element in the electoral process and the constitution of parliament. This is effected by elaborate legislation, the common features of which are periodic reviews of and changes to electoral boundaries by independent commissioners. In several of the states, and at the Commonwealth level, these procedures have recently been modified to make the work of the commissioners ‘selfexecuting’ and thereby reduce the prospect of political interference. The legislation that provides a distribution system for the House

of Representatives is more elaborate than the legislation of the several states because of the need to allocate seats between the six states before distributing seats within each state. 2.6.2E

Commonwealth Constitution

24 [The terms of this provision are set out at 2.2.16E.] 29 Until the Parliament of the Commonwealth otherwise provides, the Parliament of any State may make laws for determining the divisions in each State for which members of the House of Representatives may be chosen, and the number of members to be chosen for each division. A division shall not be formed out of parts of different States.

2.6.3 The Commonwealth Electoral Act 1918 (Cth) establishes detailed procedures for the regular and independent review of House of Representatives electorates, and prescribes a flexible standard of one vote one value for those electorates. The flexibility lies in the permitted deviation of ±10 per cent from equality, and in the direction that, as far as practicable, the number of voters in each electorate in a state or territory will be equal: s 66(3). Two distinct processes are prescribed by the Commonwealth Electoral Act: the allocation of House of Representative seats between the states (that is, the number of seats allocated to each state); and distribution of allocated seats within each state (that is, the

drawing of electoral boundaries for each of the allocated seats). 2.6.4 The allocation process is dealt with in Pt III (representation in the parliament), Div 3 (representation of the states and territories in the House of Representatives) of the Act. These provisions replaced the Representation Act 1905 (Cth), parts of which had been challenged and found to be invalid in Attorney-General (Cth) (Ex rel McKinlay) v Commonwealth 2.6.10C and Attorney-General (NSW) (Ex rel McKellar) v Commonwealth (1977) 139 CLR 527 (see 2.6.17). [page 120] Section 46 of the Act obliges the Electoral Commissioner to begin a reassessment of the allocation of seats between the states between 11 and 12 months after the first meeting of the House of Representatives following a general election, adopting the suggestion of Gibbs J in McKinlay’s case that the allocation process ‘be set in train at a fixed time after the first meeting of any parliament, so that the determination would be available for use at the next election’: 135 CLR at 51. The Electoral Commissioner is directed to rely on the latest population statistics, supplied by the Australian Statistician (s 46(1B), (1C)); that is, the process of allocating seats is not tied to the last official census, a link that the High Court had criticised in McKinlay’s case: see, for example, 135 CLR at 53 per Gibbs J. Section 48 obliges the Electoral Commissioner to allocate the House of Representatives seats amongst the states in direct

proportion to their populations. The section prescribes a formula for giving effect to this allocation, identical to the formula prescribed, ‘until the Parliament otherwise provides’, by s 24(i) and (ii) of the Constitution. Its adoption in the Commonwealth Electoral Act follows the High Court’s decision in McKellar’s case invalidating a different formula which allowed each state an extra seat if, on dividing its population by the quota, there was a remainder of any size. Section 50 of the Act provides that the Electoral Commissioner’s reallocation (certified to the minister, published in the Gazette and tabled in parliament under s 49) will take effect for the next general election of the House of Representatives. (Section 76 makes special provision to accommodate any increase or reduction in a state’s allocation of seats where the general election is called on before a redistribution, made necessary by the reallocation, can be effected in that state.) Section 50, in providing that the reallocation is immediately effective, goes further than the High Court’s decision in McKinlay required: see the comments of Gibbs J on the validity of a general election based on an outdated allocation: 135 CLR at 53. 2.6.5 The distribution process is dealt with in Pt III (electoral divisions) of the Commonwealth Electoral Act, the opening sections of which provide that each state and the Australian Capital Territory shall be distributed into electorates, each represented by one member in the House of Representatives: ss 56, 57. The Electoral Commissioner is obliged to keep enrolments in the electorates under monthly review (s 58) and to commence the redistribution process for any state if: there has been a change in the number of seats allocated to

the state; if more than one-third of the state’s electorates are, and have been for 2 months, ‘malapportioned Divisions’ (that is, more than 10 per cent above or below the state’s average electorate enrolment (s 59(10)); or if 7 years has passed since the last distribution in the state: s 59(2). The obligation to commence the redistribution process is qualified by s 59(3) and (4), so as to prevent the commencement of that process in the last year of the life of the House of Representatives. The timing of redistributions of the Australian Capital Territory is covered by s 59(7), (8), (9), (9A) and (9B). Section 60 requires the Electoral Commission to appoint a Redistribution Committee for the purpose of each redistribution of a state or for the Australian Capital Territory. The committee is required to ‘make a proposed distribution of the State or Territory’: s 66(1). [page 121] The criteria for this ‘proposed distribution’, as specified in s 66(3), are identical to those specified in s 73(4) for the final distribution: see below. After publication of the ‘proposed distribution’ (s 68) and an opportunity for objections (s 69), the Redistribution Committee together with the chairperson and other members of the Electoral Commission, constituting ‘an augmented Electoral Commission’ (s

70), are to consider the objections to the proposed distribution (s 72) and make a determination distributing the electorates in the relevant state or the Australian Capital Territory: s 73(1). Sections 73(3) and 73(4) lay down the criteria for this distribution. Section 73(3) directs that each state or territory is to be distributed into electoral divisions equal in number to the number of members of the House of Representatives to be chosen in the state or territory at a general election. Section 73(4) directs the augmented Electoral Commission to endeavour to ensure, as far as practicable, the number of electors in each electoral division will remain within 2 per cent of the average enrolment in that state or territory 3 years and 6 months after the making of the determination. In addition, the commission is to give due consideration to a number of factors, including: community of interests, including economic, social and regional interests; means of communication and travel; the trend of population changes; physical features and area of the electoral division; and the boundaries of existing divisions in the state or territory. According to s 73(6), the redistribution made under s 73(1) comes into operation at the next general election and is not to be used for any by-election to fill a casual vacancy before that general election. Having made its determination under s 73, the augmented Electoral Commission must state the reasons for the determination in writing: s 74. Details of the redistribution and the reasons are to

be forwarded to the minister and laid before each House of Parliament: s 75. However, the houses are not given the power, which they had under the previous version of the Commonwealth Electoral Act, to disallow a redistribution: McKinlay’s case. Section 76 prescribes a quick procedure for a ‘miniredistribution’ of a state where: the number of electorates (‘Divisions’) in the state differs from the number of members to be chosen in the state (following a new determination under s 48(1)); and the Governor-General has issued writs for a general election. The procedure involves either consolidating adjoining electorates into one new electorate (where the number of electorates is too large) or dividing pairs of adjoining electorates into three new electorates (where the number of electorates is too small). This ‘mini-redistribution’ accommodates the mandate of s 50 of the Act, that a re-allocation between the states takes effect from the next general election. Section 77 provides some protection against judicial review for the commission’s determinations, in terms similar to the protection provided to the commissioner’s allocation decisions by s 48(3). The extent of that protection is still to be tested. 2.6.6 In most states, legislation establishes a permanent Electoral Commissioner or Electoral Commissioners who are charged with the responsibility of redistributing electorates. In Tasmania, the five House of Assembly electorates are identical to those for the

[page 122] Commonwealth House of Representatives. This identity is maintained by ad hoc legislation whenever the boundaries are altered at a federal redistribution. The degree of political control over the distribution process varies from state to state. Under the Western Australian legislation, the initiation of a redistribution does not require any political decision. Further, while adoption of a redistribution proposal needs action by the government, that action should automatically follow the Distribution Commissioners’ report. In Tonkin v Brand [1962] WAR 2, the Western Australian Supreme Court declared that the government had a legal duty to set in train the machinery for electoral redistribution. The New South Wales and South Australian legislation goes further by guaranteeing the independence of the Electoral Commissioners and the democratic basis of electoral distribution, not only against executive pressure, but also, in some cases, against amending or repealing legislation passed through the normal parliamentary process. The relevant provisions can be found in the following legislation: Constitution Act 1902 (NSW) ss 7B, 25–28A; Parliamentary Electorates and Elections Act 1912 (NSW) Pt II; Electoral Act 1992 (Qld) ss 35–57; Constitution Act 1934 (SA) Pt V; Electoral Act 2004 (Tas) s 10;

Constitution Act 1975 (Vic) ss 94F, 94G; Electoral Boundaries Commission Act 1982 (Vic); Electoral Act 1907 (WA) ss 5B, 16G. 2.6.7 Even where legislation establishes the independence of Electoral Commissioners and of the redistribution process (by providing that the commissioners’ decision shall not be vetoed or frustrated), there is substantial scope for political interference. Amending legislation can prescribe new criteria, demanding that special weight be given to, for example, rural votes or that a wide variation from the quota be allowed: see, for example, Electoral Act 1907 (WA) s 16G(3). As Kirby J observed in Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 576–7 2.11.39C: Changes in electoral democracy: At the time of federation, both in federal and State elections in Australia, as in other countries, there were significant departures from the ideal of electoral democracy. In all but two of the Australian States, women had no vote. Property qualifications existed. So did plural voting. The number of voters in electorates (and hence the value and influence of their votes) varied considerably. Substantial variations existed in the size of metropolitan and rural constituencies. Over the ensuing century, tolerance of such disparities in the value of each elector’s vote declined in Australia, as in other countries with democratic governments. In part, this change occurred because of improvements in the means of communication. These removed, or reduced, a justification commonly offered for disparities. In part, it followed parliamentary repeal of the worst types of malapportionment with their tendency to entrench sectional interests. And in part, in other countries, it reflected the insistence of the courts and, more recently, international bodies, that such disparities should be minimised to ensure compliance with fundamental rights and to require that the rhetoric

about democracy and representative government be matched by legally enforceable, and approximately equal, voting entitlements.

[page 123] Within Australia, the general principle of approximate equality in the value of each vote (with an allowable variation usually expressed in terms of percentages) is now reflected in the electoral law of the Commonwealth and most of the States. Western Australia remains an exception to the trend towards ‘equality of electorate size as reflecting a change in society’s perception of the appropriate expression of the concept of representative democracy’. In that State alone, the disparities in electorate numbers remain very large. They do so as a result of the law in question in these proceedings. By reason of population movements, the disparities between the respective electoral values of metropolitan and non-metropolitan votes in the State have continued to increase. Such variance is obviously of large political significance. In otherwise close elections, it favours the interests of those candidates and political parties that draw more support from non-metropolitan voters. In a general election, such a bias in the value of individual votes can accumulate to influence the composition of the State Parliament and hence the formation of the Government of the State (references omitted).

2.6.8 Marquet’s case was one chapter in a long story of malapportionment in Western Australia: see Western Australian Hansard, 30 March 2005, Second Reading Speech introducing the One Vote One Value Bill. An attempt to achieve ‘one vote one value’, by way of an argument that the Commonwealth Constitution should be interpreted as giving rise to an implication that Western Australia must comply with that requirement, failed in McGinty v Western Australia (1996) 186 CLR 140. In 2001, the

Australian Labor Party won a majority in the Legislative Assembly and the Legislative Council. The government introduced legislation in August 2001 to repeal the Electoral Distribution Act 1947 (WA) which provided the basis for vote weighting for nonmetropolitan electorates. However, s 14 of the Constitution Act Amendment Act 1899 (WA) required an absolute majority in both Houses of Parliament for amendments to the Electoral Distribution Act 1947 (Cth) to have effect. Labor had a 17:16 majority on the floor of the council, but it was acknowledged that it would need a majority of 18 to pass its reforms: Kelly, 2006. A compromise with the Greens saw one vote one value reforms enacted for the assembly and the council retaining malapportionment. After the vote on the Electoral Redistribution Repeal Bill 2001 — but before the giving of royal assent — the Clerk of the Legislative Council, Laurie Marquet, sought a declaration that the new legislation was invalid for failure to satisfy the absolute majority requirement. The Supreme Court held that the bills had failed to satisfy the manner and form requirement and therefore could not be presented for royal assent. An appeal to the High Court failed: see further 2.11.39C. In June 2004, a Liberal MLC, Alan Cadby, resigned after he was disadvantaged by a pre-selection process. The one vote one value bill was passed with Cadby’s support after Labor agreed to guarantee five seats for the ‘Mining and Pastoral Region’ that had been favoured by malapportionment. This guarantee was effected by expanding the size of the assembly from 57 to 59 seats. Malapportionment remains in the assembly, but now operates in six geographically large non-metropolitan seats rather than the previous 23 non-metropolitan seats. Malapportionment has in fact increased in the council, with the 36 seats available being elected from only three metropolitan and three

non-metropolitan constituencies allowing, in the worst case, a vote weighting of 4.6 to 1 (that is, a voter in one of the nonmetropolitan electorates has 4.6 times the voting power of a voter in a metropolitan electorate). In Victoria, amendments to the Constitution Act 1975 made by the Constitution (Parliamentary Reform) Act 2003 seek to entrench the independence of the Electoral Commissioner and the integrity of the processes established by the Electoral Act 2002: see Constitution Act 1975 (Vic) ss 94F, 94G. [page 124] The redistribution systems established in South Australia and New South Wales include a genuinely independent commission whose decisions are implemented automatically, a basic criterion of one vote one value and, most significantly, protection of the systems against legislative interference. A challenge to the constitutional validity of the South Australian system was dismissed by the Privy Council in Gilbertson v Attorney-General (SA) [1978] AC 772. 2.6.9 A number of the key procedures regarding the allocation and distribution of seats in the House of Representatives (outlined at 2.6.3–2.6.5) were amendments made to the Commonwealth Electoral Act 1918 (Cth) in the aftermath of McKinlay’s case. The case involved three separate suits where voters sought declarations that various sections of the Commonwealth Electoral Act (as it then stood) were invalid because they were inconsistent with the first paragraph of s 24 of the Constitution, and that the boundaries

of several House of Representatives electorates in Victoria, Queensland and South Australia were not fixed according to law. The Commonwealth Electoral Act provided for the distribution and redistribution of House of Representatives electorates within each state. The Act provided, in s 18, that the number of electors in a state should be divided by the number of members to be returned for the state, thus establishing a quota. Section 19 directed the Distribution Commissioners to give due consideration to a range of factors, and not to depart from the ‘quota’ (the average number of voters in each Division) ‘to a greater extent than onetenth more or one-tenth less’. Sections 24 and 25 of the Commonwealth Electoral Act provided that any proposed distribution required the approval of both Houses of Parliament and a proclamation by the GovernorGeneral to be effective. Until such approval and proclamation, the old distribution remained in force. House of Representatives seats for all states other than Western Australia had last been redistributed during 1968. According to evidence before the High Court, the ratios between the current enrolments in the largest and smallest electorates were 2:1 (Queensland), 1.8:1 (Victoria) and 1.7:1 (South Australia). The evidence on this disparity was obscure; it is not clear whether the evidence was drawn from voting figures from the election of 18 May 1974 or from more recent electoral office returns: 135 CLR at 39 per McTiernan and Jacobs JJ; 63–4 per Murphy J. During the hearing of these challenges, two of the plaintiffs amended their statements of claim to seek further declarations that parts of the Representation Act 1905 (Cth) were also invalid due to inconsistency with the second paragraph of s 24 of the Constitution. These provisions of the Representation Act dealt

with the allocation and reallocation of House of Representatives seats between the six states, a process which is, logically, preliminary to the distribution process laid down in the Commonwealth Electoral Act. According to s 2 of the Representation Act, the Chief Electoral Officer was to ‘ascertain the numbers of the people of the Commonwealth, and … of the several States’. He was to rely on the latest Commonwealth census (ss 3(1), 4(1)); a census was to be held every 10th year ‘or at such other time as is prescribed’: Census and Statistics Act 1905 (Cth) s 8. The Chief Electoral Officer was then to divide the number of people of the Commonwealth by twice the number of senators, thus producing a ‘quota’. The population of each state was then to be divided by the quota to produce the allocation of members for that state, allowing an extra member for any remainder: Representation Act ss 9, 10. However, any alteration in the number of members to be chosen from a state was not to take effect until the government, the Distribution Commissioners and the Houses of Parliament had [page 125] initiated, conducted and endorsed a redistribution of electorates for that state: Representation Act s 12(a), with Commonwealth Electoral Act ss 24, 25. The last such reallocation had been made in 1974, giving Western Australia an extra seat, based on the 1971 census. 2.6.10C Attorney-General (Cth) (Ex rel McKinlay) v Commonwealth

(1975) 135 CLR 1 [McTiernan and Jacobs JJ held that the relevant sections of the Representation Act were valid, but said that s 12(a) could not validly operate so as to defeat the requirement of s 24 of the Constitution that the number of members chosen in the respective states should be in proportion to the respective numbers of their people. On the validity of the system of electoral redistribution in the Commonwealth Electoral Act, they said that the words ‘chosen by the people’ in s 24 expressed a constitutional requirement but were not words which could be rewritten or paraphrased in an exact manner:] McTiernan and Jacobs JJ: The words embrace the notion of equality of numbers in so far as the choice of members must be by the people of the Commonwealth. Inequality of distribution of numbers between districts or divisions in respect of which members are chosen is one factor which may lead to a choice on the basis of such an unequal distribution being unable to be described as a choice by the people of the Commonwealth … The words ‘chosen by the people of the Commonwealth’ fall to be applied to different circumstances at different times and at any particular time the facts and circumstances may show that some or all members are not, or would not in the event of an election, be chosen by the people within the meaning of these words in s 24. At some point choice by electors could cease to be able to be described as a choice by the people of the Commonwealth. It is a question of degree. It cannot be determined in the abstract … For instance, the long established universal adult suffrage may now be recognized as a fact and as a result it is doubtful whether, subject to the particular provision in s 30, anything less than this could now be described as a choice by the people. But there is nothing in our history and our development as a nation which would require that before a member be described as

chosen by the people of the Commonwealth absolute or as nearly as practicable absolute equality of numbers of the people exist in every constituted electoral district in a State. Even though the notion of equality is present the matter remains one of degree. [McTiernan and Jacobs JJ said that there was no inconsistency between some inequality in electorates and the constitutional requirement in s 24: ‘A margin of one-tenth is not one which in these circumstances takes away the quality of choice which s 24 of the Constitution enjoins’: 135 CLR at 37. However, McTiernan and Jacobs JJ said no provision in the Commonwealth Electoral Act ‘can validly operate in so far as by such an operation members of the House of Representatives would not on a general election be chosen by the people of the Commonwealth’: 135 CLR at 38. They then considered the ‘substantial inequalities’ that had developed in three states, South Australia, Victoria and Queensland. They noted that, in Queensland, the division largest in number of electors in May 1974 had almost twice the number of electors as the division with the smallest number and had 38.5 per cent more electors than the quota under s 19 of the Commonwealth Electoral Act. That variation from equality was not ‘such that a choosing of members by those divisions is not a choosing of [page 126] members by the people within the meaning of s 24 of the Constitution’: 135 CLR at 39. McTiernan and Jacobs JJ then turned to the United States authorities:] On the words of Art I s 2 of the Constitution of the United States of America the Supreme Court has determined that ‘chosen … by the people of the several States’ requires that as nearly as practicable one man’s vote in a congressional election must be worth as much as another’s: Wesberry v Sanders 376 US

1 (1964). The facts were that Georgia’s Fifth Congressional District, one of ten, had a population of 832,680. The average population of the ten districts was 394,312 and one district had a population of only 272,154. The district was thus ‘grossly out of balance’ with other congressional districts of Georgia (per Clark J 376 US 19 (1964)). Although the actual result in Wesberry v Sanders may well be the result which would follow from the application to those facts of the principle which we have earlier suggested, the requirement in the reasoning of the majority that there be ‘as near as practicable’ equality postulates a degree of equality which goes beyond what we would accept as applicable to our Constitution. Gibbs J: If the words of s 24 are read in their natural sense, without seeking for implications or hidden meanings, they appear to have nothing whatever to do with the determination of electoral divisions within a State. The plaintiffs rest their submission on the opening words of the section. Those words require the House of Representatives to be ‘composed of members directly chosen by the people of the Commonwealth’. It is said that the members must be chosen by, or perhaps more precisely by electors representing, all the people, and that it must be implied or inferred that all people are to be placed on the same footing, so that each member will represent the same number of people or at least of electors. Further, it is said that the section is intended to ensure that the House of Representatives is elected on democratic principles and that such principles require that electoral divisions should contain equal numbers of people or of electors. We have to decide whether s 24, properly interpreted, does have this effect. If it does not, we are not justified in importing new requirements into it simply because, as a matter of policy, they may seem to be desirable. Our duty is to declare the law as enacted in the Constitution and not to add to its provisions new doctrines which may happen to conform to our own prepossessions.

The obvious purpose of the opening words of s 24 is to ensure that members of the House of Representatives are chosen directly by popular vote, and not by some indirect means, such as by the Parliament or Executive Government of a State, or by an electoral college. When the section says that members shall be chosen ‘by the people’ it cannot mean by all the people of the Commonwealth — obviously it means by those people who are qualified to vote … It clearly appears from other sections of the Constitution — ss 25, 30, 41 and 128 — that it was recognised that people might constitutionally be denied the franchise on the ground of race, sex or lack of property — the Constitution goes no further than to ensure that an adult who has the right to vote at elections for the more numerous House of the Parliament of a State shall not be prevented by a law of the Commonwealth from voting at elections for either House of the Parliament of the Commonwealth: s 41 … Even if, contrary to what I have said, ‘people’ in s 24 did mean all people, the further construction that the plaintiffs seek to put on the section could not be justified. The section says nothing in terms as to the weight to be given to the votes of those people who cast them. It does not mention equality. Moreover, the concluding words of s 24, by providing a minimum number of members for each original State, create an exception to the rule that the number of members chosen in the [page 127] several States shall be in proportion to the respective numbers of their people, and have the result that so long as the population of any State is so small that its representation, if fixed proportionately, would be less than five, it will be impossible to achieve equality in the number of people or of electors in electoral divisions throughout Australia. … Neither in 1901 nor subsequently has there been a universal

recognition of the so-called principle that electorates should be numerically equal. Gibbs CJ referred to the historical disparities in the size of House of Commons electorates, as well as those of colonial and state parliaments. No doubt most people would agree that for the healthy functioning of a democratic system of government it is desirable that the electorate should be fairly apportioned into electoral districts whose boundaries are not gerrymandered, that the ballots should be secretly and honestly conducted, that the vote should be fairly counted and that corrupt electoral practices should be suppressed, but opinions may well differ as to how these ideals should be attained. The Constitution does not lay down particular guidance on these matters; the framers of the Constitution trusted the Parliament to legislate with respect to them if necessary, no doubt remembering that in England, from which our system of representative government is derived, democracy did not need the support of a written constitution … [Gibbs J referred to several decisions of the United States Supreme Court, to the effect that art 1, s 2 of the United States Constitution (expressed in terms similar to s 24) required an equality of voters in electorates for the Federal House of Representatives: Wesberry v Sanders 376 US 1 (1964); Kirkpatrick v Preisler 394 US 526 (1969); Wells v Rockefeller 394 US 542 (1969); White v Weiser 412 US 783 (1973). He said that the United States decisions had ‘provoked strong differences of opinion between eminent judges in the Supreme Court of that nation’; but ‘they cannot assist us in the construction of our Constitution’: 135 CLR at 47. He concluded that the attack on ss 19, 24 and 25 of the Commonwealth Electoral Act failed. His Honour turned to the question whether ss 2, 3, 4 and 12 of the Representation Act were invalid because they contravened the second paragraph of s 24 of the Constitution.] The second paragraph of s 24 of the Constitution

commences by laying down what appears to be an unqualified rule, namely, ‘The number of members chosen in the several States shall be in proportion to the respective numbers of their people’ … Although those words are on their face absolute, there are other constitutional requirements, equally absolute and no less important, that must also be observed. ‘Every House of Representatives shall continue for three years from the first meeting of the House, and no longer, but may be sooner dissolved by the Governor-General’: s 28. Writs for general elections of members of the House of Representatives ‘shall be issued within ten days from the expiry of a House of Representatives or from the proclamation of a dissolution thereof’: s 32. These requirements lie at the very heart of our system of government, and in the event of a conflict would necessarily prevail over s 24. For example, an election could not be postponed, when otherwise necessary, simply because the number of members to be chosen in the several States had not been determined on the basis of the most recent reliable figures. The apparently absolute words of s 24 may therefore need some qualification to enable them to work in harmony with the rest of the Constitution. When the Parliament exercises its power to provide for the manner in which a determination of the number of members to be chosen in the several States is made under s 24, there are a number of practical questions to which it must direct its attention … [page 128] Two … questions that will arise for the consideration of the Parliament are how frequently the determination is to be made, and how the respective numbers of the people of the States are to be ascertained. The Representation Act, in its present form, answers these questions by relating both the making of the determination and the ascertainment of the numbers to the

census … Under legislation now in force it is provided that the census is to be taken ‘in the year One thousand nine hundred and eleven and in every tenth year thereafter or at such other time as is prescribed’: s 8 of the Census and Statistics Act 1905–1973 (Cth). Although the regulation-making power has in recent years been used to bring about a census every five, instead of every ten, years, it would of course be lawful to prescribe that the census should be taken much less frequently. The relevant words of s 24 of the Constitution require that the ‘number of members chosen in the several States shall be’ in the requisite proportion. These words naturally suggest that the proportion is to exist on each occasion when the members are chosen, ie each time an election is held. To ensure that this requirement is observed, it appears necessary that a new determination should be made within a reasonably short time before every election … This would present no difficulty if the House of Representatives continued for its normal term of about three years. The making of a determination could be set in train at a fixed time after the first meeting of any Parliament, so that the determination would be available for use at the next election. This would mean that the census would not always provide the latest reliable statistics from which to ascertain the numbers of the people of the States. However, the Constitution requires that the number of members chosen should be in the correct proportion, and it does not require that census figures should be used. The constitutional requirement must be given effect, notwithstanding that on some occasions statistics other than those provided by the census may have to be used in ascertaining the numbers. It appears to me that laws made by the Parliament to provide the manner in which the number of members chosen in the several States shall be determined cannot validly permit of any evasion of the requirement that a determination must be made within a reasonable time before each election. That means that when the House continues for its normal term, a determination must be made during the period of three years or less for which it continues …

Consistently with the opinions I have expressed it must be held that ss 3 and 4 of the Representation Act are invalid because their effect is to require a determination to be made only when a census is taken and not before every regular election. The provisions of s 12(b) are, however, in my opinion, valid. When a vacancy arises in the House and a by-election has to be held there is no occasion to choose members in the several States. The by-election merely restores to the State in which it is held the representation to which it was previously entitled. It maintains the status quo. There is no need to apply to such an election a determination altering the number of members to be chosen in the various States. The provisions of s 12(a) would in my opinion be valid if the section went on to provide a procedure, or if it operated in a context, which ensured that redistribution would take place with all due diligence should the need for it become manifest as a result of the furnishing of a certificate under s 6 of the Representation Act and of the determination under s 9 that follows from it. However, the combined effect of s 12(a) of the Representation Act and ss 24 and 25 of the Commonwealth Electoral Act is that no redistribution need ever be made and that the determination might never take effect. For this reason, in my opinion, s 12(a) is invalid. Although it is obvious, it should be remarked that it does not follow from the fact that the Representation Act is in part invalid that the numbers chosen in the several States in the past have not been in their correct proportion. Even if it were established that the numbers were not or are not in their correct proportion (and there is no evidence to that effect), that [page 129] would not mean that elections conducted in the past have been

invalidly conducted, or that an election conducted in future on the basis of the existing determination as to the number of members to be chosen in the several States would be invalid. As I have already pointed out, there is an overriding constitutional duty to hold elections in certain circumstances. There is also a constitutional duty to ensure that each State is proportionately represented in the House of Representatives, but a failure to perform that duty does not invalidate an election held otherwise in compliance with the Constitution. Since, no doubt, the Parliament will act to give effect to the requirements of s 24 now that they have been pointed out, it is unnecessary to consider what remedies might be available if it did not. [Barwick CJ, Stephen and Mason JJ delivered separate judgments to the same effect as Gibbs J. On the validity of the Representation Act, Stephen and Mason JJ adopted the reasons of Gibbs J. However, on the validity of the Commonwealth Electoral Act, Stephen and Mason JJ qualified their rejection of the plaintiff’s argument.] Stephen J: Three great principles, representative democracy (by which I mean that the legislators are chosen by the people), direct popular election, and the national character of the lower House, may each be discerned in the opening words of s 24 … The principle of representative democracy does indeed predicate the enfranchisement of electors, the existence of an electoral system capable of giving effect to their selection of representatives and the bestowal of legislative functions upon the representatives thus selected. However, the particular quality and character of the content of each one of these three ingredients of representative democracy, and there may well be others, is not fixed and precise. I take each in turn. The extent of the franchise; whether it extends to all residents or to all residents over a given age or is restricted, perhaps, to male British subjects over twentyone, maybe with a superadded property qualification and whether more or less replete with disqualifications on grounds of incapacity or criminality or the like, it will none the less

constitute an enfranchisement of electors. The electoral system, with its innumerable details including numbers and qualifications of representatives, single or multi-member electorates, voting methods and the various methods, including varieties of proportional representation, whereby the significance and outcome of the votes cast may be determined; in each there is scope for variety and no one formula can pre-empt the field as alone consistent with representative democracy. Again the wide range of legislative functions which a legislature thus elected may possess is so clear in our federal polity, with its history of a variety of colonial legislatures, that it requires no elaboration. It is, then, quite apparent that representative democracy is descriptive of a whole spectrum of political institutions, each differing in countless respects yet answering to that generic description. The spectrum has finite limits and in a particular instance there may be absent some quality which is regarded as so essential to representative democracy as to place that instance outside those limits altogether; but at no one point within the range of the spectrum does there exist any single requirement so essential as to be determinative of the existence of representative democracy. Mason J: All that the paragraph in s 24 requires is that there should be a direct choice of the members by the people — a prescription which does not cease to be satisfied because there is some, or even a marked, variation in the number of persons or electors in the electoral divisions within a State. The existence of such variations does not detract from the accuracy of the description of our existing electoral system as one in which the members of the House are directly chosen by the people of the Commonwealth. [page 130]

It is perhaps conceivable that variations in the numbers of electors or people in single member electorates could become so grossly disproportionate as to raise a question whether an election held on boundaries so drawn would produce a House of Representatives composed of members directly chosen by the people of the Commonwealth, but this is a matter quite removed from the proposition that s 24 insists upon a practical equality of people or electors in single member electorates. [Murphy J held that s 12(a) of the Representation Act was invalid. His Honour did not consider the validity of ss 3 and 4. On the Commonwealth Electoral Act he said that the words ‘chosen by the people’ in s 24 ‘should be construed in the same way as it was by the United States Supreme Court but having as the standard of equality the alternatives of equal numbers of people and equal numbers of electors’: 135 CLR at 70–1. He cited seven factors that led him to this conclusion:] Murphy J: … (a) The obvious importance placed on the phrase by its positioning in the opening sentence of that part of the Constitution devoted to the House of Representatives, and the fact that it is expressed in the language of command. (b) The democratic theme of equal sharing of political power which pervades the Constitution. In 1902, the authority on the Constitution, Professor W Harrison Moore wrote: ‘The predominant feature of the Australian Constitution is the prevalence of the democratic principle, in its most modern guise.’ (Constitution of the Commonwealth of Australia, 1st ed (1902), p 327) and ‘The great underlying principle, is, that the rights of individuals are sufficiently secured by ensuring, as far as possible, to each a share, and an equal share, in political power.’ (My emphasis.) (Ibid, p 329.)

(c) The reference is to the ‘people of the Commonwealth’, which emphasises the intention of sharing of political power. (d) The absence of any other means of redress for those deprived of an equal share of representation, even where it is grossly unequal … History here and elsewhere reveals that with few exceptions, legislators who hold office because of an unbalanced electoral system will not act to change the system. The more unbalanced it becomes, the more severe are the consequences of correction and the more reluctant are the legislators to change it. (e) The fact that the phrase was taken directly from the United States Constitution. The construction placed upon it by the United States Supreme Court that it commands electoral equality is compelling in its reasoning and applicable to our Constitution … (f) The automatic result of equal representation for equal numbers of people and of electors follows when representatives are chosen on the basis provided by s 29: ‘In the absence of other provision, each State shall be one electorate.’ (In the election for the first Parliament, two of the States were single electorates.) As the United States Supreme Court has observed, it would be extraordinary and unacceptable to suggest that in such a State-wide election, the votes cast in some parts could be weighted at two or three times the value of votes cast by those living in more populous parts of the State: We do not believe that the Framers of the Constitution intended to permit the same vote diluting discrimination to be accomplished through the device of districts containing widely varied

numbers of inhabitants. Wesberry v Sanders 376 US 8 (1964) 11 Law Ed 2d 487. [page 131] (g) The fact that the laws made by the Parliament pursuant to ss 29 and 30 are subject to the Constitution, and therefore subject to the commands in s 24. [Murphy J then turned to the question whether equality was to be measured in people or electors:] In my opinion, the standard of equality is to be measured in each State in numbers of electors rather than numbers of people. The emphasis in ‘chosen by the people’ in s 24 is on a choosing by all the people capable of choosing, that is, the electors. The number of members in each State is to be proportionate (subject to the minimum) to the population of each State. But in the choosing in each State, the electors share the voting power equally, whether the State is one electorate or in divisions. This view is supported by the reasoning in the United States cases which refer repeatedly to equality of voting power and similar expressions as the principle underlying the command. It is reinforced by the ‘one person, one vote’ mandate in s 30 of the Constitution.

2.6.11 The judgment of the United States Supreme Court in Wesberry v Sanders 376 US 1 (1964) asserted the constitutional principle that ‘one man’s vote in a congressional election is to be worth as much as another’s’ (376 US at 7), and refers to the intention of the framers that ‘population … was to be the basis of the House of Representatives’: 376 US at 9. The electoral

distribution struck down in Wesberry was for electorates within the state of Georgia for the federal House of Representatives. In Georgia, the ratio of the largest to smallest electorate was 3:1, whereas it was 2:1 in Queensland. In McKinlay’s case, McTiernan and Jacobs JJ stated that the principle that they favoured ‘may well’ have achieved the same result as arrived at in Wesberry (135 CLR at 39) but would not invalidate the Queensland distribution. Why not? What is the substantial distinction between the two situations? 2.6.12 McTiernan and Jacobs JJ, in their joint judgment, found that s 24(1) of the Commonwealth Electoral Act and s 12(a) of the Representation Act had the potential to frustrate the mandates contained in s 24 of the Constitution, that the House of Representatives should be chosen by the people of the Commonwealth and that the number of members chosen in the several states should be in proportion to the respective numbers of their people. However, they did not declare those sections to be invalid; rather, they declared that the two provisions could not validly operate so as to frustrate the requirements of s 24 of the Constitution. What is the difference between that approach and the approach adopted by, say, Gibbs J, who held that s 12(a) of the Representation Act was invalid? What would be the practical effect of a declaration such as that proposed by McTiernan and Jacobs JJ? Could it be said that it sacrifices certainty in the interests of flexibility? See ‘Constitutional Validity of Legislation According to the Circumstances’ (1976) 50 ALJ 205 at 205–6. 2.6.13 How might the requirement, accepted by all members of the High Court, that the members chosen for the several states should be in proportion to the population of the states, be enforced? Is it a requirement that the court is equipped to enforce? Note that Gibbs J discounted the possibility of invalidating any

election based on an unconstitutional allocation of seats and said that it was ‘unnecessary to consider what remedies might be available if parliament did not … act to give effect to the requirements of s 24 now that they have been pointed out’: 135 CLR at 53. [page 132] 2.6.14 In 1988, the Constitutional Commission expressed the view that ‘one vote one value is a fundamental principle of democracy’, but conceded that a tolerance of ±10 per cent ‘represents a reasonable application of that principle’: Constitutional Commission, 1988, p 154. The commission recommended that the Commonwealth Constitution should be amended to ‘require that electoral divisions be determined at such times as are necessary to ensure that the principle of one vote one value with +10% tolerance is maintained’ for Commonwealth, state and territory electorates. ‘For reasons of practicality’, the commission said, ‘any provision to entrench the principle of one vote one value in the Constitution should refer to the number of electors and not persons in an electorate’: Constitutional Commission, 1988, p 155. The commission concluded (p 155): We accept that a + 10 per cent tolerance will not of itself ensure the realisation of the principle of equal suffrage. It does not, for example, address the problem of gerrymanders. However, it will correct the gross discrepancies that exist now. Very importantly, the + 10 per cent tolerance is the best practical formulation of a general principle. It avoids the interpretational problems associated with the phrase ‘as nearly as

practicable, the same’. Perhaps absolute equality is not achievable. Our aim is to entrench a reasonable standard of political equality in the Constitution. Although some of us would prefer to set a + 5 per cent tolerance, we agree that the + 10 per cent tolerance is an acceptable guarantee at this time.

In June 1988, the House of Representatives and the Senate passed the Constitution Alteration (Fair Elections) Act 1988 (Cth) which would have, inter alia, given effect to the commission’s recommendation by inserting ss 124A–124F into the Commonwealth Constitution. At a referendum held on 3 September 1988, this proposal was rejected by the voters. 2.6.15 The High Court’s recognition of the constitutional principle of representative democracy in Nationwide News Ltd v Wills (1992) 177 CLR 1 (see 10.2.1) and Australian Capital Television Pty Ltd v Commonwealth (No 2) (1992) 177 CLR 106 10.3.5C appeared to raise the possibility that the court would find in s 24 of the Constitution a guarantee of electoral equality. If, in the words of Deane and Toohey JJ in Nationwide News Pty Ltd v Wills, the Constitution required that ‘all citizens of the Commonwealth who are not under some special disability are entitled to share equally in the exercise of those ultimate powers of governmental control’ (177 CLR at 71–2), then equality of voting power might be thought to be constitutionally required. 2.6.16 However, the High Court’s decision in McGinty v Western Australia (1996) 186 CLR 140 1.2.27C cast serious (perhaps fatal) doubt on that prospect. A majority of the court (Brennan CJ, Dawson, McHugh and Gummow JJ; Toohey and Gaudron JJ dissenting) held that there was no constitutional requirement, whether derived from s 24 of the Commonwealth

Constitution or from the Constitution Act 1889 (WA), that demanded that electorates for the Western Australian Parliament have equal numbers of voters. Three members of the majority (Dawson, McHugh and Gummow JJ) said that neither the principle of representative democracy nor the language of s 24 required equality of value for House of Representatives votes. McHugh J described the Constitution as making ‘the federal Parliament the final arbiter of the question of the relative size of electorates just as it makes federal Parliament the final arbiter on whether there should be universal suffrage, secret ballot, preferential or proportional voting [page 133] or first past the post voting’: 186 CLR at 244. Moreover, ss 29 and 30 of the Commonwealth Constitution, electoral practices in Australia and Great Britain at the time of federation, and various constitutional provisions that authorised unequal voting power made it ‘impossible to hold that the Constitution requires equality of electoral districts’: 186 CLR at 245. Brennan CJ assumed, without deciding, that there was such a principle, but held that it did not extend to the state parliaments: 186 CLR at 175–6. Dawson J said that, beyond requiring direct choice, the Constitution left the matter of electoral systems to the Commonwealth Parliament: 186 CLR at 184. Gummow J said that the reference in s 24 to ‘directly chosen by the people of the Commonwealth’ was a broad expression requiring a popular vote; other provisions in the Constitution (ss 24–30) left the matter at large to be resolved by the parliament; and McKinlay

stood for the proposition that s 24 did not require equality in electoral divisions (186 CLR at 279); and he observed that ‘the Constitution did not entrench the secret ballot, compulsory voting, preferential or proportional voting, nor any universal adult suffrage’: 186 CLR at 283. 2.6.17 Attorney-General (NSW) (Ex rel McKellar) v Commonwealth (1977) 139 CLR 527 raised the validity of sections of the Representation Act 1905 (Cth) that had not been questioned in McKinlay’s case 2.6.10C. The plaintiff sought a declaration that ss 1A and 10 of the Representation Act were invalid: 1A In this Act, ‘the people of the Commonwealth’ does not include the people of any Territory. … 10 For the purpose of determining the number of members of the House of Representatives to be chosen in the several States, the following procedure shall be followed: (a) A quota shall be ascertained by dividing the number of people of the Commonwealth, as shown by the certificate (for the time being in force) of the Chief Electoral Officer, by twice the number of Senators for the States. (b) The number of Members to be chosen in each State shall, subject to the Constitution, be determined by dividing the number of people of the State, as shown by the certificate (for the time being in force) of the Chief Electoral Officer, by the quota; and if on such division there is a remainder, one more Member shall be chosen in the State.

The court (Barwick CJ, Gibbs, Stephen, Mason, Murphy and Aickin JJ) unanimously held that s 1A was valid. Gibbs, Stephen, Mason, Jacobs and Murphy JJ held that s 10(a) was valid. When

determining the number of seats available to be divided between the six states, and when making that division, s 24 of the Constitution required the population of the territories and any representation of the territories in the parliament to be excluded from the calculations. Stephen J explained (139 CLR at 553): In such a process, concerned exclusively with the States, the population figures of entities other than the States would seem to have no part to play, any more than would the number of representatives of those populations. Each appears to be wholly irrelevant to the subject matter of the second paragraph of s 24, the ensuring of proportionality of representation for each State. The subject matter of the second paragraph, ‘the number of members to be chosen in the several States’, being devoted exclusively to a subject matter of concern only to the States, one would expect that in any formula devised for the ascertainment of those numbers its components would comprise matters exclusively relevant to the States. On this

[page 134] view the ‘people of the Commonwealth’ referred to in sub-para (i) would be confined to people of the States and the reference to senators would be similarly restricted.

However, the whole court concluded that s 10(b), as it then read, was invalid. Two reasons were offered for this conclusion: Section 24 of the Constitution required that the number of members of the House of Representatives should be, as nearly as practicable, twice the number of the senators. All the justices agreed that the addition of an extra member to the number of members allocated to any state, if there was

‘a remainder’ after its population had been divided by the quota, was likely to defeat that ‘nexus’ requirement of s 24. Section 24 of the Constitution also required that the number of members of the House of Representatives allocated to each state should be in proportion to its population. Stephen, Mason, Jacobs and Aickin JJ held that the addition of an extra member to the number of members allocated to any state if there was ‘a remainder’ after its population had been divided by the quota, was also likely to defeat that ‘proportionality’ requirement of s 24. Barwick CJ, Gibbs and Murphy JJ did not commit themselves on this point. Until 1964, s 10(b) had adopted the method of dealing with ‘remainders’ used (pending the parliament ‘otherwise providing’) in s 24 of the Constitution; that is, an extra member was only to be allocated to a state if, after dividing its population by the quota, there was a remainder greater than one-half of the quota. The court decided that the Representation Act 1964 (Cth), by which s 10(b) was amended to its current form, was invalid. Consequently, s 10(b) stayed as it had read before the 1964 amendment. In that form, it was fully consistent with s 24 of the Constitution and was therefore valid. 2.6.18 One consequence of the decision in McKellar’s case was that, since 1964, the House of Representatives had been constituted in a way inconsistent with s 24 of the Constitution, that is, it had too many members. Could such a conclusion be used to attack the validity of any of the proceedings in parliament or legislation produced by parliament in that period? As one might

expect, the courts have always been reluctant to allow arguments of this type to be pressed to their logical conclusions. For example, in Victoria v Commonwealth (PMA case) (1975) 134 CLR 81 2.10.25C, the High Court held that the joint sitting procedure of s 57 of the Constitution could not be used to enact legislation unless there had been strict compliance with all the preliminary processes. But the judges who came to this conclusion would not agree that the election of parliament following a defective double dissolution could be impugned on the basis of failure to comply with those preliminary processes. Gibbs J said that, assuming an invalid dissolution (purportedly under s 57) of both houses and a consequential election, he could ‘see no difficulty in holding that the new Parliament would have validly assembled’: 134 CLR at 157. Similar observations were made by Barwick CJ (134 CLR at 120), Stephen J (134 CLR at 178) and, more equivocally, Mason J: 134 CLR at 183–4. For a similar approach, see Clayton v Heffron (1960) 105 CLR 214 at 247 2.10.15C; Simpson v Attorney-General [1955] NZLR 271.

PARLIAMENTARY PRIVILEGES 2.7.1 The houses of the several Australian parliaments, their committees and their members are recognised as possessing certain legal powers, privileges and immunities, which are generally [page 135] described as parliamentary privileges. For the most part, the privileges are derived from specific legislative grants, such as the

Commonwealth Constitution s 49 or the Constitution Act 1975 (Vic) s 19(1). The terms in which most of the legislative grants have been expressed refer to the privileges of the House of Commons in the United Kingdom Parliament at Westminster. The privileges of the House of Commons developed over many centuries of confrontation, negotiation and compromise between that house, on the one hand, and the Crown, the law courts and the House of Lords on the other. In the United Kingdom, parliamentary privilege is described as part of the law and custom of parliament, whose existence and validity are recognised by the courts but which is, in general, enforced by the Houses of Parliament and not by the courts: de Smith, 1981, p 315. 2.7.2 On the establishment of colonial legislatures in Australia in the mid-19th century, it was argued by some colonial parliamentarians that the privileges of the House of Commons had passed to their institutions. The courts consistently expressed the view that there was no wholesale transfer to the colonial legislatures of the privileges of the House of Commons: Kielley v Carson (1842) 4 Moo PC 63; 113 ER 225; Fenton v Hampton (1858) 11 Moo PC 347; 14 ER 727; Doyle v Falconer (1866) LR 1 PC 328 at 339; Barton v Taylor (1886) 11 App Cas 197 at 203; Norton v Crick (1894) 15 LR (NSW) 172. However, the courts accepted that the colonial (now state) legislatures inherited those privileges of the House of Commons that were reasonably necessary to their existence and the proper exercise of their functions and duties: Kielley v Carson (1842) 4 Moo PC 63 at 88, 92; 113 ER 225 at 234, 236; Armstrong v Budd (1969) 71 SR (NSW) 386. This relatively restrictive view of the privileges of colonial legislatures

prompted most of the Australian parliaments to legislate so as to declare their privileges in expansive terms.

Commonwealth Parliament 2.7.3E

Commonwealth Constitution

49 The powers, privileges, and immunities of the Senate and of the House of Representatives, and of the members and the committees of each House, shall be such as are declared by the Parliament, and until declared shall be those of the Commons House of Parliament of the United Kingdom, and of its members and committees, at the establishment of the Commonwealth.

2.7.4 The Commonwealth Parliament has exercised the power to declare certain aspects of the parliament’s powers, privileges and immunities in the Parliamentary Privileges Act 1987 (Cth): see 2.7.6–2.7.8. That Act declares that it is not intended to displace the existing powers, privileges and immunities of each house, and of the members and committees of each house, as in force before the commencement of the Act, except to the extent that the Act expressly provides otherwise: s 5. In addition, specific powers to administer oaths and affirmations to witnesses have been conferred on two joint committees of the Commonwealth Parliament: Public Works Committee Act 1969 (Cth) s 20(1); Public Accounts and Audit Committee Act 1951 (Cth) s 10(1).

[page 136] The Parliamentary Papers Act 1908 (Cth) provides for the publication of parliamentary papers and protects the printer and publisher of those papers from any liability arising out of the publication. Further, the Parliamentary Proceedings Broadcasting Act 1946 (Cth) authorises the broadcast of parliamentary proceedings and gives immunity from civil or criminal liability for the broadcasting of any part of those proceedings. Accordingly, the parliament’s powers, privileges and immunities derive from three sources: the powers, privileges and immunities held by the House of Commons on 1 January 1901 (the date at which the Australian Constitution came into operation); the Parliamentary Privileges Act 1987; and legislation conferring particular powers, privileges or immunities. The establishment of parliamentary committees and sources of power to establish inquiries is extensively reviewed in Lindell, 1995. The nature and scope of the powers, privileges and immunities conferred on the parliament by s 49 of the Constitution was explored in the R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157. The case involved the extraordinary power of the parliament to charge, adjudicate and punish (which involved imprisonment) for a serious breach of privilege; namely, contempt of parliament occasioned by a newspaper owner and a journalist for publication of an article that made serious allegations regarding the conduct of a member of the House of Representatives.

Fitzpatrick and Browne had been taken into custody by Richards, the Chief Commissioner of Police at Canberra, who was acting on warrants issued by the Speaker of the House of Representatives. The warrants asserted that the House of Representatives had, on 10 June 1955, resolved that Fitzpatrick (in the case of one warrant) and Browne (in the case of the second warrant), ‘being guilty of a serious breach of privilege, be for his offence committed to the custody of the … Chief Commissioner of Police … and that he be kept in custody until the tenth day of September, 1955, or until earlier prorogation or dissolution’, and directed Richards to execute the warrants by taking Fitzpatrick and Browne into custody and keeping them in custody until 10 September 1955 or until the earlier prorogation or dissolution of the parliament. Fitzpatrick and Browne applied to the High Court for writs of habeas corpus. 2.7.5C R v Richards; Ex parte Fitzpatrick and Browne (1955) 92 CLR 157 Dixon CJ, McTiernan, Williams, Webb, Fullagar, Kitto and Taylor JJ: The Speaker’s warrants were, as they say on their face, issued pursuant to resolutions of the House. The basis upon which the House appears to have proceeded and upon which the warrants were issued is that the Parliament has not declared so far the powers, privileges, and immunities of the Senate and of the House of Representatives, and that the latter part of s 49 is in operation, with the consequence that the powers of the House of Representatives are those of the Commons House of Parliament of the United Kingdom and of its members and committees at the establishment of the Commonwealth. The question, what are the powers, privileges and immunities of the Commons House of Parliament at the establishment of the

Commonwealth, is one which the courts of law in England have treated as a matter for their decision. But the courts in England arrived at that position after a long course of judicial decision not unaccompanied by political controversy. The law in England was finally settled about 1840. [page 137] … Stated shortly, it is this: it is for the courts to judge of 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. The judgment of the House is expressed by its resolution and by the warrant of the Speaker. If the warrant specifies the ground of the commitment the court may, it would seem, determine whether it is sufficient in law as a ground to amount to a breach of privilege, but if the warrant is upon its face consistent with a breach of an acknowledged privilege it is conclusive and it is no objection that the breach of privilege is stated in general terms. This statement of law appears to be in accordance with cases by which it was finally established, namely, the case of the Sheriff of Middlesex (1840) 11 Ad & E 273 113 ER 419. So far as this country is concerned, it is established authoritatively by the decisions of the Privy Council in Dill v Murphy (1864) 1 Moo PC (NS) 487 15 ER 784 and in Speaker of the Legislative Assembly of Victoria v Glass (1871) LR 3 PC App 560. In the present case the warrant would clearly be sufficient if it had been issued by the Speaker of the House of Commons in pursuance of the resolution of that House. Indeed, the contrary is not urged. It would be sufficient because it recites in each case that the person concerned has been guilty of a serious breach of privilege and it recites a resolution to that effect, and the

resolution proceeds that for his offence he be committed to the custody of the person for the time being performing the duties of Chief Commissioner of Police at Canberra, or to the custody of the Keeper of the Gaol at such place as Mr Speaker from time to time directs. The operative words of the warrant directed to Mr Richards are these: — ‘These are therefore to command you the said Edward Richards to receive the said Raymond Edward Fitzpatrick’ (in one case) ‘and Frank Courtney Browne’ (in the other) ‘into your custody and with such assistance as you may require to keep him in your custody subject to any direction given by me in pursuance of the said resolution until’ the dates and the events which are mentioned. Now, if, under the law which we have attempted to describe, that warrant were produced to a court sitting in London, as we are here, as a warrant of the House of Commons, it would be regarded by the court as conclusive of what it states, namely, that a breach of privilege had been committed and that the House, acting upon that view, had directed that the two persons concerned should be committed and the Speaker, accordingly, had issued his warrant. In the ordinary phrase current in the law courts, it would not be possible to go behind that warrant. It states a contempt or breach of privilege in general terms, and not in particular terms, but it is completely consistent with a breach having occurred and it states that one did occur. The question in the case is whether that state of the law applies under s 49 of the Constitution to the House of Representatives. If you take the language of the latter part of s 49 and read it apart from any other considerations, it is difficult in the extreme to see how any other answer could be given to the question than that that law is applicable in Australia to the House of Representatives. For s 49 says that, until the powers, privileges and immunities of the House are declared by Act of Parliament, the powers, privileges and immunities of the House shall be those of the Commons House of Parliament of the United Kingdom at the establishment of the Commonwealth. The language is such as

to be apt to transfer to the House the full powers, privileges and immunities of the House of Commons. As Lord Cairns has said, an essential ingredient, not a mere accident, in those powers, is the protection from the examination of the conclusion of the House expressed by the warrant … The justices referred to an argument that, under the Commonwealth Constitution, it was the duty of the courts to consider whether any act was beyond the power which the [page 138] Constitution assigns to that body. ‘As a general proposition’, they said, ‘the truth of that consideration admits of no denial.’ The answer, in our opinion, lies in the very plain words of s 49 itself. The words are incapable of a restricted meaning, unless that restricted meaning be imperatively demanded as something to be placed artificially upon them by the more general considerations which the Constitution supplies. Added to that simple reason are the facts of the history of this particular branch of the law. Students of English constitutional history are well aware of the controversy which attended the establishment of the powers, privileges and immunities of the House of Commons. Students of English constitutional law are made aware at a very early stage of their tuition of the judicial declarations terminating that controversy, and it may be said that there is no more conspicuous chapter in the constitutional law of Great Britain than the particular matter with which we are dealing. It is quite incredible that the framers of s 49 were not completely aware of the state of the law in Great Britain and, when they adopted the language of s 49, were not quite conscious of the consequences which followed from it. We are therefore of opinion that the general structure of this Constitution, meaning by that the fact that it is an instrument creating a constitution of a kind commonly described as rigid in which an excess of power means

invalidity does not provide a sufficient ground for placing upon the express words of s 49 an artificial limitation … Then it was argued that this is a constitution which adopts the theory of the separation of powers and places the judicial power exclusively in the judicature as established under the Constitution, the executive power in the executive, and restricts the legislature to legislative powers. It is said that the power exercised by resolving upon the imprisonment of two men and issuing a warrant to carry it into effect belonged to the judicial power and ought therefore not to be conceded under the words of s 49 to either House of the Parliament. It is correct that the Constitution is based in its structure upon the separation of powers. It is true that the judicial power of the Commonwealth is reposed exclusively in the courts contemplated by Chap III. It is further correct that it is a general principle of construction that the legislative powers should not be interpreted as allowing of the creation of judicial powers or authorities in any body except the courts which are described by Chap III of the Constitution … The consideration we have already mentioned is of necessity an answer to this contention, namely, that in unequivocal terms the powers of the House of Commons have been bestowed upon the House of Representatives. It should be added to that very simple statement that throughout the course of English history there has been a tendency to regard those powers as not strictly judicial but as belonging to the legislature, rather as something essential or, at any rate, proper for its protection. This is not the occasion to discuss the historical grounds upon which these powers and privileges attached to the House of Commons. It is sufficient to say that they were regarded by many authorities as proper incidents of the legislative function, notwithstanding the fact that considered more theoretically — perhaps one might even say, scientifically — they belong to the judicial sphere. But our decision is based upon the ground that a general view of the Constitution and the separation of powers is not a sufficient reason for giving to these words, which appear to

us to be so clear, a restrictive or secondary meaning which they do not properly bear. [Dixon CJ, McTiernan, Williams, Webb, Fullagar, Kitto and Taylor JJ rejected an argument that s 49 was spent because the parliament had exercised its power to legislate so as to define the privileges of the houses. They rejected as ‘ill-founded’ a further argument that, because no rules or orders had been made under s 50 of the Commonwealth Constitution, the House of Representatives could not exercise its powers and privileges.]

[page 139] 2.7.6 The power conferred on parliament by s 49 of the Constitution was exercised, finally, when the Parliamentary Privileges Act 1987 (Cth) was enacted. It declares that the powers, privileges and immunities of each House of Parliament, their members and committees, as in force under s 49 of the Constitution immediately before the commencement of the Act, continue in force: s 5. Notwithstanding the preservation effected by s 5, the Act limits the powers, privileges and immunities of the Houses of the Commonwealth Parliament in several ways: Section 4 limits the conduct that can amount to an offence against a house, including a contempt of parliament: s 3(3). It appears that the conduct in question must be seen to have an effect, intention or likely effect to interfere with the house’s (or a parliamentary committee’s) authority or function or with a member’s free performance of parliamentary duties.

Section 6 removes the threat that critics of parliament and members formerly faced, of being punished for contempt of parliament by reason of defaming or criticising the parliament, a house, a committee or a member. Section 9 reinforces that removal, and enhances the power of the courts to review and control the exercise of punitive powers by the houses. A general warrant, in the terms issued by the Speaker of the House of Representatives and upheld by the High Court in R v Richards; Ex parte Fitzpatrick and Browne, can no longer be issued. The warrant committing the person to custody must particularise the alleged offence. On the authority of Stockdale v Hansard (1839) 9 Ad & E 1; 112 ER 1112, courts could then determine whether the matters set out in the warrant could in law amount to a contempt of parliament. Section 7 both limits and expands the punitive powers of the parliament. Whereas a house could formerly imprison a person adjudged guilty of contempt for the duration of the current session of parliament, imprisonment is now limited to 6 months but is not affected by the end of the session of parliament. Previously, a house could not impose a fine in punishment of a contempt (R v Pitt (1762) 97 ER 861) but the Act permits the imposition of a fine. 2.7.7 Sections 12 and 13 of the Parliamentary Privileges Act introduce criminal offences that may be tried in the courts. The conduct that constitutes these offences may also be regarded as a contempt of parliament, because in 1901 the House of Commons would have claimed, and been conceded by the courts, the power to

punish intimidation of witnesses and the unauthorised disclosure of evidence: May, 1989, pp 131–2. Section 3A applies the general principles of criminal responsibility set out in Ch 2 of the Criminal Code (Cth) to offences under the Parliamentary Privileges Act but the Code does not apply to an offence against a house, defined to include a breach of the privileges or immunities or a contempt of a house or of the members or committees: see also s 3(3). Neither s 12 nor s 13 removes the power that the Houses of Parliament would have, by virtue of s 49 of the Commonwealth Constitution, of imposing a penalty, consistent with s 7 of the Act, for a contempt of parliament. Could a person who has been dealt with by one of the houses in the exercise of its power to punish for contempt be prosecuted under either of these sections? Or, could such a person plead autrefois acquit or autrefois convict? (That is, that the prosecution in these circumstances would offend the double jeopardy principle.) [page 140] 2.7.8 Section 16 of the Parliamentary Privileges Act underlines the legal immunity of proceedings in parliament declared by the Bill of Rights 1688 (Eng) art 9. In practical terms, the immunity means that members of parliament are protected against any criminal or civil liability that might otherwise arise out of statements made in the course of debates or proceedings in parliament. Members of the parliament cannot be compelled to give evidence before a court or royal commission relating to anything said in the course of debates or proceedings in parliament.

Further, persons who give evidence before a parliamentary committee are similarly protected. A member of parliament is competent, although not compellable, to give evidence that a particular document has been tabled in parliament (Sankey v Whitlam (1978) 142 CLR 1 at 35–7 per Gibbs ACJ) or that a particular member of parliament was present in the house on a particular day: Amman Aviation Pty Ltd v Commonwealth (1988) 19 FCR 223 at 230 per Beaumont J. But no court or tribunal can receive evidence of proceedings in parliament that involves any question as to the substance of those proceedings. 2.7.9 So, in Amman Aviation Pty Ltd v Commonwealth (1988) 19 FCR 223 at 231, Beaumont J refused to admit into evidence an extract from Hansard, which the applicant claimed would have established that a minister had been improperly influenced by the applicant’s commercial competitor when deciding to cancel the applicant’s contract, saying: Such an examination, in a contentious area, cannot be reconciled with the complete freedom of speech envisaged in the Bill of Rights and the Act. It would be otherwise if the tender were for a non-contentious purpose, for instance, to prove that certain documents were tabled in Parliament, without disclosing who tabled them … or … to prove the time of proceedings. If what is involved in a tender of evidence from Hansard is simply not capable of being contentious, it is difficult to see how the right of free speech could be affected. But what is sought here is to use Hansard to justify an inference that Senator Evans was influenced by Sir Peter Abeles in the context of the respondent’s decision to terminate the applicant’s contract. This is a highly contentious matter. In my view, the present tender is by way of or for the purpose of questioning the motive, intention or good faith of the senator and is thus proscribed by s 16(3)(b). Also, in my opinion, the tender is by way of, or for the purpose of, inviting the drawing of

inferences or conclusions from what was said in the Senate and is thus made unlawful by s 16(3)(c). The tender must be rejected accordingly.

2.7.10 In Hamsher v Swift (1992) 33 FCR 545, French J (then a judge of the Federal Court) refused to allow the introduction into evidence of a statement made by the Minister for Immigration in the Senate. The applicants claimed that the statement showed that the minister had made particular decisions under the Migration Act 1958 (Cth) or that it provided the basis on which the applicants could construct an estoppel against the minister. The minister had raised no objection to the evidence in question, but French J said that the prohibition expressed in s 16 of the Parliamentary Privileges Act did not depend upon an objection being raised (33 FCR at 564): Section 16(3) is expressed in terms of an absolute prohibition. Whether that prohibition can be overcome by any permission of the House of Parliament concerned may be doubtful and need not be decided here. But it is apparent under the legislation as it now stands that the prohibition contained in s 16(3) cannot be waived by an individual Member or be taken to have been waived in the absence of objection.

[page 141] French J concluded that s 16(3)(b) and (c) prohibited the use of the minister’s statement for the purposes sought by the applicant.

State and territory parliaments New South Wales

2.7.11 The New South Wales Parliament depends for most of its privileges upon the rather uncertain principle of necessity. In Armstrong v Budd (1969) 71 SR (NSW) 386, the New South Wales Court of Appeal held that the Legislative Council in that state had an implied power to expel a member of the council if the council adjudged the member to have been guilty of conduct unworthy of a member. Wallace P noted that in Kielley v Carson (1842) 4 Moo PC 63; 13 ER 225, the Privy Council had acknowledged that colonial legislatures possessed those powers and privileges that were reasonably necessary to the proper exercise of their functions. He continued (71 SR (NSW) 402): The critical question is to decide what is ‘reasonable’ under present-day conditions and modern habits of thought to preserve the existence and proper exercise of the functions of the Legislative Council as it now exists. It would be unthinkable to ‘peg’ the concept of what is reasonable to the conditions in New South Wales when it had just emerged from convict days. Indeed, when Kielley v Carson was decided convicts were still being sent to western portions of Australia and had only ceased to be sent out to New South Wales one year earlier. This is not to say that the implied power as enunciated by the Privy Council can be enlarged by the passage of time, but the word ‘reasonable’ in this context must have an ambulatory meaning to enable it to have sense and sensibility when applied to the conditions obtaining in 1969.

There have been several specific conferrals of powers and privileges on the New South Wales Parliament. Either house of the parliament, or one of its committees, may summon witnesses to give evidence (Parliamentary Evidence Act 1901 (NSW) s 4) provided they are not a member of the council or assembly. That house can administer an oath or ‘solemn declaration’ to those witnesses: s 10. A failure or refusal to answer lawful questions constitutes a contempt of parliament punishable, by order of either

house, by imprisonment for a maximum of 1 month under warrant of the President of the Council or the Speaker of the Assembly: s 11. Any witness who wilfully makes a false statement is liable, on prosecution, to imprisonment for a term not exceeding 5 years: s 13. The Parliamentary Standing Committee on Public Works is authorised to summon witnesses and compel the production of documents (Public Works Act 1912 (NSW) s 21) and its chairman may commit recalcitrant witnesses to gaol for a maximum of 1 month or fine them a maximum of $100: s 22(1). Absolute privilege against liability for defamation is extended to witnesses attending before either house or a committee: Parliamentary Evidence Act 1901 (NSW) s 12; and to the publication of documents by order or under the authority of either house and the publication of the debates of either house: Defamation Act 2005 (NSW) s 27. 2.7.12 Can a member’s statements made in parliament be questioned outside parliament if the member waives his or her parliamentary privilege? This important issue was considered in Arena v Nader (1997) 42 NSWLR 427. [page 142] In September 1997, a member of the New South Wales Legislative Council, Mrs Franca Arena, stated in the council that prominent people would be exposed in a police royal commission as paedophiles. Arena claimed that the Premier and Opposition Leader had held a private meeting to discuss the royal commission and that ‘an agreement was reached to ensure that people in high

places would not be named as it would have been too traumatic for the community to realise how many of its so-called upstanding citizens were involved in criminal activities’: Legislative Council, Debates, 17 September 1997, p 64. On 24 September 1997, the parliament enacted the Special Commissions of Inquiry Amendment Act 1997 (NSW), which, among other things, gave each House of Parliament the power to authorise the Governor to issue a commission to a judge or queen’s counsel to inquire into and report to the Governor and the house on any matter relating to parliamentary proceedings. The house passing such a resolution could also waive parliamentary privilege in connection with any special commission. The member could retain parliamentary privilege in respect of anything said or done by the member in parliamentary proceedings but could give evidence to a special commission if the member chose to waive privilege. The Legislative Council then resolved to establish a special commission of inquiry, and appointed John Nader QC to report into the matters that Arena had raised in the council. Arena challenged the validity of the relevant provisions of the Special Commissions of Inquiry Amendment Act 1997. The New South Wales Court of Appeal (Priestley, Handley and Meagher JJA) held that the privileges, immunities and powers conferred by art 9 of the Bill of Rights were conferred upon the institution of parliament as a whole; and while those privileges could be invoked by individual members of parliament they are an attribute of office and not a personal privilege; a House of Parliament could take steps to waive a member’s privilege and permit an external inquiry into statements made inside the house while at the same time the relevant statute operated not to waive a member’s privilege: see 42 NSWLR at 437.

In refusing an application for special leave to appeal from the judgment of the Court of Appeal, ((1997) 71 ALJR 1604), the High Court (Brennan CJ, Gummow and Hayne JJ) said (71 ALJR at 1605): A House of Parliament in which allegations are made has a legitimate interest in knowing, and perhaps a duty to ascertain, whether there is substance in allegations made by a member on a matter of public interest. It is within the power of the Parliament to authorise that House to engage, or to authorise the engagement, of a Commissioner to inquire into such allegations and to report to the House … The Act does not alter the powers of the House: rather it affects the privileges which govern the manner in which the House transacts its business.

2.7.13 In Egan v Willis (1998) 195 CLR 424, the High Court considered the extent of the New South Wales Parliament’s power to punish contempt and the scope of judicial power to review the existence of parliamentary privilege. In May 1996 the Legislative Council called on the Leader of the Government in that house, Egan, to table certain documents in the council or deliver them to the Clerk of the Council. Following Egan’s failure to comply, the council passed a resolution judging Egan guilty of contempt and suspending him from the council for the remainder of the day’s sitting. After refusing to leave the house, Egan was taken out of the chamber and the building by the Usher of the Black Rod. [page 143] A majority of the High Court (at 494, 511) applied the principle expressed by Dixon CJ, on behalf of the court, in R v Richards; Ex

parte Fitzpatrick and Browne (1955) 92 CLR 157 2.7.5C at 162 that ‘it is for the courts to judge of 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’. Gaudron, Gummow and Hayne JJ described that proposition as having ‘equal application to the present case’, and as ensuring ‘that intervention by the courts is only “at the initial jurisdictional level” …’: 195 CLR 424 at 446; see also at 460 per McHugh J; 490 per Kirby J; 509 per Callinan J. The court upheld the doctrine of reasonable necessity: see, in particular, 195 CLR 424 at 495–6 per Kirby J; 514 per Callinan J. A house of the New South Wales Parliament may suspend a member for a limited period when that member is called upon to produce a non-privileged document in the house and the member refuses to do so.

Queensland 2.7.14 The Queensland Legislative Assembly, its members and committees enjoy the powers, rights, privileges and immunities defined by legislation and until defined by legislation those powers, rights or immunities that by custom, statute or otherwise are enjoyed by the House of Commons in the United Kingdom Parliament and its members and committees at the establishment of the Commonwealth in 1 January 1901: Constitution of Queensland 2001 s 9. These privileges would include the power to order the attendance of witnesses and the production of documents, and the power to punish, by fine (or, failing payment of the fine, imprisonment), contempt of parliament. They would also protect members of parliament from criminal or civil liability in

respect of anything said or published by them during proceedings in parliament.

South Australia 2.7.15 The South Australian Legislative Council, House of Assembly, their committees and their members have been granted the privileges, immunities and powers of the House of Commons in the United Kingdom Parliament, its committees and members as at 24 October 1856: Constitution Act 1934 (SA) s 38. However, the parliamentary privilege against legal proceedings has been abolished: no member of either house of the South Australian Parliament can claim a privilege against any process issued by a court of law, other than an immunity from the writ of capias ad satisfaciendum (that is, a writ of execution that deprives a person of their liberty until they make satisfaction of any award of damages made by a court judgment) during a session of parliament or within 10 days prior to the meeting of parliament, and as an excuse for non-attendance as a witness in any court when attending parliament: s 39.

Tasmania 2.7.16 The Tasmanian Legislative Council, House of Assembly and their committees are authorised to order the attendance of witnesses and the production of documents: Parliamentary Privilege Act 1858 (Tas) s 1. The council and the assembly are empowered to punish contempts in a summary manner, by imprisonment for the duration of the parliamentary session or part thereof, contempts by members of a house or by any other person.

Contempts can include disobedience of any order of either house or of a committee to attend, produce papers or other [page 144] documents before that house or committee; refusing to be examined or to answer lawful and relevant questions; assaulting, menacing, obstructing or insulting behaviour; the publishing or sending to a member of any insulting or threatening letter on account of his or her behaviour in parliament; the sending of a challenge to fight a member on account of his or her behaviour in parliament; the offering of a bribe to, or attempting to bribe, a member; or the creating or joining in of any disturbance in or in the immediate vicinity of the house. The President of the Council or the Speaker of the Assembly may issue a warrant for imprisonment in pursuance of a resolution of the relevant house (ss 5, 7), and may order the detention of a person creating or joining in a disturbance in the house during its sitting, pending consideration by the house: s 6. Members of the Tasmanian Parliament are protected against liability for anything said or published by them during proceedings in parliament: Defamation Act 2005 (Tas) s 27.

Victoria 2.7.17 There has been a complete transfer of the powers and privileges of the House of Commons to the Victorian Parliament. Section 19(1) of the Constitution Act 1975 (Vic) confers on the Legislative Council, Legislative Assembly, their committees and

their members the privileges, immunities and powers of the House of Commons in the United Kingdom Parliament, its committees and members as at 21 July 1855. In addition, each house of the Victorian Parliament and any committee of the parliament is authorised to administer an oath or affirmation to a witness appearing before the house or the committee: Constitution Act 1975 (Vic) s 19A(2), (3), (6). The necessity for this additional grant arises from the fact that the equivalent power was only conferred on the House of Commons and its committees by the Parliamentary Witnesses Oaths Act 1871 (UK), 16 years after the date by reference to which the powers and privileges of the Victorian Parliament were defined. Evidence given by a witness before a committee of a house of the Victorian Parliament is absolutely privileged from an action in defamation. However, any person who wilfully gives false evidence to a committee may be charged with perjury: Constitution Act 1975 (Vic) s 19A(7), (8). Because of the general conferral of the powers and privileges of the House of Commons effected by s 19, either house of the Victorian Parliament may impose the punishment of imprisonment for a contempt of the house and, by declining to include particulars of the contempt in the warrant for imprisonment, effectively exclude judicial review of its action: Dill v Murphy (1864) 1 Moo PC, NS, 487; 15 ER 784; Speaker of the Legislative Assembly v Glass (1871) LR 3 PC 560.

Western Australia 2.7.18 The Western Australian Legislative Council, Legislative Assembly, their committees and their members have been granted the privileges, immunities and powers set out in the Parliamentary

Privileges Act 1891 (WA) and, to the extent that they are not inconsistent with that Act, the privileges etc of the House of Commons in the United Kingdom Parliament: s 1. However, each house’s power to punish for contempt is limited to seven categories of contempt, defined in substantially the same terms as those used in the Tasmanian Act s 8. The President of the Council or the Speaker of the Assembly may issue a warrant for imprisonment in pursuance of a resolution of the relevant house (s 9) and may order the detention of a person creating or joining in a disturbance in the house during its sitting, pending consideration by the house: s 10. [page 145] The Western Australian Legislative Council, the Legislative Assembly and their committees are authorised to order the attendance of witnesses and the production of documents: s 4. It is a defence to the publication of defamatory matter if the defendant proves that it was published on an occasion of absolute privilege: Defamation Act 2005 (WA) s 27(1).

The territories 2.7.19 Section 24 of the Australian Capital Territory (SelfGovernment) Act 1988 (Cth) authorises the Australian Capital Territory Legislative Assembly to make laws respecting the powers (other than legislative powers), privileges and immunities of the Legislative Assembly, but so that these powers, privileges and immunities so declared do not exceed the powers, privileges and

immunities of the Commonwealth House of Representatives. At the time of writing, the Australian Capital Territory had made no such laws, so s 16 of the Parliamentary Privileges Act 1987 (Cth) operates in the field left vacant by the Australian Capital Territory: see, for example, Commonwealth & Air Marshal McCormack in his capacity as Chief of Air Force v Vance [2005] ACTCA 35. 2.7.20 Section 12 of the Northern Territory (Self-Government) Act (Cth) is in substantially the same terms as s 24 of the Australian Capital Territory (Self-Government) Act 1988. However, the Northern Territory has enacted a Legislative Assembly (Powers and Privileges) Act (NT). The Act declares the powers, privileges and immunities of the Northern Territory Legislative Assembly, with the powers, privileges and immunities of the Commonwealth House of Representatives applying where the Northern Territory’s powers have not otherwise been declared: s 4. The Northern Territory law guarantees freedom of speech in the assembly consistently with art 9 of the Bill of Rights 1688 (UK): s 6. It immunises members of parliament from arrest or attendance at court on sitting days (s 7), regulates service and process of documents within the assembly precinct (s 8), regulates the publication of assembly documents and proceedings (ss 9–12), confers powers on the Speaker to control assembly processes (ss 15–17), deals with issues relating to witnesses in assembly proceedings (ss 18–21) and deals with evidentiary issues arising from parliamentary proceedings: ss 22, 24. The assembly has power to prosecute and commit offenders against the assembly under the Act: ss 25–26. Resolutions and warrants for committal are susceptible to judicial review by the Supreme Court of the Northern Territory: s 26.

STANDARD LEGISLATIVE PROCEDURE Introduction 2.8.1 Among parliament’s functions is the making of law through the enactment of legislation: its pre-eminent function from a lawyer’s perspective. How do the individuals who constitute parliament join together and, as a parliament, produce a statute? There are rules of law that define the necessary process of enactment. In order to identify an Act of Parliament, we need to check to see whether it has complied with that process. However, identifying the relevant rules may raise complex issues, because the rules defining the process of enactment may vary from one type of legislation to another, or may be subject to alteration by an Act of Parliament, or may be non-justiciable. [page 146] 2.8.2 The standard definitions of parliament are those found in such legislation as s 1 of the Commonwealth Constitution, s 3 of the Constitution Act 1902 (NSW) or s 15 of the Constitution Act 1975 (Vic). Parliament consists of two houses and the Crown, represented by the Governor-General or the Governor: see 2.2.2–2.2.10 and 2.2.16E. The Queensland legislation, of course, refers to only one house and the Governor: see Constitution of Queensland 2001 s 6; Constitution Act 1867 (Qld) s 2. The notion, that each of these three institutions (in Queensland, two institutions) is an essential ingredient in parliament and that

legislation can only be enacted when each of the component institutions approves it, is not stated explicitly in the legislation, but such provisions as ss 1, 53, 57 and 58 of the Commonwealth Constitution leave room for no other inference.

The legislation 2.8.3E

Commonwealth Constitution

1 The legislative power of the Commonwealth shall be vested in a Federal Parliament, which shall consist of the Queen, a Senate, and a House of Representatives, and which is hereinafter called ‘The Parliament’, or ‘The Parliament of the Commonwealth’. … Until the Parliament otherwise provides, the presence of at least one-third of the whole number of the senators shall be necessary to constitute a meeting of the Senate for the exercise of its powers. … 2 A Governor-General appointed by the Queen shall be Her Majesty’s representative in the Commonwealth, and shall have and may exercise in the Commonwealth during the Queen’s pleasure, but subject to this Constitution, such powers and functions of the Queen as Her Majesty may be pleased to assign to him. … 23 Questions arising in the Senate shall be determined by a majority of votes, and each senator shall have one vote. The President shall in all cases be entitled to vote; and when the votes are equal the question shall pass in the negative. … 39 Until the Parliament otherwise provides, the presence of at least one-third of the whole number of the members of the House

of Representatives shall be necessary to constitute a meeting of the House of the exercise of its powers. … 40 Questions arising in the House of Representatives shall be determined by a majority of votes other than that of the Speaker. The Speaker shall not vote unless the numbers are equal, and then he shall have a casting vote. … 50 Each House of the Parliament may make rules and orders with respect to — (i)

the mode in which its powers, privileges, and immunities may be exercised and upheld; (ii) the order and conduct of its business and proceedings either separately or jointly with the other House. … 58 When a proposed law passed by both Houses of the Parliament is presented to the Governor-General for the Queen’s assent, he shall declare, according to his discretion, but subject to this Constitution, that he assents in the Queen’s name, or that he withholds assent, or that he reserves the law for the Queen’s pleasure. [page 147] The Governor-General may return to the House in which it originated any proposed law so presented to him, and may transmit there with any amendments which he may recommend, and the Houses may deal with the recommendation.

2.8.4 These provisions, read literally, confer very considerable power on the Queen of Australia. However, in Sue v Hill (1999)

199 CLR 462 (see 2.4.8), Gleeson CJ, Gummow and Hayne JJ explained that these provisions need to be understood in historical context, and informed by the doctrine of responsible government. Gleeson CJ, Gummow and Hayne JJ said (199 CLR at 495): We turn now to the position of the Crown in relation to the government of the Commonwealth. Section 2 of the Constitution states: A Governor-General appointed by the Queen shall be Her Majesty’s representative in the Commonwealth, and shall have and may exercise in the Commonwealth during the Queen’s pleasure, but subject to this Constitution, such powers and functions of the Queen as Her Majesty may be pleased to assign to him. (emphasis added) It has been accepted, at least since the time of the appointment of Sir Isaac Isaacs in 1931, that in making the appointment of a GovernorGeneral the monarch acts on the advice of the Australian Prime Minister (Cunneen, King’s Men — Australia’s Governors-General from Hopetoun to Isaacs, (1983) at 173–182). The same is true of the exercise of the power vested by s 4 of the Constitution in the monarch to appoint a person to administer the government of the Commonwealth and the power given to the monarch by s 126 to authorise the Governor-General to appoint deputies within any part of the Commonwealth. Section 58 makes provision for the Governor-General to reserve a ‘proposed law passed by both Houses of the Parliament’ for the Queen’s pleasure, in which event the law shall not have any force unless and until, in the manner prescribed by s 60, the Governor-General makes known the receipt of the Queen’s assent. Further, s 59 provides for disallowance by the Queen of any law within one year of the GovernorGeneral’s assent. The text of the Constitution is silent as to the identity of the Ministers upon whose advice the monarch is to act in these respects. As indicated when dealing earlier in these reasons with the former position of the States, provisions in colonial constitutional

arrangements for reservation and disallowance had been designed to ensure surveillance of colonial legislatures by the Imperial Government. The convention in 1900 was that the monarch, in relation to such matters, would act on the advice of a British Minister. That advice frequently was given after consultation between the Colonial Office and the Ministry in the colony in question (Inglis Clark, Studies in Australian Constitutional Law, (1901) at 323). With respect to the Commonwealth, the whole convention, like that respecting the appointment of Governors-General, changed after the Imperial Conference of 1926 (Final Report of the Constitutional Commission, (1988), vol 1, pars 2.122– 2.123). As early as 1929, it was stated in the Report of the Royal Commission on the Constitution (at 70) with reference to the provisions of ss 58 and 59 of the Constitution that ‘in virtue of the equality of status which, from a constitutional as distinct from a legal point of view, now exists between Great Britain and the self-governing Dominions as members of the British Commonwealth of Nations, and on the principles which are set out in the Report submitted by the Inter-Imperial Relations Committee to the Imperial Conference in 1926’, for ‘British

[page 148] Ministers to tender advice to the Crown against the views of Australian Ministers in any matter appertaining to the affairs of the Commonwealth’ would ‘not be in accordance with constitutional practice’. Whilst the text of the Constitution has not changed, its operation has. This reflects the changed identity of those upon whose advice the sovereign accepts that he or she is bound to act in Australian matters by reason, among other things, of the attitude taken since 1926 by the sovereign’s advisers in the United Kingdom. The Constitution speaks to the present and its interpretation takes account of and moves with these developments. Hence the statement by Gibbs J in Southern Centre of

Theosophy Inc v South Australia ((1979) 145 CLR 246 at 261), with reference to the Royal Style and Titles Act 1973 (Cth), that: … [i]t is right to say that this alteration in Her Majesty’s style and titles was a formal recognition of the changes that had occurred in the constitutional relations between the United Kingdom and Australia.

2.8.5 The equivalent provisions in each of the states are rather less detailed, except in Victoria (see s 18 of the Constitution Act 1975 (Vic), which prescribes the majorities required to pass specific types of legislation). In the remainder of cases the inevitable inference is that most questions are resolved by a simple majority. (A simple majority is one more than half the number of members voting; an absolute majority is one more than half of the total number of members eligible to vote, no matter how many members vote.) But, in so far as any of the state parliaments is defined as consisting of two houses and the Crown, and the power to make laws is vested in that institution (see the legislation referred to at 2.2.2–2.2.10), it must follow that approval by each of those components is necessary before parliament can be said to have legislated. That inference is reinforced by the presence of such provisions as Constitution Act 1902 (NSW) s 5B, Constitution Act 1975 (Vic) ss 65A–65G and Constitution Act 1934 (SA) s 41, which provide for elaborate alternative procedures where the two houses of parliament cannot agree on proposed legislation. 2.8.6 The courts have consistently acted on the assumption that to produce an Act of Parliament a bill must be approved by each of the houses and by the Crown through the provision of royal assent. In Stockdale v Hansard (1839) 9 Ad & E 1; 112 ER 1112, the Queen’s Bench dismissed a plea that the House of Commons

could, by resolution, protect a printer who had published libellous material from being sued for libel. Patteson J said (at 9 Ad & E 190): The proposition is certainly very startling, that any man, or body of men, however exalted, except those branches of the legislature concurring, should by passing a resolution that they have the power to do an act illegal in itself, be able to bind all persons whatsoever, and preclude them from enquiring into the existence of that power and the legality of that act.

In Stevenson v R (1865) 2 WW & A’B 143, the Victorian Supreme Court held that the approval by the Legislative Assembly of a bill imposing customs duties could not authorise the collection of those duties. Stawell CJ declared that resolutions by the assembly were not equal to an Act of Parliament and the claim that one house might authorise a tax was ‘in direct violation of the established principle that no tax can be imposed save with the full assent of the three estates of the realm’: 2 WW & A’B at 159. [page 149]

Standing orders 2.8.7 Each of the Houses of Parliament of the Commonwealth, states and territories has adopted its own standing orders regulating the procedure within the house on any bill. These standing orders are based upon those of the House of Commons in the United Kingdom Parliament and specify the stages through which bills should pass as they are considered by the house and, ultimately,

approved and passed on to the next stage (to the other house or to the Crown’s representative for the royal assent). The typical stages through which a bill passes are: first reading: a formality which gives the bill a place in the house’s agenda; second reading: the occasion when the policy underlying the bill is debated; the house will either approve the motion for a second reading, or reject it by amending the motion; committee stage: when the bill ‘goes into committee’, the house considers it through its relevant committee, clause by clause, and debates detailed amendments; and third reading: once the detailed consideration is concluded, the bill is reported back to the house. Immediately, as a general rule, the sponsor of the bill moves that the bill be read a third time, and that motion will be treated as a formality. The clerk to the house will read the long title of the bill as he or she did at the first and second reading stages. The bill has then passed the house. These procedures are prescribed by the internal rules of the houses. They may be altered or suspended by a resolution of the relevant house. But, are they justiciable? In Edinburgh and Dalkeith Railway Co v Wauchope (1842) 8 Cl & F 710; 8 ER 279, the House of Lords rejected the argument that a private Act of Parliament could be impugned on the ground that, in passing it, the House of Commons had not observed its own standing orders. Lord Campbell declared that ‘no court of justice can inquire into … what passed in Parliament during a bill’s

progress in its various stages through both houses’: 8 Cl & F at 725; 8 ER at 285. More recently, in British Railways Board v Pickin [1974] AC 765, the House of Lords rejected an attack on a private Act of Parliament, grounded on an alleged defect in the enacting procedure; namely, the fraud of the respondents, who had promoted the private Act. Lord Morris was unequivocal (1974 AC at 790): It must surely be for Parliament to lay down the procedures which are to be followed before a Bill can become an Act. It must be for Parliament to decide whether its decreed procedures have in fact been followed. It must be for Parliament to lay down and to construe its standing orders and further to decide whether they have been obeyed: it must be for Parliament to decide whether in any particular case to dispense with compliance with such orders.

It is at least doubtful whether, in view of the High Court’s decision in Victoria v Commonwealth (PMA case) 2.10.25C, Australian courts would take such a deferential attitude, at least regarding those parliamentary procedures laid down by the Constitution such as s 57 2.10.20E rather than by standing order. Certainly the High Court would not endorse Lord Morris’s proposition that ‘in the courts there may be argument as to the correct interpretation of the enactment: there must be none as to whether it should be on the statute book at all’: [1974] AC at 787. See PMA case (1975) 134 CLR 81 at 164; Conklin, 1975. However, the orthodox [page 150]

view in Australia (as in the United Kingdom) is that issues regarding the enforcement of standing orders are for the houses of parliament alone, not the courts.

Royal assent 2.8.8 Assent to or approval of legislation by the Crown is an integral part of the legislative process. But the Crown (whether in the person of the Queen or a Governor-General or Governor) has a very limited role. Even the formal constitutional documents recognise no power in the Crown to amend bills passed by the Houses of Parliament. The Governor-General may return bills to one of the Commonwealth Houses of Parliament with a recommendation for amendment: Commonwealth Constitution s 58. But the power was intended to have a very limited operation; namely, to enable ‘inaccuracies or discrepancies which have crept into’ legislation to be corrected with a minimum of formality: Quick and Garran, 1901, p 692; Lumb, 1986, p 229. 2.8.9 The first paragraph of s 58 makes clear the limited discretion of the Crown. The Governor-General has three options: to assent, to withhold assent or to reserve the bill ‘for the Queen’s pleasure’. This limited discretion is now an integral part of the parliamentary system as the Queensland Supreme Court held in R v Commissioner for Transport; Ex parte Cobb & Co Ltd [1963] Qd R 547. An Act passed by the Queensland Parliament and assented to by the Governor was attacked on the ground that part of the Act regulated coastal shipping and the Governor was obliged by the Merchant Shipping Act 1889 (UK) to reserve legislation dealing with that topic for the Queen’s assent. That is, he could not assent to such legislation. (The requirement that such legislation be

reserved was removed by s 9 of the Australia Act 1986: see 1.3.20E.) In support of the Act, it was argued that the part to which the Governor could not assent should be separated from the rest, which would then be valid. The Queensland Full Supreme Court rejected that argument, because such a separation (or ‘severance’) would recognise that the Governor could give his assent to part of a bill. Stanley J said ([1963] Qd R at 568): The Queen does not legislate by her own power, nor does the Legislative Assembly by its own power. The combined powers of both are required to convert a Bill into an Act. Therefore in my opinion the problem of severance cannot arise in this matter. The Queen cannot assent to part of a Bill; nor can the Governor assent on her behalf to part of a Bill. If any part of the Bill be not acceptable, the whole Bill is sent back to the Assembly. If part only could be assented to, that part by itself might achieve something radically different from what the Assembly intended. The Sovereign no longer originates legislation.

See further Campbell, 2003. 2.8.10 The function of the Crown in assenting to legislation could not be described as an independent one. Legislation is given the royal assent because the ministry advises the Governor-General or Governor to assent. Assent is a formal act, an automatic and inevitable response to the prompting of the government of the day. As noted at 2.1.11, Anne Twomey has argued that although an underlying discretion in the Crown or its vice-regal representative to refuse royal assent may continue to exist, convention would prevent it being exercised on policy grounds alone, and it is heavily circumscribed by constitutional convention. It ‘could only be legitimately exercised to uphold fundamental constitutional principles such as representative

[page 151] government, and then, only in circumstances where the matter could not be dealt with by the courts’, so that very little, if any, of that discretion now could be exercised: Twomey, 2006. Greg Taylor argues that the Crown should refuse assent if advised to do so by its ministers: Taylor, 2007. See also Campbell, 2003. The rationale for this is succinctly stated by Sawer, 1977, pp 184–5. The refusal to give assent, when advised by the ministry, would lead either to the dismissal of the Governor-General or Governor, or to the resignation of the ministry and an election in which the former ministry would confront the Governor-General or Governor. See also Campbell, 2003.

Reservation 2.8.11 Section 74 of the Commonwealth Constitution denies to the Governor-General the power to assent to any legislation that would limit appeals from the High Court to the Privy Council. Bills for this purpose must be reserved for the assent of the Queen. This limitation was designed to give the United Kingdom Government a veto over any reduction in the appellate jurisdiction of the Privy Council. It was intended that the Privy Council should impose British ideas of law and justice on Australia, and thereby protect British interests here: La Nauze, 1972, p 261. However, the limitation ceased to have any practical significance in 1975, when the Privy Council (Appeals from the High Court) Act 1975 (Cth) removed the last category of High Court decisions in which an appeal might be taken to the Privy Council without a certificate from the High Court.

Until 1986, state governors were required to reserve certain types of legislation for assent by the Queen: Hanks, 1985, p 68. By s 9 of the Australia Act 1986 (Cth), those requirements are declared to have no force or effect.

Disallowance 2.8.12 Section 59 of the Commonwealth Constitution authorises the Queen to ‘disallow any law within one year from the Governor-General’s assent’, and thereby ‘annul the law’. The power was described as one that ‘can no longer be exercised in relation to dominion legislation’: Conference on Operation of Dominion Legislation, Cmd 2479, 1929, para 23. More recently, it was described as ‘now a dead letter’: Lumb and Moens, 1995, p 333. A similar theoretical possibility of disallowance of state legislation, conferred by s 32 of the Australian Constitutions Act 1842 (UK), was formally removed by s 8 of the Australia Act 1986.

SPECIAL PROCEDURES (FINANCIAL LEGISLATION) 2.9.1 Within a parliamentary system, the enactment of financial legislation is of particular importance. Without access to finance, no government can function. The business of government is not only to keep the peace but also to regulate a wide range of social, economic and technological activity and, more importantly when it comes to finance, to provide a large number of services for the community such as education, health, transport and social security. The direct provision of the range of services that we now expect of

our governments requires the disbursement of billions of dollars in salaries, subsidies, grants and benefits. [page 152] 2.9.2 Given the constraints of our economic system, the bulk of this money must be raised through taxation. In order to collect that revenue, legislation entitling the government to demand payment must be enacted by parliament: Attorney-General v Wilts United Dairies Ltd (1920) 37 TLR 884; Commonwealth v Colonial Combing Spinning and Weaving Co Ltd (1922) 31 CLR 421; Congreve v Home Office [1976] QB 629. Once the money is raised through taxation, it is not available for government expenditure until parliament has enacted further legislation authorising the government to spend the money. The need for legislative ‘appropriation’ of the money required to support the Commonwealth Government’s expenditure is stated in s 83 of the Commonwealth Constitution. It has been regarded as a fundamental rule of public law in the United Kingdom since the late 17th century. It has been endorsed by such decisions as Alcock v Fergie (1867) 4 WW & A’B 285; New South Wales v Bardolph (1934) 52 CLR 455; Commonwealth v Burns [1971] VR 825; Brown v West (1990) 169 CLR 195. 2.9.3 So, unless a government can have taxation and appropriation legislation passed by parliament, it has no prospect of carrying on the business of government. Given a bicameral parliamentary system, in which the two houses represent different political communities (because they are, for example, elected at different times, or by different voters, or for different terms, or by

different voting systems), there is always a risk that a government will be unable to obtain passage of financial legislation through both houses of parliament. Indeed, the critical importance of finance to a government may be a sufficient temptation for one of the houses of parliament to refuse to pass the necessary legislation, in the hope of coercing the government into changing policy. The constitutional documents at both state and Commonwealth level make some attempt to regulate this problem, to spell out the relative rights of the two houses of parliament, and of the government (this, of course, is not a problem in the polities, for example, Queensland, the Australian Capital Territory and the Northern Territory with a single house of parliament). However, the efficacy and efficiency of these provisions is open to doubt.

State parliaments 2.9.4E

Constitution Act 1975 (Vic)

62 (1) A Bill for appropriating any part of the Consolidated Fund or for imposing any duty, rate, tax, rent, return or impost must originate in the Assembly. (2) Subject to section 65, a Bill for appropriating any part of the Consolidated Fund or for imposing any duty, rate, tax, rent, return or impost may be rejected but not altered by the Council. 63 The Assembly may not originate or pass any vote resolution or Bill for appropriating any part of the Consolidated Fund or of any duty rate tax rent return or impost for any purpose which has not been first recommended by a message of the Governor to the Assembly during the session in which such vote

resolution or Bill is passed. 64 (1) A Bill shall not be taken to be a Bill for appropriating any part of the Consolidated Fund or for imposing any duty rate tax rent return or impost by reason only of its containing provisions for the imposition of appropriation of fines or other pecuniary [page 153] penalties or for the demand or payment or appropriation of fees for licences or fees for services under such Bill. (2) The Council may once at each of the undermentioned stages of a Bill which the Council cannot alter return such Bill to the Assembly suggesting by message the omission or amendment of any terms or provisions therein, and the Assembly may if it thinks fit make any such omissions or amendments with or without modifications: Provided that the Council may not suggest any omission or amendment the effect of which will be to increase any proposed charge or burden on the people. (3) The stages of a Bill at which the Council may return the Bill with a message as aforesaid shall be — (a) the consideration of the Bill in Committee; (b) the consideration of the report of the Committee; and (c) the consideration of the question that the Bill be read a third time. 65 (1) In this section ‘Annual Appropriation Bill’ means a Bill which deals only with the annual appropriation of the Consolidated Fund for the ordinary annual services of the Government for a particular year only but does not include a Bill to appropriate money for appropriations for

(2)

(3) (4)

(5)

(6)

(7)

or relating to the Parliament. For the purposes of sub-section (1), ‘ordinary annual services’ includes — (a) the construction or acquisition of public works, land or buildings; and (b) the construction or acquisition of plant or equipment which normally would be regarded as involving an expenditure of capital; and (c) services proposed to be provided by the Government which have not formerly been provided by the Government. An Annual Appropriation Bill must deal only with appropriation. Sub-section (5) applies if an Annual Appropriation Bill is passed by the Assembly and within 1 month of its passing by the Assembly — (a) the Council rejects or fails to pass it; or (b) the Council returns it to the Assembly with a message suggesting any amendment to which the Assembly does not agree. If this sub-section applies, the Annual Appropriation Bill, with any amendments suggested by the Council and made by the Assembly, must be presented to the Governor for Her Majesty’s Assent and becomes an Act of Parliament on the Royal Assent being signified notwithstanding that the Council has not passed the Bill. The words of enactment for an Annual Appropriation Bill that is to be presented to the Governor for Her Majesty’s Assent under sub-section (5) are to be altered to ‘Her Majesty and the Legislative Assembly in accordance with section 65(5) of the Constitution Act 1975 enact as follows:’. There is to be endorsed on the Annual Appropriation Bill when it is presented to the Governor for Her Majesty’s

Assent under sub-section (5), the certificate of the Speaker signed by the Speaker that the Bill is a Bill to which section 65(5) of the Constitution Act 1975 applies and has been passed in accordance with that section. (8) The certificate of the Speaker under this section is conclusive evidence for all purposes and cannot be questioned in any court. (9) The alteration of an Annual Appropriation Bill to give effect to sub-section (6) is not to be taken to be an amendment of the Bill.

[page 154] 2.9.5 The constitutional legislation of three other states (South Australia, Tasmania and Western Australia) follows a common system for financial/money bills: both taxation and appropriation bills must originate in the assembly. However, before an appropriation bill can originate there, a message recommending the appropriation must be received from the Governor. A taxation bill or appropriation bill, once passed by the assembly, cannot be amended by the council, although the council may reject such bills. Proposals for the resolution of deadlocks over financial legislation were made by royal commissions in Tasmania (1982) and Western Australia (1985), but those proposals have not been implemented: Constitutional Commission, 1988, pp 228–9. 2.9.6 It is from legislative provisions such as ss 62–65 of the Constitution Act 1975 (Vic), along with other provisions dealing with the links between ministers of the Crown and parliament, that

we can construct the legal foundation of the system of responsible government. A government must have the confidence of the assembly. This is because money bills, whether for taxation or appropriation, originate from the assembly. Only the government, not the opposition or a backbencher, can propose any taxation or expenditure measure to the assembly, because a recommending message from the Governor is a prerequisite and that must be made on ministerial advice. Further, the council is denied the important power of amending taxation or appropriation bills; it can only pass them or reject them, and rejection of the government’s annual appropriation bill would be a controversial and cumbersome weapon. To protect the council against exploitation by the assembly and the government, each of the Constitution Acts prohibits ‘tacking’; that is, the annual appropriation bill is not to contain any provision dealing with matters other than appropriation, provisions that the council cannot amend because of its inability to amend money bills. See also Constitution Act 1934 (SA) ss 59–64; Constitution Act 1934 (Tas) Pt IV, ss 42–45. 2.9.7 All of these provisions work towards establishing the financial supremacy of the assembly. But how close to that supremacy do the constitutional provisions in South Australia, Tasmania and Western Australia approach? They allow the council to reject a money bill, or to delay its passage indefinitely or to request amendments, so that, while no money bill can be introduced without the initiative of the government, and will make little progress without the approval of the assembly, no money bill can complete the legislative process without the approval of the council. Until 2003, when the Constitution (Parliamentary Reform) Act

2003 (Vic) was passed, the Victorian provisions relating to the enactment of financial legislation also left the upper house, the Legislative Council, with substantial power to prevent the enactment of taxation and appropriation bills. The council’s power had been demonstrated several times. It rejected or delayed annual appropriation bills in 1865, 1867, 1877, 1947 and 1952: Cowen, 1957, pp 35, 37–9. However, the 2003 amendments deal with this problem by providing the Premier with the power to advise the Governor to give assent to an annual appropriation bill. Further, a new Div 9A of the Constitution Act 1975 (Vic) deals with disputes relating to deadlocked bills. 2.9.8 The Constitution Act 1902 (NSW) s 5A provides a relatively simple solution to the problem of blocked appropriation bills, as follows: 5A (1) If the Legislative Assembly passes any Bill appropriating revenue or moneys for the ordinary annual services of the Government and the Legislative Council rejects or fails to pass it or returns the Bill to the Legislative Assembly with a message suggesting any amendment to which the Legislative Assembly does not agree, the Legislative Assembly may direct that the Bill with or without any amendment suggested by the Legislative Council, be presented

[page 155] to the Governor for the signification of His Majesty’s pleasure thereon, and shall become an Act of the Legislature upon the Royal Assent being signified thereto, notwithstanding that the Legislative Council has not consented to the Bill. (2) The Legislative Council shall be taken to have failed to pass any such Bill, if the Bill is not returned to the Legislative Assembly within one

month after its transmission to the Legislative Council and the Session continues during such period. (3) If a Bill which appropriates revenue or moneys for the ordinary services of the Government becomes an Act under the provisions of this section, any provision in such Act dealing with any matter other than such appropriation shall be of no effect.

In Victoria, s 65 of the Constitution Act 1975 (Vic) provides for a similar procedure which, ultimately, permits the passage of the appropriation bill for the ordinary annual services of the government without the consent of the Legislative Council. The upshot is that in New South Wales and Victoria, the upper house cannot ‘block supply’ of funds to the government by rejecting (or failing to pass) appropriation bills in the manner that can occur at the Commonwealth level. The concept of legislation appropriating money for ‘the ordinary annual services of the government’ was borrowed from ss 53 and 54 of the Commonwealth Constitution 2.9.9E. The interpretation of this ‘virtually meaningless expression’ (Pearce, 1977, p 134) has been a subject for debate. One view is that the term refers to recurrent expenditure, salaries, administrative expenses and maintenance of established government programs, but excludes capital expenditure on new plant and equipment. Another view is that the term refers to all government expenditure, whether recurrent or capital, on any government service that the government might reasonably be expected to provide: Pearce, 1977, pp 130–4. Other provisions in the Constitution Act 1902 (NSW) provide that all appropriation and taxation bills shall originate in the assembly (s 5) and that a message from the Governor is an essential precondition to the assembly considering these bills: s 46. While there is no statutory prohibition on the council amending financial

legislation, s 5A(1) clearly contemplates that the council will not amend, but may request the assembly to amend, appropriation bills.

Commonwealth Parliament 2.9.9E

Commonwealth Constitution

53 Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But 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. The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government. The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people. The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications. Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws. [page 156]

54 The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation. 55 Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only. 56 A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by message of the Governor-General to the House in which the proposal originated.

2.9.10 As with the state legislation, these provisions reflect the superiority of the lower house of parliament in financial legislation. But the superiority is, as with all state parliaments except that of New South Wales and Victoria, qualified. The only functions denied to the Senate are (a) the origination of all appropriation and taxation bills; and (b) the amendment of all taxation bills, of certain appropriation bills and of any bill where the amendment would increase any proposed charge or burden on the people. There is no specific denial of the Senate’s power to reject or delay indefinitely any money bill. The right of the Senate to reject or defer consideration of appropriation legislation was a critical issue in October and November 1975 and to the dismissal of the Whitlam Government, to which we shall shortly turn: see 2.9.13.

2.9.11 Why does s 53 deny to the Senate the power to amend most financial legislation yet allow it to suggest amendments, perhaps repeatedly, and, most significantly, to reject financial legislation? Why is the House of Representatives’ superiority in financial matters incomplete? Section 53 was drafted to reflect a hard-fought compromise between the delegates to the Constitutional Conventions, particularly the 1897 convention in Adelaide. Delegates from the smaller colonies, South Australia, Tasmania and Western Australia (Queensland did not attend), pressed for equal voting rights on all matters for the Senate and the House of Representatives. They wanted to protect the interests of the smaller states, each of which would have the same representation in the Senate as did each of the two larger states. On the other hand, delegates from the larger colonies of New South Wales and Victoria were anxious that the powers of the Senate over money bills should be clearly subordinate to the power of the House of Representatives (where the two larger colonies must have a majority). Some delegates from the smaller colonies were prepared to concede a degree of Senate inferiority in order to preserve the federal movement, and the present s 53 represents the concessions that those few delegates were prepared to make. An integral part of the compromise was s 57 of the Constitution: La Nauze, 1972, pp 138–46, 187–91. Today, we might describe that compromise as unsatisfactory, as leaving too many ambiguities and contradictions, and as failing to provide an effective means of resolving conflicts over financial legislation. Writing of s 57 as a means of resolving deadlocks over appropriation, Castles said: Today, when government funds loom much more largely in the life of

society, compared to the second half of the nineteenth century, the delay of three months or more before those deadlock provisions might operate in money matters might seem inordinate. Before the turn

[page 157] of the century however, before the birth of the modern welfare State, and the more limited role accepted then for government activity, this means of resolving even conflicts on supply does not seem to have been regarded with great concern. (Castles, 1975, at 287.)

2.9.12 The point, that the compromises expressed in ss 53 and 57 did not produce a durable solution, is expressed clearly in the following passage by Howard and Saunders: The three-month interval which is required in addition to the timeconsuming processes of the normal parliamentary passage of legislation, plus dissolution and re-election, made s 57 an unsuitable provision for the resolution of a deadlock caused by the failure of the Senate to pass an Appropriation Bill (as speedily became apparent in the weeks after the Senate deferred supply in 1975). The historical explanation for this seems to depend upon a mixture of expediency, assumptions about contemporary constitutional practice and expectations of future constitutional development. The patent inconsistency between ss 53 and 57 is symptomatic of the generally unsatisfactory nature of the provisions relating to the powers and composition of the Senate if read literally and in isolation from the rest of the Constitution. To a considerable extent this is owing to the fact that with the exception of the (equally unsatisfactory) financial clauses, the provisions relating to the Senate were the most contentious at the conventions. They are the direct result of a contemporary political compromise. (Howard and Saunders, 1977, p 259.)

The Senate’s deferral of supply: 1975 2.9.13 In October 1975, the Senate resolved that the Commonwealth Government’s loan bill and appropriation bills (which had been passed by the House of Representatives) ‘be not further proceeded with until the Government agrees to submit itself to the judgment of the people’: Senate, Debates, vol s 63, 15 and 16 October 1975, pp 1156, 1221, 1241. Despite repeated calls from the government and the House of Representatives that the bills should be passed, the Senate persisted in its attitude. 2.9.14 On 10 November 1975, the Governor-General consulted with the Chief Justice of Australia, Sir Garfield Barwick, seeking Barwick’s advice on the constitutional propriety (or otherwise) of dismissing the Prime Minister. The Chief Justice’s advice included the following passage: The Constitution of Australia is a federal constitution which embodies the principle of ministerial responsibility. The Parliament consists of two houses, the House of Representatives and the Senate, each popularly elected, and each with the same legislative power, with the one exception that the Senate may not originate nor amend a money Bill. Two relevant constitutional consequences flow from this structure of the Parliament. First the Senate has constitutional power to refuse to pass a money Bill; it has power to refuse supply to the government of the day. Secondly, a Prime Minister who cannot ensure supply to the Crown, including funds for carrying on the ordinary services of government, must either advise a general election (of a kind which the constitutional situation may then allow) or resign. If, being unable to secure supply, he refuses to take either course, Your Excellency has constitutional authority to withdraw his commission as Prime Minister.

[page 158]

2.9.15 On 11 November 1975, the Governor-General terminated Prime Minister Gough Whitlam’s commission and commissioned the then Opposition leader Malcolm Fraser as Prime Minister on condition that the appropriation bills were passed and that the Prime Minister should advise the GovernorGeneral to proclaim a double dissolution under s 57 of the Constitution. The Senate immediately passed the appropriation bills, the motion for their immediate passage being moved by the Labor leader in the Senate who did not know of Whitlam’s dismissal: Sawer, 1977, p 165. At all stages throughout the crisis, the Labor Government and the House of Representatives had rejected the Senate’s claim to a right to refuse or defer supply. The Governor-General issued a formal statement explaining his action. The Governor-General’s statement included the following passage: The Constitution combines the two elements of responsible government and federalism. The Senate is, like the House, a popularly elected chamber. It was designed to provide representation by States, not by electorates, and was given by s 53, equal powers with the House with respect to proposed laws, except in the respects mentioned in the section. It was denied power to originate or amend Appropriation Bills but was left with power to reject them or defer consideration of them. The Senate accordingly has the power and has exercised the power to refuse to grant supply to the Government. The Government stands in the position that it has been denied supply by the Parliament with all the consequences which flow from that fact. There have been public discussions about whether there is a convention deriving from the principles of responsible government that the Senate must never under any circumstances exercise the power to reject an Appropriation Bill. The Constitution must prevail over any convention because, in determining the question how far the conventions of responsible government have been grafted on to the

federal compact, the Constitution itself must in the end control the situation.

2.9.16 So far as the question of legal power is concerned, the majority of the High Court had already expressed its opinion. In Victoria v Commonwealth (PMA case) (1975) 135 CLR 81 at 121 2.10.25C, Barwick CJ said: The Senate is a part of the Parliament and, except as to laws appropriating revenue or money for the ordinary annual services of the Government or imposing taxation, is co-equal with the House of Representatives. Bills may originate and do originate in the Senate. Section 53 of the Constitution makes it abundantly clear that the Senate is to have equal power with the House of Representatives in respect of all laws other than those specifically expected. The only limitations as to the equality of the powers of the Senate with those of the House of Representatives are those imposed by the first three paragraphs of that section, to the terms of which the limitations must be confined.

See also the comments of Gibbs J (135 CLR at 143), Stephen J (135 CLR at 168) and Mason J (135 CLR at 185). 2.9.17 The Senate’s action in October and November 1975 has been attacked on the ground that, while s 53 allowed to the Senate power to reject financial legislation, that power was not intended to be used to bring down a government supported by the House of Representatives. Rather, it was intended as a final protection for the smaller states, which they might invoke against any specific financial legislation that threatened their interests. This argument relies, [page 159]

initially, on statements made by delegates to the Constitutional Conventions of the 1890s. As Howard and Saunders put it: The exercise of the Senate’s power of veto of a financial Bill was usually contemplated in the context either of a Bill appropriating revenue for a particular project or of a Bill imposing taxation, for it was possible to imagine a dispute over the policy expressed in such Bills (Howard and Saunders, 1977, p 256).

The argument is that the system of responsible government (under which governments are formed from the party that controls the House of Representatives) requires the Senate to use its legal powers with restraint. To ensure that the governmental system functions effectively, the literal terms of the Constitution are modified by a rule of political practice (a constitutional convention), which by regulating the use of discretionary powers ‘keeps the legal constitution in touch with the growth of ideas’: Jennings, 1959, p 23; see also Marshall and Moodie, 1967, pp 26– 35; de Smith and Brazier, 1989, pp 28–47. The argument in support of such a convention is set out at length in Hall and Iremonger, 1976, pp 91–107 and in Howard and Saunders, 1977, pp 252–67; it is also discussed in Castles, 1975, at 287–90, Sawer, 1975, pp 121–8 and Chapter 7. 2.9.18 As a practical matter, the argument was settled by the Governor-General when he dismissed Prime Minister Whitlam on 11 November 1975: ‘The Constitution’, he said, ‘must prevail over any convention because, in determining how far the conventions of responsible government have been grafted onto the federal compact, the Constitution itself must in the end control the situation’. For an elaboration of this approach and a refutation of the argument that convention prevented the Senate rejecting an

appropriation bill, see Richardson, 1976 and Howard and Saunders, 1977, pp 288–90.

Non-compliance with procedures and forms: ss 53, 54 and 56 2.9.19 Sections 53, 54 and 56 lay down the procedures to be followed by the Parliament for the enactment and the form of certain ‘proposed laws’. What would be the effect of a failure to follow those procedures or to comply with that form? For example, could the annual Appropriation Act be attacked on the ground that the Act originated in the Senate (s 53), or that it was not recommended by a message of the Governor-General (s 56), or that it did not deal only with appropriation (s 54)? Could an Act imposing taxation be attacked on the ground that it had originated in the Senate, or had been amended in the Senate (s 53)? 2.9.20 In Osborne v Commonwealth (1911) 12 CLR 321, two members of the High Court remarked on the distinction between ss 53 and 54 (which refer to a ‘proposed law’ or ‘proposed laws’) and s 55 (which refers to ‘laws’). In the course of considering whether a failure to comply with the form prescribed by s 55 would be fatal to the validity of the Act, Griffith CJ said (12 CLR at 336): Sections 53 and 54 deal with ‘proposed laws’, that is, Bills or projects of law still under consideration and not assented to — and they lay down rules to be observed with respect to proposed laws at that stage. Whatever obligations are imposed by these sections are directed to the houses of Parliament whose conduct of their internal affairs is not subject to review by a court of law.

[page 160] Barton J accepted that ss 53 and 54 ‘relate … only to the order of business between the two houses in dealing with the progress of Bills, and are, therefore, and from the necessity of the thing, merely directory’: 12 CLR at 352. 2.9.21 It seems that the enforcement of these procedures and forms is left to the two houses of parliament. If the Senate originates a money bill, the House of Representatives can decline to consider the bill; and if the Senate amends a taxation bill or a bill appropriating money for the ordinary annual services of the government, the House of Representatives can refuse to consider the amendments. If the House of Representatives proceeds to consider the bill, as transmitted from the Senate, it could be said to have waived its privileges, and so to have sanctioned the Senate’s action. Similarly, if the Senate passes an appropriation bill that does not comply with s 54, it could be said to have waived the protection that s 54 offered it: Pearce, 1977, pp 121–2; Lumb and Moens, 1995, pp 304, 314. Edmund Barton (who chaired the drafting committee for the Constitution) expressed this view at the Adelaide Constitutional Convention in 1897: Where the words ‘proposed laws’ have been used, those sections deal with the position which would arise where, as between the two houses, a house as a matter of procedure originated, or otherwise dealt with or amended a Bill which by this Constitution it is desired that the house should not originate or amend. These are questions that must be settled between the houses, because no court in the world has ever yet dealt with the question whether as between the two houses in their own

relations, one or other house has exceeded its powers in originating or amending Bills (Convention Debates, Adelaide (1897), pp 576–7).

2.9.22 In Northern Suburbs General Cemetery Reserve Fund v Commonwealth (1993) 176 CLR 555, a majority of the High Court agreed that s 54 of the Constitution does not impose justiciable restraints on the passage of Commonwealth legislation. Mason CJ, Deane, Toohey and Gaudron JJ referred to the ‘traditional view’ that failure on the part of the parliament to comply with procedural provisions such as s 54 (which referred to ‘a proposed law’) ‘is not contemporaneously justiciable and does not give rise to the invalidity of the resulting Act when it has been passed by the two Houses of the Parliament and received the royal assent’: 176 CLR at 578. Brennan J observed that s 54 related ‘to the passage of a Bill, not to the validity or effect of the Act when passed and assented to’: 176 CLR at 585. 2.9.23 The terms of ss 53, 54 and 56 raise some difficult questions. For example, what is meant by appropriation ‘for the ordinary annual services of the Government’? It is clear that this refers to a species of appropriation legislation (it was not intended to cover all appropriations) but what is that species? The purpose of the distinction between appropriation for the ordinary annual services of the government and other appropriation is also clear. The Senate can amend the latter legislation but not the former. But does that understanding bring us any closer to defining the distinction? Apparently, the delegates to the Constitutional Conventions of the 1890s accepted that appropriation for the ordinary annual services of the government involved authorising the government to spend money on matters of settled policy where no new development or capital expenditure was involved. The first

appropriation bills observed this distinction so that, in each year, one bill appropriated money for salaries of government employees, maintenance of plant and equipment and general recurrent expenses while another bill appropriated money for capital expenditure on works and buildings. [page 161] However, in 1952 Solicitor-General Bailey advised the government that expenditure on capital items could be regarded as expenditure on the ordinary annual services of the government. Indeed, the only expenditure not in that class was that of grants to the states. Bailey repeated his advice, on this occasion to the Joint Public Accounts Committee of the Parliament in 1961. The nub of his opinion was contained in one passage: ‘The ordinary annual services of the Government’ may be described as those services provided or maintained within any year which the Government may, in the light of its powers and authority, reasonably be expected to provide or maintain as the occasion requires through the departments of the public service and other Commonwealth agencies and instrumentalities. Accordingly, if the expenditure is to be incurred for an item which is itself such a service, it may be regarded, without more, as proper for inclusion in an ordinary Appropriation Bill (Parliamentary Paper No 79 of 1961, para 11).

In 1964, the government redrafted its supply bills (the interim appropriation bills which, when enacted, give the government sufficient money to carry out its functions until the Appropriation Acts are passed) along the lines suggested by Bailey. The Senate put considerable pressure on the government to abandon the new

procedure and 12 months later the government reverted to the old distinction, which has been maintained ever since. Expenditure is divided into two bills, with the second covering expenditure of a capital nature, grants to the states and new policies, and being open to amendment by the Senate.

Non-compliance with form: s 55 2.9.24 There is no doubt that failure to comply with the form demanded by s 55 is fatal to the validity of legislation (or at least that part of the legislation that offends against s 55). It is rather curious that s 55 should have been drafted in a fashion so different from s 54, for the purpose of both sections was clearly the same; namely, to protect the Senate against exploitation by a government and the House of Representatives of the Senate’s inability to amend most financial legislation. Speaking of s 55, Barton ACJ in Buchanan v Commonwealth (1913) 16 CLR 315 at 328 explained this purpose in the following passage: The paragraph is clearly to protect the House representing the States from being faced with the alternative of rejecting a tax Bill necessary for the adjustment of finances, or passing it with the addition of some matter of policy independent of taxation, to which they might be emphatically opposed.

The questions thrown up by s 55 are questions of detail: What is a ‘law imposing taxation’? When does a law ‘deal only with the imposition of taxation’? The meaning of these phrases, and the implications of s 55 for the drafting of Commonwealth legislation, are explored in Chapter 5 where we consider the power of the Commonwealth Parliament to enact taxation legislation.

ALTERNATIVE PROCEDURES State parliaments 2.10.1 The common motivation in establishing an alternative process for legislation has been to find a means of resolving disputes or deadlocks between two houses of parliament. [page 162] The efficiency of the various procedures, such as s 5B of the Constitution Act 1902 (NSW) or s 57 of the Commonwealth Constitution, and their utility in achieving this end is a matter of debate. However, it seems clear that these procedures were promoted for that purpose, even if in final form they are cumbersome (and in some instances overly complex) so as to discourage their use. 2.10.2 The potential for conflict between the two houses in a bicameral parliament is inherent in their constitutions, for they represent different electorates and are likely to reflect distinct political values. We need go back no further than the beginning of the 20th century to observe the conflict, although it had been endemic since the 1850s when bicameral parliaments were established in most of the Australian colonies. By 1908 each of the states’ lower houses was elected on the basis of adult suffrage. There were no property, educational or gender-based restrictions although there were some racial restrictions. However, four of the Legislative Councils (those of South Australia, Tasmania, Victoria

and Western Australia) were elected on a narrow property franchise, whilst those of New South Wales and Queensland consisted of members appointed for life by the Governors. These distinct constituencies brought the houses into frequent conflict. Yet no colony had any established procedure to resolve disputes or deadlocks between the houses. 2.10.3 In the first 70-odd years of responsible government a New South Wales or Queensland government frustrated by its upper house regarding its legislative program could advise the Governor to appoint extra members sympathetic to the government. That tactic worked in Queensland in 1921 when the Labor Government advised the Governor to appoint additional, and compliant, legislative councillors so that a bill abolishing the council itself would be enacted: Morrison, 1960, p 269. A similar gambit was frustrated in New South Wales in 1926 when J T Lang advised the Governor to appoint 25 legislative councillors all pledged to vote for the abolition of the council and, following their appointment, some of the new members voted against the council’s abolition. Lang advised the Governor to appoint extra, and presumably more reliable, councillors but the Governor baulked at a second swamping operation: Evatt, 1967, p XIV. 2.10.4 The abolition of the Queensland Upper House (1921) and the conversion of the New South Wales Upper House to an indirectly elected body (1933) removed the problem of inter-house conflicts in the former state and also removed a relatively straightforward method of resolving those conflicts in the latter state. The conflicts, of course, did not go away with the disappearance of appointed upper houses. Because upper and lower houses are elected in different ways, they will always represent different electorates and often different political interests. This is so

for a variety of reasons, even though the franchise for each house (that is, persons with the legal right to vote) may be identical. For example, generally, members of the upper house are elected for a longer period, or on the basis of a different voting system (in Tasmania, legislative councillors represent single-member constituencies and House of Assembly members are elected by proportional representation, while in South Australia the systems are reversed), or on the basis of a different distribution of electoral boundaries: in Western Australia, the Legislative Council distribution gives rural voters a 3:1 advantage over metropolitan voters while the Legislative Assembly only allows rural voters a 2:1 advantage: see Constitutional Commission, 1988, p 148. [page 163] 2.10.5 Section 5 of the Colonial Laws Validity Act 1865 (UK) confirmed that the colonial legislatures and their successors, the state parliaments, could introduce new procedures for passing legislation, procedures that could allow for the enactment of legislation on which the two houses of a legislature or parliament were in dispute: 5 Every Colonial Legislature shall have, and be deemed at all Times to have had, full Power within its Jurisdiction to establish Courts of Judicature, and to abolish and reconstitute the same, and to alter the Constitution thereof, and to make Provision for the Administration of Justice therein; and every Representative Legislature shall, in respect to the Colony under its Jurisdiction, have, and be deemed at all Times to have had, full Power to make Laws respecting the Constitution, Powers, 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 by any Act of Parliament, Letters Patent, Order in Council, or Colonial Law for the Time being in force in the said Colony.

The significance of s 5, as emphasising the flexibility of state constitutions, was considered in Taylor v Attorney-General (Qld) (1917) 23 CLR 457 (see 2.10.12) and McCawley v R [1920] AC 691 (see 2.10.13). Its potential for supporting a reduction of flexibility in state constitutions was considered in Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 (see 2.11.10C). The Colonial Laws Validity Act was repealed in its application to state parliaments by s 3(1) of the Australia Act 1986 (Cth). The potentially restrictive aspect of s 5 of the Colonial Laws Validity Act is continued by s 6 of the Australia Act 1.3.20E, though the enabling aspect of that provision has not been re-enacted. Accordingly, the power of each state parliament to legislate so as to vary its own constitution, powers and procedure will now depend on that parliament’s general law-making power, as expressed, for example, in s 5 of the Constitution Act 1902 (NSW) or s 16 of the Constitution Act 1975 (Vic); see Clayton v Heffron (1960) 105 CLR 214 2.10.15C at 250.

The legislation 2.10.6 Three of the states have established formal legislative procedures for the resolution of deadlocks between the houses. (Proposals for constitutional amendments in Tasmania and Western Australia, made by royal commissions in 1982 and 1985, have not been implemented: see Constitutional Commission, 1988, pp 254–5.) The least cumbersome of these is that of New South Wales.

2.10.7E

Constitution Act 1902 (NSW)

5B(1) If the Legislative Assembly passes any Bill other than a Bill to which section 5A of this Act applies, and the Legislative Council rejects or fails to pass it or passes it with any amendment to which the Legislative Assembly does not agree, and if after an interval of three months the Legislative Assembly in the same Session or in the next Session again passes the Bill with or without any amendment which has been made or agreed to by the Legislative Council, and the Legislative Council rejects or fails to pass it or passes it with any amendment to which the Legislative Assembly does not agree, and if after a free conference between managers there is not agreement between the Legislative Council and the Legislative [page 164] Assembly, the Governor may convene a joint sitting of the Members of the Legislative Council and the members of the Legislative Assembly. The Members present at the joint sitting may deliberate upon the Bill as last proposed by the Legislative Assembly and upon any amendments made by the Legislative Council with which the Legislative Assembly does not agree. No vote shall be taken at the joint sitting. (2) After the joint sitting and either after any further communication with the Legislative Council in order to bring about agreement, if possible, between the Legislative Council and the Legislative Assembly, or without any such communication the Legislative Assembly may by resolution direct that the Bill as last proposed by the Legislative Assembly and either with or without any amendment subsequently agreed to by the Legislative Council and the Legislative Assembly, shall, at any time during the life of

the Parliament or at the next general election of Members of the Legislative Assembly, be submitted by way of referendum to the electors qualified to vote for the election of Members of the Legislative Assembly. The referendum shall be held and conducted as may be provided by law, and if, at any time no such law exists, the law for the time being in force relating to the holding and conduct of a general election of Members of the Legislative Assembly shall, mutatis mutandis, apply to and in respect of the holding and conduct of the referendum, with such modifications, omissions, and additions as the Governor may by notification published in the Gazette declare to be necessary or convenient for the purposes of such application. (3) If at the referendum a majority of the electors voting approve the Bill it shall be presented to the Governor for the signification of His Majesty’s pleasure thereon and become an Act of the Legislature upon the Royal Assent being signified thereto, notwithstanding that the Legislative Council has not consented to the Bill. (4) For the purposes of this section the Legislative Council shall be taken to have failed to pass a Bill if the Bill is not returned to the Legislative Assembly within two months after its transmission to the Legislative Council and the Session continues during such period.

2.10.8 Subsection 5 declares that a bill to which s 7A of the Constitution Act applies may be enacted in accordance with the procedure laid down in s 5B. Section 7A specifically provides that any bill that seeks to abolish, dissolve or alter the powers of the Legislative Council must be approved by the New South Wales electors at a referendum before being presented to the Governor for

royal assent. So, the approval of such a bill by the electors under s 5B shall be regarded as approval by the electors for the purpose of s 7A. Subsection 6 lays down the formal procedure for the summoning of a joint sitting, and for the conduct of such a sitting. 2.10.9E

Constitution Act 1975 (Vic)

Division 9A — Provisions Relating to Disputes concerning Bills 65A (1) In this Division — ‘Deadlocked Bill’ means a Disputed Bill to which section 65C(3) or 65D(1) applies; ‘Dispute Resolution’ means a resolution reached by the Dispute Resolution Committee recommending to the Assembly and the Council that the Disputed Bill specified in the resolution — [page 165] (a) be passed as transmitted by the Assembly to the Council without amendment; or (b) be passed with the amendment or amendments specified in the resolution; or (c) not be passed; ‘Dispute Resolution Committee’ means the Committee established under section 65B; ‘Disputed Bill’ means a Bill which has passed the Assembly and having been transmitted to and received by the Council not less than 2 months before the end of the session has not been passed by the Council within 2 months after the Bill is so transmitted, either without amendment or with such

amendments only as may be agreed to by both the Assembly and the Council. (2) For the purposes of this Division, any omission or amendment suggested by the Council in accordance with section 64 is deemed to be an amendment made by the Council. (3) This Division does not apply to an Annual Appropriation Bill within the meaning of section 65. Section 65B provides for the establishment of a Dispute Resolution Committee ‘as soon as conveniently practicable after the commencement of each Parliament’, with seven members appointed by the Legislative Assembly and five members appointed by the Council. Section 65C directs the Dispute Resolution Committee to reach a Dispute Resolution on a Disputed Bill within 30 days after a Disputed Bill is referred to the Committee by the Assembly; any Dispute Resolution reached by the Committee is to be tabled in the Assembly and the Council; but, if the Committee does not reach a Dispute Resolution, the Disputed Bill becomes a Deadlocked Bill. … 65D (1) If either the Assembly or the Council fails to give effect to the Dispute Resolution within the period of 30 days or the period of 10 sitting days (whichever period is longer) after the tabling of the Dispute Resolution in that House, the Disputed Bill becomes a Deadlocked Bill. (2) For the purposes of sub-section (1), the Assembly or the Council fails to give effect to the Dispute Resolution — (a) if the Dispute Resolution provided that the Disputed Bill be passed by the Council as transmitted by the Assembly to the Council without amendment, and the Council does not pass the Bill without amendment;

(b) if the Dispute Resolution provided that the Disputed Bill be passed with the amendment or amendments specified in the Dispute Resolution, and the Assembly or the Council does not pass the Bill with the specified amendment or amendments; (c) if the Dispute Resolution provided that the Disputed Bill not be passed, and the Assembly or the Council resolves not to accept the Dispute Resolution. (3) If the Assembly or the Council has, in relation to a Bill to which section 18(1B) applies, given effect to a Dispute Resolution, it is only lawful to present the Bill to the Governor for Her Majesty’s assent if the Bill has been approved by the majority of electors voting at a referendum. (4) If the Assembly or the Council has, in relation to a Bill to which section 18(2) or 18(2AA) applies, given effect to a Dispute Resolution, it is only lawful to present the Bill to the Governor for Her Majesty’s assent if the third reading of the Bill was passed by a special majority or an absolute majority, as the case may be. [page 166]

65E (1) This section applies in the case of a Deadlocked Bill. (2) The Premier may advise the Governor in writing that the Assembly be dissolved as a result of this section applying to the Deadlocked Bill specified in the advice. (3) There is to be attached to the advice under sub-section (2) a copy of the Deadlocked Bill endorsed with the certificate of the Speaker signed by the Speaker that the Bill is a Bill to which section 65E of the Constitution Act 1975 applies.

(4) The certificate of the Speaker under this section is conclusive evidence for all purposes and cannot be questioned in any court. (5) If the Premier does not give advice under sub-section (2), the Deadlocked Bill may be re-introduced in the Assembly in accordance with section 65F. 65F (1) This section applies if during the existence of the Assembly first elected after the previous Assembly has been dissolved under section 65E(2) or otherwise dissolved or lawfully determined, a Deadlocked Bill from the previous Assembly is again introduced in the Assembly. (2) For the purposes of this section, a Deadlocked Bill may be introduced in the Assembly in the form in which — (a) it was introduced in the previous Assembly; or (b) it was passed by the previous Assembly and transmitted to the previous Council; or (c) it is consistent with the Dispute Resolution reached in respect of the Deadlocked Bill. (3) If a Bill introduced in accordance with this section again becomes a Disputed Bill, the Premier may advise the Governor in writing to convene a joint sitting of the Assembly and the Council. (4) There is to be attached to the advice under sub-section (3) a copy of the Disputed Bill endorsed with the certificate of the Speaker signed by the Speaker that the Bill is a Bill to which section 65F(3) of the Constitution Act 1975 applies. (5) The certificate of the Speaker under this section is conclusive evidence for all purposes and cannot be questioned in any court. … (6) A joint sitting of the Assembly and the Council convened in accordance with this section may consider all the Bills

that are Disputed Bills in accordance with this section. 65G (1) A joint sitting of the Assembly and the Council convened in accordance with section 65F must consider a Disputed Bill to which that section applies in the form in which it was last passed by the Assembly and transmitted to the Council. (2) Subject to sub-section (3), the joint sitting of the Assembly and the Council is to be conducted in accordance with the rules adopted by the members present at the joint sitting. (3) At the joint sitting of the Assembly and the Council — (a) the members have the same privileges and immunities as the members of the Assembly in relation to proceedings before that House; (b) subject to sub-section (4), a question is to be decided by a majority of the votes cast by the members present at the joint sitting; (c) in the event of an equality of votes on a question, the question is to be taken to have been determined in the negative. [page 167] (4) If an absolute majority of the total number of the members of the Assembly and the Council passes the third reading of the Disputed Bill with or without any amendments at the joint sitting of the Assembly and the Council, the Bill so passed is to be taken to have been duly passed by both Houses of the Parliament, whether or not it is a Bill to which section 18(2) or 18(2AA) applies. (5) Subject to sub-sections (6) and (7), a Bill passed in accordance with this section must be presented to the

Governor for Her Majesty’s Assent and becomes an Act of Parliament on the Royal Assent being signified. (6) If a Bill to which section 18(1B) applies is passed in accordance with this section, it must be submitted to a referendum. (7) A Bill that is referred to in sub-section (6) and that is approved by the majority of electors voting at a referendum must be presented to the Governor for Her Majesty’s assent and becomes an Act of Parliament on the Royal Assent being signified. (8) There is to be endorsed on the Bill when it is presented to the Governor for Her Majesty’s Assent under subsection (5) or (7), the certificate of the Speaker signed by the Speaker that the Bill is a Bill to which section 65G of the Constitution Act 1975 applies and has been passed in accordance with that section. (9) The certificate of the Speaker under this section is conclusive evidence for all purposes and cannot be questioned in any court. (10) If a Bill is passed in accordance with this section, the Bill is deemed for all purposes to be a Bill that has been passed by the Assembly and the Council.

2.10.10 The procedure established by Div 9A of the Constitution Act 1975 (Vic) prescribes a series of steps for overcoming the resistance of the Legislative Council to a proposed law that is supported by the council: deliberation by the Dispute Resolution Committee; consideration of any proposal to resolve the dispute by the assembly and the council; early dissolution of the assembly; a general election for the assembly and the council (a general election for the council being tied to the dissolution of the assembly: Constitution Act 1975 (Vic) s 28); approval of the

proposed law again by the assembly; the revival of the dispute between the assembly and the council over the proposed law; a joint sitting of the assembly and council; and approval of the proposed law (with or without further amendment) by an absolute majority of the members of the assembly and the council. At that point, the proposed law is treated as if it has been approved by the assembly and the council and, unless it is a proposed law to which s 18(1B) applies, it becomes an Act of Parliament upon the royal assent being signified. (Section 18(1B) of the Constitution Act prohibits the presentation to the Governor for royal assent of bills amending or repealing certain provisions in the Constitution Act unless the bill has been passed by the assembly and the council and approved by the majority of the electors voting at a referendum.) 2.10.11 The machinery established by s 5B of the Constitution Act 1902 (NSW) has been used only once, and then unsuccessfully. In 1959, the Labor Government attempted to use the procedure for the enactment of a bill to abolish the Legislative Council. Some members of the council sought an injunction restraining the referendum referred to in s 5B(2), which was refused (Clayton v Heffron 2.10.15C), and, at the referendum that followed, the voters rejected the bill. [page 168] 2.10.12 Section 5B of the Constitution Act 1902 (NSW) is closely modelled on the Parliamentary Bills Referendum Act 1908 (Qld), the validity of which was challenged in Taylor v AttorneyGeneral (Qld) (1917) 23 CLR 457. (At that time, the Queensland

Parliament consisted of two houses — the assembly, with members elected on a popular franchise, and the council, with members appointed for life. The council was abolished in 1922.) The Parliamentary Bills Referendum Act 1908 (Qld) provided that when a bill had been passed by the Legislative Assembly in two successive sessions and on each occasion had been rejected by the Legislative Council, it might be submitted to the electors at a referendum. If approved by them, the bill could then be presented to the Governor for royal assent and would become an Act of Parliament in the same manner as if it had been passed by both houses of parliament. In 1915 and 1916 the Legislative Assembly passed, in two successive sessions, a bill to abolish the Legislative Council. The Legislative Council twice rejected the bill and in April 1917 the Governor issued a proclamation directing that the bill be submitted to a referendum of electors. The plaintiffs, who were members of the Legislative Council, began proceedings in the Supreme Court of Queensland claiming declarations that the Act of 1908 was invalid, and that the Legislative Council could not be abolished. They also claimed an injunction to restrain the holding of the referendum. The Supreme Court granted an interlocutory injunction to restrain the referendum. The defendants appealed to the High Court which ordered the case removed to the court’s original jurisdiction, and dissolved the interlocutory injunction after the Attorney-General of Queensland undertook that no action would be taken to present the abolition bill to the Governor for royal assent if approved at the referendum. The referendum was held on 5 May 1917 and the voters rejected the bill. Notwithstanding that the issue was now moot, the case was argued before the High Court in August 1917, and the court’s decision handed down on 6 September 1917.

Central to the High Court’s reasoning was the second clause of s 5 of the Colonial Laws Validity Act 1865 (UK). Barton J (with whom Gavan Duffy and Rich JJ agreed) held that s 5 of the Colonial Laws Validity Act established the validity of the Parliamentary Bills Referendum Act 1908. As a ‘representative legislature’, the Queensland Parliament had full power to legislate on its constitution, powers and procedure (at 23 CLR 468): I take the constitution of a legislature, as the term is here used, to mean the composition, form or nature of the House of legislature where there is only one House, or of either House if the legislative body consists of two Houses. Probably the power does not extend to authorise the elimination of the representative character of the legislature within the meaning of the Act.

Barton J concluded that the Act of 1908 was ‘a law “respecting the powers” of the legislature in certain cases … It … provides for the substitution of the popular vote as often as the circumstances indicated may occur’: 23 CLR at 469. Moreover, the bill to abolish the council would be, if passed, a law ‘respecting the constitution’ of the legislature, supported by s 5 of the Colonial Laws Validity Act. Isaacs J (with whom Powers J agreed) held that the Act of 1908 was fully supported by s 5 of the Colonial Laws Validity Act and by cl 22 of the Order-in-Council of 6 June 1859, which had established the Queensland Parliament. That clause had authorised the parliament to make laws altering or repealing all or any of the provisions of this Order-in-Council in the same manner as any other laws ‘for the good government of the colony’. [page 169]

Isaacs J agreed that the Queensland legislature could use the referendum procedure to legislate for the abolition of the Legislative Council. However, in the course of his judgment he suggested that some limits to the power to reconstruct the legislature may exist (23 CLR at 474): When power is given to a colonial legislature to alter the constitution of the legislature, that must be read subject to the fundamental conception that, consistently with the very nature of our constitution as an Empire, the Crown is not included in the ambit of such a power. I read the words ‘constitution of such legislature’ as including the change from a unicameral to a bicameral system, or the reverse. Probably the ‘representative’ character of the legislature is a basic condition of the power relied on, and is preserved by the word ‘such’, but, that being maintained, I can see no reason for cutting down the plain natural meaning of the words in question so as to exclude the power of a selfgoverning community to say that for State purposes one House is sufficient as its organ of legislation.

2.10.13 The essentially flexible character of state Constitution Acts was confirmed by the Privy Council in McCawley v R [1920] AC 691. In the course of deciding that the Queensland Parliament could enact legislation inconsistent with certain provisions of the Constitution Act 1867 (Qld) without first expressly repealing those provisions, the Privy Council distinguished ([1920] AC at 703): … between constitutions the terms of which may be modified or repealed with no other formality than is necessary in the case of other legislation, and constitutions which can only be altered with some special formality, and in some cases by a specially convened assembly … Some communities, and notably Great Britain, have not in the framing of constitutions felt it necessary, or thought it useful, to shackle the complete independence of their successors. They have shrunk from the assumption that a degree of wisdom and foresight has been conceded to

their generation which will be, or may be, wanting to their successors, in spite of the fact that those successors will possess more experience of the circumstances and necessities amid which their lives are lived. Those constitution framers who have adopted the other view must be supposed to have believed that certainty and stability were in such a matter the supreme desiderata. Giving effect to this belief, they have created obstacles of varying difficulty in the path of those who would lay rash hands upon the ark of the constitution.

The Privy Council said that the Constitution Acts of the Australian states were, in the sense outlined above, uncontrolled ([1920] AC at 706): What was given was given completely, and unequivocally, in the belief fully justified by the event, that these young communities would successfully work out their own constitutional salvation.

The Queensland Parliament’s power to legislate on constitutional topics in the same manner as it might legislate on other topics (the Privy Council drew an analogy between the Constitution Act and ‘a Dog Act or any other Act’: [1920] AC at 704) was confirmed by s 5 of the Colonial Laws Validity Act, by cl 22 of the Order-inCouncil and by s 2 of the Constitution Act 1867 (Qld). They authorised the Queensland Parliament ‘to make laws for the peace, welfare and good government of the colony in all cases whatsoever’. The Privy Council said of this last provision that ‘it would be almost impossible to use wider or less restrictive language’: [1920] AC at 712. [page 170] The Privy Council made one qualification to their general

description of the Queensland Constitution Act as uncontrolled: where the Act had indicated that a special legislative procedure should be followed when legislating on a particular topic, this could introduce some rigidity into the Constitution Act: [1920] AC at 712, 714. 2.10.14 The second basis for the Queensland Parliament’s power to introduce new legislative procedures, proposed by Isaacs J in Taylor v Attorney-General (Qld) (1917) 23 CLR 457 (see 2.10.12) was cl 22 of the Order-in-Council of 6 June 1859. Each of the original state (or colonial) constitutions contained an equivalent of this clause: New South Wales Constitution Act 1855 (UK) s 4; Constitution Act 1856 (SA) s 34; for Tasmania: Australian Constitutions Act (No 2) 1850 (UK) s 32; Victorian Constitution Act 1855 (UK) s 4; Constitution Act 1855 (Vic) s 60; Constitution Act 1889 (WA) s 73. In Clayton v Heffron (1960) 105 CLR 214, the High Court of Australia examined a third basis that could support state legislation reconstructing legislative procedures, a basis that had been suggested by the Privy Council in McCawley’s case [1920] AC 691 at 712 (see 2.10.13). In 1933, s 5B was added to the Constitution Act 1902 (NSW). In 1959 and again in 1960, the New South Wales Legislative Assembly passed a bill for the abolition of the Legislative Council. The bill was, on each occasion, sent to the

council, which declined to consider the bill and returned it to the assembly. The assembly then requested a free conference of managers but the council refused the request. The Governor then sent messages to both houses convening a joint sitting but the council resolved that its members should not attend. In fact, 23 legislative councillors did attend a joint sitting with the Legislative Assembly. The assembly then resolved that the bill to abolish the council should be submitted to a referendum. Five members of the council, one member of the assembly and one member of the Commonwealth House of Representatives then brought a suit in the New South Wales Supreme Court against the Premier, other ministers and the Electoral Commissioner seeking declarations that s 5B was valid, or that the bill to abolish the council had not complied with s 5B, and injunctions to restrain the holding of the referendum. An interlocutory injunction was granted by McLelland CJ in Equity, but on the hearing of the suits before the full bench of five judges, the relief sought was denied. The plaintiffs appealed to the High Court of Australia. Dixon CJ, McTiernan, Taylor and Windeyer JJ dismissed three arguments: that the Abolition Bill had failed to comply with s 7A of the Constitution Act 1902 (NSW); that there had been a breach of the privileges of the Legislative Council; and that the council had not rejected the Abolition Bill. They then turned to the argument that, because there had been no free conference between the two houses and no joint sitting of the members of the Houses, there was a fatal defect in the procedure. [page 171]

2.10.15C

Clayton v Heffron (1960) 105 CLR 214

Dixon CJ, McTiernan, Taylor and Windeyer JJ: There is no doubt that the words ‘after a free conference between managers’ contain an implied direction that such a conference shall take place. In the same way the words relating to the joint sitting of members of the houses import an intention that the Governor shall then exercise the authority to convene a joint sitting of members. But it is an entirely different thing to find in the direction an intention that a departure from the procedure shall spell invalidity in the statute when it is passed approved and assented to … The power here is to enact a public general statute and the power to do this extends to a statute altering the constitution of the legislature so that if the statute is to be void every future piece of legislation passed by the legislature of the State so constituted will have no force or effect. The matter of procedure prescribed is a matter affecting the process in Parliament of legislating, a matter at once outside the ordinary scope of inquiry by the courts and also one not necessarily of public notoriety. The point of procedure concerns a step preliminary to the calling by the Governor of a joint sitting of the members of the two houses. Such a meeting was convened in point of fact and a meeting of certain members of the two houses took place at the time and place appointed. The point that in itself it could not amount to a joint meeting of members because the Council had resolved that its members should not attend is untenable. The preliminary step of appointing managers freely to confer rested on the cooperation of both houses in a conflict. It would rest with either house to neglect the duty and so bring the proceedings to nought … Before one reaches the conclusion that the failure to fulfil the requirement of holding a free conference will result in the invalidity of the law if adopted, it is natural to treat the fact that the Legislative Council may

decline a conference of managers as a reason to be added to the other considerations for holding that it is not a matter going to validity. Lawyers speak of statutory provisions as imperative when any want of strict compliance with them means that the resulting act, be it a statute, a contract or what you will, is null and void. They speak of them as directory when they mean that although they are legal requirements which it is unlawful to disregard, yet failure to fulfil them does not mean that the resulting act is wholly ineffective, is null and void. It is almost unnecessary to say that the decided cases illustrating the distinction relate to much humbler matters than the validity or invalidity of the constitution of the legislature of a State. But in them all the performance of a public duty or the fulfilment of a public function by a body of persons to whom the task is confided is regarded as something to be contrasted with the acquisition or exercise of private rights or privileges and the fact that to treat deviation in the former case from the conditions or directions laid down as meaning complete invalidity would work inconvenience or worse on a section of the public, is treated as a powerful consideration against doing so. Is it possible to imagine a stronger case of inconvenience than the invalidation perhaps at some future time of a constitutional provision possessing all the outward appearance of a valid law on the ground than when it was made managers of the Council had not met managers of the Assembly before the members of the two houses were required by the Governor to meet? [Dixon CJ, McTiernan, Taylor and Windeyer JJ held that a free conference of managers of the two houses was not an essential condition for the ultimate validity of legislation passed through s 5B. They then turned to the question whether s 5B was valid:] [page 172] There are two sources of possible constitutional power

enabling the legislature to adopt s 5B: one is s 5 of the Constitution Act, 1902–1956 (NSW), the other is s 5 of the Colonial Laws Validity Act 1865 (28 & 29 Vict c 63) … Section 5 of the Constitution Act 1902–1956 appears on consideration to contain a sufficient power not only to change the bicameral system into a unicameral system but also to enable the resolution of disagreements between the two houses by submitting an Act passed by the Assembly for the approval of the electors in substitution for the assent of the Council and, moreover, to include in the application of that legislative process Bills for the abolition of the Legislative Council and Bills otherwise falling within the description dealt with by s 7A. The reasoning supporting this conclusion is indeed simple. It rests on the plain if very general words of s 5 of the Constitution Act. The first paragraph of the section is as follows: ‘The Legislature shall, subject to the provisions of the Commonwealth of Australia Constitution Act have power to make laws for the peace, welfare and good government of New South Wales in all cases whatsoever’. The expression ‘legislature’ is defined in s 3 to mean the Sovereign with the consent of the Legislative Council and Legislative Assembly … The first paragraph confers a complete and unrestricted power to make laws with reference to New South Wales. There is doubtless a territorial limitation implied in the reference to New South Wales but there is no limitation of subject matter. The laws may be constitutional or at the other extreme they may deal with subjects of little significance. Clearly the power extends to laws altering the Constitution Act itself: cf McCawley v R [1920] AC 691, 703–6, 709; (1926) 28 CLR 106, 114–17, 120 … There are many reasons for assuming that the assent of the Crown must always remain necessary but what ground is there for supposing that the legislature must always remain defined in terms of two houses? The purpose of the provision is to express the full legislative power of a State the authority of which is continued under ss 106 and 107 of the

Constitution of the Commonwealth. The Legislature was endowed with constituent as well as ordinary legislative power … It seems obvious that the combined effect of s 4 of the Constitution Statute and s 1 of the Constitution Act was to confer upon the legislature of New South Wales a full constituent power … The authority thus conferred is that exercised in adopting s 5 of the Constitution Act 1902 and it formed an ample foundation for that enactment. It must be remembered that the negative restrictions which s 7A imposes under the operation of s 5 of the Colonial Laws Validity Act were complied with when s 5B was enacted. That being so, once it is seen that s 5 gives the legislature a full constituent power the question why should the power of the legislature not extend to the enactment of s 5B almost answers itself. What it means is that the power to legislate, including the power to legislate for the abolition of the Council, may be exercised by the Crown with the consent of the Assembly provided the proposed law is approved by the majority of the electors voting at a referendum. That is a law falling within the authority described by s 5 of the Constitution Act 1902. That being so it is valid.

2.10.16 Fullagar J held that the validity of s 5B was settled by Taylor v Attorney-General (Qld) (see 2.10.12), that the procedure specified by s 5B was mandatory, and that, as there had been neither a free conference nor a joint sitting, ‘the submission of the Abolition Bill to a referendum and the subsequent assent by the Governor cannot produce a valid Act of the legislature of New South Wales’: 105 CLR at 262. [page 173]

Kitto J shared the view of the majority on the validity of s 5B: 105 CLR at 265. His Honour regarded the requirements of s 5B as mandatory but said that the section implied that the council must be prepared to participate in the proceedings (105 CLR at 268): The words in which a condition is stated … surely cannot mean that the very chamber whose opposition to the Bill is to be prevented from proving a final obstacle to its enactment may, by refusing co-operation, make its opposition successful.

Menzies J held s 5B to be valid, for substantially the same reasons as the majority. His view of the procedures specified in s 5B was the same as that of Kitto J. 2.10.17 The distinction between mandatory and directory procedures, although central to the reasoning of the justices in Clayton v Heffron, has been somewhat discredited over the past 30 years. In Tasker v Fulwood [1978] 1 NSWLR 20 at 23, the New South Wales Court of Appeal said that the use of the labels ‘mandatory’ and ‘directory’ tended to conceal the real issue when legislation prescribed a procedure to be followed when public power is exercised; namely, did the legislature intend that a failure to comply with the stipulated procedure or requirement would invalidate the act done or that the validity of the act would be preserved notwithstanding non-compliance? That approach was also endorsed by the Full Court of the Federal Court in Yappeen Holdings Pty Ltd v Calardu Pty Ltd (1992) 36 FCR 478 at 494. The correctness of the interpretive approach outlined in Tasker v Fulwood — where what is decisive is whether (or not) the purpose of the relevant legislation was that any act done in breach of a statutory condition would render it invalid — was expressly endorsed by the High Court in the important case of Project Blue

Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at [91]–[93] per McHugh, Gummow, Kirby and Hayne JJ: ‘The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties in holding void every act done in breach of the condition’. In answering that question in Clayton v Heffron, Fullagar J relied on the form of s 5B, which made the referendum conditional upon completing the earlier steps. On the other hand, the majority pointed to the ‘powerful consideration’ of the possible ‘inconvenience or worse on the section of the public’ which would follow if the steps were regarded as essential to validity.

Commonwealth Parliament 2.10.18 The first draft of the Commonwealth Constitution, prepared by Sir Samuel Griffith and Andrew Inglis Clark and adopted at the 1891 Convention, made no provision for resolving deadlocks between the two houses of the Commonwealth Parliament. The pressure for the inclusion of some procedure to deal with inter-house disputes came from the two largest colonies, New South Wales and Victoria, whose populations would ensure them the domination of the House of Representatives, but who would be out-numbered by the four smaller states in the Senate. An attempt to insert a deadlock provision was defeated at the Adelaide Convention in 1897, although most observers saw that defeat as anything but final, for without such a provision the voters in New South Wales and Victoria were unlikely to vote for federation. At the Sydney Convention in 1897, after the convention’s largest and most intricate debate, the delegates agreed in principle to the insertion of a provision for resolving deadlocks

and went on to agree on the outlines of the procedure specified in the present s 57. The delegates who voted for a deadlock provision were drawn, by and large, from New South Wales, South Australia [page 174] and Victoria; those who opposed it were from Tasmania and Western Australia. (Queensland did not participate in these conventions.) La Nauze tells us of the political considerations that lay behind the adoption of the deadlock provision: Although equal representation in the Senate had been so decisively confirmed by the convention, the support of the large States had not been given without implied conditions. To defend it in the coming referenda campaigns without some safeguard against an indefinite blocking of the popular will would be difficult in New South Wales and impossible in Victoria … The representatives of Victoria and New South Wales seemed to feel that they must have some machinery, any machinery, for ending deadlocks to justify publicly their concession of equal representation in the Senate. The South Australians, almost to a man, seemed to be anxious to meet these fears of political embarrassment, provided a method could be found which would not put them at the mercy of a simple majority of Australian electors (La Nauze, 1972, pp 188, 190).

2.10.19 At the Melbourne Convention of 1898, the delegates settled, or assumed they were settling, the procedure. ‘Deadlocks would be finally resolved by a three-fifths majority in a joint sitting of both houses after the election following a dissolution of both houses’: La Nauze, 1972, p 217. This settlement was thrown into some confusion when the voters of New South Wales approved the draft Commonwealth Constitution by a small majority (71,595 to

66,228): the relevant New South Wales legislation required an affirmative vote of 80,000. The New South Wales Premier, George Reid, proposed a series of alterations to the 1898 draft of the Constitution and a Premiers’ conference (at which Queensland and the five colonies that had participated in the conventions were represented) agreed on eight changes, among them the substitution of an absolute majority (instead of a three-fifths majority) at the joint sitting specified in s 57: La Nauze, 1972, pp 242–3. The new draft was then approved by the necessary majorities in referenda in New South Wales, Queensland, South Australia, Tasmania and Victoria. Western Australia waited until 1900 before putting the draft to a referendum, which approved the draft. 2.10.20E

Commonwealth Constitution

57 If the House of Representatives passes any proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree and if after an interval of three months the House of Representatives, in the same or the next session, again passes the proposed law with or without any amendments which have been made, suggested, or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the Governor-General may dissolve the Senate and the House of Representatives simultaneously. But such dissolution shall not take place within six months before the date of the expiry of the House of Representatives by effluxion of time. If after such dissolution the House of Representatives again passes the proposed law, with or without any amendments which have been made, suggested, or agreed to by the Senate and the Senate rejects or fails to pass it, or passes it with amendments to

which the House of Representatives will not agree, the GovernorGeneral may convene a joint sitting of the members of the Senate and of the House of Representatives. [page 175] The members present at a joint sitting may deliberate and shall vote together upon the proposed law as last proposed by the House of Representatives, and upon amendments, if any, which have been made therein by one House and not agreed by the other, and any such amendments which are affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives shall be taken to have been carried, and if the proposed law, with the amendments, if any, so carried is affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives, it shall be taken to have been duly passed by both Houses of the Parliament, and shall be presented to the Governor-General for the Queen’s assent.

2.10.21 Writing in 1972, La Nauze remarked of the convention debates on s 57 that there was ‘a certain retrospective unreality about the debate, for it is humanly impossible not to reflect that the apprehensions on both sides were illusory’: La Nauze, 1972, p 183. In so far as the delegates were obsessed with potential conflict between the smaller and larger states, no doubt La Nauze’s observation is sound, as Deakin so acutely observed: The contest will not be, never has been, and cannot be, between States and States. It must be and will be between the representatives of the States according to the different political principles upon which they are returned. (Convention Debates, Sydney, 1897, p 584.)

However, the delegates’ concern to provide some means of resolving deadlocks was not out of touch with political reality, for the different bases on which the two federal houses are elected ensures that the political composition of the houses will often differ. The combination of unequal constituencies (both Tasmania and New South Wales return 12 senators, but the former returns 17 and the latter 48 members to the House of Representatives), different terms (senators hold their seats for 6 years, representatives for a maximum of 3 years), different voting systems (proportional representation for senators, single-member constituencies for the house) and elections at different times (there is no legal requirement that the elections be synchronised) means that the Senate is likely to reflect different political interests from that reflected by the House of Representatives. Before the introduction of proportional representation for the Senate, disparities between political strengths in each house were often absurd. After the general election of May 1913, the Liberal Party had 38 of 75 seats in the House of Representatives, but only seven of the 36 Senate places. When proportional representation replaced the cruder voting systems in 1949, the probability of extreme imbalance in the Senate disappeared. Even so, the composition of the Senate was likely to be quite different from that in the house. The later Menzies Governments, and the Holt, Gorton, McMahon, Whitlam, Fraser, Hawke, Keating, Howard, Rudd, Gillard, Abbott and Turnbull Governments all had to contend with a Senate in which their parties were in the minority (although John Howard did enjoy a brief period when the Coalition held power in both houses). 2.10.22 The s 57 procedure has now been exploited seven times, although only once (in 1974) has it been pushed through to its final

stages with a joint sitting passing the disputed legislation. In 1987, the Hawke Labor Government abandoned plans to convene a joint sitting following the double dissolution and election of that year, when a flaw was discovered in the bill that was to go to the joint sitting: see Australian Journal of Politics and History, 1988, at 218. [page 176] 2.10.23 The fourth use of the s 57 procedure (November 1975) was also characterised by some observers as an abuse of that procedure. When the Governor-General, Sir John Kerr, dismissed Prime Minister Whitlam, he commissioned a new Prime Minister, J M Fraser, on condition that he undertook to obtain supply and that he advised a double dissolution. The double dissolution could only be based (and was based, according to the Governor-General’s proclamation of 11 November 1975) on 21 bills, each of which had been sponsored by the Whitlam Government, opposed by the Fraser-led Opposition and through the essential preliminary procedures specified in s 57. Referring to a passage in Stephen J’s judgment in Western Australia v Commonwealth (Territorial Senators’ case) (1975) 134 CLR 201 2.2.21C, Katz argued that the proper purpose of the double dissolution power is to resolve a deadlock over a bill or bills that have complied with the s 57 procedure; that the purpose of the 1975 double dissolution was different (to resolve a deadlock over the appropriation bills); and that, therefore, the double dissolution was invalid: Katz, 1976, at 396–9. This argument is discussed in detail (and rejected) in Howard and Saunders, 1977, pp 236–7 and Sawer 1977, pp 57–63.

2.10.24 The double dissolution of 1974 was challenged before the High Court in three separate proceedings. In the first of these proceedings, injunctions were sought to prevent the holding of the joint sitting specified in s 57. The injunctions were sought after the results of the general election of 18 May 1974 made it clear that the government could command an absolute majority at the joint sitting. The court refused to grant the injunctions, and most of the judges indicated that the proper remedy for any defect in the s 57 procedure would be to challenge the validity of any legislation after its passage through the joint sitting: Cormack v Cope (1974) 131 CLR 432 2.12.3C. The second challenge was brought in Victoria v Commonwealth (PMA case) (1975) 134 CLR 81. The Petroleum and Minerals Authority Bill (the PMA Bill) was first passed by the House of Representatives on 12 December 1973. It was introduced in the Senate on 13 December 1973 where, on the motion of the Opposition, debate was adjourned. The Senate then rose for the Christmas adjournment. On 14 February 1974, the GovernorGeneral prorogued parliament to 28 February. The Senate resumed debate on the PMA Bill on 19 March 1974 and, on 2 April 1974, rejected the motion that it be read a second time. The House of Representatives passed the PMA Bill a second time on 8 April 1974. On 10 April 1974, the Senate resolved to defer consideration of the PMA Bill for 6 months. The Governor-General dissolved both houses on 11 April 1974. After the subsequent general election, the PMA Bill was again passed by the House of Representatives and rejected by the Senate. The Governor-General convened a joint sitting of the houses and the PMA Bill was approved by that sitting on 6 August 1974. It then received the royal assent as the Petroleum and Minerals Authority Act 1973 (Cth). The plaintiffs (the States of Victoria, Queensland, Western

Australia and New South Wales) began proceedings in the High Court of Australia, seeking declarations that the Petroleum and Minerals Authority Act was not a valid law of the Commonwealth. The defendant filed a defence to the effect that the PMA Bill had complied with the s 57 procedure and that the questions raised by the plaintiffs were not justiciable. The State of Victoria sought to have the defence struck out and the summons seeking this result was referred by Stephen J to the Full Court of the High Court. In the result, the critical issue considered by the High Court in the PMA case was when can it be said that the Senate ‘fails to pass’ a proposed law for purposes of s 57 of the Constitution. [page 177]

2.10.25C

Victoria v Commonwealth (PMA case) (1975) 134 CLR 81

Barwick CJ: The submission of the defendants are: (A) That the resolutions and orders of the Senate on 13 December 1973 without more may amount to a rejection or failure by it to pass the proposed law. (B) That in determining whether the Senate rejected or failed to pass any proposed law regard may be had not only to any relevant resolutions of the Senate but to all relevant facts. Speeches of senators within the Senate may be such. Statements whether by senators or others outside the Senate may also be relevant. All the subparagraphs of para 6 of the defence contain relevant facts. (C) That the interval of three months referred to in s 57 is

from the first passing of the proposed law by the House of Representatives. (D) That the words of condition in the first paragraph of s 57 are used in a directory sense. (E) Statement of claim raises non-justiciable issues. The Commonwealth in the last submission advanced an argument of great significance. The submission was that this court has no power to declare that a law which had not been passed in accordance with the lawmaking requirement of s 57 of the Constitution was invalid, a submission somewhat akin to, though not identical with, but of like consequence to, a submission which had been made by the Commonwealth in Cormack v Cope (1974) 131 CLR 432. The undeniable assertion made in Cormack v Cope that this court is the guardian of the Constitution, and the authorities there cited, are fully relevant to the resolution of the submissions made in this case. Part of that Constitution provides for lawmaking processes. Section 57 is a notable example of that prescription. The court, in my opinion, not only has the power but, when approached by a litigant with a proper interest to do so, has the duty to examine whether or not the law making process prescribed by the Constitution has been followed and, if it has not, to declare that that which has emerged with the appearance of an Act, though having received the royal assent, is not a valid law of the Commonwealth … [Barwick CJ said that he completely disagreed with the argument ‘that the Governor-General had the power unexaminably to decide whether or not the condition of s 57 had been satisfied’:] The powers given to the Governor-General by s 57 are statutory powers — the statute being an organic instrument — conditioned on the existence of facts … I can see no basis on which the Constitution can be read as giving the Governor-General

a power to decide the facts on which the legality of his own actions or the validity of an Act may depend. Of course, the Governor-General must form a view for himself as to whether the circumstances of the proposed law satisfy the requirements of the first paragraph of s 57. But his power is contingent on the existence in fact of the conditions which that paragraph expresses: in my opinion, the power to decide the fact is reposed in this court and in this court alone. That is a facet of the undoubted position of the court as the guardian of the Constitution. [Barwick CJ also rejected an argument that the terms of s 57 were merely directory, so that failure to conform to its requirements would not affect the validity of what was done. It was ‘quite inappropriate’ to apply the distinction between a directory and a mandatory statutory [page 178] provision to s 57: 134 CLR at 119–20. He then turned to the possible consequence of the exercise by the Governor-General of the double dissolution power in circumstances where the preconditions to the exercise of that power were later found not to exist.] The dissolution itself is a fact which can neither be void nor be undone. If, without having power to do so, the GovernorGeneral did dissolve both houses, there would be no basis for setting aside the dissolution or for treating it as not having occurred. None the less, the double dissolution would not have been authorised, and therefore it would not satisfy the second paragraph of s 57 and provide a warrant for a joint sitting. The joint sitting, pursuant to the third paragraph of that section, which was dependent upon such a dissolution, which, though not void, was not lawful, would not have power to affirm any law. It is not necessary, in my opinion, to regard any part of s 57 as directory in order to conclude that, though the proclamation be

unlawful, the sequential dissolution in fact occurred and was incapable of being disregarded, reversed or undone. [Turning to the question whether the Senate had ‘failed to pass’ the bill on 13 December, Barwick CJ noted that the Commonwealth’s argument was based on the premise that s 57’s purpose was to enable the will of the House of Representatives to prevail.] It seems to me that this submission is untenable. The Senate is a part of the Parliament and, except as to laws appropriating revenue or money for the ordinary annual services of the government or imposing taxation, is co-equal with the House of Representatives. Bills may originate and do originate in the Senate. Section 53 of the Constitution makes it abundantly clear that the Senate is to have equal powers with the House of Representatives in respect of all laws other than those specifically excepted. The only limitations as to the equality of the powers of the Senate with those of the House of Representatives are those imposed by the first three paragraphs of that section, to the terms of which the limitations must be confined. It is evident from the terms of the Constitution that the Senate was intended to represent the States, parts of the Commonwealth, as distinct from the House of Representatives which represents the electors throughout Australia. It is often said that the Senate has, in this respect, failed of its purpose. This may be so, due partly to the party system and to the nature of the electoral system: but even if that assertion be true it does not detract from the constitutional position that it was intended that proposed laws could be considered by the Senate from a point of view different from that which the House of Representatives may take. The Senate is not a mere house of review: rather it is a house which may examine a proposed law from a stand-point different from that which the House of Representatives may have taken. That a Bill needs consideration and debate is beyond question, though one cannot but observe that due to the dominance of the executive in the House of Representatives and perhaps, at times,

in the Senate, opportunity for debate may be very attenuated. But, whatever exigencies of party policies, the Constitution cannot be read as if laws ought to be passed by the Senate without debate, or as if the House of Representatives may in any respect command the Senate in relation to a Bill. Thus, in approaching the meaning of the word ‘fails’ in s 57, it must be borne in mind that the Senate is both entitled and bound to consider a proposed law and to have a proper opportunity for debate and that its concurrence, apart from the provisions of s 57, is indispensable to a valid Act of the Parliament. It seems that the word ‘fails’ in s 57 involves the notion that a time has arrived when, even allowing for the deliberate processes of the Senate, the Senate ought to answer whether [page 179] or not it will pass the Bill or make amendments to it for the consideration of the House: that the time has arrived for the Senate to take a stand with respect to the Bill. If that time has arrived and the Senate rather than take a stand merely prevaricates, it can properly be said at that time to have failed to pass the Bill. In considering whether such a time has arrived, it may be that antecedent conduct of the Senate, particularly in relation to the proposed law, may be relevant. But it will be the conduct of the Senate itself and not the conduct or opinions or anticipatory statements of individual senators, whatever may be their party standing or party authority, which can have any relevance to the question whether, the situation having been reached where the Senate is called upon to give an answer on the Bill, it has failed to pass it … In order to deny that the Senate has failed to pass the Bill, it may be enough to say that all the processes available to the Senate in the consideration of a Bill have not been exhausted.

It may be that even before those processes are exhausted the Senate may fail to pass within the meaning of s 57. In 1951 the reference of the Commonwealth Banking Bill to a select committee did not prevent the conclusion that the Senate had failed to pass, having regard to its entire conduct in regard to the Bill. It was said that the reference to the select committee in the particular circumstances was no more than prevarication. On other occasions and in different circumstances, the same conclusion perhaps may not be drawn from a reference of a Bill to a select committee. However, I have no doubt that it cannot properly be said that when the Senate resolved on 13 December 1973 to adjourn the debate on the motion for a second reading until in effect the next sitting day, it had failed to pass the Bill. In my opinion, it could not be said that the time had arrived that day when the Senate was in any sense obliged to express itself definitively on the Bill. The concept of failure to pass must, it seems to me, mean more than ‘not pass’. Failure in this sense imports, as I have said, the notion of the presence of an obligation as a house to take a definitive stand. My conclusion therefore is that the Senate did not fail to pass the proposed law on 13 December 1973 within the meaning and operation of s 57 of the Constitution. The adjournment by the Senate of the debate until what was in effect the next day of sitting cannot be said, in my opinion, to have been a mere prevarication. Indeed, the suspension of standing orders to allow of the making of the motion for a second reading, scarce portends an intention to prevaricate. The next question is whether or not the period of three months in the first paragraph of s 57 is to run from the date of the Senate’s relevant treatment of the Bill, or whether it runs from the first passage of the Bill by the House of Representatives. Reading s 57 as a piece of English, I am unable to see any basis upon which the words ‘if after an interval of three months’ could be referable other than to the action of the Senate …

But, apart from reading the section as a piece of English, the purpose behind the section, it seems to me, is to fix a period of time after the Senate has considered the law and taken up a definitive position with respect to it, during which the House of Representatives should have time to consider, no doubt in the light of what has been said in debate in the Senate, whether the law should go forward again. Also, the decision of the Senate whether it should maintain its former attitude to the Bill may well be affected by the lapse of time. I cannot see any policy which would be satisfied by annexing the interval of three months to the first passage of the proposed law by the House of Representatives … There is no question that the first paragraph of s 57 gives the House of Representatives the initiative both in the formulation of the proposed law and in its re-enactment after an [page 180] interval of three months, but the purpose of a double dissolution is not to ensure that the will of the House prevails. Rather it is a means by which the electorate can express itself and perhaps thus resolve the ‘deadlock’ which has been demonstrated to exist between the House and the Senate … Further, the purpose of the joint sitting if the ‘deadlock’ continues is not to secure the will of the House of Representatives. It is to secure the view of the absolute majority of the total number of the members of both houses, which may or may not represent the will of the House of Representatives. It is little to the point that it may generally be expected that the members of the more numerous House will carry the day in a joint sitting. But that is not a necessary consequence. This argument on the construction of s 57 which the Crown put forward is, in my opinion, untenable. In my opinion, the requirements of the first paragraph of s 57

were not satisfied in relation to the Bill. The Senate had not failed to pass it on 13 December 1973, and the interval of three months from the date of the Senate’s rejection of the Bill which should have elapsed before the House of Representatives again passed the proposed law did not elapse. A consequence is that, had there been no other proposed laws which satisfied the provisions of s 57, the Governor-General would not have had authority to dissolve the Senate and the House of Representatives simultaneously merely because of what occurred in the Senate on 13 December 1973 in relation to the Bill. I therefore conclude that the Bill, though assented to by the Governor-General, is not a valid law of the Commonwealth. [Gibbs, Stephen and Mason JJ agreed that the issues were justiciable. McTiernan J asserted that the case presented a ‘political question … not within the judicial power of the Commonwealth, vested by s 71 of the Constitution in the court, to decide’: 134 CLR at 135. Jacobs J expressed no opinion on this issue. Gibbs and Mason JJ also agreed that the provisions of s 57 were mandatory. Gibbs, Stephen and Mason JJ agreed that the 3-month interval was to be measured from the Senate’s rejection or failure to pass and that the Senate had neither rejected nor failed to pass the PMA Bill on 13 December 1973. McTiernan J expressed no opinion on these issues. On the effect of a procedural flaw on the election of a new parliament, Gibbs, Stephen and Mason JJ offered the following comments:] Gibbs J: One consequence of … an invalid dissolution would clearly be that a proposed law affirmed by an absolute majority at any subsequent joint sitting of members of the Senate and House of Representatives would not be valid for it would not have satisfied the conditions of law making laid down by s 57. But the conditions which s 57 attaches to the exercise of the powers which it confers do not also attach to the powers given by ss 12 and 32 of the Constitution to cause writs to be used for the election of members of the Senate and of the House of Representatives. If the Senate were in fact dissolved, and if

thereafter writs for an election were issued, the election was held and a new Parliament was summoned to meet, I can see no difficulty in holding that the new Parliament would have validly assembled. This of course is not to suggest that this court could not intervene to uphold the Constitution and prevent an invalid proclamation for the dissolution of the Senate from being given effect. Stephen J: In the case of s 57 no such consequences would, in my view, ensue; once the Governor-General has in fact dissolved both chambers, whether or not he is justified in doing so in terms of s 57, the existing Parliament will have been brought effectively to an end and the new Parliament which results from the issue of writs and the holding of an election following such dissolution will be quite unaffected by whatever may or may not have preceded that dissolution. [page 181] Mason J: It does not follow, despite the suggestion to the contrary made by the Solicitor-General, that the court could intervene to declare invalid a dissolution of the Parliament and an ensuing election. The jurisdiction of the court is engaged because there is at issue the validity of a statute enacted by the Parliament, a question which it will decide in a suit for a declaration as to validity. Intervention by the court at any other stage of the parliamentary process involves different considerations of a complex character, jurisdictional and discretionary, some of which were discussed in Clayton v Heffron (1960) 105 CLR 214, Cormack v Cope (1974) 131 CLR 432, and the decisions there referred to. Even if it be thought that a logical consequence of granting relief to the plaintiffs now would be to expose a prospective dissolution of Parliament under s 57 to

judicial scrutiny, this does not demonstrate that relief cannot be granted in the present cases.

2.10.26 Jacobs J dissented on the substantive issues before the court. He held that s 57 allowed the Senate 3 months in which to pass a bill passed by the House of Representatives. That is, the Senate ‘fails to pass’ a proposed law if it does not pass the proposed law as soon as it is transmitted to the Senate from the House of Representatives, and the Senate continues in a state or condition of failing to pass the proposed law for so long as it does not pass the proposed law. This interpretation, according to Jacobs J, was justified by the ordinary meaning of the phrase, by the need to avoid uncertainty in the application of s 57 and by the purpose of s 57, to achieve the passage of legislation in a form acceptable to the House of Representatives. He also concluded that, in the present case, the Senate had positively ‘failed to pass’ the PMA Bill on 13 December or during the immediately following days, if s 57 required the phrase ‘fails to pass’ to be read in that sense. It had not been ‘reasonable for the Senate to adjourn leaving this business undone’: 134 CLR at 199. 2.10.27 In Cormack v Cope (1974) 131 CLR 432 2.12.3C, the High Court had foreshadowed this decision. While refusing to enjoin the joint sitting, the majority of the court had held that the procedures specified in s 57 were justiciable and Barwick CJ had indicated that the Petroleum and Minerals Authority Act had not satisfied those procedures. An argument that the phrase ‘any proposed law’ in s 57 was confined to a single bill was rejected. The court held that a double dissolution could be proclaimed and a joint

sitting convened in respect of any number of bills that had been through the necessary s 57 procedures. The majority also expressed the opinion that it was not part of the Governor-General’s function to specify the business that might be discussed at the joint sitting that he convened. Accordingly, that part of his proclamation that invited the members of both houses to ‘deliberate and vote together on’ six named bills was of no legal effect. Rather, it was ‘surplusage’ or ‘unnecessary material’, but only Barwick CJ thought that its presence in the proclamation could invalidate the proclamation. 2.10.28 It is clear that the majority in the PMA case saw the phrase ‘fails to pass’ as implying some definite action, or some clear default, on the part of the Senate. Barwick CJ, Gibbs J and Mason J spoke of the failure to pass a bill after a reasonable time had been allowed for consideration: 134 CLR at 122, 148, 186, respectively. Stephen J talked of the Senate taking advantage of its normal processes ‘for ulterior purposes, for delaying rather than considering and then passing or rejecting, a proposed law’: 134 CLR at 171. At the same time, the majority refused to regard statements made by senators during the Senate debates as going to the proof [page 182] of this issue. Surely, this creates a fundamental dilemma: how is it possible to determine whether the normal processes are being used ‘for ulterior purposes’, or whether the Senate has ‘had a reasonable opportunity to pass’ a bill, unless one examines the actions and attitudes of those people who constitute the Senate? No doubt there are real dangers in treating parliamentary debates as an

authoritative source on such issues, but how else might the question (as posed by the majority) be sensibly answered? 2.10.29 Geoffrey Sawer made the point that, if the majority view of ‘fails to pass’ is ‘applied to the circumstances of 1951 without any reference to what was said in debates, the result is inconclusive’. On that occasion, the Prime Minister R G Menzies advised the Governor-General to dissolve both houses after the Senate had agreed to a second reading motion on the Commonwealth Bank Bill and then resolved to refer the bill to a select committee for consideration and report. Menzies advised the Governor-General that this amounted to a failure to pass and that, as the bill had earlier been passed by the House of Representatives, amended by the Senate and passed again by the House of Representatives after the necessary 3 months’ delay, he should proclaim a double dissolution. The Governor-General acted on this advice. Sawer goes on to observe that ‘only the tone of debate can tip the scale’ when the Senate has done no more than use its ordinary procedures, as it did in 1951. Indeed, he remarks that a judicial examination of the 1951 events (which ignored the Parliamentary Debates) may well have found that the s 57 procedures had not been followed: Sawer, 1977, pp 50–1. 2.10.30 Is there any way, given the majority’s approach to the phrase ‘fails to pass’, that the court can avoid making a political assessment of proceedings in parliament? Might this inevitability support the argument that s 57 is not justiciable as McTiernan J held in the PMA case? Consider the point made by Sawer: ‘Judicial supervision is not necessary in this matter, because the necessary consequence of the operation of s 57 is to leave ultimate judgment on a predominantly political question to the electors, both the Representatives electors and the Senate electors’: Sawer, 1977, p

54; see also the judgment of Jacobs J in Western Australia v Commonwealth (Territorial Senators’ case) (1975) 134 CLR 201 at 275–6 2.2.21C. 2.10.31 The majority judgments in the PMA case asserted that the High Court could, in appropriate proceedings, review a double dissolution and joint sitting under s 57 and decide that these were ineffective because the legislation on which they were founded, and in whose enactment they purported to form distinct stages, had not complied with the earlier procedural steps specified in s 57. But the majority justices denied that a failure to adhere to the procedural steps would invalidate the double dissolution and the subsequent general election: 134 CLR at 120 per Barwick CJ; 156 per Gibbs J; 178 per Stephen J; 183 per Mason J. Their views have been described by Sawer as ‘logically unsatisfying’ (Sawer, 1977, p 52), and by Zines as ‘unconvincing’: Zines, 1977, p 231. Zines suggested that ‘policy considerations, involving political and social consequences’ could justify the judges’ view that the validity of legislation may be tested but not the validity of a dissolution or election: Zines, 1977, p 232. 2.10.32 The third challenge to the 1974 double dissolution came in Western Australia v Commonwealth (Territorial Senators case) (1975) 134 CLR 201, where the High Court was asked to declare invalid the Senate (Representation of Territories) Act 1973 (Cth). The grounds of attack were, first, that there had not been full compliance with the s 57 procedures (which had been used to enact the Act) and, second, that the provisions of the Act were in conflict with s 7 of the Constitution. (That second issue is dealt with at 2.2.21C.)

[page 183] The Senate (Representation of Territories) Bill 1973 was first passed by the House of Representatives on 30 May 1973 and was rejected by the Senate on 7 June 1973. It was passed a second time by the House of Representatives on 27 September 1973 and again rejected by the Senate on 14 November 1973. Following the double dissolution of 11 April 1974, a general election and further disagreement between the houses over the bill, a joint sitting passed the bill and it received the royal assent on 7 August 1974 as the Senate (Representation of Territories) Act 1973 (Cth). The High Court (Barwick CJ, McTiernan, Gibbs, Stephen, Mason, Jacobs and Murphy JJ) was unanimous in rejecting the first ground of the plaintiffs’ attack. There had, the justices said, been a sufficient compliance with the requirements of s 57 of the Constitution. The principal argument raised by the plaintiffs, in support of their claim that the legislation had not complied with s 57, was based on the delay between the Senate’s second rejection of the bill (14 November 1973) and the Governor-General’s dissolution of the two houses (11 April 1974). The plaintiffs argued that the Governor-General could only exercise his power under s 57 if he did so without undue delay: unless the deadlock between the houses was exploited (within a limited period), the basis for a double dissolution would disappear. In support of this argument, the plaintiffs said that the parliament’s bicameral character would be impaired if the government and the House of Representatives were able ‘to store up over a period a great number of measures which, following one double dissolution, might then be enacted at a joint sitting of both chambers’, as Stephen J put it: 134 CLR at 251.

Stephen J pointed out that s 57 imposed no time limit on the Governor-General’s double dissolution power, although other time limits were expressed in the section. There was no basis for reading into s 57 a requirement that the power be exercised immediately after a deadlock had occurred. If the power was only to be exercised without undue delay or within a reasonable time, how was that period to be measured? It would, Stephen J said, be ‘quite inappropriate that the court should conjecture as to when delay by His Excellency exceeds the limits of reasonableness and becomes undue delay’: 134 CLR at 252. Mason J said (134 CLR at 265–6): The notion on which the suggestion is based, that the disagreement comes to an end if the power is not exercised forthwith, is not only artificial but in many circumstances would be entirely at variance with the facts … The plaintiffs’ argument either requires the introduction into the first paragraph of the section of some words such as ‘thereupon’, ‘forthwith’ or ‘immediately thereafter’ which, if inserted, would need to be strictly applied, or alternatively leaves the power subject to some restriction which is vague and imprecise and is therefore unacceptable. The first alternative would, if it were accepted, destroy the possibility of further negotiation between the Houses after a second rejection by the Senate — any negotiation would produce a delay fatal to the exercise of the power.

The other members of the court, apart from Barwick CJ, agreed that s 57 did not require the Governor-General to use the power to dissolve both houses within any limited time. Barwick CJ said that the action of the Governor-General in dissolving both houses under s 57 must be (134 CLR at 221): … proximate to the time that the difference between the Houses

emerged. It would be quite incongruous that at a considerable remove of time and after the business of the Parliament had been proceeding for many months, it should be dissolved to enable the electorate to pass

[page 184] upon a question which could appear to have been shelved: to vote in relation to a Bill or a difference between the houses which had in truth become stale.

In particular, Barwick CJ said, bills twice rejected by the Senate could not be ‘stockpiled’; they could not be laid aside against the possibility of some remote double dissolution. However, he concluded that there had not been such a delay in the present case as to make the dispute over the Senate (Representation of Territories) Bill no longer current on 11 April 1974. 2.10.33 In the Territorial Senators’ case, Jacobs J, who held that s 57 did not impose any time limits on the Governor-General’s double dissolution power, also addressed the question whether compliance with the s 57 procedures was justiciable. He accepted that this question had been resolved in the PMA case 2.10.25C. But he said that, apart from that decision, he would have decided that there was no place for adjudication by the court in questions of procedure arising under s 57 (134 CLR at 275–6): The procedure prescribed leads to the expression by the people of their preference in the choice of their elected representatives, a preference expressed with the knowledge that a joint sitting of those representatives may need to take place, and no court in the absence of a clearly conferred power has the right to thwart or interfere with the people’s expression of their choice. The people’s expression cures any formal

defects which may have previously existed. That is democratic government within the terms of the Constitution by which the people elected to be governed.

Murphy J (who had not participated in the decision in the PMA case) also held that the issue of compliance with s 57 was not justiciable. 2.10.34 In the course of his judgment in the Territorial Senators’ case, Stephen J suggested that a double dissolution could only be proclaimed for the purpose of resolving a deadlock over legislation (134 CLR at 261): The power may … only be exercised in reliance upon the fact of the twice repeated rejection and not in purported reliance upon some quite different event. If it should appear, perhaps from some recital in the dissolution proclamation, that His Excellency had purported to dissolve both chambers for some other reason, not itself involving satisfaction of the necessary condition precedent called for by s 57, the fact that there did also exist circumstances which would have provided a proper ground for dissolution will not make the dissolution one authorised by s 57.

On the other hand, Mason J noted (134 CLR at 265): The power to dissolve can be exercised even in circumstances in which the Government and the House of Representatives lose their enthusiasm for the proposed law and desire a double dissolution for other reasons having no connexion with the Senate’s rejection of the proposed law.

Given that Stephen J appears to have been contemplating an ‘ulterior motive’ obvious on the face of the Governor-General’s proclamation, there may be little practical difference between him and Mason J.

[page 185] 2.10.35 The observations of two members of the court in the Territorial Senators’ case raise an important issue: to what extent is the Governor-General’s power under s 57 an independent one which is to be exercised at his or her own discretion? Jacobs J said (134 CLR at 278): Neither the Queen nor the Governor-General acts personally. This is true of the powers of the Governor-General under s 57. He in all respects exercises his powers under the section on the advice of an Australian minister.

Murphy J said, in support of his view that compliance with the procedures of s 57 was not justiciable (134 CLR at 293): The decision whether the procedures in s 57 for a double dissolution had been observed is a political decision, confided by the Constitution, not to the judiciary, but to the Governor-General on the advice of the Executive Council (Constitution s 62).

Similarly, Mason J spoke of the power to dissolve at a time and for reasons chosen by ‘the Government and the House of Representatives’: 134 CLR at 265. 2.10.36 In the Territorial Senators’ case, Stephen J said that a joint sitting (summoned by the Governor-General as the penultimate stage in the s 57 legislative procedure) ‘may not consider a measure other than that for the consideration of which it has been convened’; that is, specified in the Governor-General’s proclamation summoning the joint sitting: 134 CLR at 262. However, in Cormack v Cope (1974) 131 CLR 432 2.12.3C,

Stephen J had said that the terms of the Governor-General’s proclamation could not affect the business of the joint sitting ‘one way or another’ by omitting to specify or by specifying the bills to be considered: 131 CLR at 471. This view was adopted by Gibbs and Mason JJ in the Territorial Senators’ case: 134 CLR at 242, 267, respectively. At the other end of the spectrum, Barwick CJ had said in Cormack v Cope that the Governor-General had, when summoning the joint sitting of August 1974, ‘exceeded his function in specifying the business of the joint sitting’: 131 CLR at 458. It is sobering to reflect that, from this wide range of judicial opinions, a government’s legal advisers may be obliged to draft practicable and legally sound instruments (proclaiming a double dissolution or summoning a joint sitting) should that government wish to use the s 57 procedures for the enactment of legislation. 2.10.37 The Constitutional Commission described the s 57 procedure, as developed through political practice and interpreted by judicial decision, as ‘unsatisfactory and open to abuse’. A government could ‘obtain a double dissolution by the device of passing a bill known to be totally unacceptable to the nongovernment party or parties’, as had happened in 1914 and 1951. Or a government could store up a twice-rejected bill and use it as the basis for a double dissolution ‘at a time considered opportune for its own political success’: Constitutional Commission, 1988, pp 256–7. The commission recommended that s 57 be amended so as to allow a double dissolution only during the last year of the term of the House of Representatives, and to clarify that the GovernorGeneral acts on the advice of ministers. The commission also proposed clarification of the concepts of failure to pass and passage with unacceptable amendments, and a requirement that, at the

joint sitting, a specified minimum number of senators vote in favour of the bill: Constitutional Commission, 1988, pp 247–8. [page 186]

RESTRICTIVE PROCEDURES 2.11.1 Restrictive procedures for the enactment of certain types of legislation were inserted in the first Constitution Acts of the Australian colonies. A restrictive procedure makes it harder for parliament to enact legislation on certain subject matters. For example, s 60 of the Constitution Act 1855 (Vic) declared that it ‘shall not be lawful to present to the Governor of the said Colony for Her Majesty’s assent any Bill by which an alteration in the constitution of the … Legislative Council and Legislative Assembly … may be made unless on its second and third readings it shall have been approved by’ absolute majorities in each chamber. The clear purpose of this, and other similar provisions in the Constitution Acts of the colonies, was to protect specified aspects of the constitutional structure against interference through the normal legislative process. These provisions reflect a judgment on the part of those who enacted them that certain elements in the structure of government were so fundamental or so highly valued that they should be preserved against any future interference. The provisions were, of course, a conservative device intended to frustrate any radical (or, indeed, minor) reforms sponsored by a mere majority of the legislators. Yet, paradoxically, these provisions demanding special majorities or special legislative procedures were

themselves enacted by the normal procedures; that is, by the simple majorities that the provisions purported to disenfranchise. 2.11.2 While such special legislative procedures have long been prescribed in Australian constitutional instruments, it was not until 1931 (in Trethowan’s case (1931) 44 CLR 394 2.11.10C) that the efficacy and ‘bindingness’ of such provisions was tested. In 1920, the Privy Council suggested in McCawley v R [1920] AC 691 (see 2.10.13) that such provisions could be effective and that a parliament that ignored such procedural restrictions might be held to have failed to legislate. The basic point decided in McCawley was that the Queensland Parliament could enact legislation, the terms of which were inconsistent with the terms of the Constitution Act 1867 (Qld), without first expressly repealing the latter Act. Rather, the enactment of inconsistent legislation would impliedly repeal so much of the earlier Constitution Act as conflicted with it. In the course of their opinion, their Lordships referred to s 9 of the Constitution Act 1867 which required a two-thirds majority in both houses for legislation altering the constitution of the Legislative Council and observed that ‘the legislature in this isolated section carefully selected one special and individual case in which limitations are imposed upon the power of the Parliament of Queensland to express and carry out its purpose in the ordinary way, by a bare majority’: [1920] AC at 712. And later they commented that ‘the legislature of Queensland is the master of its own household, except in so far as its powers have in special cases been restricted’: [1920] AC at 714. These observations were not part of the decision in McCawley’s case, and there was some reason for supposing that, if a government that controlled parliament (that is, with simple

majorities in each house) put its mind to it, that government could legislate in disregard of such procedural restrictions as s 60 of the Constitution Act (Vic) or s 9 of the Constitution Act 1867 (Qld).

State parliaments 2.11.3 If the powers conferred by Imperial law on the Australian state parliaments are as plenary and of the same nature as those of the Imperial Parliament at Westminster, are they [page 187] disabled from reconstituting themselves or from fettering their own legislative action? Can they deprive themselves and their successors of the power to legislate on any particular topic or to modify or repeal any statute they may enact? Can they transfer or surrender some or all of their power to new legislative bodies of their own creation? The answers to these questions emerge from the various constituent statutes, not by considering the English rules of parliamentary sovereignty. However, those constituent statutes may be interpreted in light of principles that form part of the rules of parliamentary sovereignty. This topic is comprehensively examined by Anne Twomey, 2004. Until 1986, the answers to these questions were considered to depend largely on s 5 of the Colonial Laws Validity Act 1865 (UK) (see 1.3.4–1.3.5). However, that provision has now been replaced by s 6 of the Australia Act 1986 (Cth) 1.3.20E, 2.11.16E, which probably has substantially the same effect.

The legislation 2.11.4E

Constitution Act 1902 (NSW)

7A (1) The Legislative Council shall not be abolished nor, subject to the provisions of subsection six of this section, shall its constitution or powers be altered except in the manner provided in this section. (2) A Bill for any purpose within subsection (1) shall not be presented to the Governor for His Majesty’s assent until the Bill has been approved by the electors in accordance with this section. (3) On a day not sooner than two months after the passage of the Bill through both Houses of the Legislature the Bill shall be submitted to the electors qualified to vote for the election of Members of the Legislative Assembly. Such day shall be appointed by the Legislature. (4) When the Bill is submitted to the electors the vote shall be taken in such manner as the Legislature prescribes. (5) If a majority of the electors voting approve the Bill, it shall be presented to the Governor for His Majesty’s assent. (6) The provisions of this section shall extend to any Bill for the repeal or amendment of this section, but shall not apply to any Bill for (a) the repeal; or (b) the amendment from time to time; or (c) the re-enactment from time to time with or without modifications of any of the following sections of this Act, namely, sections thirteen, fourteen, fifteen, 17B, 17C, eighteen, nineteen, twenty, twenty-one, twenty-two and 38A, or of

any provision for the time being in force so far as it relates to the subject-matter dealt with in any of those sections. (7) repealed (8) In this section a reference to the Legislative Council shall be construed as a reference to the Legislative Council as reconstituted in accordance with this Act.

[page 188] 2.11.5 Section 7A was enacted by the New South Wales Parliament in 1929 at a time when both houses were controlled by the conservative political parties. The council had survived, through the defection of Labor appointees, an attack by J T Lang’s Labor Government in 1925. However, the Labor Party was determined to follow Queensland’s example and abolish the New South Wales Legislative Council. The politicians who saw the council as essential to their interests came up with this ‘entrenching’ provision as a protection against the probable return of the Labor Party to a majority in the assembly, from which position the Labor Party could use the Governor’s appointing power to obtain a majority in the council. In 1930, following its return to power, the Lang Labor Government again moved to abolish the council, and the protection extended by s 7A was tested: see Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 2.11.10C. 2.11.6 The pattern set by s 7A has been followed in several other constitutional provisions which demand a referendum of electors as part of the legislative process:

Constitution Act 1902 (NSW) s 7B: any bill to extend the life of the assembly beyond 4 years; and any bill to amend or repeal ss 11B (compulsory voting), 26, 27, 28 (distribution of assembly electorates) or 29 and the 7th Sch (conduct of assembly elections). Constitution (Fixed Term Parliaments) Special Provisions Act 1991 (NSW) s 9: any bill to repeal or amend the Act (which prescribes a fixed term for the parliament which first met on 2 July 1991). Constitution Act Amendment Act 1934 (Qld) s 3: any bill to re-establish the council (s 4); any bill to extend the life of the assembly beyond 3 years. Constitution Act 1934 (SA) s 10a: any bill to abolish the assembly or the council, to alter the powers of the council, or to affect the established procedures for altering the Constitution Act or resolving deadlocks (s 88); any bill that would alter the system for distributing seats in the Legislative Assembly. Constitution Act 1975 (Vic) s 18(1B): any bill to repeal, alter or vary the provisions listed in paragraphs (a)–(p). Constitution Act 1889 (WA) s 73: any bill that affects the office of Governor, abolishes the Legislative Council or Assembly, provides for other than direct election to the council or assembly, or reduces the size of the council or assembly. Each of the above provisions also demands that any bill to amend or repeal that provision shall be approved by the electors at a referendum before being submitted to the Governor for royal assent. This legislative technique,

regarding the entrenchment of the restrictive procedures themselves, is known as self-entrenchment. 2.11.7 Section 18(2) of the Constitution Act 1975 (Vic) prohibits the presentation to the Governor of certain bills (including a bill to amend s 18(2)) unless those bills have been passed by a ‘special majority’ — defined in s 18(1A) to mean ‘3/5ths of the whole number of the members of the Assembly and of the Council respectively’. A less restrictive legislative procedure is prescribed by s 18(2AA) of the Constitution Act 1975 (Vic), which prohibits the presentation to the Governor of certain bills unless those bills have been passed by an absolute majority in each house. (An absolute majority is a majority of those eligible to vote — irrespective of who votes. A simple majority is a majority of those [page 189] who, in fact, vote.) Section 18(2) also demands that any bill to amend or repeal it be passed by the same special procedure. Section 18(2A) requires absolute majorities in the assembly and the council for a bill by which s 85 of the Constitution Act (dealing with the jurisdiction of the Supreme Court) may be repealed, altered or varied. A similar procedure (approval by absolute majorities) is prescribed by s 8 of the Constitution Act 1934 (SA) for bills altering the constitution of the council or the assembly. Section 10A(2)(d) demands that a bill to amend or repeal s 8 be passed through the referendum procedure.

2.11.8 Section 41A of the Constitution Act 1934 (Tas) is another example of a restrictive procedure. It provides: The Assembly may not pass any Bill to amend s 23 unless no less than two-thirds of its Members vote for passing the Bill or for a motion on the passing of which the Bill will be deemed to have passed.

Section 23 fixes the maximum life of the assembly at 4 years. There is no special procedure prescribed for the amendment or repeal of s 41A. Accordingly, the restriction imposed by s 41A is of doubtful efficacy as it is not self-entrenched. The repeal of s 41A could, arguably, be affected by legislation passed by simple majority. 2.11.9 In 1930, the Labor Government of New South Wales announced that it intended, again, to press for the passage of legislation abolishing the Legislative Council. The Legislative Council then passed two government bills: one to repeal s 7A of the Constitution Act 1902 (NSW); the other to abolish the council. It seems that the council did this because it recognised that the government could have sufficient new councillors appointed to ensure passage of the bills and it believed that the bills would be the subject of a referendum, as required by s 7A. The bills were then passed by the Legislative Assembly and the government announced that it would not submit them to a referendum but would advise the Governor to give the bills the royal assent. Immediately, two members of the council began a suit in the Supreme Court against the President of the Legislative Council and the ministers in the government seeking a declaration that compliance with the provisions of s 7A was essential and injunctions to restrain the presentation to the Governor of the two bills until they had been approved by the electors in accordance with s 7A.

Long Innes J at first instance granted an interim injunction and referred the suit to the Full Court of the Supreme Court. The Full Court issued the declaration and the injunctions sought by the plaintiffs. The defendants appealed to the High Court of Australia. Rich J referred to an argument that the New South Wales Parliament retained full power to amend its Constitution Act. 2.11.10C

Attorney-General (NSW) v Trethowan (1931) 44 CLR 394

Rich J: The argument leaves out of account an occurrence of great constitutional importance to the dominions. It ignores the passing of the Colonial Laws Validity Act 1865. Section 5 of that Act confers upon representative legislatures in the dominions full power to [page 190] make laws respecting the constitution, powers and procedure of such legislatures, provided that such laws shall have been passed in such manner and form as may from time to time be required by any Act of Parliament, letters patent, Order-in-council, or colonial law for the time being in force therein. This is a parallel power, but it is not alternative. It is the final and authoritative expression of every colonial representative legislature’s power to make laws respecting its own constitution, powers and procedure … Two methods of controlling the operations of the legislature appear to be allowed by the express terms of s 5 of the Colonial Laws Validity Act. The constitution of the legislative body may be altered; that is to say, the power of legislation may be reposed in an authority differently constituted. Again, laws may

be passed imposing legal requirements as to manner and form in which constitutional amendments must be passed. In my opinion the efficacy of s 7A depends upon the answer to the questions — does it fall within the proviso as to a requirement of manner and form? and does it introduce into the legislative body a new element? If the true answer to either of these questions is yes, then the Legislative Council cannot be abolished without a referendum unless and until s 7A is repealed, and s 7A cannot be repealed except by a Bill approved at a referendum before it is presented for the royal assent … The first question is whether sub-s 6, which is a colonial law for the time being in force, requires a manner and form in which a law repealing s 7A must be passed. In my opinion it does … In my opinion the proviso to s 5 relates to the entire process of turning a proposed law into a legislative enactment, and was intended to enjoin fulfilment of every condition and compliance with every requirement which existing legislation imposed upon the process of law-making. This view is enough to dispose of the case; but if what is done under sub-s 6 did not fall under the proviso, the question would still remain whether for the purpose of abolishing the Legislative Council and the purpose of repealing s 7A a new element is not introduced into the legislative authority. It was conceded that under s 5 it was competent to the legislature to establish a third chamber whose assent would be required to complete any legislative act. It could not be denied that, if a third chamber could be introduced, a body of persons of another character might also be created a constituent element of the legislature … If the legislative body consists of different elements for the purpose of legislation upon different subjects, the natural method of applying the definition would be to consider what was the subject upon which the particular exercise of power was proposed, and to treat s 5 as conferring upon the body constituted to deal with that subject authority to pass the law although it related to the powers of the legislature. An examination of s 7A shows that a legislative body has been

created for the purpose of passing or co-operating in passing a particular law. There is no reason why this authority need extend to all laws … McCawley’s case [1920] AC 691; 28 CLR 106 reaffirms the full power of such a legislature as that of New South Wales, which passed s 7A, to regulate its own constitution. Such a power naturally extends to the enactment of safeguards aimed at restraining improvident or hasty action. There is no reason why a parliament representing the people should be powerless to determine whether the constitutional salvation of the State is to be reached by cautious and well considered steps rather than by rash and ill considered measures … I am, therefore, of opinion that neither of the Bills in question may be lawfully presented to the Governor for the royal assent, and be validly assented to, until it is approved by a majority of the electors. [page 191] Dixon J: The case depends upon the question whether the Bill for the repeal of s 7A may be presented for the royal assent and become a valid law without compliance with the condition which that section itself prescribes requiring that a Bill for its repeal shall first be approved by a majority of the electors. This question must be answered upon a consideration of the true meaning and effect of the written instrument from which the Parliament of New South Wales derives its legislative power. It is not to be determined by the direct application of the doctrine of parliamentary sovereignty … The incapacity of the British legislature to limit its own power otherwise than by transferring a portion or abdicating the whole of its sovereignty has been accounted for by the history of the High Court of Parliament, and has been explained as a necessary consequence

of a true conception of sovereignty. But in any case it depends upon considerations which have no application to the legislature of New South Wales, which is not a sovereign body and has a purely statutory origin. Because of the supremacy of the Imperial Parliament over the law, the courts merely apply its legislative enactments and do not examine their validity, but because the law over which the Imperial Parliament is supreme determines the powers of a legislature in a dominion, the courts must decide upon the validity as well as the application of the statutes of that legislature. It must not be supposed, however, that all difficulties would vanish if the full doctrine of parliamentary supremacy could be invoked. An Act of the British Parliament which contained a provision that no Bill repealing any part of the Act including the part so restraining its own repeal should be presented for the royal assent unless the Bill were first approved by the electors, would have the force of law until the Sovereign actually did assent to a Bill for its repeal. In strictness it would be an unlawful proceeding to present such a Bill for the royal assent before it had been approved by the electors. If, before the Bill received the assent of the Crown, it was found possible, as appears to have been done in this appeal, to raise for judicial decision the question whether it was lawful to present the Bill for that assent, the courts would be bound to pronounce it unlawful to do so. Moreover, if it happened that, notwithstanding the statutory inhibition, the Bill did receive the royal assent although it was not submitted to the electors, the courts might be called upon to consider whether the supreme legislative power in respect of the matter had in truth been exercised in the manner required for its authentic expression and by the elements in which it had come to reside. But the answer to this question, whether evident or obscure, would be deduced from the principle of parliamentary supremacy over the law. This principle, from its very nature, cannot determine the character or the operation of the constituent powers of the legislature of New South Wales which are the result of statute … The difficulty of the supreme legislature lessening its own powers does not arise from the flexibility of the constitution. On the contrary, it

may be said that is precisely the point at which the flexibility of the British constitution ceases to be absolute. Because it rests upon the supremacy over the law, some changes which detract from that supremacy cannot be made effectively. The necessary limitations upon the flexibility of the constitution of New South Wales result from a consideration of exactly an opposite character. They arise directly or indirectly from the sovereignty of the Imperial Parliament. But in virtue of its sovereignty it was open to the Imperial Parliament itself to give, or to empower the legislature of New South Wales to give to the constitution of that State as much or as little rigidity as might be proper. [Dixon J referred to the original constitution statute, 18 and 19 Vict c 54, s 4 of which authorised the New South Wales Parliament to amend or repeal its original Constitution Act 1855, and to the Constitution Act 1902 which involved an exercise of that power. His Honour referred to the Colonial Laws Validity Act 1865, and continued:] [page 192] It was a declared object of that Act to remove doubts respecting the powers of colonial legislatures and these questions depend upon considerations out of which such doubts arose. Upon the subjects with which it deals, the statement of the law contained in the Colonial Laws Validity Act was meant to be definitive, and a subject with which it deals is the constituent power of such legislatures and the manner in which that power shall be exercised … This provision both confers power and describes the conditions to be observed in its exercise. It authorises a representative legislature to make laws respecting its own constitution, its own powers and its own procedure … it is plenary save in so far as it may be qualified by a law which falls within the description of the proviso. The power to make laws respecting its own constitution enables the legislature to deal with

its own nature and composition. The power to make laws respecting its own procedure enables it to prescribe rules which have the force of law for its own conduct. Laws which relate to its own constitution and procedure must govern the legislature in the exercise of its powers including the exercise of its powers to repeal those very laws. The power to make laws respecting its own powers would naturally be understood to mean that it might deal with its own legislative authority. Under such a power a legislature, whose authority was limited in respect of subject matter or restrained by constitutional checks or safeguards, might enlarge the limits or diminish or remove the restraints. Conversely, the power might be expected to enable a legislature to impose constitutional restraints upon its own authority or to limit its power in respect of subject matter. But such restraints and limitations, if they are to be real and effective and achieve their end, must bind the legislature. If the legislature, nevertheless, continues to retain unaffected and unimpaired by its own laws the power given by this provision to legislate respecting its own power, it is evident that it may always repeal the limitations and restraints which those laws purport to impose. Moreover, this means, as McCawley’s case [1920] AC 691, 28 CLR 106 establishes, that no formal repeal is necessary to resume the power and the legislature remains competent to make laws inconsistent with the restraints or limitations which its former statutes have sought to create. If and in so far, therefore, as s 5 confers a superior and indestructible power to make laws with respect to the legislature’s own powers, it cannot enable it to impose upon those powers any effective restraints or restrictions … Considered apart from the proviso, the language in which this provision is expressed could not reasonably be understood to authorise any regulation, control or impairment of the power it describes … But the proviso recognises that the exercise of the power may to some extent be qualified or controlled by law … Such a law … cannot do more than prescribe the mode in

which laws respecting these matters must be made. To be valid, a law respecting the powers of the legislature must ‘have been passed in such manner and form as may from time to time be required by any … colonial law’ (scil, a law of that legislature) ‘for the time being in force’. Its validity cannot otherwise be affected by a prior law of that legislature. In other words no degree of rigidity greater than this can be given by the legislature to the constitution. The law proposed by the Bill to repeal s 7A of the Constitution Act 1902 to 1929 answers the description ‘a law respecting the powers of the legislature’ just as the provisions of s 7A itself constitute a law with respect to those powers. But the proposal cannot be put into effect save by a law which ‘shall have been passed in such manner and form as may be required by any’ prior law of the New South Wales legislature. Unless it be void, s 7A is undeniably a prior law of the New South Wales legislature. It is no less a law of that legislature because it requires the approval of the electors as a condition of its repeal. But it is not void unless this requirement is repugnant to s 5 of the Colonial Laws Validity Act. No requirement is [page 193] repugnant to that section if it is within the contemplation of its proviso, which concedes the efficacy of enactments requiring a manner or form in which laws shall be passed. If, therefore, a provision that a particular law respecting the powers of the legislature may not be made unless it is approved by the electors, requires a manner or form in which such a law shall be passed, then s 7A is a valid law and cannot be repealed without the approval of the electorate. I have arrived at the conclusion that such a provision is properly described as requiring a manner in which the law shall be passed and falls within the category allowed by the proviso …

For these reasons I think s 7A is valid and effective, and the appeal should be dismissed. [Starke J delivered a concurring judgment. Gavan Duffy CJ and McTiernan J dissented on the ground that s 7A(6) did not prescribe a ‘manner and form’ for legislating, but purported to ‘destroy or permanently diminish the authority’ of the New South Wales Parliament to legislate on the subject of its own constitution: 44 CLR at 443.]

2.11.11 On appeal, the Privy Council affirmed the decision of the High Court: Attorney-General (NSW) v Trethowan. Its decision was that s 7A of the Constitution Act was within the power conferred by s 5 of the Colonial Laws Validity Act and that, because of the proviso to s 5, it could not be repealed except in the manner provided in subs (6). Of the decision, R T E Latham wrote: ‘Trethowan’s case … is an instance where the diffidence of the Privy Council amounted to timidity. The board avoided a fundamental issue, squarely raised, by a decision “on the words of the statute”’: Latham, 1949, at 525. To what extent did the High Court avoid that criticism and come to grips with the fundamental issue? 2.11.12 If we assume that subs (6) — the self-entrenchment provision — had not been included in s 7A, the bicameral parliament would have retained the power to abolish the Legislative Council. It could have repealed s 7A through its normal legislative process and, once s 7A was repealed, it could then have abolished the council through its normal legislative process. However, while s 7A remained on the statute books, the New South Wales Parliament could not have abolished the council

through its normal legislative process. While s 7A survived, it laid down a binding manner and form that conditioned the validity of legislation abolishing the council, and s 7A would survive until repealed. It might, of course, be repealed by implication as well as expressly but the enactment or purported enactment by the bicameral parliament of a bill to abolish the council would not have repealed, impliedly or expressly, the assumed s 7A. 2.11.13 A later Act impliedly repeals an earlier Act when, and to the extent that, the provisions or terms of the later Act are inconsistent with those of the earlier Act: see, for example, Kartinyeri v Commonwealth (1998) 195 CLR 337. But an earlier Act is not repealed because the procedure adopted for the enactment of a later Act is inconsistent with that prescribed by the terms of the earlier Act. There is no inconsistency of provisions or terms between an Act (or so-called Act) enacted, or purportedly enacted, by the bicameral parliament, and an earlier [page 194] Act that prescribes a different manner and form for the later Act’s enactment, a manner that has not been observed. 2.11.14 Assuming still that s 7A did not contain subs (6), would a single Act of the bicameral parliament that contained provisions repealing s 7A and abolishing the Legislative Council be a valid Act abolishing the council, if it had not been submitted to a referendum? At the time the Act received the royal assent, can its provisions abolishing the Legislative Council be said to have been passed in the manner and form required by law? At the time it was

presented for the royal assent, did not the law require that it be first approved at a referendum? 2.11.15 Would the decision in Trethowan’s case have been reached without the proviso to s 5 of the Colonial Laws Validity Act? Could it have been reached in the absence of the whole of s 5? Did s 5 add anything to the power given to the New South Wales Parliament by the Constitution Act 1855 (NSW) and the Constitution Act 1902 (NSW)? Could not the New South Wales Parliament find sufficient power to enact s 7A in the following provisions: New South Wales Constitution Act 1855 (UK) ss 4, 9; Constitution Act 1902 (NSW) s 5? See Clayton v Heffron (1960) 105 CLR 214 at 250–2 2.10.15C. With the passage of the Australia Act 1986 (Cth), the Colonial Laws Validity Act 1865 (UK) no longer operated on the legislation of Australian state parliaments. But as noted above, s 5 of the Colonial Laws Validity Act 1865 was effectively reproduced in s 6 of the Australia Act 1986 (Cth). Importantly, the Australia Act is an Act of the Commonwealth Parliament. This means that any state legislation that is inconsistent with it is invalid (to the extent of the inconsistency) by virtue of s 109 of the Australian Constitution. 2.11.16E

Australia Act 1986 (Cth)

3 (1) The Act of the Parliament of the United Kingdom known as the Colonial Laws Validity Act 1865 shall not apply to any law made after the commencement of this Act by the Parliament of a State. …

6 Notwithstanding sections 2 and 3(2) above, a law made after the commencement of this Act by the 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, whether made before or after the commencement of this Act. [The significance of the replacement of s 5 of the Colonial Laws Validity Act with s 6 of the Australia Act was explored by the High Court in Attorney-General (WA) v Marquet (2003) 217 CLR 545 2.11.39C; see also Lee, 1988, at 309–11; Goldsworthy, 1987, at 410– 12; Twomey, 2004.]

2.11.17 Trethowan’s case could have been resolved without any discussion of sovereignty, legislative powers and procedures and manner and form. The plaintiffs sought an injunction to enforce a clear prohibition set down in s 7A of the Constitution Act; namely, s 7A(2) provided that a bill to abolish the council ‘shall not be presented to the Governor’ until [page 195] approved at a referendum. That prohibition was unequivocal and the judges needed to decide one thing only: would they enforce it? However, the case was argued and decided at all levels as if that was not the issue; rather, the issue was assumed to be: can legislation passed in defiance of s 7A(2) and s 7A(6) have the effect of abolishing the council and repealing s 7A? The assumption was made (and, indeed, the High Court insisted on this before giving

leave to appeal) that the bills in question had been approved by the assembly, the council and the Governor, and the question asked was: ‘Are the resulting (hypothetical) Acts valid?’. Taylor v Attorney-General (Qld) (1917) 23 CLR 457 (see 2.10.12) and Clayton v Heffron were argued on similar hypothetical bases. 2.11.18 The majority clearly rejected McTiernan J’s argument that s 7A was, in substance, a law depriving the New South Wales Parliament of legislative power. Would the majority’s decision have been different if s 7A had required that bills to repeal it or abolish the Legislative Council be approved by 60 per cent of the electors? 80 per cent? 100 per cent? Would such a provision be characterised as an abdication, renunciation or diminution of legislative power (as opposed to a legislative procedure that provides for its exercise) and therefore invalid? 2.11.19 Writing of the successor to s 5 of the Colonial Laws Validity Act, s 6 of the Australia Act, Goldsworthy has said that ‘a distinction must be drawn between manner and form requirements and attempts to restrict Parliament’s substantive powers’, and he referred to King CJ’s discussion of this problem in West Lakes Ltd v South Australia (1980) 25 SASR 389 2.11.31C at 397: Goldsworthy, 1987, at 419. Goldsworthy applied this distinction to a variety of possible restrictive procedures, including veto rights given to outside bodies; the requirement that legislation adopt a specified form of words; special majority requirements; and referendum requirements: Goldsworthy, 1987, at 417–23. 2.11.20 In South Eastern Drainage Board v Savings Bank of South Australia (1939) 62 CLR 603, the High Court rejected a challenge to s 14 of the South Eastern Drainage Amendment Act 1900 (SA), which was inconsistent with certain provisions of the Real Property

Act 1886 (SA). Section 6 of the 1886 Act declared that ‘no law, so far as inconsistent with this Act, shall apply to land subject to the provisions of this Act, nor shall any future law, so far as inconsistent with this Act, so apply unless it shall be expressly enacted that it shall so apply notwithstanding the provisions of the Real Property Act 1886’. The 1900 Act did not contain an express declaration of the type specified in s 6 of the 1886 Act. Dixon J rejected an argument that s 5 of the Colonial Laws Validity Act 1865 rendered s 14 of the 1900 Act invalid because of its failure to contain the declaration specified in s 6 of the 1886 Act (62 CLR at 625): Section 6 of the Real Property Act is, in my opinion, not a law respecting the constitution, powers or procedure of the South Australian legislature … The section is a declaration as to what meaning and operation are to be given to future enactments, not a definition or restriction of the powers of the legislature.

Evatt J said that the legislature of South Australia had ‘plenary power to couch its enactments in such literary form as it may choose’ and could not ‘be effectively commanded by a prior legislature to express its intention in a particular way’: 62 CLR at 633. He said that Trethowan’s case had nothing to do with the matter. Although s 6 of the 1886 Act was not a mere interpretation section and purported to lay down a rigid rule binding upon all future parliaments, its command was ‘quite ineffective and inoperative’: 62 CLR at 633–4. [page 196]

2.11.21 The reason offered by Dixon J for concluding that s 5 of the Colonial Laws Validity Act was irrelevant to the issues in the South Eastern Drainage Board case is difficult to reconcile with the terms of s 5. The question was not, as Dixon J proposed, whether s 6 of the earlier Act, the Real Property Act 1886, was a law respecting the constitution, powers and procedure of the legislature. Rather, the question was whether the later Act, s 14 of the South Eastern Drainage Amendment Act 1900, answered that description; and, if so, whether s 6 of the earlier Act prescribed a manner and form for enacting the later Act. Even if s 5 of the Colonial Laws Validity Act was irrelevant to the problem in the South Eastern Drainage case, it might be argued that compliance with the form laid down by s 6 of the Real Property Act 1886 was essential in order to produce legislation on the topic specified in that section. It might be said that, unless s 14 of the South Eastern Drainage Amendment Act 1900 contained the formula specified by the Act of 1886, ‘the supreme legislative power in respect to the matter had not been exercised in the manner required for its authentic expression’: see Dixon J in Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 426. This proposition — ‘that a legislature has no power to ignore the conditions of law-making that are imposed by the instrument which itself regulates the power to make law’ — was explored by the Privy Council in Bribery Commissioner v Ranasinghe [1965] AC 172. In that case, the Ceylon (Constitution) Order-in-Council 1946 contained the following clauses: 18 Save as otherwise provided in sub-s (4) of s 29, any question proposed for decision by either chamber shall be determined by a

majority of votes of the Senators or Members, as the case may be, present and voting … 29 (1) Subject to the provisions of this Order, Parliament shall have power to make laws for the peace, order and good government of the Island … (4) In the exercise of its powers under this section, Parliament may amend or repeal any of the provisions of this Order or any other Order of Her Majesty in Council in its application to the Island: Provided that no Bill for the amendment or repeal of any of the provisions of this Order shall be presented for the Royal Assent unless it has endorsed on it a certificate under the hand of the Speaker that the number of votes cast in favour thereof in the House of Representatives amount to not less than two-thirds of the whole number of Members of the House (including those not present). Every certificate of the Speaker under this subsection shall be conclusive for all purposes and shall not be questioned in any court of law.

Section 55 of the Order-in-Council provided that the appointment, transfer and disciplinary control of judicial officers was to be vested in a judicial service commission. The Bribery Amendment Act 1958 (Ceylon) created bribery tribunals with jurisdiction to hear, try and determine prosecutions for bribery. The tribunal was to consist of three members chosen from a panel appointed by the Governor-General on the advice of the Minister for Justice. The members of the tribunals were clearly judicial officers within s 55 of the Order-in-Council, but there was nothing in the Bribery Amendment Act to show that it had been passed by the necessary two-thirds majority. Certainly the bill for the Act did not carry the Speaker’s certificate required by s 29(4) of the Order-in-Council when presented for royal assent. The respondent was prosecuted for bribery before a bribery

tribunal. He was convicted but, on appeal to the Supreme Court of Ceylon, the conviction was declared null and inoperative because the members of the tribunal had not been lawfully appointed. The prosecutor appealed to the Privy Council, whose opinion was delivered by Lord Pearce. [page 197]

2.11.22C

Bribery Commissioner v Ranasinghe [1965] AC 172

Lord Pearce: When a sovereign parliament has purported to enact a Bill and it has received the royal assent, is it a valid Act in the course of whose passing there was a procedural defect, or is it an invalid Act which parliament had no power to pass in that manner? The strongest argument in favour of the appellant’s contention is the fact that s 29(3) expressly makes void any Act passed in respect of the matters entrenched on and prohibited by s 29(2), whereas s 29(4) makes no such provision, but merely couches the prohibition in procedural terms. The appellant’s argument placed much reliance on the opinion of this Board in McCawley v R [1920] AC 691 … Just as in that case the legislature of the colony of Queensland was held to have power by a mere majority vote to pass an Act that was inconsistent with the provisions of the existing Constitution of the colony as to the tenure of judicial office, so, it was said, the legislature of Ceylon had no less a power to depart from the requirements of a section such as s 55 of the Order-in-Council, notwithstanding the wording of s 18 and s 29(4). Their Lordships are satisfied that the attempted analogy between the two cases is

delusive and that McCawley’s case, so far as it is material, is in fact opposed to the appellant’s reasoning. In view of the importance of the matter it is desirable to deal with this argument in some detail. [The Privy Council noted that McCawley’s case concerned the Constitution Act 1867 (Qld), s 2 of which gave the legislature ‘power to make laws for the peace, welfare and good government of the colony in all cases whatsoever’, and continued:] The only express restriction on this comprehensive power was contained in a later section, s 9, which required a two-thirds majority of the Council and of the Assembly as a condition precedent to the validity of legislation altering the constitution of the Council. As to this Lord Birkenhead LC, delivering the board’s opinion, remarked [1920] AC 691 at 712: ‘We observe, therefore, the legislature in this isolated instance carefully selecting one special and individual case in which limitations are imposed upon the power of the Parliament of Queensland to express and to carry out its purpose in the ordinary way, by a bare majority’. This observation was coupled with the summary statement at 714: ‘The legislature of Queensland is the master of its own household, except in so far as its powers have in special cases been restricted. No such restriction has been established, and none in fact exists, in such a case as is raised in the issues now under appeal’. These passages show clearly that the board in McCawley’s case [1920] AC 691 took the view, which commends itself to the Board in the present case, that a legislature has no power to ignore the conditions of law-making that are imposed by the instrument which itself regulates its power to make law. This restriction exists independently of the question whether the legislature is sovereign, as is the legislature of Ceylon, or whether the Constitution is ‘uncontrolled’, as the board held the Constitution of Queensland to be. Such a Constitution can, indeed, be altered or amended by the legislature, if the

regulating instrument so provides and if the terms of those provisions are complied with: and the alteration or amendment may include the change or abolition of those very provisions. But the proposition which is not acceptable is that a legislature, once established, has some inherent power derived from the mere fact of its establishment to make a valid law by the resolution of a bare majority which its own constituent instrument has said shall not be a valid law unless made by a different type of majority or by a different legislative process. And this is the proposition which is in reality involved in the argument. [page 198] It is possible now to state summarily what is the essential difference between the McCawley case [1920] AC 691 and this case. There the legislature, having full power to make laws by a majority, except upon one subject that was not in question, passed a law which conflicted with one of the existing terms of its Constitution Act. It was held that this was valid legislation, since it must be treated as pro tanto an alteration of the Constitution, which was neither fundamental in the sense of being beyond change nor so constructed as to require any special legislative process to pass upon the topic dealt with. In the present case, on the other hand, the legislature has purported to pass a law which, being in conflict with s 55 of the Order-in-Council, must be treated, if it is to be valid, as an implied alteration of the constitutional provisions about the appointment of judicial officers. Since such alterations, even if express, can only be made by laws which comply with the special legislative procedure laid down in s 29(4), the Ceylon legislature has not got the general power to legislate so as to amend its Constitution by ordinary majority resolutions, such as the Queensland legislature was found to have under s 2 of its Constitution Act, but is rather in the position, for affecting such amendments, that that legislature

was held to be in by virtue of its s 9, namely, compelled to operate a special procedure in order to achieve the desired result. [Lord Pearce referred to Trethowan’s case, declaring that ‘the effect of s 5 of the Colonial Laws Validity Act, which is framed in a manner somewhat similar to s 29(4) of the Ceylon Constitution was that where a legislative power is given subject to certain manner and form, that power does not exist unless and until the manner and form is complied with’. He continued:] The legislative power of the Ceylon Parliament is derived from s 18 and s 29 of its Constitution. Section 18 expressly says ‘save as otherwise ordered in sub-s (4) of s 29’. Section 29(1) is expressed to be ‘subject to the provisions of this Order’. And any power under s 29(4) is expressly subject to its proviso. Therefore in the case of amendment and repeal of the Constitution the Speaker’s certificate is a necessary part of the legislative process and any Bill which does not comply with the condition precedent of the proviso, is and remains, even though it receives the royal assent, invalid and ultra vires. No question of sovereignty arises. A parliament does not cease to be sovereign whenever its component members fail to produce among themselves a requisite majority, eg, when in the case of ordinary legislation the voting is evenly divided or when in the case of legislation to amend the Constitution there is only a bare majority if the Constitution requires something more. The minority are entitled under the Constitution of Ceylon to have no amendment of it which is not passed by a two-thirds majority. The limitation thus imposed on some lesser majority of members does not limit the sovereign powers of parliament itself which can always, whenever it chooses, pass the amendment with the requisite majority.

2.11.23

In Harris v Minister of the Interior 1952 (2) SA 428, the

Appellate Division of the South African Supreme Court held that the Separate Representation of Voters Act 1951 (Sth Africa), which provided for separate representation in parliament for Europeans and non-Europeans, was not an authentic Act of Parliament because it had been passed through the normal legislative processes, whereas s 152 of the South Africa Act 1909 (UK) required a two-thirds majority at a joint sitting of both houses. The South Africa Act 1909 had no special sanctity because of its Imperial status; the Statute of Westminster 1931 (UK) authorised the South African Parliament to alter or repeal the South Africa Act as if it were an Act of the local legislature. In the course of his judgment, Centlivres CJ said that in South Africa ‘legal [page 199] sovereignty is or may be divided between Parliament as ordinarily constituted and Parliament as constituted under … the proviso to s 152’: 1952 (2) SA at 464. Later he said (1952 (2) SA at 468): The Union is an autonomous State in no way subordinate to any other country in the world. To say that the Union is not a sovereign State, simply because its Parliament functioning bicamerally has not the power to amend certain sections of the South Africa Act, is to state a manifest absurdity. Those sections can be amended by Parliament sitting unicamerally. The Union is, therefore, through its legislature able to pass any laws it pleases.

2.11.24 The proposition that a parliament could be compelled to follow special legislative procedures, even where the Colonial Laws Validity Act was not applicable, was suggested by Dixon J in

Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 426 2.11.10C. The proposition, as expressed by Dixon J, depends on the argument that, if the courts are expected to concede supreme authority to an Act of Parliament, then the courts must have some method of recognising what is, and what is not, an Act of Parliament. There must be rules of recognition that the courts apply to determine whether an alleged Act of Parliament is, in truth, such an Act. These rules of recognition are susceptible to change or alteration in the same way as other rules of law: by Act of Parliament. So the courts, when confronted with a purported statute, should test the legitimacy of the ‘statute’ by measuring it against the appropriate rules of recognition. If it measures up, it is a statute; if it does not comply, then it is not a statute and not entitled to any more respect from the courts than a scrap of paper would receive. As Dixon J said, the courts are ‘called upon to consider whether the supreme legislative power in respect of the matter had in truth been exercised and by the elements in which it had come to reside’: 44 CLR at 426. It could be said that neither s 5 of the Colonial Laws Validity Act (see 1.3.4–1.3.5), nor s 6 of the Australia Act 1.3.20E, established any novel proposition; they simply declared the obvious rule that, in order to legislate, a parliament must follow the currently prescribed legislative procedure. 2.11.25 In Victoria v Commonwealth (PMA case) (1975) 134 CLR 81 2.10.25C, Gibbs J considered and rejected a submission that the High Court had no jurisdiction to investigate the legislative process that might have led to the enactment of legislation. In the course of doing so, he discussed the general question raised in the preceding paragraph (134 CLR at 163–4):

The principle that the courts may not examine the way in which the law-making process has been performed has no application where a legislature is established under or governed by an instrument which prescribes that laws of a certain kind may only be passed if the legislature is constituted or exercises its functions in a particular manner, eg by the members of both Houses sitting together (as was required by the South Africa Act: Harris v Minister of the Interior 1952 (2) SALR 428; sub nom Harris v Donges [1952] 1 TLR 1245) or by a two-thirds majority (which was rendered necessary by the Ceylon (Constitution) Order in Council considered in Bribery Commissioner v Ranasinghe [1965] AC 172). These cases decide that when the law requires a legislature to enact legislation in a particular manner, the courts may investigate whether the legislature has exercised its powers in the manner required; this is recognised also in McCawley v R [1920] AC 691 at 703–4, 712, 714; (1920) 28 CLR 106, at 114–15, 123, 125 and McDonald v Cain [1953] VLR 411 at 419, 425–6, 433–5. In all of these cases it happens that the restrictions on the manner of the exercise

[page 200] of legislative power that had to be considered related to amendments to the Constitution, but the principle which has been evolved is not limited to constitutional amendments. Nor did the decision in these cases in any way depend upon the provisions of s 5 of the Colonial Laws Validity Act, 1865; that Act no longer applied to the laws of Ceylon or South Africa at the times when the decisions that respectively related to those countries were given. The principle that underlies these decisions was expressed succinctly by Lord Pearce in Bribery Commissioner v Ranasinghe [1965] AC at 197 in the following words: ‘a legislature has no power to ignore the conditions of lawmaking that are imposed by the instrument which itself regulates its power to make law’. He distinguished the English authorities by saying that ‘in the Constitution of the United Kingdom there is no governing instrument which

prescribes the lawmaking powers and the forms which are essential to those powers’ [1965] AC at 195. (If the Parliament Acts, 1911 and 1949 (UK) can properly be regarded as an instrument of that kind, questions such as those that now arise will nevertheless be unlikely to fall for decision under those Acts, because they provide, by ss 2(3) and 3, that when a Bill is presented for the Royal assent there shall be indorsed upon it the certificate of the Speaker of the House of Commons that the provisions of the section have been duly complied with, and that any such certificate shall be conclusive for all purposes.) The duty of the courts to inquire whether the conditions of law making have been fulfilled does not depend on whether or not a legislature is sovereign; the legislatures of Ceylon and of South Africa were sovereign legislatures. Nor does it depend on whether the legislature forms part of a unitary or a federal system; Ceylon and South Africa were unitary constitutions. The remarks of their Lordships in McCawley v R [1920] AC at 703–4; (1920) 28 CLR at 114–15 support this view, and appear inconsistent with what was later suggested in Clayton v Heffron (1960) 105 CLR at 245. The distinction is between legislatures which are, and those which are not, governed by an instrument which imposes conditions on the power to make laws.

2.11.26 In Western Australia v Wilsmore (1981) 33 ALR 13, the Supreme Court of Western Australia held that restrictive legislative procedures, at least as expressed in the Constitution Acts of the Australian states, were made effective by s 106 of the Commonwealth Constitution. Wilsmore had sued the state of Western Australia for a declaration that the Electoral Act Amendment Act (No 2) 1979 (WA) was invalid because the legislation had not been passed by absolute majorities in the assembly and the council, as required by s 73 of the Constitution Act 1889 (WA). The declarations were refused by Brinsden J but, on appeal, they were granted by the Full Court: Wilsmore v Western Australia [1981] WAR 159. The State

of Western Australia then applied to the Full Court for leave to appeal to the Privy Council. The Full Court decided that such an appeal was excluded by s 39(2)(a) of the Judiciary Act 1903 (Cth), which prohibits appeals to the Privy Council from any decision of a state court exercising federal jurisdiction. According to s 30(2)(a) of the Judiciary Act, a state court dealing with a ‘matter arising under the Commonwealth Constitution’ is exercising federal jurisdiction. The Full Court said that, because the matter before the court from which leave to appeal was now sought raised questions about the alteration of the state constitution, it arose under s 106 of the Commonwealth Constitution: 106 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 altered in accordance with the Constitution of the State.

[page 201] Burt CJ, with whom Lavan and Jones JJ agreed, said (at 33 ALR 18): One can concede that s 73 of the State Constitution as a law is entirely dependent for its authority upon Imperial legislation and it would still remain true to say that to alter the State Constitution other than in accordance with that Constitution would offend against s 106 of the Commonwealth Constitution. By the force of that section it would be ineffective and, again, by the force of that section, the State Constitution prior to the purported amendment and in the instant case, the right which the respondent possessed under it would ‘continue’.

So the question in the case can be said to arise under both the State Constitution and the Commonwealth Constitution and to say that requires one to say that it is a matter ‘arising under the Constitution’ within the meaning of s 30(2)(a) of the Judiciary Act. That conclusion can be expressed by saying that s 106 of the Commonwealth Constitution by its own force and for its own purposes is a law which requires that such manner and form provisions as are to be found in the State Constitution conditioning the power to amend the Constitution be observed. And when the question arises as to whether this has or has not been done it is a matter ‘arising under the Constitution’ within the meaning of s 30(2)(a) of the Judiciary Act.

2.11.27 Western Australia then appealed to the High Court of Australia, which allowed the appeal, holding that the procedure laid down in s 73 of the Constitution Act 1889 (WA) did not purport to lay down a restrictive procedure for amendments to the Electoral Act: Western Australia v Wilsmore (1982) 149 CLR 79. In the course of his judgment, Wilson J (with whom Gibbs CJ, Stephen and Mason JJ agreed) said that it was unnecessary to pursue ‘the source of the legal efficacy of the s 73 procedure’ (149 CLR at 96): It matters not in the present contest whether the proviso to s 73, laying down the procedure is of binding force because of s 5 of the Colonial Laws Validity Act 1865 (UK), s 5 of the Western Australian Constitution Act 1890 (UK), s 106 of the Australian Constitution or simply because, on such authority as may be gleaned from Ranasinghe, it finds a place in the Constitution Act itself.

2.11.28 In Commonwealth Aluminium Corporation Ltd v Attorney-General (Qld) (Comalco case) [1976] Qd R 231, the plaintiff challenged the validity of the Mining Royalties Act 1974 (Qld) on the ground that the Act had not been passed in

accordance with procedures prescribed by the Commonwealth Aluminium Corporation Pty Ltd Agreement Act 1957 (Qld). The 1957 Act authorised the Queensland Government to enter into an agreement with the Commonwealth Aluminium Corporation Pty Ltd (Comalco) under which Comalco would pay the government specified royalties on bauxite mined in Queensland. The Act provided that the agreement should have the force of law as though enacted in the Act (s 3) and that the agreement should not be varied nor the rights of Comalco under the agreement ‘derogated from’ except pursuant to another agreement between the government and Comalco: s 4. However, the 1974 Act (which was not preceded by any agreement between the government and Comalco), gave to the Governor-in-Council the power to alter the royalties to be paid by Comalco. A majority of the Full Court of the Queensland Supreme Court rejected the challenge to the Mining Royalties Act 1974. Wanstall J held that the proviso to s 5 of the Colonial Laws Validity Act did not oblige the Queensland Parliament to comply with any procedure laid [page 202] down by s 4 of the 1957 Act because that Act did not prescribe a ‘manner and form’ for the enactment of legislation ([1976] Qd R at 237): On the contrary its only purpose and intention qua the legislature is to prohibit future legislation on that subject variation of the agreement in any manner or form. Such legislation is to be replaced by executive government action … To be a ‘manner and form’ provision within s 5 it

must be one operative on the legislative process at some point (Trethowan’s case … per Rich J at 419).

After quoting from the judgment of Dixon J in Attorney-General (NSW) v Trethowan 2.11.10C, Wanstall J concluded ([1976] Qd R at 239): To be effective, the qualification as to manner or form must be one which operates within the legislation process as such, albeit not necessarily within the legislative chamber. It is only such a qualification which avoids being repugnant to s 5, ie one which may be categorised as a condition of the exercise of the legislative power. In my respectful opinion it is unreal so to attempt to categorise a law which forbids that exercise, as does s 4 by conferring the exclusive right of variation on another body. Because it is not a manner or form provision it may be repealed or altered by the normal process of legislating inconsistently with its provisions ….

Dunn J, who agreed that the challenge should be rejected, held that s 5 of the Colonial Laws Validity Act was irrelevant because neither the 1958 Act nor the 1974 Act was a law ‘respecting the constitution, powers and procedure’ of the Queensland Parliament. Hoare J dissented, holding that s 4 of the 1957 Act prescribed a manner and form for producing legislation (and was valid because it was, at least, a law ‘for the peace, welfare and good government of Queensland’ within s 2 of the Constitution Act 1867). He also considered that the 1974 Act was obliged to follow that manner and form because it was a law with respect to the constitution, powers and procedure of the legislature — ‘for the very reason that it conflicts with a law which provides for a manner and form’: [1976] Qd R at 248. 2.11.29

The Comalco case throws into sharp focus a basic policy

issue that underlies the whole question of restrictive legislative procedures: how far should one parliament be permitted to impose on a future parliament restrictive procedures, procedures with which the first parliament was not obliged to comply? Should the courts accept that an elected parliament, facing a series of contemporary problems, may not deal with those problems in the way that seems appropriate to it, because an earlier parliament (not faced with those problems but claiming clairvoyance) had decreed that a special and restrictive legislative procedure must be followed by any future parliament? Are the courts to endorse what is, essentially, a denial by yesterday’s legislators that today’s legislators lack prudence and sound judgment? 2.11.30 In West Lakes Ltd v South Australia (1980) 25 SASR 389, the Supreme Court of South Australia grappled with some of these complex and interesting questions. Importantly, the court addressed the issue as to when a purported legislative procedure is invalid for prescribing a procedure that is too difficult to satisfy or seeks to incorporate a non-democratic actor into the process. In both instances invalidity arises as the procedure amounts in substance to a renunciation or diminution of legislative power, not the prescription of a method (manner and form) for its exercise. To do so is (constitutionally) inconsistent with s 2(1) of the Australia Act 1986 (Cth) which states ‘that the legislative powers of the Parliament of each State include full power to make laws for the peace, order and good government of that State’. [page 203] The case involved an agreement between the Premier of South

Australia and West Lakes Ltd that provided for the development, by the company, of an area of waste land subject to a special town planning code set out in the agreement. The agreement provided that it might be varied by further agreement between the Premier and West Lakes Ltd. The West Lakes Development Act 1969 (SA) ratified the agreement and provided that the agreement should have effect as if its terms were ‘expressly enacted in this Act’: s 3. Section 16 authorised ‘the Minister’ to make regulations altering the planning code set out in the agreement. No such regulation was to be made except with the consent in writing of West Lakes Ltd: s 16(4). In 1980, the government introduced into parliament a bill to amend the 1969 Act by providing that the company’s consent would be unnecessary for the making of a regulation to allow floodlights to be installed on a sports ground located in the development area. West Lakes Ltd began proceedings in the South Australian Supreme Court for a declaration that South Australia was bound by the agreement to the extent that it could not support the passage of the bill and an injunction to restrain the state from furthering the bill. King CJ said that one of the issues raised before the court was whether the Parliament of South Australia had the power to pass the 1980 bill into law without the consent of West Lakes Ltd. The company had argued that parliament in 1969 had enacted that the terms of the agreement could not be amended by a subsequent Act of Parliament except with the company’s consent. 2.11.31C

West Lakes Ltd v South Australia (1980) 25 SASR 389

King CJ: The exercise by a parliament of its legislative powers requires some understood and recognised procedure for the declaration of the will of the parliament. Ordinarily, that procedure is established by the Standing Orders of the Houses of Parliament, and by the internal practices and usage of the parliament. Generally speaking, it is not within the function or competence of the Courts to inquire into the internal procedures of the parliament, nor into any questions as to whether they have been observed. The parliament may, however, choose to pass an Act giving the force of law to procedures as to the manner and form in which legislation, or legislation of a particular class, must be passed … [King CJ quoted two passages from the judgment of Dixon J in Trethowan’s case (1931) 44 CLR 394 at 425–6 2.11.10C and Gibbs J’s exposition in the PMA case (1975) 135 CLR 81 at 163–47 2.10.25C. His Honour continued:] Bribery Commissioner v Ranasinghe [1965] AC 172, a decision of the Privy Council, is authority both for the proposition that a legislature, whose powers are derived from a written instrument, does not have inherent power derived from the mere fact of its establishment to pass laws by resolution of a bare majority in disregard of a legal requirement that they be passed in a specified manner or form, and for the further proposition that the Courts have jurisdiction to declare invalid a law passed in disregard of such a legal requirement. Reference may also be made to McDonald v Cain [1953] VLR 411 as authority for the latter proposition … The Parliament can only exercise the power to make laws respecting the constitution powers and procedure of the legislature by enacting legislation in the manner and form (if any) prescribed by its own legislation. This is expressly provided in s 5 of the Colonial

[page 204] Laws Validity Act. I think, however, that it is quite clear that the bill under consideration is not a proposed law respecting any of the topics enumerated in s 5 of the Colonial Laws Validity Act. The question of whether the Parliament can only exercise its powers to make laws respecting topics other than those enumerated in s 5 of the Colonial Laws Validity Act in the manner and form (if any) required by its own legislation or whether it may ignore any such requirement, is one of great constitutional importance. In view of the conclusions which I reached as to the other issues in the case, it is unnecessary for me to decide that question, and I think that it is undesirable therefore that I should express any view upon it. When it falls for decision, the question will involve a consideration of the way in which the constitutional principles discussed above are to be applied to a legislature which derives its authority from constitutional sources of the kind which are the foundation of the authority of the South Australian Parliament. It will, moreover, involve a consideration of the true effect of the decision of the High Court in South-Eastern Drainage Board (South Australia) v Savings Bank of South Australia (1939) 62 CLR 603. A question might arise as to whether a particular statutory provision is truly a manner and form provision, which must be observed (at least as to legislation which falls within s 5 of the Colonial Laws Validity Act) as a condition of the validity of the Act, or whether it is a limitation or restraint of substance, which would not invalidate legislation inconsistent with the limitation or restraint. … The question whether the special majority provision related to manner and form did not arise in Ranasinghe’s case, at 172. The Colonial Laws Validity Act did not apply and the case turned upon the provision being one of the ‘the conditions of lawmaking that are imposed by the instrument which itself regulates the power to make law’ (Ranasinghe’s case, at 197). There must be a point at which a special majority

provision would appear as an attempt to deprive the parliament of powers rather than as a measure to prescribe the manner or form of their exercise. This point might be reached more quickly where the legislative topic which is the subject of the requirement is not a fundamental constitutional provision. When one looks at extraparliamentary requirements, the difficulty of treating them as relating to manner and form becomes greater. It is true that Dixon J in Trethowan’s case (1931) 44 CLR 394 gave ‘manner and form’ a very wide meaning. At pp 432–3, referring to the use of the expression in the proviso to s 5 of the Colonial Laws Validity Act, he said: The more natural, the wider and the more generally accepted meaning includes within the proviso all the conditions which the Imperial Parliament or that of the self-governing State or Colony may see fit to prescribe as essential to the enactment of a valid law. Trethowan’s case, supra, however, concerned a requirement that an important constitutional alteration be approved by the electors at a referendum. Such a requirement, although extraparliamentary in character, is easily seen to be a manner and form provision because it is confined to obtaining the direct approval of the people whom the ‘representative legislature’ represents. If, however, parliament purports to make the validity of legislation on a particular topic conditional upon the concurrence of an extra-parliamentary individual, group of individuals, organisation or corporation, a serious question must arise as to whether the provision is truly a law prescribing the manner or form of legislation, or whether it is not rather a law as to substance, being a renunciation of the power to legislate on that topic unless the condition exists. The problem of distinguishing between substance on the one hand and manner and form on the other is discussed in Professor Friedman’s article on Trethowan’s

[page 205] case, Parliamentary Sovereignty and the Limits of Legal Change (1950) 24 Australian Law Journal 103, at pp 105–6 and by the learned author of Lumb on The Constitutions of the Australian States (1963) p 112; see also the judgment of McTiernan J in Trethowan’s case (1931) 44 CLR 394 and Commonwealth Aluminium Corporation Limited v Attorney-General [1976] Qd R 231. [King CJ said that he could not treat the West Lakes Development Act 1969 as prescribing the manner or form of future legislation.] A provision requiring the consent to legislation of a certain kind, of an entity not forming part of the legislative structure (including in that structure the people whom the members of the legislature represent), does not, to my mind, prescribe a manner or form of lawmaking, but rather amounts to a renunciation pro tanto of the lawmaking power. Such a provision relates to the substance of the lawmaking power, not to the manner or form of its exercise … It follows, in my view, that even if the statute bears the meaning attributed to it, it does not prescribe a manner or form of legislation and Parliament may legislate inconsistently with it. Parliament may therefore validly enact the bill which is under attack. [King CJ went on to conclude that the 1969 Act did not purport to impose any restrictive legislative procedure on the South Australian Parliament. He held that there was no impediment to the enactment of the 1980 bill, and that the court had no jurisdiction to prevent any minister of the Crown proposing any bill for the consideration of parliament or furthering such a bill. Zelling J said that the court had no jurisdiction to intervene at this stage of the legislative process; and he cited Rediffusion (Hong Kong) Ltd v Attorney-General (Hong Kong) 1970 AC 1936 and Cormack v Cope

(1974) 131 CLR 432 2.12.3C. He also held that the West Lakes Development Act did not contain any manner and form provision so as to attract the application of s 5 of the Colonial Laws Validity Act.] Zelling J: In the alternative Mr Williams argued that the statute provided a manner and form outside the Colonial Laws Validity Act. He relied for this argument principally on the advice of the Privy Council in Bribery Commissioner v Ranasinghe [1965] AC 172. It would appear from that case that it is possible to have a manner and form provision which is not one referring to the constitution powers and procedures of the legislature so as to attract the operation of s 5 of the Colonial Laws Validity Act. That conclusion would seem to follow also from the judgment of Gibbs J in Victoria v The Commonwealth and Connor (1974) 134 CLR 81 at 163. While I accept, without deciding, that it is possible to have a section entrenched by a manner and form provision which does not fall within s 5 of the Colonial Laws Validity Act, nevertheless, given the general rules that the Acts of one Parliament do not bind its successors, it would require very clear words before a court would find that that was what had happened. It is one thing to find manner and form provisions in a statute affecting the constitution, it is quite another to find Lord Birkenhead’s proverbial Dog Act or a provision thereof elevated to constitutional status. No such clarity of provision exists in the statute at bar, with or without the indenture superadded. In my opinion, the short answer in the instant case is that there is no manner and form procedure provided by the West Lakes Development Act irrespective of whether the amending bill is a law respecting the constitution powers and procedures of the legislature of South Australia, or whether it is not. [page 206]

However, there is an even simpler answer than the last two to the propositions put by Mr Williams. That is, that for an entrenchment statute to avoid being repealed by a subsequent Act of the same Parliament passed without any special manner and form, the entrenching clause must itself be entrenched. On the true construction of this Act I cannot see any entrenchment of the entrenching clause or clauses relied on by Mr Williams, even if all the other propositions put by him were in fact correct. The answer to the fourth question is therefore: No. [Matheson J held that s 5 of the Colonial Laws Validity Act was irrelevant because the proposed bill was not a law ‘respecting the constitution powers and procedures’ of the South Australian Parliament. He then turned to the argument based on Ranasinghe’s case [1965] AC 1727 2.11.22C. He could not see how the West Lakes Development Act 1969 could fall within the proposition in that case ‘that a legislature has no power to ignore the conditions of lawmaking that are imposed by the instrument which itself regulates its power to make law’: [1965] 1 AC at 197. The 1969 Act was not such an instrument.] Matheson J: Counsel also relied on a passage in the judgment of Gibbs J in Victoria v Commonwealth and Connor (1975) 134 CLR 81 at 163, who, after referring to several decisions including Ranasinghe’s case [1965] AC 172, said: ‘In all of these cases it happens that the restrictions on the manner of the exercise of legislative power that had to be considered related to amendments to the Constitution, but the principle which has been invoked is not limited to constitutional amendments’. This statement was obiter and not expressed by any of the other Justices, but be that as it may, I do not think his Honour meant that all Acts of Parliament, no matter what their subject matter, can contain manner and form requirements which bind successive parliaments. I do not think his Honour extended the principle of these cases in such a way that the plaintiff can successfully invoke it here and I am certainly not prepared so to

extend it. I stress that immediately after the passage which I have just quoted, his Honour went on to quote Lord Pearce’s dictum in Ranasinghe’s case, supra, ‘The Legislature has no power to ignore the conditions of lawmaking that are imposed by the instrument which itself regulates its power to make law.’ I have already expressed my view that the West Lakes Development Act 1969– 1970, is not such an instrument. In my opinion the second argument fails, and, although this question does not arise here, I do not subscribe to the view that, where Parliament enacts a section providing for a different method of legislation for the particular type of legislation covered by it, it can bind a later Parliament by providing at the same time that the entrenching section itself can only be repealed by the same procedure. [Matheson J agreed that the court should not prevent any Minister of the Crown from proposing or taking steps to further any bill for the consideration of parliament.]

2.11.32 The argument developed by the plaintiff in this case lacked even the superficial plausibility of the plaintiff’s argument in the Comalco case [1976] Qd R 231 (see 2.11.28). The 1969 Act, on its face, did not purport to limit the capacity of the parliament to legislate, or insist that legislation be passed according to a particular procedure; whereas s 4 of the Commonwealth Aluminium Corporation Pty Ltd Agreement Act 1957 (Qld) could be read as purporting to do just that. The real interest in this decision, therefore, does not lie in the failure of the plaintiff’s attack on the 1980 bill but in the judges’ discussion of the arguments, principally the argument that [page 207]

sought to exploit Bribery Commissioner v Ranasinghe [1965] AC 172 2.11.22C. Each of the judgments indicates substantial reluctance to permit the use of that decision (and its reasoning) to reduce the flexibility of parliament’s legislative procedures. 2.11.33 King CJ suggested two ways in which the effect of the Ranasinghe argument could be limited or avoided. First, ‘a special majority provision’ might be upheld where it controlled enactment of some fundamental constitutional provision (as in s 7A of the Constitution Act 1902 (NSW) 2.11.4E) but not where it controlled enactment of ordinary legislation: 25 SASR at 397. And, second, a restrictive procedure that required the consent of some persons or body outside ‘the representative legislative structure’ would be a renunciation of the law-making power rather than the prescription of legislative procedures: 25 SASR at 398. Matheson J did not develop his arguments to the same degree; but his unwillingness to accept the full implications of the Ranasinghe reasoning (as developed by Gibbs J in the PMA case) is clear from his assertion that one parliament could not bind a later parliament to follow a restrictive procedure when repealing a restrictive procedure: 25 SASR at 422. (This appears to be an attack on the effectiveness of a clause modelled on s 7A(6) of the Constitution Act 1902 (NSW).) On the other hand, Zelling J accepted, at least for the purposes of argument, the implications of the reasoning in Ranasinghe. He would have limited its impact by insisting on ‘very clear words before a court would find that’ a restrictive legislative procedure had been effectively prescribed. Moreover, he said, such a restrictive procedure ‘must itself be entrenched’ (that is, protected by a restrictive legislative procedure) before it could be effective: 25 SASR at 413–14.

2.11.34 There are indications, then, in West Lakes Ltd v South Australia of a judicial reaction against the logical thrust of arguments based on Ranasinghe’s case [1965] AC 172. Underlying the judgments of King CJ and Matheson J, it seems, is an unwillingness to allow the law-making process to be rigidified any more than the High Court and Privy Council decisions in Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 2.11.10C; (1932) 47 CLR 97 compel. 2.11.35 In City of Collingwood v Victoria [1993] 2 VR 66, Harper J held that the Victoria Park Act 1992 (Vic) could not, in law, accomplish any alteration or variation to s 85 of the Constitution Act 1975 (Vic), because the manner and form of the enactment of the Victoria Park Act did not meet the requirements of s 85 of the Constitution Act. Section 85(1) conferred unrestricted jurisdiction on the Supreme Court of Victoria. Section 85(5) declared that no Act was to be taken to repeal, alter or vary s 85 unless the Act did so directly or expressly referred to s 85, and unless the introduction of the bill for the Act was accompanied by a statement of the reasons for repealing, altering or amending s 85. Harper J concluded that the Victoria Park Act did contain provisions purporting to limit the jurisdiction of the Supreme Court. However, because that Act did not directly repeal, alter or vary s 85 and did not state an express intention to do so, the provisions in question did not limit the Supreme Court’s jurisdiction (2 VR at 78): The Victoria Park Act is one which the Parliament was competent to enact; but, because the manner and form of its enactment did not meet that which is required by s 85 of the Constitution Act before legislation may be taken to repeal, alter or vary that section, the Victoria Park Act

(whatever its purpose may be) does not in law accomplish such alteration or variation.

[page 208] Curiously, Harper J did not refer to s 6 of the Australia Act, nor to any of the cases that had discussed procedural restrictions on state parliaments. 2.11.36 No appeal was brought from the decision of Harper J in City of Collingwood v Victoria. However, the Victorian Parliament enacted the Victoria Park Land Act 1992 (Vic) in substantially the same terms as the Victoria Park Act 1992, though this time following the procedure prescribed in s 85(5) of the Constitution Act 1975 (Vic). The City of Collingwood issued proceedings in the Supreme Court of Victoria, claiming a declaration that the Victoria Park Land Act was invalid. On the application of the State of Victoria, the question whether the Victoria Park Land Act was a statute that the parliament was competent to pass was referred to the Full Court of the Supreme Court. The Full Court answered the question in the affirmative: City of Collingwood v Victoria (No 2) [1994] 1 VR 652. In a judgment with which Southwell and Teague JJ agreed, Brooking J held that the Victoria Park Land Act did not interfere with the jurisdiction of the Supreme Court. Brooking J then considered the effect of ss 18 and 85 of the Constitution Act. He noted that s 18 required that any bill to alter the constitution of the parliament, the council or the assembly, or which would repeal, alter or vary certain parts of the Constitution Act, must be passed by absolute majorities in each house. He also noted that s 85 made special provision concerning

the repeal, alteration or variation of that section, and continued (1 VR at 670): Thus a large part of the Act of 1975 is protected against repeal, alteration or variation otherwise than in accordance with s 18 and so the present Constitution is a ‘controlled’ one in many respects. By the constitutional law of Victoria the Supreme Court has, ever since the giving of the Constitution of 1855, had and exercised the power of keeping Parliament and its houses within the limitations imposed upon them by the Constitution. Ever since its creation by the Supreme Court (Administration) Act 1852 (15 Vict No 10) the Supreme Court has been the superior court of Victoria. What happened in 1975 was that certain provisions concerning the constitution, position, powers and jurisdiction of the court and the position of the judges were plucked out of the Supreme Court Act 1958 and became Pt III of the new Constitution Act. As a result of this and of the provisions of ss 18 and 85 of the new Act, the constitutional provision of the court became entrenched in the sense of being protected against what might be called inadvertent legislative impairment and protected against legislative alteration without the assent of an absolute majority of each house.

2.11.37 The issue of compliance with s 85(5) of the Constitution Act 1975 (Vic) returned to the Supreme Court in Broken Hill Proprietary Co Ltd v Dagi [1996] 2 VR 117. The Court of Appeal (constituted by five judges) allowed an appeal from Cummins J, who had found the appellant guilty of contempt of court because it had procured the passage by the Papua New Guinea Parliament of legislation intended to frustrate proceedings against the appellant in the Supreme Court of Victoria. In making that finding, Cummins J held that s 46 of the Public Prosecutions Act 1994 (Vic) was invalid, because it had not been passed in the manner and form required by s 85(5) of the Constitution Act. (Section 46 provided that no application could be made to the

Supreme Court for punishment of any person for contempt of court except by the Attorney-General.) On appeal, the Court of Appeal held that the manner and form prescribed by s 85(5) had been followed when s 46 was enacted. In particular, the requirement expressed in s 85(5)(b), that the member of parliament who introduced the relevant bill make a statement of the reasons for altering the jurisdiction of the Supreme Court, had been met. In a judgment with [page 209] which Winneke P and Brooking JA agreed, Phillips JA noted that the reasons offered by the Attorney-General (who had introduced the relevant bill) were open to a number of criticisms. Nevertheless, they amounted to a statement of reasons for the purposes of s 85(5) (b) (2 VR at 189): This Court has the power, and indeed the duty, to inquire into the question of compliance with manner and form provisions which Parliament itself has enacted (Victoria v Commonwealth (1975) 134 CLR 81 at 117–8, 162–4, 180 and 181–2; see also Collingwood v Victoria (No 2) [1994] 1 VR 652 at 669–70) and in this case the question for the Court is whether the relevant member of Parliament did make a statement of the reasons for repealing, altering or varying s 85; for that alone can satisfy the requirement, enacted by the Parliament on an earlier occasion, in s 85(5)(b). Despite the criticisms that were levelled at what was said in Parliament in this instance, it is plain that there was included within the second reading speech what purported to be ‘a statement … of the reasons’ for altering or varying s 85 in relation to the jurisdiction, powers or authorities of the Supreme Court. It may be that the declared reasons are now thought by one side or the other to have been insufficient, inadequate or even misconceived, but that does not

mean that a statement of reasons was not given and in all the circumstances I think that this Court should regard s 85(5)(b) as having been complied with.

2.11.38 The most recent and important pronouncement from the High Court on state restrictive procedures — in particular, the nature and scope of s 6 of the Australia Act 1986 (Cth) and what kinds of laws fall within its proviso — comes from Attorney-General (WA) v Marquet (2003) 217 CLR 545. Amongst other things, the High Court considered when a state law is ‘respecting the constitution, powers or procedure of the Parliament of the State’ so that any applicable restrictive (manner and form) procedure is constitutionally binding and must be followed for the law to be validly enacted. The case involved two bills that were passed in 2001 by the Legislative Assembly and the Legislative Council of Western Australia — the Electoral Distribution Repeal Bill 2001 and the Electoral Amendment Bill 2001. The first bill would have repealed the Electoral Distribution Act 1947 (WA), s 13 of which prohibited the presentation of a bill to amend the Act unless the bill was passed by absolute majorities in each of the assembly and the council. The second bill would have changed the number of members of the Legislative Council and the method of determining electoral districts. Neither bill was passed by an absolute majority in the council. Marquet, the Clerk of the Parliament of Western Australia, commenced proceedings in the Supreme Court of Western Australia seeking determination of the question whether the bills could be presented to the Governor for assent. A majority of the Supreme Court (Malcolm CJ, Anderson, Steytler and Parker JJ; Wheeler J dissenting) held that it was not lawful for Marquet to

present the bills to the Governor. The Attorney-General applied to the High Court for special leave to appeal. The application was heard by six justices. Gleeson CJ, Gummow, Hayne and Heydon JJ traced the history of the Electoral Distribution Act and s 13 of that Act from the original Constitution Act 1889 (WA). Taking into account that history, and the fact that definition of electoral boundaries was legally essential to the election of the parliament, they held that the Repeal Bill and the Amendment Bill were properly characterised as bills to amend the Electoral Distribution Act 1947: 217 CLR 545 at 562–4. They then turned to the issue whether the Repeal Bill and the Amendment Bill could only be enacted by following the s 13 procedure. [page 210]

2.11.39C

Attorney-General (WA) v Marquet (2003) 217 CLR 545

Gleeson CJ, Gummow, Hayne and Heydon J: Section 13 of the Electoral Distribution Act as a manner and form provision Discussion of the application of manner and form provisions has provoked much debate about the theoretical underpinnings for their operation. Thus, to ask whether a Parliament has power to bind its successors by enacting a manner and form provision has, in the past, led into debates cast in the language of sovereignty or into philosophical debates about whether a generally expressed

power includes power to relinquish part of it. Neither the language of sovereignty, nor examination in the philosophical terms described, assists the inquiry that must be made in this case. Sooner or later an analysis of either kind comes to depend upon the content that is given to words like ‘sovereignty’ or ‘general power’. It is now nearly 50 years since HWR Wade convincingly demonstrated (HWR Wade, ‘The Basis of Legal Sovereignty’ 1955 Cambridge Law Journal 172) that the basal question presented in a case like the present, when it arises and must be considered in a British context, is about the relationship between the judicial and legislative branches of government and, in particular, what rule of recognition the courts apply to determine what is or is not an act of the relevant legislature. When Diceyan theories about the role of the Parliament at Westminster held sway the answer which Wade identified as having been given in England to the question of what rule of recognition an English court would apply in relation to the Acts of that Parliament was: any Act enacted in the ordinary way by that Parliament regardless of any earlier provision about manner and form: Vauxhall Estates Ltd v Liverpool Corporation [1932] 1 KB 733 at 743 per Avory J; Ellen Street Estates Ltd v Minister for Health [1934] 1 KB 590 at 597 per Maugham LJ; British Coal Corporation v The King [1935] AC 500 at 520 per Viscount Sankey LC; Manuel v Attorney-General [1983] Ch 77 at 89 per Sir Robert Megarry VC. Sir Owen Dixon explained that such an analysis proceeded from an understanding of the relationship between the judicial and the legislative branches of government that was apt to a structure of government which did not depend ultimately upon the constitutional assignment of particular powers to the legislature or provide for a constitutional division of powers between polities: Dixon, ‘The Law and the Constitution’, (1935) 51 Law Quarterly Review 590 at 604. It was a structure of government in which the only relevant fundamental or constitutional rule engaged was the rule of recognition. This was ‘the pivot of the legal system’: Dixon,

‘The Law and the Constitution’, (1935) 51 Law Quarterly Review 590 at 593. There was no other fundamental or constitutional rule which applied. And that is why a different answer was to be given when considering the legislation of subordinate legislatures where a superior legislature (the Imperial Parliament) had provided for some manner and form provision. There was a higher, more fundamental, rule that was engaged. Given such constitutional developments in Britain as devolution, and the undertaking of treaty obligations in relation to Europe, analysis of the first kind described might now be thought (HWR Wade, Constitutional Fundamentals, (1989) at 40–47) to encounter difficulties today. It is, of course, neither necessary nor appropriate to explore those difficulties here. In an Australian context it was, at first, important to recognise that the colonial legislatures stood in the second category we have identified. They were subordinate legislatures, and manner and form provisions could be and were imposed upon them by Imperial legislation. Section 73 of the 1889 Constitution can be seen as one example of such a provision. (It must be recalled that the 1889 Constitution depended for its operation upon enabling Imperial [page 211] legislation — the Western Australia Constitution Act 1890 (Imp).) In addition, the Colonial Laws Validity Act 1865 (Imp) gave effect to manner and form provisions found not only in Imperial law but also in colonial law. That too was seen as the imposition of manner and form provisions by superior law. Now, however, it is essential to begin by recognising that constitutional arrangements in this country have changed in fundamental respects from those that applied in 1889. It is not necessary to attempt to give a list of all of those changes. Their consequences find reflection in decisions like Sue v Hill (1999)

199 CLR 462. Two interrelated considerations are central to a proper understanding of the changes that have happened in constitutional structure. First, constitutional norms, whatever may be their historical origins, are now to be traced to Australian sources. Secondly, unlike Britain in the nineteenth century, the constitutional norms which apply in this country are more complex than an unadorned Diceyan precept of parliamentary sovereignty. Those constitutional norms accord an essential place to the obligation of the judicial branch to assess the validity of legislative and executive acts against relevant constitutional requirements … For present purposes, two changes in constitutional arrangements are critically important: first, the fact of federation and creation of the States, and secondly, the enactment by the federal Parliament of the Australia Act. Section 106 of the Constitution provides that ‘the Constitution of each State … shall, subject to this Constitution, continue as at the establishment of the Commonwealth … until altered in accordance with the Constitution of the State.’ Then, in 1986, pursuant to a reference of power under s 51(xxxviii) of the Constitution, the federal Parliament enacted the Australia Act in order, as its long title said, ‘to bring constitutional arrangements affecting the Commonwealth and the States into conformity with the status of the Commonwealth of Australia as a sovereign, independent and federal nation’. The Australia Act, too, is to be traced to its Australian source — the Constitution of the Commonwealth. The Australia Act takes its force and effect from the reference of power to the federal Parliament, made under s 51(xxxviii), and the operation that the Act is to be given as a law of the Commonwealth in relation to State law by s 109 of the Constitution: Sue v Hill (1999) 199 CLR 462 at 61–62. Although the phrase ‘subject to this Constitution’ appears both in s 51 and s 106, it was decided in Port MacDonnell Professional Fishermen’s Assn Inc v South Australia (1989) 168 CLR 340 at

381 that ‘the dilemma … must be resolved in favour of the grant of power in par (xxxviii)’. The Australia Act had two provisions of particular relevance to manner and form provisions. First, s 3(1) provided that the Colonial Laws Validity Act should not apply to any law made after the commencement of the Australia Act by the Parliament of a State and, second, the provisions of s 6 earlier set out were enacted. It is of particular importance to recognise that the Australia Act stands as a form of law to which the Parliament of Western Australia is relevantly subordinate. To the extent to which s 6 applies, the powers of the Parliament of Western Australia to legislate are confined. What has been seen as the conundrum of whether a body given general power to legislate can give up part of that power need not be resolved. By federal law, effect must be given to some manner and form provisions found in State legislation. The Justices noted that no challenge was made to the validity of the Australia Act. That this should be so is not surprising when it is recalled that in Port MacDonnell Professional Fishermen’s Assn Inc v South Australia all seven Justices constituting the Court concluded, (1989) 168 CLR 340 at 381, that ‘the continuance of the Constitution of a State pursuant to s 106 is subject to any Commonwealth law enacted pursuant to the grant [page 212] of legislative power in par (xxxviii)’ of s 51. Section 6 of the Australia Act, therefore, is not to be seen as some attempt to alter s 106 or s 107 otherwise than in accordance with the procedures required by s 128. Section 6 was enacted in the valid exercise of power given to the federal Parliament by s 51(xxxviii). Section 13 of the Electoral Distribution Act and s 6 of the Australia

Act Was either the Repeal Bill or the Amendment Bill, if it became law, within s 6 of the Australia Act? That is, was it ‘a law … respecting the constitution, powers or procedure of the Parliament of the State’? If either Bill, on its becoming law, would meet that description, s 6 of the Australia Act would be engaged and the law would ‘be of no force or effect unless it was made in such manner and form as … required by a law’ made by the Western Australian Parliament. The meaning to be given to the expression ‘constitution, powers or procedure of the Parliament’ must be ascertained taking proper account of the history that lay behind the enactment of the Australia Act. In particular, it is necessary to give due weight to the learning that evolved about the operation of the Colonial Laws Validity Act, s 5 of which also spoke of ‘laws respecting the constitution, powers, and procedure’ of the legislatures to which it applied. In s 5 of the Colonial Laws Validity Act the expression ‘constitution, powers, and procedure’ appeared in that part of the section which provided that a representative legislature ‘shall … have, and be deemed at all times to have had, full power to make laws respecting’ those subjects. The reference to manner and form requirements in the proviso to the section was treated (Attorney-General (NSW) v Trethowan (1932) 47 CLR 97) as a condition upon which the full power referred to in s 5 was exercisable. Section 6 of the Australia Act takes a different form. It provides directly for the requirement to observe manner and form. Nonetheless, the use of the expression ‘constitution, powers or procedure’ in the Australia Act is evidently intended to build on the provisions of the Colonial Laws Validity Act. (The use of the conjunction ‘or’ rather than ‘and’ in the collocation is readily explained by the drafting change from grant of power to requirement to obey manner and form.) On its face, the expression ‘constitution, powers or procedure’ of a legislature describes a field which is larger than that

identified as ‘the constitution’ of a legislature. It is not necessary or appropriate to attempt to describe the boundaries of the areas within the field that the three separate integers of the expression ‘constitution, powers or procedure’ cover, let alone attempt to define the boundaries of the entire field … It is enough to focus on the expression the ‘constitution’ of the Parliament. The ‘constitution’ of a State Parliament includes (perhaps it is confined to) its own ‘nature and composition’: Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 at 429 per Dixon J … For some purposes, the nature and composition of the Western Australian Parliament might be described sufficiently as ‘bicameral and representative’. But the reference in s 6 of the Australia Act to the ‘constitution’ of a State Parliament should not be read as confined to those two descriptions if they are understood, as the submissions of the Attorneys-General for New South Wales and Queensland suggested, at a high level of abstraction. That is, s 6 is not to be read as confined to laws which abolish a House, or altogether take away the ‘representative’ character of a State Parliament or one of its Houses. At least to some extent the ‘constitution’ of the Parliament extends to features which go to give it, and its Houses, a representative character. Thus, s 6 may be engaged in cases in which the legislation deals with matters that are encompassed by the general description ‘representative’ and go [page 213] to give that word its application in the particular case. So, for example, an upper House whose members are elected in a single State-wide electorate by proportional representation is differently constituted from an upper House whose members are separately elected in single member provinces by first past the post voting. Each may properly be described as a ‘representative’ chamber,

but the parliament would be differently constituted if one form of election to the upper House were to be adopted in place of the other. Not every matter which touches the election of members of a Parliament is a matter affecting the Parliament’s constitution. In Clydesdale v Hughes (1934) 51 CLR 518 at 528, three members of the Court held that a law providing that the holding of a particular office did not disable or disqualify a person from sitting as a member of the Legislative Council of Western Australia was not a law which, for the purposes of s 73 of the 1889 Constitution, effected an alteration or change in the constitution of that House: see also Western Australia v Wilsmore (1982) 149 CLR 79 at 102. Again, however, it is neither necessary nor appropriate to attempt to trace the metes and bounds of the relevant field. … The Repeal Bill did away with the scheme under which there were two Houses elected from 57 districts and six regions respectively, where the 57 districts were to be ascertained in accordance with the rules prescribed by s 6 of the Electoral Distribution Act. Those rules depended upon the division between the metropolitan and other areas and the application of a tolerance of 15 per cent more or less. Upon the Repeal Bill coming into force the manner of effecting representation in the Parliament would have been at large. Considered separately, then, the Repeal Bill was for a law respecting the constitution of the Parliament of Western Australia. The Amendment Bill, if it came into force, would have provided for 57 electoral districts and six electoral regions, but they would have been differently drawn from the way for which the Electoral Distribution Act provided. The criteria to be applied in drawing electoral boundaries under the Amendment Bill would have differed according to whether the electoral district had an area of less than 100,000 square kilometres. The tolerance in the smaller districts would have been reduced from 15 per cent to 10 per cent; in the larger districts the formula was more

complicated, but again the tolerance was changed from 15 per cent. In addition, and no less significantly, under the Amendment Bill, the number of members of the Council would have been increased, from the 30 specified by s 5 of the Constitution Acts Amendment Act 1899, to 36. The Amendment Bill was for a law respecting the constitution of the Parliament of Western Australia. [Gleeson CJ, Gummow, Hayne and Heydon JJ said it was unnecessary to decide whether, apart from s 6 of the Australia Act, it was necessary to follow the procedure in s 13 of the Electoral Distribution Act. They rejected an argument that prorogation of the parliament after the bill’s passage through the assembly and the council caused the bills to lapse and prevented their presentation to the Governor: 217 CLR 545 at 575–6. The justices concluded that it would not be lawful to present the two bills to the Governor for royal assent. They ordered that special leave to appeal be granted, the appeal being treated as instituted and heard instanter but dismissed: 217 CLR 545 at 626. ]

2.11.40 Kirby J dissented, on the basis that s 13 of the Electoral Distribution Act 1947 was not entrenched and that Act could be repealed by the passage of the bills through the normal legislative processes; Callinan J agreed with Gleeson CJ, Gummow, Hayne and Heydon JJ that the application for special leave should be granted and the appeal dismissed. [page 214] Importantly, the High Court’s decision in Marquet appears to cast further doubt on the efficacy of the Ranasinghe principle (and, indeed, any other method other than s 6 of the Australia Act 1986)

to make binding a restrictive procedure on a state parliament. Anne Twomey has said that ‘the likely consequence of the judgment of the majority in Marquet is that s 6 of the Australia Acts will be treated as the exclusive source for the enforcement of manner and form requirements, with the result that many provisions in State Constitution Acts and other legislation that are purportedly entrenched may be repealed or amended by ordinary legislation.’: (2004) 15 Public Law Review 186.

Commonwealth Parliament Background: an inflexible Constitution 2.11.41 The Commonwealth Constitution establishes a restrictive legislative procedure for one class of legislation, that which alters the Constitution: s 128. It seems clear that compliance with this procedure is essential. The substantial number of cases in which Commonwealth legislation, passed by the normal legislative process, has been held invalid because of a conflict with the terms of the Commonwealth Constitution clearly supports that proposition. The proposition can also be supported by reasoning. The Commonwealth Parliament is given, under the Constitution, power to legislate on specific topics, most of which are listed in ss 51, 52, 76 and 77, but principally in s 51. Amongst those topics we cannot find any express reference to the alteration of the Constitution. The power to legislate on that topic comes only from s 128, and the power given by that section is given subject to strict procedural limits. It should, however, be noted that s 51(xxxvi) provides the Commonwealth Parliament with the power to enact legislation on ‘matters in respect of which this Constitution makes

provision until the Parliament otherwise provides’. The relevant content of the constitutional provisions that contain this phrase (see, for example, ss 29, 30, 32, 34 and 39 of the Constitution) can be changed by ordinary legislation. 2.11.42 The position of the Commonwealth Parliament is clearly different from that of the state parliaments. The latter have a general legislative power that authorises them to alter their Constitution Acts, a power confirmed by s 2(2) of the Australia Act 1986. The Commonwealth Parliament on the other hand has a series of narrowly-defined legislative powers, over specified topics. Again, the state Constitution Acts have no special status and can be amended and repealed by state parliaments in the same way as any piece of legislation: McCawley v R [1920] AC 691 (see 2.10.13). The Commonwealth Constitution was enacted by the United Kingdom Parliament for Australia, and would override any inconsistent local legislation, state or Commonwealth. As part of an Imperial enactment extending to Australia, the Commonwealth Constitution had a special status, confirmed by s 2 of the Colonial Laws Validity Act. Any colonial law (which included Commonwealth legislation) that was repugnant to an Imperial Act extending to the colony (which included Australia) was to be ‘absolutely void and inoperative’. Section 2 of the Colonial Laws Validity Act was repealed, in its application to the Commonwealth Parliament, by the Statute of Westminster 1931 (UK) s 2 1.3.11E. However, s 8 preserved the special overriding status of the Commonwealth Constitution: 8 Nothing in this Act shall be deemed to confer any power to repeal or alter the Constitution Act of the Commonwealth of Australia or the Constitution Act of the

[page 215] Dominion of New Zealand otherwise than in accordance with the law existing before the commencement of this Act.

2.11.43 There is a second clear distinction between the position of the Commonwealth Parliament and that of the state parliaments. While the latter have the power to establish special restrictive (or alternative) legislative procedures, the Commonwealth Parliament cannot, for its legislative procedures are defined by the Commonwealth Constitution (ss 1, 23, 40, 58) and those procedures may be altered only if the Constitution is altered. Accordingly, it would not be open to the Commonwealth Parliament to enact, say, an Act implementing the International Covenant on Civil and Political Rights and include in the Act a clause demanding that no repeal or amendment could take effect unless approved by a two-thirds majority in each House of Parliament. Such an Act would involve an alteration of the Constitution and, unless passed in accordance with s 128, would be invalid. These issues are discussed in Winterton, 1980. 2.11.44 However, it may be open to the Commonwealth Parliament to use the power given to it by s 51(xxxviii) of the Constitution to introduce restrictive legislative procedures. That provision authorises the parliament to make laws with respect to: The exercise within the Commonwealth at the request or with the concurrence of the parliaments of all the States directly concerned, of any power which can at the establishment of this Constitution be exercised only by the parliament of the United Kingdom or by the Federal Council of Australasia.

This power was given a broad reading by the High Court in Port Macdonnell Professional Fishermen’s Association Inc v South Australia (1989) 168 CLR 340. It provided the constitutional basis for the offshore settlement of 1980, and for the Australia Act 1986 (Cth), which achieved a significant enlargement of state powers: see 1.6.6–1.6.10. It could be argued that, in 1901, only the United Kingdom Parliament could legislate to require the Commonwealth Parliament to follow a restrictive procedure when legislating on, for example, human rights. It might then follow that, if the state parliaments requested the Commonwealth Parliament to legislate in those terms, s 51(xxxviii) would authorise the parliament to do so. However, the power conferred by s 51(xxxviii) is declared to be ‘subject to this Constitution’, and it could be argued that the clear purpose of s 51(xxxviii) is to permit legislation dealing with matters of concern to the states rather than to provide a method of, in effect, altering the Constitution. The possibility that s 51(xxxviii) could support legislation amending the Constitution is reviewed by Craven, 1986, pp 176–90. See also Crawford, 1992, pp 191ff. 2.11.45C

Commonwealth Constitution

128 This Constitution shall not be altered except in the following manner: The proposed law for the alteration thereof must be passed by an absolute majority of each House of Parliament, and not less than two or more than six months after its passage through both Houses the proposed law shall be submitted in each State to the electors qualified to vote for the election of members of the House of Representatives. But if either House passes any such proposed law by an

absolute majority, and the other House rejects or fails to pass it or passes it with any amendment to which the first-mentioned [page 216] House will not agree, and if after an interval of three months the first-mentioned House in the same or the next session again passes the proposed law by an absolute majority with or without any amendment which has been made or agreed to by the other House, and such other House rejects or fails to pass it or passes it with any amendment to which the first-mentioned House will not agree, the Governor-General may submit the proposed law as last proposed by the first-mentioned House, and either with or without any amendments subsequently agreed to by both Houses, to the electors in each State qualified to vote for the election of the House of Representatives. When a proposed law is submitted to the electors the vote shall be taken in such manner as the Parliament prescribes. But until the qualifications of electors of members of the House of Representatives becomes uniform throughout the Commonwealth, only one-half the electors voting for and against the proposed law shall be counted in any State in which adult suffrage prevails. And if in a majority of the States a majority of the electors voting approve the proposed law, and if a majority of all the electors voting also approve the proposed law, it shall be presented to the Governor-General for the Queen’s assent. No alteration diminishing the proportionate representation of any State in either House of the Parliament, or the minimum number or representatives of a Senate in the House of Representatives, or increasing, diminishing, or otherwise altering the limits of the State, or in any manner affecting the provisions of the Constitution in relation thereto, shall become law unless the majority of the electors voting in that State approve the proposed law.

2.11.46 The alteration procedure is a difficult one to negotiate. At the time of writing, only eight referenda have been successful from 44 attempts: see further Bennett and Brennan, 2000. (Note that, for some alterations to the Constitution, s 128 specifies approval by a majority of electors in the state affected, which, for certain alterations, could require approval by a majority of electors in all states: see Lumb, 1986, p 386.) 2.11.47 It has been argued that the alteration process is not available for the passage of any change to the Constitution. For example, can the process be used to accomplish the following changes in our constitutional systems: conversion of the Commonwealth to a unitary form of government; conversion of the Commonwealth to a republican form of government; or secession of one or more states from the Commonwealth? It could be said that the preamble to the Commonwealth of Australia Constitution Act 1900 (UK) (of which the Commonwealth Constitution forms s 9) entrenches certain aspects of our constitutional structure. The preamble recites that the people of five colonies (not including Western Australia) ‘have agreed to unite in one indissoluble federal Commonwealth under the Crown of the United Kingdom’. In 1933, the state of Western Australia petitioned the House of Commons in the United Kingdom Parliament, seeking the enactment of legislation to allow the state to withdraw from the

Commonwealth. The law officers of the Crown gave as their opinion that the United Kingdom Parliament could amend or repeal the Commonwealth of Australia Constitution Act 1900. ‘The provisions for the alteration of the Constitution which are contained in the Constitution itself (s 128) in no way affect the sovereign powers of the United Kingdom [page 217] Parliament’: O’Connell and Riordan, 1971, p 416. The opinion said nothing about the power of the Commonwealth Parliament to effect this change through the s 128 procedure, but it is consistent with the general tone of the opinion and earlier correspondence that it was assumed that no such power existed. Indeed, Lumb asserts that the law officers believed that ‘to enact secession legislation was within the power of the Imperial Parliament alone’: Lumb, 1986, p 388. On the other hand, several writers have treated s 128 as a paramount provision that authorises radical changes to the Constitution; see Latham, 1949, at 18; Canaway, 1938, at 109; Sawer, 1957, at 5; Encel, Horne and Thompson, 1977, p 155. For a detailed discussion of the capacity of s 128 to support a dissolution of the Australian federation, see Craven, 1986, pp 160– 75. This position was strengthened with the passage of the Australia Acts in 1986, which, amongst other things, secured Australia’s complete legal independence from the United Kingdom. One important consequence is that s 128, arguably, can amend not only those s 128 provisions that comprise the Constitution, but the preamble (which formally recognised the establishment of the Australian federation) and the covering clauses (ss 1–8 of the

Commonwealth of Australia Constitution Act 1900 (UK)) as well. The ability to control one’s own constitutional destiny is a core characteristic of a legally autonomous nation State; and in s 128 the better view is that Australia and its people now have the power and authority to undertake any kind of constitutional reform, however fundamental, that they so choose.

JUDICIAL REVIEW OF THE LEGISLATIVE PROCESS 2.12.1 The procedure for enacting legislation consists of a number of distinct stages. For most legislation, each of the Houses of Parliament and the Crown’s representative must assent to a bill before it becomes a statute. For certain types of legislation, or in certain circumstances, a different procedure may, or must, be followed. The procedure to be followed may be prescribed by statute or by the standing orders of the various Houses of Parliament. In Australia, the failure to follow standing orders will not affect the validity of enacted legislation, because their enforcement is regarded (by the courts) as a matter of parliamentary privilege: see 2.7.1–2.7.20. On the other hand, failure to observe the procedures laid down in a constitution or a statute can affect the validity of enacted (or supposedly enacted) legislation, where the procedures are regarded as mandatory: Victoria v Commonwealth (PMA case) 2.10.25C; Attorney-General (NSW) v Trethowan 2.11.10C. 2.12.2 It seems clear that the validity of an Act of Parliament can be challenged, once the Act has gone through (or purportedly gone through) the legislative process and become law. But is it

possible to anticipate such a challenge? When it appears that a bill, not yet enacted and not, therefore, law, has not followed some prescribed step in the legislative process, or that some step is about to be ignored, can the courts be called on to intervene and restrain further parliamentary action? Or must the legislative process have run its course (however defective) and a bill be enacted into law before the courts may decide on the matter? The orthodox view is that the courts treat as non-justiciable issues as to whether internal parliamentary procedures (standing orders) have been followed or not. That makes good constitutional sense. The default rule must surely be that the judicial review jurisdiction of a court is enlivened only upon the creation of a law. But is the situation different when the legislative procedure to be followed is set down by a constitution? In Cormack v Cope (1974) 131 CLR 432 the High Court had [page 218] to grapple with this difficult and fascinating issue in the context of the alternative (double dissolution) procedure contained in s 57 of the Constitution. As noted, Cormack v Cope preceded the PMA case that was considered above. The proceedings in Cormack v Cope commenced in the High Court at the stage of the s 57 process where the Governor-General had convened a joint sitting of the two houses of the Commonwealth Parliament after the general (double dissolution) election had failed to break the legislative deadlock. 2.12.3C

Cormack v Cope (1974) 131 CLR 432

[On 11 April 1974, the Governor-General proclaimed a double dissolution of the Commonwealth Parliament, reciting six bills (including the Petroleum and Minerals Authority Bill 1973) as grounds for the dissolution. After the subsequent general election and continued deadlock between the two houses, the Governor-General convened a joint sitting to deliberate and vote on the six bills. Two senators commenced proceedings in the original jurisdiction of the High Court against the President of the Senate, the Speaker of the House of Representatives, the Clerks of both houses, the Prime Minister, the Attorney-General and the Commonwealth, claiming declarations that the convening of the joint sitting was invalid and injunctions to restrain the introduction into the joint sitting of any of the bills or their presentation to the Governor-General for royal assent. The State of Queensland issued a separate writ in the High Court against the members of the Commonwealth Executive Council, seeking similar declarations and injunctions in respect of the Petroleum and Minerals Authority Bill. The plaintiffs relied on two alleged defects in the s 57 procedure: the dissolution procedure had been used for six bills at once, whereas it was available for only one bill at a time; and the Petroleum and Minerals Authority Bill had not met the requirements of s 57, in that 3 months had not elapsed between the Senate’s rejection or failure to pass and the second passing by the House of Representatives. The plaintiffs applied for interlocutory injunctions, pending the hearing of their actions, and Barwick CJ, before whom the application had been made, referred to the Full High Court the motion for injunctions and the question whether the declarations sought by the plaintiffs should be made. Argument was heard before the court the same day (2 August) and the court’s judgment was delivered on 5 August. The judges dealt first with the action brought by the two senators.

Barwick CJ referred to a submission advanced on behalf of the Commonwealth, that the court could not inquire into the regularity of the actions of the Governor-General when the latter participated in the process of law-making. The submission was founded on the propositions that s 49 of the Constitution conferred on the Senate and the House of Representatives all the powers, privileges and immunities of the House of Commons and the courts in the United Kingdom traditionally refrained from any interference in the law-making activities of the parliament.] Barwick CJ: But the submission, in my opinion, was basically misconceived. We are not here dealing with a parliament whose laws and activities have the paramountcy of the houses of Parliament in the United Kingdom. The lawmaking process of the Parliament in Australia is [page 219] controlled by a written Constitution. This is particularly true of the special lawmaking process for which s 57 makes provision. It has been pointed out by the Privy Council in unequivocal language in the case of Bribery Commissioner v Ranasinghe [1965] AC 172 that where the lawmaking process of a legislature is laid down by its constating instrument, the courts have a right and duty to ensure that the lawmaking process is observed … These words were written with respect to a Constitution which required a particular majority for the passage of an Act of a particular nature. The analogy in the case of s 57 is that the Constitution requires the various steps which I have outlined to be validly taken as a part of the lawmaking process. Speaking of the position of the court in relation to such lawmaking processes, laid down by the constating instrument, Lord Pearce said in that case (AC at 194): ‘The court has a duty to see that the Constitution is

not infringed and to preserve it inviolate’, language which is singularly appropriate to the position of this court in relation to the Australian Constitution. While it may be true the court will not interfere in what I would call the intra-mural deliberative activities of the Parliament, it has both a right and a duty to interfere if the constitutionally required process of lawmaking is not properly carried out … Ordinarily, the court’s interference to ensure a due observance of the Constitution in connexion with the making of laws is effected by declaring void what purports to be an Act of Parliament, after it has been passed by the Parliament and received the royal assent. In general, this is a sufficient means of ensuring that the processes of lawmaking which the Constitution requires are properly followed and in practice so far the court has confined itself to dealing with laws which have resulted from the parliamentary process. But nothing in that process has its precise analogy of or to that prescribed by s 57. In my opinion, the court in point of jurisdiction is not limited to that method of ensuring the observance of the constitutional processes of lawmaking. It seems to me that in any appropriate, though no doubt unusual, case when moved by parties who have an interest in the regularity of the steps of the lawmaking process at the time intervention is sought, the court is able, and indeed in a proper case bound, to interfere. [Barwick CJ held that the s 57 procedure could be used for more than one bill at a time. However, he indicated that the Governor-General’s proclamation convening a joint sitting could be void because it purported to direct the joint sitting to vote on the six bills, and the Governor-General had no power to determine the agenda for the joint sitting. Barwick CJ also said that the Petroleum and Minerals Authority Bill had not satisfied the procedural requirements of s 57 because there had not been the necessary 3 months’ delay, though he concluded:]

But having regard to the fact that if the joint sitting proves not to have been duly convened and affirms laws which do not satisfy s 57, those laws or some of them made in pursuance of its votes could be declared void at the instance of a proper plaintiff, I am of opinion that the court should not grant an interlocutory injunction. In so deciding, I have borne in mind the interests of the plaintiffs to seek the relief they have sought, but this consideration is not so great or compelling as to outweigh other considerations to which weight must be given. Not only is there difficulty in finding appropriate persons to enjoin, but having regard to the court’s power to declare void Acts not passed in conformity with the provisions of s 57 the court, in my opinion, ought not now to intervene by way of interlocutory relief. [page 220] [McTiernan J held the issue of compliance with s 57 was not justiciable. On the issues of judicial intervention through injunction, the other members of the court were divided.] Menzies J: It is a firmly established principle that this court may declare or treat as invalid any law of the Parliament made without the authority of the Constitution. The exercise of this authority assumes the completion of the parliamentary process to turn a Bill into an Act. It is no part of the authority of this court, however, to restrain Parliament from making unconstitutional laws. It is of course convenient to speak of an unconstitutional law but the phrase means merely that the purported law is not a law at all. This court does not consider in advance whether if Parliament were to pass a particular Bill it would result in a valid law. Another aspect of the same matter is that the introduction of a Bill does not affect rights; it is the making of a law that does that. Then a person who has the requisite interest may challenge the validity of the law.

Closely associated with these principles is another principle of great constitutional importance, namely that the court will not interfere with the proceedings of parliament or the houses of parliament. The validity of the law that follows from what parliament has done is one thing. The proceedings of parliament that lead to a valid or an invalid law are another. It is not for this court to prevent parliament from doing what, in the opinion of this court, will result in an invalid law. Gibbs J: I am disposed to think that this court has jurisdiction to interfere at any stage of the special lawmaking process permitted by s 57, in order to prevent a violation of the Constitution and that an assertion of the privileges of Parliament would not deprive the court of the jurisdiction with which the Constitution invests it. However, although I accept that such a jurisdiction exists, in my opinion it would be wrong to exercise it by granting the relief sought in the present case. There can be no doubt that a proposed law, which has been affirmed by an absolute majority of the total members of both houses of Parliament at a joint sitting, will be invalid and void unless the requirements prescribed by s 57 have been satisfied. The only power to enact a law at a joint sitting is that given by s 57. The provisions of that section are not merely directory but attach conditions to the grant of the power and if those conditions have not been fulfilled, the power will not have been validly exercised. Once a proposed law had been affirmed at a joint sitting, this court would have undoubted jurisdiction to pronounce on its validity and it would be appropriate then to do so. In other words, after the proceedings of the joint sitting had been completed, this court would have jurisdiction to give, and could conveniently give, an adequate remedy if there had been a breach of the provisions of s 57, and it is not necessary, in order to prevent a violation of the Constitution, that the court should interfere in the legislative or administrative processes prescribed by s 57 before any proposed law has been passed.

These circumstances are relevant and important in deciding whether the discretionary remedies of declaration and injunction should be granted in a case such as the present. Stephen J: … I am of the view that this court does not intervene in matters involving the lawmaking process … There may be exceptions to this rule in cases in which, if such cases there be, the product of any irregularity in legislative procedure is other than a statute which is capable of challenge in this court by those affected by its terms upon the ground that it is not a true product of the constitutionally appointed legislative process. It suffices to say that this not such a case; if the past legislative history of the measure now described as the Petroleum and Minerals Authority Bill is ultimately shown not to have involved compliance with s 57 [page 221] and yet is affirmed by the requisite majority at a joint sitting and becomes an Act there will, no doubt, be opportunity for those affected by its terms to attack its validity. I may add that in my view this limitation of intervention by the court depends not upon discretionary but jurisdictional grounds … It is upon this jurisdictional ground that I would dismiss the plaintiffs’ motion for injunctions and declarations and would answer in the negative the question referred to the court. Mason J: In my view, proceedings at a joint sitting, pursuant to s 57 are proceedings in Parliament under Ch 1 of the Constitution. Whether this court has jurisdiction to intervene in the parliamentary process by granting an injunction or making a declaration, the effect of which would be to prevent the parliamentary sitting convened by the Governor-General from

taking place, is a question which I do not find it necessary to decide finally. It is sufficient for me to say that, assuming such a jurisdiction to exist, no case is here made out for its exercise. My principal reason for coming to this conclusion is that the grounds upon which the plaintiffs rely in order to invalidate the joint sitting or to limit its deliberations, are all grounds upon which the validity of the Bills would be open to challenge in the event that they are passed by a majority at the joint sitting and are assented to … Intervention in the parliamentary process by the grant of interlocutory relief before a Bill is assented to and becomes law, is to be justified, if at all, as an exceptional measure essential to prevent a violation of the Constitution: see Hughes & Vale Pty Ltd v Gair (1954) 90 CLR 203. As the six Bills, if passed at the joint sitting and assented to are open to challenge in properly constituted proceedings seeking a declaration of invalidity on the grounds now argued, I can see no sufficient basis for the court in this case taking the exceptional step of granting relief by way of intervening in the parliamentary process. [Barwick CJ, McTiernan, Menzies and Stephen JJ went on to dismiss the application for an interlocutory injunction by the State of Queensland on the ground that it had ‘no sufficient interest to maintain this suit’: 131 CLR at 475 per Barwick CJ. Gibbs and Mason JJ dismissed Queensland’s application for the same reasons they dismissed the application of the two senators.]

2.12.4 The joint sitting proceeded, and duly passed the six bills which were then given royal assent. The Petroleum and Minerals Authority Act 1973 was challenged in Victoria v Commonwealth (PMA case) 2.10.25C and the High Court held that there had not been the 3-month delay required by s 57 and that the Act was,

therefore, invalid. Three other Acts passed at the joint sitting were challenged in Western Australia v Commonwealth (Territorial Senators’ case) 2.2.21C. They were the Commonwealth Electoral Act (No 2) 1973, the Senate (Representation of Territories) Act 1973 and the Representation Act 1973. The challenge was unsuccessful. In the PMA case, Gibbs J offered an example of the type of case where the court would grant an injunction to restrain some step in the legislative process. He rejected an argument that a parliament, elected after an improperly proclaimed double dissolution, would be invalidly assembled, and said that ‘this of course is not to suggest that this court could not intervene to uphold the Constitution and prevent an invalid proclamation for the dissolution of the Senate from being given effect’: 134 CLR at 157. Mason J, while dealing with a similar argument, suggested that it might be ‘a logical consequence’ of the court’s decision in the PMA case that ‘a prospective dissolution of Parliament under s 57 would be exposed to judicial scrutiny’: 134 CLR at 184. [page 222] 2.12.5 The question whether the courts should intervene in the legislative process of parliament is raised only infrequently. On the occasions that the issue has been raised, quite divergent attitudes have been adopted by the judges. The decisions that favour judicial intervention are, for the most part, decisions of state courts. 2.12.6 In Taylor v Attorney-General (Qld) [1917] St R Qd 208, the Queensland Supreme Court granted an interlocutory injunction to restrain the holding of a referendum on a bill which had been

passed by the Legislative Assembly but blocked by the Legislative Council. The court concluded that the injunction was justified because the alternative procedure provided by the Parliamentary Bills Referendum Act 1908 (Qld) was not validly available for the passage of the proposed legislation. On appeal, the High Court decided that there was no defect in the legislative process. The appeal was heard after the interlocutory injunction had been dissolved and the Attorney-General had undertaken that the bill in question would not be presented to the Governor for the royal assent: see 2.10.12. 2.12.7 In Trethowan v Peden (1930) 31 SR (NSW) 183, the New South Wales Supreme Court was prepared to issue and continue an interim injunction to prevent officials of the state parliament and members of the state government from presenting two bills to the Governor for royal assent, a presentation that was prohibited by s 7A of the Constitution Act 1902 (NSW) 2.11.4E. Street CJ said that the injunction did not involve an interference with the proceedings of the houses of parliament; rather, it would prevent ‘a threatened violation of the statutory inhibition’ in s 7A: 31 SR (NSW) at 205. On appeal to the High Court, the question of the propriety of issuing an injunction was excluded from the appeal: see 2.11.10C. 2.12.8 In McDonald v Cain [1953] VLR 411, an interim injunction was granted by a single judge of the Victorian Supreme Court to restrain the presentation of a bill to the Governor for royal assent, pending the court’s determination whether the bill’s presentation was prohibited by s 60 of the Constitution Act 1855 (Vic) (see now s 18(2) of the Constitution Act 1975). The Full Supreme Court dissolved the interim injunction, on the ground

that the bill was not covered by s 60. Of the three members of the Full Court, O’Bryan J said that it would be proper for the court to grant the remedy of a declaration against officers of the state parliament. If it appeared that responsible ministers intended to contravene the law by advising the Governor to assent to a bill unlawfully presented to the Governor, the court would grant an injunction against the ministers: [1953] VLR at 438. The other members of the court were more equivocal, though Martin J indicated that the grant of the non-coercive remedy of declaration did not interfere with the rights of parliament: [1953] VLR at 426. 2.12.9 In Clayton v Heffron [1961] SR (NSW) 768 2.10.15C, the New South Wales Supreme Court declined to issue an injunction to restrain the holding of a referendum on a bill, passed by the Legislative Assembly and blocked by the Legislative Council. The court’s refusal was based on the substantial merits of the case, rather than on any reluctance to intervene in the legislative process. In the course of their joint judgment, Evatt CJ and Sugerman J suggested that, as a matter of discretion, the court might be unwilling to intervene in the legislative process. On the other hand, they suggested that the subject matter of the proposed legislation might justify intervention (SR (NSW) at 768): The present case is concerned with a measure whose purpose is to alter the constitution of the legislative body itself — to replace a legislature of two houses by a legislature consisting

[page 223] of one only of such houses. A degree of convenience amounting virtually to necessity makes it proper to determine at an appropriately early stage

whether such a measure, if ultimately enacted, will have been enacted with constitutional validity and in accordance with the forms required for its enactment; and the urgency in the public interest of an early determination of this question has been recognised by the entry into the agreement earlier referred to …

2.12.10 In Eastgate v Rozzoli (1990) 20 NSWLR 188, the New South Wales Court of Appeal refused to grant an interlocutory injunction that would have restrained the Speaker of the Legislative Assembly from presenting to the Governor for royal assent the Mental Health Bill 1990. (It appeared that the objection to the bill was that, if enacted, it would permit detention of persons whose conduct was not unlawful. No objection was raised to the procedure that the bill had followed in parliament.) In the course of his judgment, Kirby P said that Australian ‘courts have asserted the power to issue an injunction to restrain the officers responsible for presenting a Bill to the Governor for the royal assent and a power to make a declaration as to the validity of the legislation at that stage’, but it was ‘now settled practice in Australia that such an injunction will virtually never be issued, or a declaration made, at that stage. It will be left to the applicant to seek relief after the royal assent has been given and the Bill has become law’: 20 NSWLR at 199. Priestly and Handley JJA said that it would be essential, before the court would begin to consider intervening in the processes of parliament, ‘that the plaintiff’s basis of legal challenge to the Bill would cease to be available once the law-making process had been completed by the Bill being enacted into law’: 20 NSWLR at 204. 2.12.11 In Bignold v Dickson (1991) 23 NSWLR 683, the New South Wales Court of Appeal refused to issue an injunction to prevent the submission to a referendum of a bill to reduce the size

of the Legislative Council in that state. The plaintiff’s argument that the date appointed for the referendum did not comply with the Constitution Act 1902 (NSW) s 7A(3) was rejected by the court. Of the three members of the Court of Appeal (Kirby P, Samuels and Priestley JJA), only Kirby P referred to the issue of the court’s jurisdiction and discretion to intervene in the legislative process. He said that the present case was quite different from Eastgate v Rozzoli (1990) 20 NSWLR 188 because the plaintiff’s case was based on a negative stipulation in s 7A and involved an attack on an Act that had already been enacted as well as on the legislative process for the bill to reduce the size of the council. Kirby P noted that Trethowan v Peden (1930) 31 SR (NSW) 183 was authority for the proposition that the court could and should intervene to prevent a breach of s 7A; and, although that decision had been criticised in obiter dicta in the High Court, it had never been expressly overruled: 23 NSWLR at 704. It was unnecessary, Kirby P said, to resolve the issues of power and discretion because the plaintiff was not entitled to relief in any event. 2.12.12 The High Court has taken a generally negative attitude towards the question of judicial intervention in the legislative process, apart from the appeals in Taylor v Attorney-General (Qld) (1917) 23 CLR 457 (see 2.10.12) and Attorney-General (NSW) v Trethowan (1931) 44 CLR 394 2.11.10C, where the question was excluded from the appeals. 2.12.13 In Hughes and Vale Pty Ltd v Gair (1954) 90 CLR 203, the High Court refused to grant an injunction to restrain the presentation to the Governor of Queensland of a bill for an Act that would, the plaintiff argued, contravene s 92 of the Commonwealth Constitution

[page 224] by restricting the absolute freedom of interstate trade. Dixon CJ, with whom Webb, Fullagar, Kitto and Taylor JJ agreed, pointed out that the injunction granted by the New South Wales Supreme Court in Trethowan v Peden (1930) 31 SR (NSW) 183 had been based on the ‘express negative provision’ in s 7A of the Constitution Act 1902 (NSW), prohibiting the course of action restrained by the injunction. Such was not the case here. But even in the case of a provision such as s 7A, it seemed Dixon CJ was unhappy about judicial intervention (SR (NSW) at 204): For myself I have long entertained a doubt as to the correctness of the decision of the Full Court of New South Wales in that case even on the terms of that Act.

2.12.14 In Clayton v Heffron (1960) 105 CLR 214, the High Court held that there had been no failure to comply with the mandatory procedures prescribed by s 5B of the Constitution Act 1902 (NSW): see 2.10.15C. However, Dixon CJ, McTiernan, Taylor and Windeyer JJ also considered whether it would have been appropriate to issue an injunction, if there had been a deficiency in the mandatory procedures. They said that for the court to inquire into the parliamentary process before its completion was (105 CLR at 235): … an inquiry which according to the traditional view courts do not undertake. The process of law-making is one thing: the power to make the law as it has emerged from the process is another. It is the latter which the court must always have jurisdiction to examine and pronounce upon. Of course the framers of a constitution may make the validity of a law depend upon any fact, event or consideration they may choose, and

if one is chosen which consists in a proceeding within parliament the courts must take it under their cognisance in order to determine whether the supposed law is a valid law; but even then one might suppose only after the law in question has been enacted and when its validity as law is impugned by someone affected by its operation.

2.12.15 The questions of jurisdiction and discretion discussed in such cases as Trethowan v Peden (1930) 31 SR (NSW) 183, Clayton v Heffron and Cormack v Cope may be resolved by legislative provisions such as s 10A(7) of the Constitution Act 1934 (SA): 10A(7) Any person entitled to vote at an election for a member or members of the House of Assembly or the Legislative Council shall have the right to bring an action in the Supreme Court for a declaration, injunction or other legal remedy to enforce any of the provisions of this section either before or after any bill referred to in this section is presented to the Governor for Her Majesty’s assent.

Section 10A(2) prohibits the presentation to the Governor for royal assent of any bill to abolish the assembly or council, to alter the powers of the council, to change the provisions for altering the Constitution Act or for resolving deadlocks or for repealing or amending s 10A until the bill has been approved by the electors at a referendum. Similar provisions can be found in s 53(5) of the Constitution Act 1867 (Qld) and s 73(6) of the Constitution Act 1889 (WA). 2.12.16 Section 10A(7) could be read as merely overcoming the problem of standing to bring proceedings; as liberalising the restrictive rules developed by the courts to determine who may be permitted to challenge the validity of government action. However, the reference to ‘an action in the Supreme Court … either before or

after any bill … is presented to the Governor’ suggests that the subsection was intended to deal with at least some of the questions [page 225] of jurisdiction and discretion. That reading is supported by a comparison with s 88(5) of the Constitution Act 1934 (SA), which appears to be limited to overcoming the problem of standing: 88 (5) Any person entitled to vote at a general election of members of the House of Assembly shall have the right to bring an action in the Supreme Court for a declaration, injunction or other legal remedy to enforce any of the provisions of this section.

(Section 88 provides that a bill to alter the system for the distribution of assembly electorates or to alter s 88 shall not be presented to the Governor for the royal assent unless the bill has been approved by the electors at a referendum.) If s 10A(7) and its Queensland and Western Australian equivalents do go beyond the problem of standing, what impact do they have on the questions of jurisdiction and discretion? They almost certainly dispel the serious doubts over the courts’ jurisdiction to intervene in the legislative process; doubts expressed in the joint judgment of Dixon CJ, McTiernan, Taylor and Windeyer JJ in Clayton v Heffron (1960) 105 CLR 214 at 235 and by Menzies and Stephen JJ in Cormack v Cope (1974) 131 CLR 432 at 464–5, 472. But, if these provisions establish a jurisdiction to intervene, what effect do they have on those factors that, according to many judicial views, would persuade a court to exercise its discretion against intervention? See, for example, Trethowan v Peden (1930) 31 SR (NSW) 183; McDonald v Cain [1953] VLR

411 (see 2.12.8); Cormack v Cope (1974) 131 CLR 432 at 460 per Barwick CJ.

Chapter references Articles Brown, ‘The Disenfranchisement of Prisoners: Roach v Electoral Commissioner & Anor — Modernity and Feudalism’ (2007) 32(3) Alternative Law Journal 132 Campbell, ‘Royal Assent to Bills’ (2003) 14(1) Public Law Review 9–13 Canaway, ‘The Safety Valve of the Constitution’ (1938) 12 Australian Law Journal 108 Castles, ‘Constitutional Conventions and the Senate’ (1975) ACLD DT 286 Conklin, ‘Pickin and Its Applicability to Canada’ (1975) 25 University of Toronto Law Journal 193 Cowen, ‘A Historical Survey of the Victorian Constitution 1856–1956’ (1957) Melbourne University Law Review 9 Dixon, ‘The Law and the Constitution’ (1935) 51 Law Quarterly Review 590 Evans, ‘Pecuniary Interests of Members of Parliament Under the Australian Constitution’ (1975) 49 Australian Law Journal 464 Galligan and Chesterman, ‘Aborigines, Citizenship and the Australian Constitution: Did the Constitution Exclude Aboriginal People from Citizenship?’ (1997) 8 Public Law Review 45 Goldsworthy, ‘Manner and Form in the Australian States’ (1987) 16 Melbourne University Law Review 403

[page 226] Katz, ‘Simultaneous Dissolution of Both Houses of the Australian Federal Parliament, 1975’ (1976) 54 Canadian Bar Review 392 Kelly, ‘Western Australian Electoral Reforms: Labor Finally Succeeds’ (2006) 41 Australian Journal of Political Science 419 Latham, ‘Changing the Constitution’ (1949) 1 Sydney Law Review 14 Lee, ‘The Australia Act 1986: Some Legislative Conundrums’ (1988) 14 Monash Law Review 298 Lindell, ‘The Arrangements for Self-government for the Australian Capital Territory: A Partial Road to Republicanism in the Seat of Government?’ (1992) 3 Public Law Review 5 Lindell, ‘Parliamentary Inquiries and Government Witnesses’ (1995) 20 Melbourne University Law Review 383 ‘Political Chronicle: Australia and Papua New Guinea July– December 1987’ (1988) 34(2) Australian Journal of Politics and History 215–62, 218 Pryles, ‘Nationality Qualifications for Members of Parliament’ (1982) 8(3) Monash University Law Review 163 Richardson, ‘The Legislative Power of the Senate in Respect of Money Bills’ (1976) 47 Australian Law Journal 285 Sawer, ‘Some Legal Assumptions of Constitutional Change’

(1957) 4 Western Australia Annual Law Review 1 Stretton and Finnimore, ‘Black Fellow Citizens: Aborigines and the Commonwealth Franchise’ (1993) 28(101) Australian Historical Studies 527–8 Taylor, ‘Two Refusals of Royal Assent in Victoria’ (2007) 29 Sydney Law Review 85 Twomey, ‘The Federal Constitutional Right to Vote’ (2000) 28 Federal Law Review 125 Twomey, ‘Manner and Form Limitations on the Power to Amend State Constitutions’ (2004) 15(3) Public Law Review 182 Winterton, ‘Can the Commonwealth Parliament Enact Manner and Form Legislation?’ (1980) 11 Federal Law Review 167 Books and texts Bryce, American Commonwealth, MacMillan, New York, 1889 Carney, Members of Parliament: Law and Ethics, Prospect, Sydney, 2000 Coper, ‘Commentary’ in Evans (ed), Labor and the Constitution 1972–1975, Heinemann Educational, Richmond, Vic, 1977 Craven, Secession: The Ultimate State Right, Melbourne University Press, Melbourne, 1986 Crawford, ‘Amendment of the Constitution’ in Craven (ed), Australian Federation towards the Second Century: A Work to Mark the Centenary of the Australasian Federation Conference, Melbourne University Press, Melbourne, 1992, p 177ff

[page 227] de Smith, Constitutional and Administrative Law, Penguin, 1981 de Smith and Brazier, Constitutional and Administrative Law, Penguin, 1989 Dudgeon and Hincks, Democracy Rules: An Electoral Education Resource, Commonwealth of Australia, Canberra, 2007 Encel, Horne and Thompson (eds), Change the Rules!: Towards a Democratic Constitution, Penguin, Ringwood, Vic, 1977 Evatt, The King and His Dominion Governors, 2nd ed, Cheshire, London, 1967 Hall and Iremonger, The Makers and the Breakers, Wellington Lane Press, Sydney, 1976 Hanks, ‘Parliamentarians and the Electorate’ in Evans (ed), Labor and the Constitution 1972–1975, Heinemann Educational, Richmond, Vic, 1977 Hanks, Australian Constitutional Law, 3rd ed, Butterworths, Sydney, 1985 Howard and Saunders, ‘The Blocking of the Budget and the Dismissal of the Government’ in Evans (ed), Labor and the Constitution 1972–1975, Heinemann Educational, Richmond, Vic, 1977, pp 251–87 Irving (ed), A Woman’s Constitution? Gender and History in the Australian Commonwealth, Hale & Iremonger, Sydney, 1996 Jennings, The Law and the Constitution, 5th ed, University

of London Press, London, 1959 La Nauze, The Making of the Australian Constitution, Melbourne University Press, Melbourne, 1972 Lindell, ‘Duty to Exercise Judicial Review’ in Zines (ed), Commentaries on the Australian Constitution, Butterworths, Sydney, 1977, pp 150–90 Lumb, The Constitution of the Commonwealth of Australia Annotated, 4th ed, Butterworths, Sydney, 1986 Lumb and Moens, The Constitution of the Commonwealth of Australia Annotated, 5th ed, Butterworths, Sydney, 1995 Mansutti, Mary Lee 1821–1909: Let Her Name Be Honoured (E Ho in association with Women’s Suffrage Centenary History Sub-committee), Adelaide, 1994 Marshall and Moodie, Some Problems of the Constitution, 4th ed, Hutchinson, London, 1967 May, Treatise on the Law, Privileges, Proceedings and Usages of Parliament, 21st ed, Butterworths, London, 1989 Morrison, ‘The Government of Queensland’ in Davis (ed), The Government of the Australian States, Longmans, London, 1960, pp 249–332 O’Connell and Riordan, Opinions on Imperial Constitutional Law, Lawbook, Sydney, 1971 Odgers, Australian Senate Practice, 5th ed, AGPS, Canberra, 1976 Pearce, ‘The Legislative Power of the Senate’ in Zines (ed), Commentaries on the Australian Constitution, Butterworths, Sydney, 1977, pp 119–37 [page 228]

Quick and Garran, The Annotated Constitution of the Australian Commonwealth, Angus & Robertson, Sydney, 1901, p 414 Sawer, Australian Federal Politics and Law 1901–1929, Melbourne University Press, Melbourne, 1956 Sawer, The Australian Constitution, AGPS, Canberra, 1975 Sawer, Federation Under Strain, Melbourne University Press, Melbourne, 1977 Sawer, Timeline Dates, Australian National University, Canberra, 2000 Sawer (ed), Elections Full, Free and Fair, The Federation Press, Sydney, 2001 Stellios, Zines’s The High Court and the Constitution, 6th ed, The Federation Press, Sydney, 2015 Twomey, The Chameleon Crown — The Queen and her Australian Governors, Federation Press, Sydney, 2006 Wade, Constitutional Fundamentals, Stevens & Sons, London, 1989, pp 40–7 Zines, ‘The Double Dissolutions and the Joint Sitting’ in Evans (ed), Labor and the Constitution 1972–1975, Heinemann, Richmond, Vic, 1977 Papers and reports Bennett, Australian Capital Territory Election 2001, Parliamentary Research Note 15/2001–02, Australia, Department of the Parliamentary Library, 2002,

Bennett and Brennan, ‘Constitutional Referenda in

Australia’, Research Paper No 2 1999–2000, Department of the Parliamentary Library, 2000 Constitutional Commission, Final Report, AGPS, Canberra, 1988 Jaensch, Democratic Representation: Then, Now, and in the Future, SA 175: Exploring the Past, Shaping the Future, 25 October 2011 Macintyre, ‘“The Idea of the People” in The People’s Conventions: Corowa (1893) and Bathurst (1896)’ Papers on Parliament No 32: Special Issue (1998) Norberry and Williams, ‘Voters and the Franchise: The Federal Story’, Research Paper No 17 2001–02, Department of the Parliamentary Library, 2002 Orr, ‘Constitutionalising the Franchise and the Status Quo: The High Court on Prisoner Voting Rights’, Discussion Paper 19/07, Democratic Audit of Australia, October 2007 Wilson and McKeown, ‘A Matter of Public Importance: Votes for Women’, Parliamentary Library, Parliament of Australia, May 2002, reissued November 2003 [page 229] Other Argus, 10 April 1902, p 4,

‘Commonwealth Notes’, Sydney Morning Herald, 10 April 1902, p 7

‘Commonwealth Notes’, Sydney Morning Herald, 13 June 1902, p 7

Commonwealth, Parliamentary Debates, House of Representatives, 23 April 1902, 11930–11951. Commonwealth, Parliamentary Debates, Senate, 9 April 1902, pp 11451–11565. Commonwealth, Parliamentary Debates, Senate, 15 and 16 October 1975, vol s 63, pp 1156, 1221, 1241 Convention Debates, Adelaide, 1897, pp 576–7 (Edmund Barton) Convention Debates, Sydney, 1897, p 584 (Alfred Deakin) New South Wales, Debates, Legislative Council, 17 September 1997, p 64 (Franca Arena) Official Report of the National Australasian Convention Debates (First Session), Adelaide, 1897, pp 715–31

[page 231]

Constitutional Interpretation and Characterisation

CHAPTER 3

INTRODUCTION 3.1.1 The concept of judicial review was introduced in Chapter 1. First asserted by the United States Supreme Court in the case of Marbury v Madison 1 Cranch 137; 5 US 137 (1803) 1.2.40C, the function of judicial review involves determining the constitutional validity of legislative and executive action and is exclusive to the judiciary. It has been accepted as ‘axiomatic’ in the Australian constitutional system: see Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 4.5.11C at 263 per Fullagar J. In exercising judicial review, the court typically engages in two related processes of reasoning: constitutional interpretation and characterisation. Constitutional interpretation (or construction) involves the process of determining constitutional meaning; for example, what do the words ‘trade and commerce’ (in ss 51(i) and 92) or ‘trading corporations’ (in s 51(xx))

mean? Characterisation is the process of determining the legal or practical operation of a law; that is, what does it do in terms of creating, modifying or abrogating rights and duties? 3.1.2 The concepts of constitutional interpretation and characterisation are connected: if a question arises as to whether a Commonwealth law is supported by a federal legislative head of power, the court is required to determine whether there is a sufficient connection between the legal and practical operation of the law and the power. That exercise will require a characterisation of the law (that is, what legal rights and duties does it create, modify or abrogate) and the interpretation of the constitutional language used in the head of power. Similarly, where the constitutional question is whether a law has contravened a constitutional limitation, the court will be required to engage in both processes. The characterisation process will be explored in greater detail later in the chapter. 3.1.3 Although these concepts (judicial review, constitutional interpretation and characterisation) are related, they need not operate together in all circumstances where a constitutional issue is presented. For example, where a court is determining whether there is an inconsistency between a Commonwealth law and a state law for the purposes of s 109 of the Constitution, it can engage in an exercise of constitutional interpretation (that is, what is a ‘law’, or when will there be an ‘inconsistency’) and characterisation (that is, determining the legal or practical operation of the respective laws in question to see if there [page 232]

is an inconsistency). However, in that context, the court is not determining whether the laws are void and, thus, not strictly engaging in the function of judicial review in the Marbury v Madison sense. In determining whether a head of federal jurisdiction has been enlivened for the purpose of ss 75 and 76 of the Constitution, a court may only be engaged in the process of constitutional interpretation (for example, what does the word ‘Commonwealth’ or ‘state’ mean for the purposes of s 75(iii) and (iv)). Nevertheless, in many constitutional cases, all three concepts will be in play. 3.1.4 This chapter will identify the broad principles of constitutional interpretation and characterisation which can be seen as operating in the High Court’s jurisprudence throughout this book. The High Court’s decision in Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 provides a useful place to start. 3.1.5C

Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479

[The Plant Variety Rights Act 1987 (Cth) and Plant Breeder’s Rights Act 1994 (Cth) authorised the grant of ‘plant variety rights’ in respect of new plant varieties. Section 51(xviii) authorises the Commonwealth Parliament to make laws etc with respect to ‘copyrights, patents of inventions and designs, and trade marks’. Grain Pool challenged the constitutional validity of the 1994 Act on the ground that the expression ‘patents of inventions’ in s 51(xviii) was limited to the meaning that expression had in 1900 and could not support the grant of rights under the Acts. The court unanimously rejected that proposition. The question for the court was whether the Commonwealth Act could

be supported by the head of legislative power in s 51(xviii) and, thus, involved judicial review, constitutional interpretation and characterisation.] Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ: The general principles which are to be applied to determine whether a law is with respect to a head of legislative power such as s 51(xviii) are well settled. They include the following. First, the constitutional text is to be construed ‘with all the generality which the words used admit’ [R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225–6]. Here the words used are ‘patents of inventions’. This, by 1900, was ‘a recognised category of legislation (as taxation, bankruptcy)’ [Stenhouse v Coleman (1944) 69 CLR 457 at 471], and when the validity of such legislation is in question the task is to consider whether it ‘answers the description, and to disregard purpose or object’ [Stenhouse v Coleman (1944) 69 CLR 457 at 471]. Secondly, the character of the law in question must be determined by reference to the rights, powers, liabilities, duties and privileges which it creates [Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 352–3, 372]. 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 [Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 368–9; Leask v The Commonwealth (1996) 187 CLR 579 at 601–2, 621, 633–4]. 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 [page 233]

appearing in s 51, it will be valid notwithstanding that there is no independent connexion between the two subjectmatters. 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 [Leask v The Commonwealth (1996) 187 CLR 579 at 602]. In a passage in the joint judgment of the Court in Nintendo Co Ltd v Centronics Systems Pty Ltd [(1994) 181 CLR 134 at 160] upholding the validity of the Circuit Layouts Act 1989 (Cth), the Court attended to the first of these matters, the construction of the terms of s 51(xviii) with the generality admitted by the words used. Their Honours said: The grant of Commonwealth legislative power which sustains the [Circuit Layouts Act] is that contained in s 51(xviii) of the Constitution with respect to ‘Copyrights, patents of inventions and designs, and trade marks’ [cf, eg, R v Brislan; Ex parte Williams (1935) 54 CLR 262; Jones v The Commonwealth (No 2) (1965) 112 CLR 206]. It is of the essence of that grant of legislative power that it authorizes the making of laws which create, confer, and provide for the enforcement of, intellectual property rights in original compositions, inventions, designs, trade marks and other products of intellectual effort. In the present case, the plaintiff contends that the final phrase in this passage should not be read so as to treat as sufficient to attract this head of power any product of intellectual effort. Those supporting validity contend that the legislation here is valid without such a wide reading of the power. That which constitutes the invention for the Varieties Act is ‘the origination’ of the ‘new plant variety’ (s 5(a)) and for the Breeder’s Rights Act it is ‘the

breeding’ of the plant variety (s 10(b)). It will be necessary to return to these submissions. What is of immediate significance for present purposes is the reference in Nintendo by their Honours to R v Brislan; Ex parte Williams and Jones v The Commonwealth [No 2]. Those authorities dealt with the inherent scope for expansion of the application of the power with respect to postal, telegraphic, telephonic ‘and other like services’ in s 51(v) of the Constitution. This serves to emphasise a point of significance in the present case. Later developments in scientific methods for the provision of telegraphic and telephonic services were contemplated by s 51(v). Likewise, it would be expected that what might answer the description of an invention for the purpose of s 51(xviii) would change to reflect developments in technology. Consistently with the general principles which we have identified above, an appropriate approach to the interpretation of s 51(xviii) is that appearing in what was then the dissenting judgment of Higgins J in Attorney-General for NSW v Brewery Employés Union of NSW (the Union Label Case) [(1908) 6 CLR 469]. Higgins J observed that trade marks were ‘artificial products of society’ [at 611]. Further, whilst ‘we are to ascertain the meaning of ‘trade marks’ as in 1900’, trade marks usage in 1900 ‘gives us the central type; it does not give us the circumference of the power’ [at 610] with respect to trade marks provided for by s 51(xviii). The centre of the thing named — trade marks — was to be taken with the meaning as in 1900 to find the circumference of the power. However, it would be ‘a mistake to treat the centre as the radius’ [at 610]. Higgins J continued [at 611–2]: Power to make laws as to any class of rights involves a power to alter those rights, to define those rights, to limit those rights, to extend those rights, and to extend the

[page 234] class of those who may enjoy those rights. In the same clause of s 51, power is given to make laws with respect to ‘copyrights’ (rights of multiplying copies of books, &c); with respect to ‘patents’ (rights to make or sell inventions); and with respect to ‘trade marks’ (rights to use marks for the purposes of trade). The power to make laws ‘with respect to’ these rights, involves a power to declare what shall be the subject of such rights. In the second place, although we are to interpret the words of the Constitution on the same principles of interpretation as we apply to any ordinary law, these very principles of interpretation compel us to take into account the nature and scope of the Act that we are interpreting — to remember that it is a Constitution, a mechanism under which laws are to be made, and not a mere Act which declares what the law is to be. (Original emphasis). His Honour went on to deal, as an instance of the application of these principles, with the decision of the United States Supreme Court in Re Klein [1 Howard 277 (n) (1843) [42 US 256]]. Higgins J said of that case [at 612]: At the making of the United States Constitution, the word ‘bankruptcy’ had the original English meaning of an adverse proceeding by a creditor against a fraudulent debtor. This was the meaning from the beginning (34 & 35 Hen VIII c 4), and at the time of the American Constitution. Yet it was held that Congress, under its power ‘to establish uniform laws on the subject of bankruptcies throughout the United States’, had power to make a law for the voluntary sequestration of their estates by debtors — power to allow a voluntary bankruptcy at the instance and for the benefit of the debtor. It was also held that the Act was valid, although the word

‘bankruptcy’ was properly applicable only to traders. In short, Congress had the same power to widen the scope of bankruptcy law as the English Parliament possessed, and as it in fact exercised after the American Revolution. Similar reasoning, with respect to the bankruptcy power (s 51(xvii)) is found in the judgment of Gibbs CJ in Storey v Lane [(1981) 147 CLR 549]. Gibbs CJ said [at 557–8]: It may be accepted that in 1901, both in England and Australia, an insolvent debtor might still have been imprisoned under an order of a punitive kind, ie an order made as a punishment rather than as a means of execution, and that there was no power in courts of bankruptcy to grant relief in such a case. But the provisions of laws made under s 51(xvii) were not intended to be stereotyped so as to confine the power of the Parliament to the legislative provisions existing in 1901 as to bankruptcy and insolvency. If the powers of the courts of bankruptcy to relieve debtors against imprisonment imposed as a consequence of the failure to pay their debts was inadequate in 1901, the Parliament had power to extend them. A law which empowers a court of bankruptcy to order the release from prison of a debtor against whom a bankruptcy petition has been presented, and who is imprisoned because of his failure to pay a provable debt or a penalty payable in consequence of the non-payment of a provable debt, or because of his non-compliance with an order to pay a provable debt, is a law with respect to bankruptcy. The judgment of the Court in Nintendo and those of Higgins J and Gibbs CJ, delivered across the lifespan of the Court, exemplify the first of the general principles of constitutional interpretation to which reference has been made. They reflect what the foundation members

[page 235] of the Court had intended by their adoption in Baxter v Commissioners of Taxation (NSW) [(1907) 4 CLR 1087 at 1105] of a passage of the judgment of Story J delivering the opinion of the Court in Martin v Hunter’s Lessee [1 Wheat 304 at 326 (1816) [14 US 141 at 151]]. In that well-known statement with respect to the interpretation of the United States Constitution, Story J had stressed that the legislative powers of the Congress were expressed ‘in general terms’, so as ‘to provide [not] merely for the exigencies of a few years, but … to endure through a long lapse of ages, the events of which were locked up in the inscrutable purposes of Providence’. These words do not suggest, and what follows in these reasons does not give effect to, any notion that the boundaries of the power conferred by s 51(xviii) are to be ascertained solely by identifying what in 1900 would have been treated as a copyright, patent, design or trade mark. No doubt some submissions by the plaintiff would fail even upon the application of so limited a criterion. However, other submissions, as will appear, fail because they give insufficient allowance for the dynamism which, even in 1900, was inherent in any understanding of the terms used in s 51(xviii).

3.1.6 Kirby J agreed with the rest of the court, but emphasised that the task of the court in constitutional interpretation is to determine the contemporary meaning of the language of the Constitution. His Honour’s approach to constitutional interpretation will be explored further below.

CONSTITUTIONAL INTERPRETATION

Different approaches 3.2.1 The Constitution came into operation in 1901. It was preceded by two Constitutional Conventions (1891 and 1897–8) during which delegates discussed, debated and disagreed on what problems were to be solved by federation and the best way to design a constitutional system to achieve the variously expressed aspirations. The draft constitution produced by that process went through colonial referenda, and was ultimately enacted, with some important modifications, by the Imperial Parliament. Some of the language used is ambiguous, sometimes deliberately so. The social, economic and political context to which the Constitution was intended to apply has shifted, in many ways considerably, since 1901. As the High Court recognised in Grain Pool, some of those changes were foreseen at the time of federation, others were not. 3.2.2 The drafters of the Constitution were well aware that the judges would play a central role in determining constitutional meaning. In 1898, Isaac Isaacs told his fellow delegates to the Sydney Constitutional Convention: We are taking infinite trouble to express what we mean in this Constitution; but as in America so it will be here, that the makers of the Constitution were not merely the conventions who sat, but the judges of the Supreme Court. (Convention Debates, 1898, p 283.)

3.2.3 Given these various constitutional dynamics, determining constitutional meaning is a difficult exercise. There has been considerable debate in the academic literature as to the appropriate approach to constitutional interpretation. Much of the contemporary debate

[page 236] followed the recognition by the High Court in the 1990s of implied limitations such as a freedom of political communication deriving from the system of representative and responsible government established by the Constitution. The establishment of these principles is considered in Chapter 10. The following extract from Jeremy Kirk provides a helpful overview of the various approaches to constitutional interpretation. 3.2.4E

J Kirk, ‘Constitutional Interpretation and a Theory of Evolutionary Originalism’ (1999) 27 Federal Law Review 232 at 323–35 (footnotes omitted)

A Constitution cannot be applied without employing some theory of interpretation. An adequate theory — that is, a coherent method or approach — must address two fundamental, connected questions. In what sense are words in the text to be understood? How is ambiguity or uncertainty to be resolved? Resolution of these matters is logically prior to the determination of particular controversies. … 1 ORIGINALISM IN AUSTRALIA 1.1 Originalism, literalism and legalism Originalist constitutional theories answer the first foundational question of interpretation broadly in this way: constitutional text is to be understood according to its intended meaning, seen within the context in which it was drafted or enacted. Originalism does not provide a clear response to the second question, the resolution of ambiguity or uncertainty. Such

uncertainty can arise either because the intended meaning is communicated unclearly or because the text reflects the fact that the framers had no formed intention on the particular matter requiring decision. Originalism is frequently associated with the interpretivist or legalist belief that ambiguities can be resolved purely from within a constitution. Thus in America the terms ‘originalism’ and ‘interpretivism’, and their respective opposites, are often seen as synonymous. This association is not necessary, however. The traditional Australian approach to constitutional interpretation has long been understood in terms of ‘literalism’ and, to a lesser extent, ‘legalism’. These two themes are widely taken to be established by the Engineers case of 1920, although in fact both were present in Australian constitutional law before that decision and, indeed, were characteristic of the preceding common law of statutory interpretation. The Australian literalist orthodoxy falls within the realm of originalism …. Literalism indicates that constitutional words are to be given their full, natural or literal meaning as understood in their textual and historical context. The courts’ role is to give effect to the intent of the Constitution’s framers, or perhaps that of the Imperial Parliament, as found ‘by an examination of the language used in the statute as a whole’. This language should be read in its ‘natural sense’; other considerations should be excluded, except ‘the state of the law as it was when the statute was passed, and the light to be got by reading it as a whole’. Provisions are to be understood according to their essential meaning at the time they were enacted in 1900. A distinction has been drawn here, derived from JS Mill, between ‘connotation’ and ‘denotation’. In modern philosophical usage this distinction tends to be termed ‘meaning’ or ‘sense’ versus ‘reference’. The Court seeks the connotation or meaning of the words: the essential qualities or characteristics of the concept referred to, as understood at 1900. The particular matters falling within the

scope of those words, the denotations or references, may change over time. [page 237] One important question here is what intentions are relevant. Judges have sometimes talked of what ‘the Constitution intended’. An intention or purpose is an end sought to be achieved, which presupposes a conscious subject who can conceive of such desired ends. A document cannot have intentions; it may merely manifest them. Meaning is what the receiver takes from a communication. The random typing of monkeys will eventually produce a work capable of having meaning to us, but it would have no intended meaning and we would have no reason to attach significance to it. Originalism involves seeking the meaning that the speaker intended to convey. The High Court has never clarified exactly whose intent counts and why. There are three main possibilities: the Imperial Parliament, which passed the Act containing the Constitution; the framers, who drafted it in the Conventions; the peoples of the colonies in 1899/1900, who approved it at referenda. References to the intentions of the Parliament have tended to be little more than a formality, apart from statements that because the Constitution was enacted in an Act of the Imperial Parliament the ordinary rules of statutory construction apply. From the first, the text has been construed in its Australian context. … Judges have most frequently referred to the intent of the framers. References to the intentions of the people have also been common, although only in rare judgments is this seen as having interpretational significance beyond referring to local intentions. Legalism represents one type of answer to the second basic question of interpretation: the resolution of uncertainty. In its strictest version it signifies that judges neither need make, nor

should make, subjective choices; nor should they refer to consequences or policy considerations, when interpreting and applying law. Two elements underpin the approach. One is the declaratory theory of law: the belief that judges merely declare or deduce, but do not create, the law. The other is the principle that a decision should not depend upon the particular judges hearing a case, which, in turn, reflects the fundamental precept of justice that like cases should be treated alike. Legalism correlates to what Americans often call ‘interpretivism’: the idea that constitutional issues can and should be resolved only by reference to norms and values within the ‘four corners’ of the Constitution. Legalism is closely allied to literalism, in that literalism encompasses the legalist aim of giving effect to the ordinary meaning of words regardless of policy or consequential considerations. Yet one can acknowledge the need for some judicial choices without forsaking the aim of generally giving effect to the natural meaning of words; thus one can be a literalist without being a strict legalist. Conversely, one can be a legalist without being a literalist, as one might seek or purport to avoid subjective choices in interpretation but be prepared to look to sources well beyond the text. Legalism was a dominant theme of the Engineers decision, with its rejection of subjective ‘political’ judgments. The majority condemned the past assertions of ‘necessary implications’ in relation to intergovernmental immunities as being vague and elusive, derived from circumstances and hopes external to the Constitution, and ‘referable to no more definite standard than the personal opinion of the Judge who declares it’. By abandoning the complex and significantly indeterminate implications involved in the implied intergovernmental immunities, Engineers did represent a clear step in a legalist direction. … 1.2 Textualism and intentionalism An issue relevant to both basic questions of constitutional

interpretation is what sources may be employed in seeking constitutional meanings. Textualism and intentionalism are strands on the spectrum of originalism. The distinction here relates to the sources employed to ascertain intent. The former looks just to the words of the document; the latter is prepared also to refer [page 238] to extrinsic materials such as the preparatory debates and previous draft Bills. The greater the role and weight allocated to such materials, the more intentionalist the approach. Either method is consistent with literalism, or with legalism. Textualism does involve searching for intent. Judges have sometimes suggested that they only seek to ascertain the meaning of a measure and do not speculate on what was intended. But it is the meaning at the time and in the context of the measure’s enactment which is taken to be relevant, thus according significance to the intended meaning. Of course, the text is a necessarily limited guide. Extrinsic materials sometimes reveal quite different intentions from what might otherwise have been supposed from the words. Sometimes, therefore, there may be significantly different results between textualist and intentionalist approaches. The High Court traditionally has taken an essentially textualist approach. Intention was found ‘from the words of the compact’, and substantially from those words alone. Reference to the Convention Debates on the drafting of the Constitution was generally frowned upon. However, the Court was prepared to refer to some extrinsic sources, such as the draft Constitution Bills, pre-1900 precedents, and texts written by framers such as Quick and Garran. The Court’s decision in Cole v Whitfield [(1988) 165 CLR 360] in 1988 signalled a move towards a somewhat more intentionalist method. The Court stated that the Convention

Debates could be referred to for three purposes, namely, to identify the ‘contemporary meaning of language used, the subject to which that language was addressed and the nature and objectives of the movement towards federation’. … 2 NON-ORIGINALISM IN AUSTRALIA The distinction between intentionalism and textualism illustrates that even within originalism there are differences of degree in the types of evidence to which recourse is permitted, and thus in the manner and extent to which original intentions are accorded significance. As one moves from intentionalism to textualism, and then further away from according primacy to original intentions, one heads into that part of the interpretative spectrum vaguely labelled ‘non-originalism’. This category is not of itself a theory. It encompasses a wide range of potential approaches to interpretation, with two common themes. The first is the idea that language is significantly indeterminate, although this varies between the view that text is still of great import, to the view that language can almost never communicate anything with certainty. Secondly, the meaning of words is not regarded as wholly frozen at the date of enactment. Thus some theorists argue that meaning does and should evolve within the common law judicial method. Similarly, others point to the evolving political tradition of the nation. Detmold suggests simply that constitutional meaning is ‘in movement’. In Australia the most prominent variant of non-originalism, often labelled ‘progressive’ or ‘dynamic’ interpretation, is itself very general. This is the view that the Constitution should be interpreted with an eye to the conditions, needs, practices, values, preferences, expectations and standards of modern times. Whilst originalism may represent the Australian orthodoxy, nonoriginalist tendencies have always had an important presence. … [The article identified non-originalist sentiments in judgments of Australia’s leading judges including Higgins J in Attorney-General

(NSW) v Brewery Employees’ Union (NSW) (Union Label case) (1908) 6 CLR 469 at 608, 616 and Isaacs J in Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 438–9. The most significant of these are the following:] Windeyer J, in a much-quoted passage from Payroll Tax [(1971) 122 CLR 353 at 396–7], sought to place Isaacs J’s judgment in Engineers in its historical context. He stated that he [page 239] did not regard Engineers ‘as the correction of antecedent errors’, but as a ‘consequence of developments that had occurred outside the law courts’, namely, the ‘growing realization’ of Australian nationalism and integration. In common law countries, ‘interpretation of a written constitution may vary and develop in response to changing circumstances’. The passage can be read as merely stating that, whilst the previous interpretation had not been clearly and unreasonably wrong, the ‘new light’ of events had shown the new approach to be more appropriate and correct. The natural reading, however, is that in making the inevitable choices involved in constitutional interpretation judges are influenced by the evolution of Australian society (as well as by their own perceptions, preferences and values). All changes in particular constitutional understandings can be seen in these two ways, but the latter view is usually more accurate and honest. Sir Anthony Mason has openly supported an approach allowing an element of dynamic interpretation. His clearest statements have been extra-judicial, but the approach can be detected in a number of his judgments. Deane J, in Theophanous [(1994) 182 CLR 104 at 171-4], placed much store on framer Andrew Inglis Clark’s talk of the need to see the Constitution as a ‘living force’. A careful reading of Clark suggests that he was essentially an originalist. Nevertheless, although not entirely unambiguous,

Deane J appeared to adopt a significantly dynamic approach. He asserted that the Constitution was ‘intended to be a living instrument’, with ‘its vitality and its adaptability to serve succeeding generations’. He sought to downplay the relevance of the framers’ intentions. Of the present Court, Kirby J’s nonoriginalist tendencies stand out. 2.2 Underlying non-originalism The dominance of the literalist/originalist orthodoxy has been such that explicit non-originalist argument has been relatively rare. Sometimes it comes close to the surface when modern policy concerns or practical consequences are discussed by judges in interpreting a power. … More frequently, however, nonoriginalist reasoning is presented within originalist terms. One common way in which this is done is the assertion of a purported 1900 meaning without providing any significant historical argument or evidence. … One prominent refrain within both American and Australian constitutional law is sometimes regarded as dynamic in nature, namely Marshall CJ’s famous assertion that ‘it is a constitution we are expounding’, one ‘intended to endure for ages to come, and, consequently, to be adapted to the various crises of human affairs’ [McCulloch v Maryland 4 Wheat 316 (1819) at 407, 415]. This sentiment has been invoked in Australia to support the presumption that Commonwealth powers are to be construed broadly [Jumbunna (1908) 6 CLR 309 at 367–8 per O’Connor J]. In fact, this strand can be seen as presupposing an originalist approach, for taking a broad view from the beginning would be unnecessary if the meaning of words could change in response to changing needs. On the other hand, it does clearly reflect some concern about the deleterious effects of having a frozen, rigid Constitution. In practice … it has facilitated departures from originalist constraints.

3.2.5 It is clear that there are many ways of categorising the various approaches to constitutional interpretation. Sir Anthony Mason has suggested a classification based upon the categories of originalism, intentionalism, literalism and progressive interpretation (Mason, 1996). Sampford and Preston identify 12 ‘external elements of selected theory’ (Sampford and Preston, 1996) and Goldsworthy distinguishes only two categories, originalism and non-originalism (Goldsworthy, 1997). The effect of the various approaches is that different [page 240] sources of law and techniques of reasoning are relied upon in interpreting the instrument. Thus, the textualist emphasises the significance of the words of the provision itself; the intentionalist draws on historical evidence to determine the meaning of a provision (which may or may not conflict with a ‘textual’ or ‘literal’ reading); and the progressivist refers to contemporary considerations of policy to guide interpretation. 3.2.6 Any method of constitutional interpretation has its limitations. Originalism raises the difficulty of identifying the founders’ intention(s). The main evidence of that intention is the debates of Constitutional Conventions held in the 1890s, but these debates are incomplete and inconclusive. They do not include the records of the drafting committees, nor do they tell us anything about the lobbying and negotiation that accompanied the debates. More importantly, they do not describe the assumptions made by the founders about the common law context within which the new system of government ought to operate. And sometimes those

assumptions may be outdated and outmoded, as Cheatle v R (1993) 177 CLR 541 demonstrated: see 9.6.13–9.6.14. In any event, the text of the debates must itself be interpreted. 3.2.7 Assumptions about what was intended can alter over time. In a detailed historical survey, Fiona Wheeler argued that, contrary to previously accepted views, the framers did not intend to incorporate a doctrine of the separation of powers into the Constitution: Wheeler, 1996, pp 99–102. And yet one of the striking features of the High Court’s jurisprudence since the 1990s was the application of the doctrine of the separation of judicial power as a brake on the exercise of legislative and executive power. This approach might be favoured by some since it recognises the significance of the role of the High Court in protecting the citizen from over-zealous legislation. On the other hand, it may be open to the criticism that, if judges are to rely on contemporary standards, they may make decisions based on shifting and uncertain values that have a questionable grounding in history. 3.2.8 Rosalind Dixon has recently advocated a functionalist approach to constitutional interpretation (Dixon, 2015). Dixon summarises this approach in the following way: [F]unctionalism, at its core, invites courts directly and openly to rely on substantive constitutional values, not simply more ‘formal’ legal sources. But in doing so, it insists that courts should also be able in some way to source the particular values they rely on in the text, history or structure of the relevant constitution. (Dixon, 2015, at 456.)

As Dixon recognises, functionalist reasoning has been suggested by scholars and can be found in High Court judgments. However, Dixon considers that ‘there still remains relatively little work on the

more general idea of a functionalist approach to constitutional reasoning in Australia’: at 456.

What approach has been adopted by the High Court? Judicial views on interpretive method 3.2.9 What theory of interpretation has been adopted by the justices of the High Court? As Jeremy Kirk noted, very few judges have explicitly identified themselves with a broad theory of constitutional interpretation. However, as the following judicial exchanges between McHugh J and Kirby J indicate, direct engagement with, and disagreement about, interpretive theories is not unknown. [page 241] 3.2.10 In Re Wakim; Ex parte McNally (1999) 198 CLR 511 8.3.66C, the court considered the validity of Commonwealth and state legislation that sought to vest state jurisdiction in federal courts. The Constitution provides a mechanism in s 77(iii) for the Commonwealth Parliament to vest federal jurisdiction in state courts, but the Constitution is silent on the possibility of federal courts exercising state jurisdiction. A majority of the court held that the provisions were invalid. McHugh J, a member of the majority, had the following to say about approaches to constitutional interpretation.

3.2.11C

Re Wakim; Ex parte McNally (1999) 198 CLR 511

McHugh J: the judiciary has no power to amend or modernise the Constitution to give effect to what the judges think is in the public interest. The function of the judiciary, including the function of this Court, is to give effect to the intention of the makers of the Constitution as evinced by the terms in which they expressed that intention. That necessarily means that decisions, taken almost a century ago by people long dead, bind the people of Australia today even in cases where most people agree that those decisions are out of touch with the present needs of Australian society. … The starting point for a principled interpretation of the Constitution is the search for the intention of its makers. That does not mean a search for their subjective beliefs, hopes or expectations. Constitutional interpretation is not a search for the mental states of those who made, or for that matter approved or enacted, the Constitution. The intention of its makers can only be deduced from the words that they used in the historical context in which they used them. … The application which this Court has given to some words and phrases of the Constitution would almost certainly have surprised most of those who participated in the making of the Constitution. Most of them could not have foreseen the extent to which the application of those words and phrases would enable the Commonwealth to dominate the federation and reduce the power of the States to control their domestic affairs. But that does not mean that this Court’s interpretation of our Constitution has lacked fidelity to the intentions of those who made the Constitution. Where the interpretation of individual words or phrases of the Constitution is in issue, the current doctrine of the Court draws a distinction between connotation and denotation or, in other words, between meaning and application. … Philosophers are

now said to regard the distinction between connotation and denotation as outdated. And in R v Judges of Federal Court of Australia; Ex parte WA National Football League [(1979) 143 CLR 190 at 234], Mason J said that ‘[t]he distinction between meaning and denotation is not without its difficulties’. But whether criticism of the distinction is or is not valid should not be seen as decisive. What is decisive is that, with perhaps only two exceptions [Attorney-General (NSW) v Brewery Employees’ Union (NSW) (1908) 6 CLR 469; King v Jones (1972) 128 CLR 614], the Court has never hesitated to apply particular words and phrases to facts and circumstances that were or may have been outside the contemplation of the makers of the Constitution. That is because, with the striking exception of s 92 — which has an historical meaning — the words of the Constitution, for the most part, describe concepts and purposes that are stated at a sufficiently high level of abstraction to enable events and matters falling within the current understanding of those concepts and purposes to be taken into account. … That being so, once we have identified the concepts, express and implied, that the makers of our Constitution intended to apply, we can give effect to the present day conceptions of those concepts. [page 242] Indeed, many words and phrases of the Constitution are expressed at such a level of generality that the most sensible conclusion to be drawn from their use in a Constitution is that the makers of the Constitution intended that they should apply to whatever facts and circumstances succeeding generations thought they covered. Examples can be found in the powers conferred on the Parliament of the Commonwealth to make laws with respect to ‘trade and commerce with other countries, and among the States’, ‘trading or financial corporations formed within the limits of the Commonwealth’, ‘external affairs’ and

‘conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State’. In these and other cases, the test is simply: what do these words mean to us as late twentieth century Australians? … The level of abstraction for some terms of the Constitution is, however, much harder to identify than that of those set out above. Thus, in 1901 ‘marriage’ was seen as meaning a voluntary union for life between one man and one woman to the exclusion of all others. If that level of abstraction were now accepted, it would deny the Parliament of the Commonwealth the power to legislate for same sex marriages, although arguably ‘marriage’ now means, or in the near future may mean, a voluntary union for life between two people to the exclusion of others. But even if we continue to hold, as Windeyer J asserted in R v Commonwealth Conciliation and Arbitration Commission; Ex parte Professional Engineers’ Association [(1959) 107 CLR 208 at 267], that the meanings of the words in the Constitution do not change as language changes, the meanings that we now place on the Constitution may not entirely coincide with the meanings placed on it by those who drafted, approved or enacted that document. That is because a Constitution contains implications, inferences and propositions as well as words, phrases and clauses. Experience derived from the events that have occurred since its enactment may enable us to see more in the combination of particular words, phrases or clauses or in the document as a whole than would have occurred to those who participated in the making of the Constitution. Thus we now see, although it was not seen in 1901, that freedom of communication on matters of government and politics is an indispensable incident of the system of government created by the Constitution and that the law of defamation must not be inconsistent with that freedom. …

3.2.12 In Grain Pool, Kirby J considered that there were many reasons why constitutional meaning (in that case, the meaning of the word ‘patents’ in s 51(xviii)) should not be tied to 1900 understandings. His Honour’s reasons were, in part, a response to the views of McHugh J in Re Wakim. 3.2.13C

Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479

Kirby J: First, those who were present at the conventions which framed the Constitution are long since dead. They did not intend, nor did they enjoy the power, to impose their wishes and understandings of the text upon contemporary Australians for whom the Constitution must, to the full extent that the text allows, meet the diverse needs of modern government. Once the Constitution was made and brought into law, it took upon itself the character proper to an instrument for the governance of a new federal nation. A constitution [page 243] is always a special law. It is quite different in function and character from an ordinary statute. It must be construed accordingly. Its purpose requires that the heads of lawmaking power should be given an ample construction because their object is to afford indefinitely, and from age to age, authority to the Federal Parliament to make laws responding to different times and changing needs. Although it is sometimes helpful, in exploring the meaning of the constitutional text, to have regard to the debates in the Constitutional Conventions that led to its adoption and other

contemporary historical and legal understandings and presuppositions, these cannot impose unchangeable meanings upon the words. They are set free from the framers’ intentions. They are free from the understandings of their meaning in 1900 whose basic relevance is often propounded to throw light on the framers’ intentions. The words gain their legitimacy and legal force from the fact that they appear in the Constitution; not from how they were conceived by the framers a century ago. Secondly, it is increasingly understood that the ultimate foundation for the authority of the Australian Constitution is not its enactment by a statute of the Imperial Parliament, as was formerly believed. Historically, that is undoubtedly what happened; but only after thorough debate of the draft Constitution by most of the Australian people and acceptance of its terms by the electors then entitled to vote. … The end of Imperial legislative authority over Australia having occurred long ago, it is inaccurate, in my view, to govern the meaning of the Australian Constitution wholly, or even in part, by reference to what was in the minds of the Imperial legislators in 1900 or of the Australian colonists who proposed the Constitution to them at that time. Thirdly, since the Engineers’ Case [(1920) 28 CLR 129], the approach to the powers of the Australian Federal Parliament has been a distinct one, different from that adopted in other federations, specifically the United States of America. The suggested constraints of federal implications or State immunities were overthrown. They were replaced by a rule, derived from earlier Privy Council opinions to the effect that ‘if the text is explicit the text is conclusive, alike in what it directs and what it forbids’. This was the approach which Isaacs J foreshadowed in the Union Label Case. It is similar to the approach which Higgins J took. It is an approach compatible with the view of the constitutional text released from conceptions derived by searching for meanings in 1900. As Windeyer J was to explain in the Payroll Tax Case [(1971) 122 CLR 353 at 396], the advent of the decision in the

Engineers’ Case did not mean that ‘the original judges of the High Court were wrong in their understanding of what at the time of federation was believed to be the effect of the Constitution and in reading it accordingly’. The approach of the Engineers’ Case was simply ‘a consequence of developments that had occurred outside the law courts as well as a cause of further developments there’. Although this approach, which expands the powers of the Federal Parliament in the Australian Commonwealth at the expense of the States, has been criticised by some textwriters and has even been called a ‘debilitating blow to federalism’, it has enjoyed on this Court staunch defenders. It was not in question in these proceedings. Fourthly, whilst remarks are occasionally offered which suggest that the search for the meaning of constitutional provisions is one directed to ‘give effect to the intention of the makers of the Constitution as evinced by the terms in which they expressed that intention’ [Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 549–550] and whilst that methodology would lend some support to the exploration of the ‘intention of the makers of the Constitution’ in 1900, I do not believe that it represents the approach which the Court has generally [page 244] adopted in more recent years. It could not, in my view, easily be reconciled with the opinion in Sue v Hill [(1999) 199 CLR 462 at 503] to the effect that the United Kingdom, for the purposes of s 44(i) of the Constitution, is a ‘foreign power’. At the time of federation, and even when the Engineers’ Case was decided, this Court declared that one of the ‘cardinal’ features of the Australian Constitution was the ‘common sovereignty of all parts of the British Empire’. A change of meaning has sometimes been explained by reference to the supposed alteration of the ‘denotation’ of a word

itself of unchanging ‘connotation’. But this linguistic device does not disguise the fact that the Court’s search has become one for the contemporary meaning of constitutional words, rather than for the meaning which those words held in 1900. The holding in Sue v Hill cannot stand with an approach to constitutional elaboration by reference to ‘original intent’. … The foregoing considerations lead me to the opinion that the notion that language in the Australian Constitution is ‘changeless’ in ‘nature and meaning’ no longer represents the contemporary approach of this Court to constitutional elaboration. In the controversy now before this Court I would not, therefore, give meaning to the word ‘patents’ by reference to the understanding of that word in 1900. I do not believe the ascertainment of that meaning in 1900 is crucial or even important. …

3.2.14 In Al-Kateb v Godwin (2004) 219 CLR 562, McHugh J and Kirby J continued their exchange on interpretive method. The question for the High Court was whether the Commonwealth Parliament could, under s 51(xix) and consistently with Ch III of the Constitution, authorise the indefinite detention of an alien in circumstances where removal or deportation from Australia was not likely in the reasonably foreseeable future. A majority of the court held the impugned provisions to be valid. In dissent, Kirby J considered that the Constitution should be interpreted consistently with international human rights obligations: McHugh J, in the majority, disagreed. 3.2.15C

Al-Kateb v Godwin (2004) 219 CLR 562

McHugh J: Most of the rules now recognised as rules of

international law are of recent origin. If Australian courts interpreted the Constitution by reference to the rules of international law now in force, they would be amending the Constitution in disregard of the direction in s 128 of the Constitution. Section 128 declares that the Constitution is to be amended only by legislation that is approved by a majority of the States and ‘a majority of all the electors voting’. Attempts to suggest that a rule of international law is merely a factor that can be taken into account in interpreting the Constitution cannot hide the fact that, if that is done, the meaning of the Constitution is changed whenever that rule changes what would otherwise be the result of the case. The point is so obvious that it hardly needs demonstration. But a simple example will suffice to show the true character of what is done if courts take a post-1900 rule of international law into account. Immediately before the rule was recognised, our Constitution had meanings that did not depend on that rule. Either the rule of international law has effect on one or more of those meanings or it has no effect. If it has an effect, its invocation has altered the meaning of the Constitution overnight. As a result, a court that took the rule into account has amended the Constitution without the authority of the people acting under s 128 of the Constitution. It has inserted a new rule into the Constitution. … [page 245] Many constitutional lawyers — probably the great majority of them — now accept that developments inside and outside Australia since 1900 may result in insights concerning the meaning of the Constitution that were not present to earlier generations. Because of those insights, the Constitution may have different meanings from those perceived in earlier times. As Professor Ronald Dworkin has often pointed out, the words of a Constitution consist of more than letters and spaces.

They contain propositions. And, because of political, social or economic developments inside and outside Australia, later generations may deduce propositions from the words of the Constitution that earlier generations did not perceive. Windeyer J made that point persuasively in Victoria v The Commonwealth [(1971) 122 CLR 353 at 395–397]. But that is a very different process from asserting that the Constitution must be read to conform to or so far as possible with the rules of international law. As I earlier pointed out, reading the Constitution up or down to conform to the rules of international law is to make those rules part of the Constitution, contrary to the direction in s 128 that the Constitution is to be amended only in accordance with the referendum process. … Failure to see the difference between taking into account political, social and economic developments since 1900 and taking into account the rules of international law is the error in the approach of those who assert that the Constitution must be read in conformity with or in so far as it can be read conformably with the rules of international law. Rules are specific. If they are taken into account as rules, they amend the Constitution. That conclusion cannot be avoided by asserting that they are simply ‘context’ or elucidating factors. Rules are too specific to do no more than provide insights into the meanings of the constitutional provisions. Either the rule is already inherent in the meaning of the provision or taking it into account alters the meaning of the provision. No doubt from time to time the making or existence of (say) a Convention or its consequences may constitute a general political, social or economic development that helps to elucidate the meaning of a constitutional head of power. But that is different from using the rules in that Convention to control the meaning of a constitutional head of power. … Eminent lawyers who have studied the question firmly believe that the Australian Constitution should contain a Bill of Rights which substantially adopts the rules found in the most important of the international human rights instruments. It is an enduring

— and many would say a just — criticism of Australia that it is now one of the few countries in the Western world that does not have a Bill of Rights. But, desirable as a Bill of Rights may be, it is not to be inserted into our Constitution by judicial decisions drawing on international instruments that are not even part of the law of this country. It would be absurd to suggest that the meaning of a grant of power in s 51 of the Constitution can be elucidated by the enactments of the Parliament. Yet those who propose that the Constitution should be read so as to conform with the rules of international law are forced to argue that rules contained in treaties made by the executive government are relevant in interpreting the Constitution. It is hard to accept, for example, that the meaning of the trade and commerce power can be affected by the Australian government entering into multilateral trade agreements. It is even more difficult to accept that the Constitution’s meaning is affected by rules created by the agreements and practices of other countries. If that were the case, judges would have to have a ‘loose-leaf’ copy of the Constitution. If Australia is to have a Bill of Rights, it must be done in the constitutional way — hard though its achievement may be — by persuading the people to amend the Constitution by inserting such a Bill. Kirby J: The understanding of the Constitution in this Court is constantly evolving. The interpretive principle that I have expressed is but another step in the process of evolution. … [page 246] [T]he complete isolation of constitutional law from the dynamic impact of international law is neither possible nor desirable today. That is why national courts, and especially national constitutional courts such as this, have a duty, so far as possible, to interpret their constitutional texts in a way that is generally harmonious with the basic principles of international

law, including as that law states human rights and fundamental freedoms. In practice, this development presents no significant difficulty for a legal system such as Australia’s. In part, this is because of the profound influence on the most basic statements of international law (and specifically of the law of human rights and fundamental freedoms) of Anglo-American lawyers and the concepts that they derived from the common law. In part, it is because such rights and freedoms express the common rights of all humanity. They preexisted their formal expression. Nor, contrary to the opinion of McHugh J, is the interpretive principle that I favour inconsistent with the provisions of s 128 of the Constitution governing its formal amendment. If this argument were valid, it would apply equally to other decisions of this Court in which the Court has given new meaning to the constitutional text and expounded new rights and duties. The Constitution provides both for formal amendment and judicial reinterpretation. From the earliest days of federation both means of adjustment and change have been followed, to the advantage of the Commonwealth and its people. It is idle to suggest otherwise. This Court has played its role in adapting the Constitution to changing times where that was proper and compatible with the constitutional text and legal principle. The developments of international law since 1945 represent no more than another change requiring adaptation. … It is true that, consistently with the Constitution, it is not part of the judicial function to insert a comprehensive Bill of Rights into the Constitution. Nor may the judiciary ‘by the back door’ incorporate an international treaty (even one ratified by Australia) as part of Australian law where the Parliament has not done so by legislation. Whether a Bill of Rights should be adopted in Australia by legislation, constitutional amendment or at all, is a political question. The limits inherent in the interpretive principle favouring consistency with the principles of international law, specifically the international law of human rights and

fundamental freedoms, must be observed by the courts. Where the Constitution or a valid national law are clear, the duty of a court, which derives its power and authority from the Constitution, is to give effect to the law’s requirements. As such, international law is not part of, nor superior to, our constitutional or statute law. Unless incorporated, it is not part of our municipal law. Nevertheless it is incorrect, with respect, to say that Australian courts, including this Court, have no function in finding ‘rights’ in the text of the Constitution. Some of this Court’s decisions, declaring what are in effect ‘rights’, would have been regarded by the founders as astonishing. In deriving a number of them, McHugh J has played a notable part. Thus, the courts in Australia are also law-makers; but in a confined and restricted way acting in accordance with the Constitution and established legal principle. I do not agree with McHugh J that the content of the trade and commerce power, expressed in the Constitution, is unaffected by the great changes that have occurred in global trade since 1901; nor influenced by multilateral, regional and bilateral agreements in which Australia has participated. With respect, to suggest that, were it otherwise, judges would need a ‘loose-leaf’ copy of the Constitution trivialises a serious question. … In any event, constitutional lawyers do indeed have ‘loose-leaf’ copies of the Constitution in which the text is elaborated by the decisions of this and other courts, and which refer to contextual, historical and other materials essential to the evolving understanding of what the Constitution means and how it [page 247] operates. I have simply indicated the need, in the present age, to add a reference to one of the most important legal developments that is occurring and to which national constitutions must adapt,

namely the growing role of international law, including the law relating to human rights and fundamental freedoms. … Therefore, with every respect to those of a contrary view, opinions that seek to cut off contemporary Australian law (including constitutional law) from the persuasive force of international law are doomed to fail. They will be seen in the future much as the reasoning of Taney CJ in Dred Scott v Sandford [(1856) 60 US 393 (holding that Mr Scott was still a slave in the United States)], Black J in Korematsu [(1944) 323 US 214] and Starke J in Ex parte Walsh [[1942] ALR 359 at 360] are now viewed: with a mixture of curiosity and embarrassment. The dissents of McLean J and Curtis J in Dred Scott strongly invoked international law to support the proposition that the appellant was not a slave but a free man. Had the interpretive principle prevailed at that time, the United States Supreme Court might have been saved a serious error of constitutional reasoning; and much injustice, indifference to human indignity and later suffering might have been avoided. The fact is that it is often helpful for national judges to check their own constitutional thinking against principles expressing the rules of a “wider civilisation”. My conclusion is no more a judicial attempt to ‘amend[] the Constitution under the guise of interpretation’ than were the many decisions of this Court, in which McHugh J participated, where the process of interpretation produced a significant change to earlier understandings of that document. If one new interpretation is forbidden, so are others. We should not declare interpretations impermissible just because we do not agree with them.

Rejection of all-embracing theory

3.2.16 Despite these occasional forays into interpretive methods, the High Court has largely refrained from identifying an allembracing theory of constitutional interpretation. In SGH v Federal Commissioner of Taxation (2002) 210 CLR 51 at 75, Gummow J cautioned against any hard and fast rules on approaches to construction questions: Questions of construction of the Constitution are not to be answered by the adoption and application of any particular, all-embracing and revelatory theory or doctrine of interpretation. Nor are they answered by the resolution of a perceived conflict between rival theories, with the placing of the victorious theory upon a high ground occupied by the modern, the enlightened and the elect.

His Honour continued that ‘questions of constitutional interpretation are not determined simply by linguistic considerations which pertained a century ago. Nevertheless those considerations are not irrelevant’. 3.2.17 This view was endorsed by the entire court in Commonwealth v Australian Capital Territory (Marriage Equality Act case) (2013) 250 CLR 441. The Australian Capital Territory Legislative Assembly had enacted legislation providing for the ‘marriage’ of same-sex couples. The Marriage Equality (Same Sex) Act 2013 (ACT) defined ‘marriage’ as ‘the union of two people of the same sex to the exclusion of all others voluntarily entered into for life’, but the provisions otherwise were similar to those contained in the Marriage Act 1961 (Cth) and the Family Law Act 1975 (Cth). The question for the court was whether the provisions of the Territory legislation were repugnant to the Commonwealth Acts. This question is considered

[page 248] further at 6.1.91–6.1.92C. In the course of addressing the repugnancy question, the court considered the scope of the marriage power in s 51(xxi) of the Constitution to cover unions of same-sex couples. McHugh J in Re Wakim; Ex parte McNally (1999) 198 CLR 511 3.2.11C had indicated that the word ‘ “marriage” now means, or in the near future may mean, a voluntary union for life between two people to the exclusion of others’. The problem, however, as recognised by McHugh J, was that ‘in 1901 “marriage” was seen [in English cases like Hyde v Hyde (1866) LR 1 PD 130 at 133] as meaning a voluntary union for life between one man and one woman to the exclusion of all others’. If the word ‘marriage’ was tied to these 1900 understandings, then parliament would not have the power within s 51(xxi) to legislate for same-sex unions. 3.2.18C Commonwealth v Australian Capital Territory (Marriage Equality Act case) (2013) 250 CLR 441 French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ: The utility of adopting or applying a single all-embracing theory of constitutional interpretation has been denied [SGH Ltd v Federal Commissioner of Taxation (2002) 210 CLR 51 at 75 per Gummow J]. This case does not require examination of those theories or the resolution of any conflict, real or supposed, between them. The determinative question in this case is whether s 51(xxi) is to be construed as referring only to the particular legal status of ‘marriage’ which could be formed at the time of federation (having the legal content which it had according to

English law at that time) or as using the word ‘marriage’ in the sense of a ‘topic of juristic classification’ [Attorney-General (Vic) v The Commonwealth (Marriage Act Case) (1962) 107 CLR 529 at 578 per Windeyer J]. For the reasons that follow, the latter construction should be adopted. Debates cast in terms like ‘originalism’ or ‘original intent’ (evidently intended to stand in opposition to ‘contemporary meaning’ (cf Grain Pool (WA) v The Commonwealth (2000) 202 CLR 479 at 522–525 per Kirby J)) with their echoes of very different debates in other jurisdictions are not to the point and serve only to obscure much more than they illuminate. In Attorney-General (Vic) v The Commonwealth (Marriage Act Case), Windeyer J rightly emphasised [at 576] that the scope of the powers which the Constitution gives is ‘not to be ascertained by merely analytical and a priori reasoning from the abstract meaning of words’. (Although Windeyer J dissented from some of the conclusions reached by the Court in the Marriage Act Case, this approach to constitutional construction is wholly orthodox.) No doubt, as Windeyer J observed [at 576], the Constitution was ‘written in language expressive of the concepts of [English] law’ and ‘[c]onstitutional interpretation is affected by established usages of legal language’. But when s 51(xxi) gives the Parliament legislative power with respect to ‘marriage’, it gives legislative power with respect to a status, reflective of a social institution, to which legal consequences attach and from which legal consequences follow. In the Marriage Act Case, Dixon CJ said [at 543] of s 51(xxi) that it covers ‘the status of the married parties’, that is, ‘the particular legal position they hold by reason of their married state’. His Honour continued, ‘“marriage” is considered as the source of the mutual rights and of the legal consequences which flow from it but requiring the definition, the support and the enforcement of the federal law’. The status of marriage, the social institution which that status reflects, and the rights and obligations which attach to that status never have been, and are not now, immutable. Section 51(xxi) is

not to be construed as conferring legislative power on the federal Parliament [page 249] with respect only to the status of marriage, the institution reflected in that status, or the rights and obligations attached to it, as they stood at federation. One obvious change in the social institution of marriage which had occurred before federation is revealed by reference to the elements which Quick and Garran described as being of the ‘essence’ of marriage, namely that the union be ‘the voluntary union for life of one man and one woman to the exclusion of all others’ [In re Bethell; Bethell v Hildyard (1888) 38 Ch D 220 at 234] (emphasis added). By the time of federation, marriage could be dissolved by judicial decree of the civil courts. With the enactment of the Matrimonial Causes Act 1857 (UK), and equivalent legislation in the Australian colonies, marriage became a voluntary union entered into for life. It was no longer a union for life. These legislative changes altered the social institution of marriage in ways which have continued to play out, not only before federation but ever since. The legal rights and obligations attaching to the status of marriage, once indissoluble, could be dissolved. Upon judicial separation, the wife had rights different from her rights during marriage. Upon dissolution, new rights and obligations could be created by order or undertaken by remarriage. The particular detail of these changes is not important. What is important is the observation that neither the social institution of marriage nor the rights and obligations attaching to the status of marriage (or condition of being married) were immutable. More generally, it is essential to recognise that the law relating to marriage, as it stood at federation, was the result of a long and tangled development. Whether that development is usefully

traced to canon law before the Council of Trent (as Windeyer J did [at 578] in the Marriage Act Case) or to Roman law (as the Commonwealth’s submissions sought to do) need not be decided. It is enough to notice that, in the Marriage Act Case, Windeyer J referred [at 578–80] to some of the more important legislative changes made between 1540 and 1857. And the consequence of those changes was that, by the time of federation, the law relating to marriage was largely statutory. As Windeyer J said [at 579]: The statute law of marriage may seem to be in a small compass. But it embodies the results of a long process of social history, it codifies much complicated learning, it sets at rest some famous controversies. (Emphasis added.) Because the status, the rights and obligations which attach to the status and the social institution reflected in the status are not, and never have been, immutable, there is no warrant for reading the legislative power given by s 51(xxi) as tied to the state of the law with respect to marriage at federation. Tying the ambit of the head of power to the then state of the law would fail to recognise that, as Higgins J said [(1908) 6 CLR 469 at 612] in AttorneyGeneral (NSW) v Brewery Employees’ Union (NSW) (Union Label Case), it is necessary to construe the Constitution remembering that ‘it is a Constitution, a mechanism under which laws are to be made, and not a mere Act which declares what the law is to be’. Not only that, it would fail to recognise that, as Windeyer J demonstrated [at 577] in the Marriage Act Case, ‘[m]arriage can have a wider meaning for law’ than the meaning given in Hyde v Hyde. The definition in Hyde v Hyde was proffered [(1866) LR 1 PD 130 at 133] as a statement of ‘essential elements and invariable features’ in answer to the question ‘What, then, is the nature of this institution as understood in Christendom?’ The answer to that question cannot be the answer

to the question ‘What is the nature of the subject matter of the marriage power in the Australian Constitution?’ It may readily be accepted that what Windeyer J described [at 577] as ‘the monogamous marriage of Christianity’ would have provided, at federation, the central type of ‘marriage’ with respect to which s 51(xxi) conferred legislative power. But, as Higgins J said [Union Label Case [page 250] (1908) 6 CLR 469 at 610] in relation to the trade marks power, usage of the term in 1900 may give the centre of the power but ‘it does not give us the circumference of the power’ (emphasis added). Hence, as Windeyer J rightly said [at 578] in the Marriage Act Case, ‘[m]arriage law is not a matter of precise demarcation’. It is, instead, ‘a recognised topic of juristic classification’. One of the several examples which Higgins J gave [at 610] in amplification of the proposition that the boundaries of the class of trade marks and other subjects referred to in s 51(xviii) (65) were not fixed according to the state of the law in 1900 was the marriage power. Higgins J said [at 610] that under the marriage power ‘the Parliament could prescribe what unions are to be regarded as marriages’. The reasons given by Higgins J for rejecting the argument that the boundaries of the power to make laws with respect to trade marks were fixed according to the state of the law in 1900 apply equally to the marriage power. To adopt and adapt what Higgins J said [at 603] in respect of the trade marks power, if s 51(xxi) uses ‘marriage’ in a sense tied to the state of the law in 1900: In place of Australia having by its Constitution acquired for the Australian Parliament the power of dealing with the whole subject [of marriage], it turns out that the Federal Parliament

can deal only with [marriage having the characteristics and consequences it had] in 1900, and that each of the States separately must deal with the other parts of the subject. (Emphasis added.) Also apposite to the marriage power, at least by way of analogy, is the observation [at 611] by Higgins J, quoted [(2000) 202 CLR 479 at 494] by six Justices of this Court in Grain Pool (WA) v The Commonwealth: Power to make laws as to any class of rights involves a power to alter those rights, to define those rights, to limit those rights, to extend those rights, and to extend the class of those who may enjoy those rights. What then is the relevant ‘topic of juristic classification’? Accepting that it ‘is not a matter of precise demarcation’, it is sufficient, for the purposes of this case, to adopt the description of the topic given [at 578] by Windeyer J in the Marriage Act Case: laws of a kind ‘generally considered, for comparative law and private international law, as being the subjects of a country’s marriage laws’. This description does not confine the topic to marriage as it was understood in nineteenth century England or Australia. It recognises that the law of marriage relates to personal status and that marriage is a status of differing content in different systems of law. It also gives due weight to the observation that marriage is a status which Anglo-Australian choice of law rules have always treated as being created and governed (in at least some cases) by foreign law, whether the law of the place of celebration of the marriage or the law of the domicile of the parties. The description given by Windeyer J identifies the content of the relevant topic of juristic classification in a way which does not fix either the concept of marriage or the content and application of choice of law rules according to the state of the law at federation.

Key dimensions of the court’s approach to constitutional interpretation 3.2.19 As the extracts in the previous section reveal, the High Court has rejected an all-embracing theory for constitutional interpretation. Instead, what can be discerned from the cases is a range of accepted principles that the High Court has applied when approaching constitutional meaning. [page 251]

The Engineers’ rules of interpretation 3.2.20 The extract above from Jeremy Kirk 3.2.4E referred to the seminal decision of the High Court in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129. The Engineers’ case concerned the Amalgamated Society of Engineers (the Engineers), which served a log of claims on a number of employers in a number of the states, including the Minister for Trading Concerns of Western Australia, who administered the state Implement and Engineering Works, North Fremantle and the state Sawmills, Perth. The state Implement and Engineering Works and the state Sawmills were bodies that were established and regulated by the Western Australia Government. After the Engineers’ claims were refused, they applied to the Commonwealth Court of Conciliation and Arbitration for a determination of the industrial dispute under federal conciliation and arbitration legislation, which was purported to be authorised by s 51(xxxv) of the Constitution. Section 51(xxxv) provides that:

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: … (xxxv) conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State;

The High Court was asked to determine two questions: whether the federal parliament had the power to make laws under s 51(xxxv) which bound the state government instrumentalities in their capacity as employers, and whether a dispute existed in fact between the Engineers and the Minister for Trading Concerns of Western Australia. 3.2.21 Up until the decision in the Engineers’ case, the High Court had developed and applied two doctrines that had a restrictive effect on the scope of federal constitutional powers. These are considered in detail at 6.2.4–6.2.14. The first, the doctrine of implied intergovernmental immunity (also referred to as the doctrine of implied prohibition), was based on a proposition, said to be a necessary implication from the federal nature of Australian Government, that the Commonwealth and the states were sovereign in the separate areas described by their respective constitutions, and were therefore able to exercise their legislative power immune from the operation of the legislation of the other: D’Emden v Pedder (1904) 1 CLR 91 at 109–11; Deakin v Webb (1904) 1 CLR 585 at 606, 616; Federated Amalgamated Government Railway and Tramway Service Association v New South Wales Railway Traffic Employés Association (Railway Servants case) (1906) 4 CLR 488. In Baxter v Commissioner of Taxation (NSW) (1907) 4 CLR 1087, the court confirmed and applied the doctrine in spite of

the Privy Council’s decision in Webb v Outrim [1907] AC 81, the appeal from Deakin v Webb that had rejected the doctrine. A second and related doctrine was the doctrine of state reserved powers. Also said to be an implication necessarily drawn from the Constitution, the doctrine of reserved powers was that the Commonwealth could not exercise its legislative power in a way that interfered with the residual or ‘reserved’ powers of the states falling outside the list of enumerated powers: R v Barger (1908) 6 CLR 41 at 69; Attorney-General (NSW); Ex rel Tooth & Co v Brewery Employees Union of New South Wales (Union Label case) (1908) 6 CLR 469 at 503; Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 352. [page 252] A majority of the High Court (Knox CJ, Isaacs, Rich and Starke JJ in a joint judgment and Higgins J for similar reasons; Gavan Duffy J dissenting) rejected these two doctrines and confirmed that s 51(xxxv) extended to enable the regulation of the states in their capacity as employers. 3.2.22C

Amalgamated Society of Engineers v Adelaide Steamship Company Ltd (Engineers’ case) (1920) 28 CLR 129

Knox CJ, Isaacs, Rich and Starke JJ: The questions for the determination of this Court are as follows: — (1) Has the Parliament of the Commonwealth power to make laws binding on the States with respect to conciliation and arbitration for the

prevention and settlement of industrial disputes extending beyond the limits of one State? (2) As to each of the respondents named in the special case — Is the dispute which has been found to exist in fact between the claimant and the Minister for Trading Concerns (WA) an industrial dispute within the meaning of sec 51 (XXXV)? The Commonwealth and the States of New South Wales, South Australia, Tasmania and Victoria have, by leave, intervened: so that all possible interests are fully represented. Queensland was given leave to intervene, but has not thought it necessary to do so. The question presented is of the highest importance to the people of Australia, grouped nationally or sectionally, and it has necessitated a survey, not merely of the Constitution itself, but also of many of the decisions of this Court on various points more or less closely related to the question we have directly to determine. The more the decisions are examined, and compared with each other and with the Constitution itself, the more evident it becomes that no clear principle can account for them. They are sometimes at variance with the natural meaning of the text of the Constitution; some are irreconcilable with others, and some are individually rested on reasons not founded on the words of the Constitution or on any recognized principle of the common law underlying the expressed terms of the Constitution, but on implication drawn from what is called the principle of ‘necessity’ that being itself referable to no more definite standard than the personal opinion of the Judge who declares it. The attempt to deduce any consistent rule from them has not only failed, but has disclosed an increasing entanglement and uncertainty, and a conflict both with the text of the Constitution and with distinct and clear declarations of law by the Privy Council. It is therefore, in the circumstances, the manifest duty of this Court to turn its earnest attention to the provisions of the Constitution itself. That instrument is the political compact of the whole of the people of Australia, enacted into binding law by the Imperial Parliament, and it is the chief and special duty of this

Court faithfully to expound and give effect to it according to its own terms, finding the intention from the words of the compact, and upholding it throughout precisely as framed. In doing this, we follow, not merely previous instances in this Court and other Courts in Australia, but also the precedent of the Privy Council in Read v Bishop of Lincoln [1892] AC 644 at p 655, where the Lord Chancellor, speaking for the Judicial Committee in relation to reviewing its own prior decisions, said: ‘Whilst fully sensible of the weight to be attached to such decisions, their Lordships are at the same time bound to examine the reasons upon which the decisions rest, and to give effect to their own view of the law.’ The grounds upon which the Privy Council came to that conclusion we refer to, [page 253] but need not repeat, adding, however, that as the Commonwealth and State Parliaments and Executives are themselves bound by the declarations of this Court as to their powers inter se, our responsibility is so much the greater to give the true effect to the relevant constitutional provisions. In doing this, to use the language of Lord Macnaghten in Vacher & Sons Ltd v London Society of Compositors [1913] AC 107, at p 118, ‘a judicial tribunal has nothing to do with the policy of any Act which it may be called upon to interpret. That may be a matter for private judgment. The duty of the Court, and its only duty, is to expound the language of the Act in accordance with the settled rules of construction.’ … The chief contention on the part of the States is that what has been called the rule of D’Emden v Pedder (1904) 1 CLR 91 justifies their immunity from Commonwealth control in respect of State trading. The rule referred to is in these terms (at p 111): ‘When a State attempts to give to its legislative or executive authority an operation which, if valid, would fetter, control, or

interfere with, the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative.’ So far from that rule supporting the position taken up on behalf of the States, its language, strictly applied, is destructive of it. An authority has been set up by a State which is claimed to be an executive authority and which, if exempt from Commonwealth legislation, does fetter or interfere with free exercise of the legislative power of the Commonwealth under pl XXXV of sec 51, unless that placitum is not as complete as its words in their natural meaning indicate, or, since sec 107 applies to State concurrent powers equally with its exclusive powers, unless every Commonwealth legislative power, however complete in itself, is subject to the unrestricted operation of every State Act. It is said that the rule above stated must be read as reciprocal, because some of the reasoning in D’Emden v Pedder (1904) 1 CLR 91 indicates a reciprocal invalidity of Commonwealth law where the State is concerned. It is somewhat difficult to extract such a statement from the judgment: it would be obiter if found. It is said, however, that the later cases regard D’Emden v Pedder as supporting that view, and ultimately the doctrine of mutual non-interference finds its most distinct formulation in Attorney-General for Queensland v AttorneyGeneral for the Commonwealth (1915) 20 CLR 148 at 162. There Griffith CJ, assuming the implication of non-interference to arise prima facie from necessity in all cases, and then to be subject to exclusion where the necessity ended, proceeded to say: ‘It is manifest that, since the rule is founded upon the necessity of the implication, the implication is excluded if it appears upon consideration of the whole Constitution that the Commonwealth, or, conversely, the State, was intended to have power to do the act the validity of which is impeached.’ Then, how is that intention to be ascertained? The learned Chief Justice proceeds to ascertain it by reference to outside circumstances, not of law or constitutional practice, but of fact, such as the expectations and

hopes of persons undefined that Crown lands then leased would become private property. It is an interpretation of the Constitution depending on an implication which is formed on a vague, individual conception of the spirit of the compact, which is not the result of interpreting any specific language to be quoted, nor referable to any recognized principle of the common law of the Constitution, and which, when started, is rebuttable by an intention of exclusion equally not referable to any language of the instrument or acknowledged common law constitutional principle, but arrived at by the Court on the opinions of Judges as to hopes and expectations respecting vague external conditions. This method of interpretation cannot, we think, provide any secure foundation for Commonwealth or State action, and must inevitably lead — and in fact has already led — to divergencies and inconsistencies more and more pronounced as the decisions accumulate. Those who rely on American authorities for [page 254] limiting pl XXXV in the way suggested, would find in the celebrated judgment of Marshall CJ in Gibbons v Ogden 9 Wheat 1 (1824) two passages militating strongly against their contention. One is at p 189 in these words: ‘We know of no rule for construing the extent of such powers, other than is given by the language of the instrument which confers them, taken in connection with the purposes for which they were conferred.’ The other is at p 196, where, speaking of the commerce power, the learned Chief Justice says: ‘This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the Constitution.’ In Keller v The United States 213 US 138 (1909), at p 146 it is said of the State police power: ‘That power, like all other reserved powers of the States, is subordinate to those in terms conferred by the Constitution upon

the nation.’ Passing to one of the latest American decisions, Virginia v West Virginia 246 US 565 (1871), and particularly at pp 596, 603, the pre-eminence of federal authority within the ambit of the text of the Constitution is maintained with equal clearness and vigour … What, then, are the settled rules of construction? The first, and ‘golden rule’ or ‘universal rule’ as it has been variously termed, has been settled in Grey v Pearson (1857) 6 HLC 61, at p 106 and the Sussex Peerage case (1844) 11 CL and Fin 85, at p 143, in well-known passages which are quoted by Lord Macnaghten in Vacher’s case [1913] AC 107 at 117–118. Lord Haldane LC, in the same case [1913] AC at 113, made some observations very pertinent to the present occasion. His Lordship, after stating that speculation on the motives of the Legislature was a topic which Judges cannot profitably or properly enter upon, said: ‘Their province is the very different one of construing the language in which the Legislature has finally expressed its conclusions, and if they undertake the other province which belongs to those who, in making the laws, have to endeavour to interpret the desire of the country, they are in danger of going astray in a labyrinth to the character of which they have no sufficient guide. In endeavouring to place the proper interpretation on the sections of the statute before this House sitting in its judicial capacity, I propose, therefore, to exclude consideration of everything excepting the state of the law as it was when the statute was passed, and the light to be got by reading it as a whole, before attempting to construe any particular section. Subject to this consideration, I think that the only safe course is to read the language of the statute in what seems to be its natural sense.’ In the case of Inland Revenue Commissioners v Herbert [1913] AC 332 Lord Haldane reaffirms the principle, with special reference to legislation of a novel kind. Other cases, of equal authority, could be cited, but it is not necessary. With respect to the interpretation of a written Constitution, the Privy Council has in several cases laid down principles which

should be observed by Courts of law, and these principles have been stated in the clearest terms. In R v Burah (1878) 3 AC at 904–905 Lord Selborne, in speaking of the case where a question arises as to whether any given legislation exceeds the power granted, says: ‘The established Courts of Justice, when a question arises whether the prescribed limits have been exceeded, must of necessity determine that question: and the only way in which they can properly do so, is by looking to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted. If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restriction by which that power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it), it is not for any Court of Justice to inquire further, or to enlarge constructively those conditions and restrictions.’ In Attorney-General for Ontario v AttorneyGeneral for Canada [1912] AC 571 at p 583 Lord Loreburn LC, for the Judicial [page 255] Committee, said: — ‘In the interpretation of a completely selfgoverning Constitution founded upon a written organic instrument, such as the British North America Act, if the text is explicit the text is conclusive, alike in what it directs and what it forbids. When the text is ambiguous, as, for example, when the words establishing two mutually exclusive jurisdictions are wide enough to bring a particular power within either, recourse must be had to the context and scheme of the Act.’ In two decisions the Judicial Committee has applied these principles to the interpretation of this Constitution, namely, Webb v Outrim (1907) AC 81; 4 CLR 356 and the Colonial Sugar Refining Co’s Case (1914) AC 237; 17 CLR 644. In the first

mentioned case, quite independently of any observations as to the meaning of the word ‘unconstitutional’, it is clear that their Lordships proceeded on the ordinary lines of statutory construction. In the second case the Judicial Committee considered the nature of the instrument itself in order to determine the more satisfactorily the depository of residual powers, and having arrived at the conclusion, as to which this Court has never faltered, that the Commonwealth is a government of enumerated or selected legislative powers, their Lordships examined the language of sec 51 to ascertain from its words whether the suggested power could be deduced. The method of arriving at the conclusion is all that is relevant here. We therefore are bound to follow the course of judicial investigation which those two august tribunals of the Empire have marked out as required by law. Before approaching, for this purpose, the consideration of the provisions of the Constitution itself, we should state explicitly that the doctrine of ‘implied prohibition’ against the exercise of a power once ascertained in accordance with ordinary rules of construction, was definitely rejected by the Privy Council in Webb v Outrim (1907) AC 81; 4 CLR 356. Though subsequently reaffirmed by three members of this Court, it has as often been rejected by two other members of the Court, and has never been unreservedly accepted and applied. From its nature, it is incapable of consistent application, because ‘necessity’ in the sense employed — a political sense — must vary in relation to various powers and various States, and, indeed, various periods and circumstances. Not only is the judicial branch of the Government inappropriate to determine political necessities, but experience, both in Australia and America, evidenced by discordant decisions, has proved both the elusiveness and the inaccuracy of the doctrine as a legal standard. Its inaccuracy is perhaps the more thoroughly perceived when it is considered what the doctrine of ‘necessity’ in a political sense means. It means the necessity of protection against the aggression of some outside

and possibly hostile body. It is based on distrust, lest powers, if once conceded to the least degree, might be abused to the point of destruction. But possible abuse of powers is no reason in British law for limiting the natural force of the language creating them. It may be taken into account by the parties when creating the powers, and they, by omission of suggested powers or by safeguards introduced by them into the compact, may delimit the powers created. But, once the parties have by the terms they employ defined the permitted limits, no Court has any right to narrow those limits by reason of any fear that the powers as actually circumscribed by the language naturally understood may be abused. This has been pointed out by the Privy Council on several occasions, including the case of the Bank of Toronto v Lambe (1887) 12 App Cas 575, at pp 586–587. The ordinary meaning of the terms employed in one place may be restricted by terms used elsewhere: that is pure legal construction. But, once their true meaning is so ascertained, they cannot be further limited by the fear of abuse. The non-granting of powers, the expressed qualifications of powers granted, the expressed retention of powers, are all to be taken into account by a Court. But the extravagant use of the granted powers in the actual [page 256] working of the Constitution is a matter to be guarded against by the constituencies and not by the Courts. When the people of Australia, to use the words of the Constitution itself, ‘united in a Federal Commonwealth’, they took power to control by ordinary constitutional means any attempt on the part of the national Parliament to misuse its powers. If it be conceivable that the representatives of the people of Australia as a whole would ever proceed to use their national powers to injure the people of Australia considered sectionally, it is certainly within the power of the people themselves to resent and reverse what may be done.

No protection of this Court in such a case is necessary or proper. Therefore, the doctrine of political necessity, as means of interpretation, is indefensible on any ground. The one clear line of judicial inquiry as to the meaning of the Constitution must be to read it naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it, and then lucet ipsa per se.

3.2.23 In the Engineers’ case, a majority of the High Court rejected the doctrines of state reserved powers and implied intergovernmental immunity on the basis that they were grounded on implications ‘formed on a vague, individual spirit of the compact’ and did not accord with the words of the constitutional text: 28 CLR at 145. The majority noted that there was nothing in the text of the Constitution that indicated any limitation on the power of the Commonwealth to exercise its power under s 51(xxxv) to regulate the states in their capacity as employers. The court eschewed consideration of the political consequences of their decision, and noted that the states could be protected from an overbearing Commonwealth Parliament by the people through representative institutions. A majority of the High Court held that the Constitution should be interpreted in accordance with the ‘ordinary’ principles of statutory interpretation, rather than to be consistent with any doctrines said to be ‘implied’ by the Constitution relating to the relationship between the Commonwealth and the states. The ‘golden rule’ of statutory interpretation, which was applied to any other British statute, was that the language of the Constitution is to be read in its natural and ordinary sense (28 CLR at 149–50), or, as Higgins J said (28 CLR at 161–2):

The fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded according to the intent of the Parliament that made it; and that intention has to be found by an examination of the language used in the statute as a whole. The question is, what does the language mean; and when we find what the language means, in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable … unless the limitation can be found elsewhere in the Constitution, it does not exist at all.

Knox CJ, Isaacs, Rich and Starke JJ said that ‘ordinary principles of construction are applied so as to discover in the actual terms of the instrument their expressed or necessarily implied meaning’ (emphasis added in the judgment): 28 CLR at 155. As Jeremy Kirk highlighted in the extract above (3.2.4E), the approach adopted by the majority of judges in this case is often referred to as a literal approach, as it emphasises the importance of the express language of the Constitution in establishing constitutional meaning. 3.2.24 A majority of the High Court (Knox CJ, Isaacs, Rich and Starke JJ in a joint judgment and Higgins J for similar reasons; Gavan Duffy J dissenting) rejected the proposition that s 107 reserved powers to the states (28 CLR at 154): [page 257] Sec 107 [of the Constitution] continues the previously existing powers of every State Parliament to legislate with respect to (1) State exclusive powers and (2) State powers which are concurrent with Commonwealth powers. But it is a fundamental and fatal error to read sec 107 as reserving any power from the Commonwealth that falls fairly within the

explicit terms of an express grant in sec 51, as that grant is reasonably construed, unless that reservation is as explicitly stated.

Instead, federal legislative supremacy was reinforced by the presence of s 109 in the Constitution, which provides that state laws are invalid to the extent of their inconsistency with federal laws. 3.2.25 Since the Engineers’ case was decided, a number of judges and scholars have noted the expansion of the power of the Commonwealth and the diminished power of the states: see, for example, Gibbs, 1994; Perry, 2012, p 172. As James Allan and Nicholas Aroney have observed: None of the Constitution’s framers would ever have imagined, back in the 1890s or in 1901, that a century or so later the Australian States would be as emasculated as they are today: that they would be so dependent upon the Commonwealth for their governmental finances; and that their policy-making capacities would be so contingent upon political decisions taken by the Federal Government. More specifically, none of the framers would have anticipated that the ‘corporations’ power (s 51(xx)) would be held to allow the Commonwealth to take over the field of industrial relations; that the ‘external affairs’ power (s 51(xxix)) would be deemed to enable the Commonwealth to enact far-reaching environmental, human rights and industrial relations laws; or that the States could be cajoled into abjuring income tax powers, not least because four federal statutes — passed at the same time (during the Second World War) and consecutively numbered — were assessed or judged individually (and, of course, held to be valid) and not as part of a package. And this is merely to highlight some of the better known ways in which the competencies of the Commonwealth have waxed while those of the States have waned. Nothing in the language of the Australian Constitution, or its structure, or the process that was used to adopt it, or the basis upon

which its approval by the voters was promoted, or the likely original understandings of most of those voters, or anything else at the time would have suggested that the States would become the enfeebled, emasculated creatures they have become. Put slightly differently, no one, or almost no one, would have guessed or predicted that virtually all of the important division of powers cases would eventually go the Commonwealth’s way. (Allan and Aroney, 2008, at 246–7 (references omitted).)

3.2.26 The court’s application of ‘literalism’ based on British precedents on statutory construction overturned two decades of decisions that were grounded in a quite different conception of the nature of the document. Justice Isaacs, who delivered the majority judgment in the Engineers’ case, said that the court should give the words of the Constitution their natural and ordinary meaning. He underscored the status of this approach by describing it as the ‘settled’ approach, as ‘the golden rule’, ‘the universal rule’ (28 CLR at 148) and ‘the only safe course’ (28 CLR at 149) to take. Quoting from the judgment of Lord Loreburn LC in Attorney-General for Ontario v Attorney-General for Canada [1912] AC 571 at 583, the Engineers’ Court said (28 CLR at 150) that ‘if the text is explicit the text is conclusive.’ If the text is ambiguous, ‘recourse must be had to the context and scheme of the Act’. When applied to a head of power, the ordinary and natural language is not to be confined by a fear that the power might be abused by parliament or that the exercise of power might intrude into areas traditionally regulated by [page 258] the states: 28 CLR at 151–2. On the facts of the Engineers’ case, when these principles were applied to s 51(xxxv), which gives the

Commonwealth power to make laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state, it was held that this allowed the Commonwealth to make laws that regulated state governments in their capacity as employers. Justice Isaacs was very critical of the early High Court (Griffith CJ, Barton and O’Connor JJ) for elevating what he believed were their personal opinions about the necessity of retaining so-called ‘reserved’ powers of the states in the new federation over a literal reading of the Constitution: 28 CLR at 141–2. 3.2.27 At least since the Engineers’ case, High Court judges therefore seek an ‘ordinary’ and ‘settled’ approach to constitutional interpretation, in part to avoid enmeshing themselves in political concerns. However, there will be times when an ‘ordinary’ reading of the Constitution is impossible, or cannot yield sensible results. Cole v Whitfield (1988) 165 CLR 360 9.4.13C was a case about the interpretation of s 92 of the Constitution, which guarantees that ‘on the imposition of uniform duties of customs, trade, commerce, and intercourse among the States … shall be absolutely free’. Before this decision, the High Court had considerable difficulty with s 92. In Cole it admitted that no ‘provision of the Constitution has been the source of greater judicial concern or the subject of greater judicial effort than s 92’, yet ‘the outcome of all the past cases was that the Court was unable to give authoritative guidance or to express an authoritative view’ on the provision: 165 CLR at 385. One source of the difficulty stems from the language of s 92 itself. The first part is straightforward — uniform duties of customs have been imposed (this occurred on 4 October 1901). But now that this has taken place, is trade, commerce and intercourse among the states to be literally absolutely free? Does this mean that traders

can trade whatever they like across state borders? Explosives? Illegal drugs? This cannot have been intended. So justices of the High Court have tried to develop approaches to s 92 that balanced the objective of securing free trade across state borders against other objectives. The position reached in Cole, that s 92 prevents discrimination against interstate trade of a protectionist kind, was informed by the historical context that led to the inclusion of s 92 in the Constitution. 3.2.28 In truth, the application of ordinary rules of interpretation to the Constitution was established well before the Engineers’ case. In Tasmania v Commonwealth (1904) 1 CLR 329 at 338 it was held that the ordinary rules of statutory interpretation were to be applied in determining constitutional meaning. The real difference between the early High Court and the Engineers’ court was the differing understandings of the necessary implications that could be drawn from the federal character of the Constitution. The reserved powers and implied immunities doctrines were, as understood by the early court, necessary features of the federal system to be protected by the court — what their Honours considered to be the proper distribution of legislative authority between the Commonwealth and the states and the relationship between the federal and state governments within the federal system.

The Jumbunna principle: interpreting provisions broadly 3.2.29 As the plurality said in Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 3.1.5C, ‘[f]irst, the

constitutional text is to be construed “with all the generality which the words used admit” ’. Their Honours cited R v Public Vehicles Licensing Appeal Tribunal (Tas); Ex parte Australian National Airways Pty Ltd (1964) 113 CLR 207 at 225–6 to support that [page 259] proposition. The court in that case (and Kirby J in Grain Pool) in turn approved the statement of O’Connor J in Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) 6 CLR 309 at 367–8 that: … it must always be remembered that we are interpreting a Constitution broad and general in its terms, intended to apply to the varying conditions which the development of our community must involve. For that reason, where the question is whether the Constitution has used an expression in the wider or in the narrower sense, the court should, in my opinion, always lean to the broader interpretation unless there is something in the context or in the rest of the Constitution to indicate that the narrower interpretation will best carry out its object and purpose.

3.2.30 One of the issues in Jumbunna was whether the adjective ‘industrial’ in the phrase ‘industrial disputes’ in s 51(xxxv) narrowed the range of disputes that could be determined by the Commonwealth Court of Conciliation and Arbitration. On one view, the phrase ‘industrial disputes’ was concerned only with disputes between employers and employees in industries such as manufacturing and production. The competing view was that the phrase was apt to refer to disputes between employers and

employees in any industry. Applying the principle enunciated above, O’Connor J reached the latter conclusion. 3.2.31 This approach to constitutional interpretation was again endorsed in Australian National Airways v Commonwealth (1945) 71 CLR 29. The High Court was invited to consider a submission that the power to regulate ‘trade and commerce’ under s 51(i) of the Constitution could not authorise the Commonwealth to set up a government trading enterprise; rather, that s 51(i) was restricted to the regulation of trading enterprises that already existed. The court rejected this argument and Dixon J said (71 CLR at 81): I am of opinion that this argument ought not be accepted. It plainly ignores that fact that it is a Constitution we are interpreting, an instrument of government meant to endure and conferring powers expressed in general propositions wide enough to be capable of flexible application to changing circumstances. It confuses the unexpressed assumptions upon which the framers of the instrument supposedly proceeded with the expressed meaning of the power. A law authorizing the government to conduct a transport service for inter-State trade, whether as a monopoly or not, appears to me to answer the description, a law with respect to trade and commerce amongst the States. It is only by importing a limitation into the descriptive words of the power that such a law can be excluded.

3.2.32 The High Court unanimously approved the ‘lean to the broader interpretation’ approach in R v Coldham; Ex parte Australian Social Welfare Union (1983) 153 CLR 297. That case, like Jumbunna, concerned the meaning of the phrase ‘industrial disputes’ in s 51(xxxv). The court rejected the view expressed in earlier decisions that the phrase ‘industrial disputes’ only referred to disputes involving people involved in ‘industrial’ labour rather than school teachers (see, for example, Federated State School Teachers’

Association of Australia v Victoria (1929) 41 CLR 569); or that ‘industrial disputes’ might refer only to people involved in ‘productive industry and organized business’: R v Commonwealth Conciliation and Arbitration Commission; Ex parte Professional Engineers’ Association (1959) 107 CLR 208 at 234 per Dixon CJ. The effect of this construction of s 51(xxxv) was to enhance the ambit of that provision and, correspondingly, the coverage of federal industrial law over state government employees. Indeed, the ‘lean to [page 260] the broader interpretation’ approach by its very nature favours the Commonwealth in federal disputes. As we will see, the application of this approach has been an important justification for rejecting narrower interpretations of federal heads of legislative power such as the corporations power in s 51(xx) (see 4.2.2–4.2.41) and the external affairs power in s 51(xxix): see 4.3.1–4.3.49. 3.2.33 Two points about Jumbunna need to be emphasised. The first is that the interpretive principle in Jumbunna applies where the power is capable of two alternative meanings. If the words of a provision are clearly confined, then resort cannot be had to the Jumbunna principle to expand the reach of the power. However, the question of whether ambiguity exists can give rise to different views. In New South Wales v Commonwealth (Incorporation case) (1990) 169 CLR 482 4.2.39C, the court considered the validity of Commonwealth legislation providing for the incorporation of companies as trading and financial corporations. Section 51(xx) of

the Constitution empowers parliament to enact laws with respect to ‘foreign corporations’ and ‘trading or financial corporations formed within the limits of the Commonwealth’. A majority of the court took the view that the words ‘formed within the limits of the Commonwealth’ limited the power over trading and financial corporations to ‘formed corporations’, that is, domestic corporations already formed. Consequently, ‘the process of incorporation itself’ was excluded from the power: 169 CLR at 498. That was the ‘plain meaning’ (169 CLR at 497) and expansive interpretive rules could not assist. In dissent, Deane J considered that the words ‘formed within the limits of the Commonwealth’ merely served as a point of contrast to ‘foreign corporations’: 169 CLR at 504–6. Thus, trading and financial corporations were formed within the limits of the Commonwealth; foreign corporations were formed outside those limits. Applying expansive interpretive principles, the words were capable of authorising the incorporation of trading and financial corporations. 3.2.34 Second, as O’Connor J indicated in Jumbunna, a narrow approach to a power may be warranted in some circumstances. There may be ‘something in the context or in the rest of the Constitution to indicate that the narrower interpretation will best carry out its object and purpose’. An obvious example is where an express limitation truncates Commonwealth power.

The relationship of one Commonwealth power to another 3.2.35 A further principle drawn from the Engineers’ case is that, generally speaking, a Commonwealth legislative power is not to be

read down by reference to the scope or delimitation of other powers. In the Engineers’ case, there was nothing in s 51(xxxv), or in any other express provision in the Constitution, that indicated that the Commonwealth could not regulate states in their capacity as employers. 3.2.36 In Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 4.2.5C, it was held that, with the rejection of the reserved powers doctrine, the corporations power in s 51(xx) should not be limited by the perceived distinction in s 51(i) between intrastate and interstate trade. While the distinction has been maintained by the court when interpreting s 51(i), the court in Strickland considered that, in light of the Engineers’ case, there was no warrant for it to confine the scope of s 51(xx). 3.2.37 Similarly, in New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C at 128, a majority of the court held that the mere presence of s 51(xxxv), which contemplates that the Commonwealth can regulate interstate industrial disputes by way of [page 261] conciliation and arbitration, did not preclude the Commonwealth from regulating industrial relations implicating a ‘trading corporation’ under the auspice of s 51(xx). 3.2.38 The position is different if the other federal power contains a ‘positive prohibition or restriction’ that is to have a

general application across powers: Work Choices case (2006) 229 CLR 1 at 128. For example, the Commonwealth has legislative power over banking, ‘other than State banking’: s 51(xiii). It also has legislative power over ‘financial corporations’ under s 51(xx). Assuming that some companies could be characterised as both banks and financial corporations (viz corporations that buy and sell money), could the Commonwealth use its power over financial corporations to regulate state banks? The answer is ‘no’ because using s 51(xx) in this way would breach the express limitation on power in s 51(xiii): Bourke v State Bank of New South Wales (1990) 170 CLR 276. The limitation in s 51(xiii) ‘other than State banking’ is not confined to that power: Bourke v State Bank of New South Wales (1990) 170 CLR 276. In Bourke, the High Court unanimously approved the following statement of principle by Dixon CJ in Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 371–2: It is hardly necessary to say that when you have … an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect, it is in accordance with the soundest principles of interpretation to treat that as inconsistent with any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification.

3.2.39 In the Work Choices case, the majority added the following examples (229 CLR at 127): Other examples of positive prohibitions or restrictions are found in the paragraphs of s 51 dealing with taxation (s 51(ii)) — ‘but so as not to discriminate between States or parts of States’; bounties (s 51(iii)) — ‘but so that such bounties shall be uniform throughout the

Commonwealth’; insurance (s 51(xiv)) — ‘other than State insurance’; and medical and dental services (s 51(xxiiiA)) — ‘but not so as to authorise any form of civil conscription’.

3.2.40 To those examples can be added the acquisition on just terms requirement in s 51(xxxi), although it may be the case that some powers, like the intellectual property power in s 51(xviii), ‘manifest[] a contrary intention which precludes the operation of s 51(xxxi)’: see Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 at 160–1.

Meanings not tied to 1900 3.2.41 One of the greatest challenges in determining constitutional meaning is applying constitutional expressions to changing circumstances. We have already seen the way in which the court in Commonwealth v Australian Capital Territory (Marriage Equality Act case) (2013) 250 CLR 441 3.2.18C avoided common law understandings of the word ‘marriage’ at 1900. The word ‘marriage’ in s 51(xxi) was to be seen as a ‘topic of juristic classification’ – ‘laws of a kind “generally considered, for comparative law and private international law, as being the subjects of a country’s marriage laws”’: 250 CLR at 459. The common law understanding at 1900, which was limited to unions between a man and a woman, was directed to different questions. In Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 3.1.5C, the court [page 262]

rejected the argument that the words ‘patents of inventions’ in s 51(xviii) of the Constitution should be interpreted by reference to the meaning that the word had at 1900. Instead, the High Court adopted an ‘ambulatory’ approach to the interpretation of that provision, recognising that the words in s 51(xviii), even at 1900, had a dynamic meaning capable of application to changing circumstances. 3.2.42 The court has developed various conceptual devices to accommodate the constitutional text to changing circumstances. In Ex parte Professional Engineers’ Association (1959) 107 CLR 208 at 267 Windeyer J said that ‘[w]e must not, in interpreting the Constitution, restrict the denotation of its terms to the things they denoted in 1900’. The expressions ‘connotation’ and ‘denotation’ were sometimes preferred in the older cases. The ‘connotation’ refers to the ‘essential’ meaning of a constitutional expression; the ‘denotation’ refers to examples of things which have qualities that satisfy the essential meaning (or connotation) at any given time. As Professor Zines has written: … [a] term may typically denote X which has qualities A, B, C and D; Y has qualities A, B and C but lacks quality D. Does Y come within the term? Put in other ways: is D part of the essence of the term? Is it within the connotation or definition of the term? If the answer is yes, then the term does not denote Y. If, on the other hand, D is regarded as merely an ‘accidental’ as distinct from an ‘essential’ quality of the term it will denote Y. (Stellios, 2015, p 23.)

3.2.43 As Professor Zines further notes, dichotomies like those of ‘connotation’ vs ‘denotation’ or ‘essence’ vs ‘incidence’ merely restate the issue and perhaps mislead some to the view that there

must be some fixed ‘nature’ that a term has which can be ascertained by examination and pure thought’: Stellios, 2015, p 24. 3.2.44 In Grain Pool, the court adopted the metaphor of a circle to describe the process of interpreting powers. In that case, the expression ‘patents of inventions’ in s 51(xviii) described the centre of the power, but not its radius. The centre could be determined by reference to the origin of the power, its history, the common law and statutory law at the time of federation, and subsequent case law. The radius of a power is to be determined by reference to contemporary circumstances at the time of the decision. In Grain Pool, the court ((2000) 202 CLR 479 at 493) endorsed the view from Nintendo that s 51(xviii) ‘authorizes the making of laws which create, confer, and provide for the enforcement of, intellectual property rights in original compositions, inventions, designs, trade marks and other products of intellectual effort’. It was a short step to recognise that plant breeders’ rights could be regulated under that section, since those rights were awarded on the basis of intellectual effort in a process that is recognisably similar to the patent system. Thus, while plant breeders’ rights were unknown at the time of federation, they are properly considered a type of ‘patent’ today. 3.2.45 Another good example of this is provided by cases on s 51(v) which refers to ‘postal, telegraphic, telephonic and other like services’ and not, in terms, to radio or television. The High Court interpreted s 51(v) as being wide enough to enable the regulation of radio and television when test cases on those topics of regulation emerged: see R v Brislan; Ex parte Williams (1935) 54 CLR 262 and Jones v Commonwealth (No 2) (1965) 112 CLR 206, respectively.

[page 263] 3.2.46 In Grain Pool, Kirby J emphasised the importance of applying the contemporary meaning of constitutional language. In R v Coldham; Ex parte Australian Social Welfare Union (1983) 153 CLR 297, the High Court said that the phrase ‘industrial disputes’ should be given its ‘popular’ or contemporary meaning — referring to ‘disputes between employers and employees about the terms of employment and the conditions of work’: 153 CLR at 312–13. This approach was emphasised in Cheatle v R (1993) 177 CLR 541 where the High Court unanimously held that the constitutional guarantee of trial by jury in s 80 was to be understood in accordance with the common law history of criminal trial by jury at federation, but adapted to accord with contemporary standards. After all, the common law can and does change; so too the context within which the language of the Constitution is to be interpreted. In Cheatle, the High Court (177 CLR at 552) drew a distinction between the ‘essential’ features of common law trial by jury at the time of federation (its ‘connotation’), which were incorporated into the constitutional guarantee in s 80 of the Constitution, and the inessential features which could be discarded if they clashed with contemporary standards (which were, presumably, inimical to its contemporary meaning or ‘denotation’): Neither the exclusion of females nor the existence of some property qualification was an essential feature of the institution of trial by jury in 1900. The relevant essential feature or requirement of the institution was, and is, that the jury be a body of persons representative of the wider community. It may be that there are certain unchanging elements of that feature or requirement such as, for example, that the panel of jurors be randomly or impartially selected rather than chosen by the prosecution

or the State. The restrictions and qualifications of jurors which either advance or are consistent with it may, however, vary with contemporary standards and perceptions. The exclusion of women and unpropertied persons was, presumably, seen as justified in earlier days by a then current perception that the only true representatives of the wider community were men of property. It would, however, be absurd to suggest that a requirement that the jury be truly representative requires a continuation of such exclusion in the more enlightened climate of 1993. To the contrary, in contemporary Australia, the exclusion of females and unpropertied persons would itself be inconsistent with such a requirement.

Use of history 3.2.47 While the majority of the court has consistently favoured an ambulatory approach or emphasised the ‘contemporary meaning’ of constitutional language, this does not mean that the court ignores historical accounts of the development of the Constitution when they are engaged in the process of interpretation. To the contrary. The search for meaning typically starts with historical analysis, and then concludes when the judges of the court determine the contemporary meaning of the language informed by that analysis. Often the purpose of a provision will be gleaned from analysis of history. The question then becomes, which historical sources may be used, and for what purposes? For many years the High Court rejected use of the convention debates. They were, after all, debates. But in Cole v Whitfield (1988) 165 CLR 360 at 385 the High Court said: Reference to history may be made, not for the purpose of substituting for the meaning of the words used the scope and effect — if such could

be established — which the founding fathers subjectively intended the section to have, but for the purpose of identifying the

[page 264] contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged.

3.2.48 The convention debates are not the only useful source. There are many. The common law is an obvious source of historical material about the law; probably the principal source. In the Engineers’ case, Knox CJ, Isaacs, Rich and Starke JJ said that the Constitution should be read ‘naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it’: (1920) 28 CLR 129 at 155. Thus, the common law can be a useful historical source, and also a useful contemporary source of normative material. As we noted above in our discussion of Cheatle, the common law can be adapted by the judges to accord with contemporary norms. 3.2.49 Cole v Whitfield (1988) 165 CLR 360 is a useful example of the ends of historical analysis in constitutional interpretation, and also the implications that can be drawn from analysis of the context in which the Constitution was made. This was a case about the meaning of s 92 of the Constitution, which guarantees that ‘[o]n the imposition of uniform duties of customs, trade, commerce, and intercourse among the States … shall be absolutely

free’. The High Court had considerable difficulty with s 92 of the Constitution. One source of the difficulty is that the text of s 92 cannot be read literally. Now that uniform duties of customs and excise have been imposed (this occurred in October 1901), is trade, commerce and intercourse among the states really to be absolutely free? Is it a licence for anarchy? In Breen v Sneddon (1961) 106 CLR 406 at 415, Kitto J said that s 92 guarantees ‘freedom and not anarchy’, it ‘creates freedom for participation in activities of the specified descriptions within a community organized by law’ and it ‘therefore presupposes law’ that allows for ‘the reasonable enjoyment by’ others of their place in society. But these are very wide concepts of potentially very broad import. The court needed to agree on a context within which construction of the provision should take place, and the convention debates provided that historical context.

The influence of precedent and overruling earlier constitutional decisions 3.2.50 Consistently with the common law method of judicial reasoning, precedent has had an important impact on constitutional interpretation in Australia. Although the High Court is not bound by its previous decisions, it does not readily depart from precedent, with a party required to establish strong reasons why the court should do so. The established grounds upon which earlier interpretations should be reconsidered were well captured in the dissenting judgment of French CJ in Alqudsi v R [2016] HCA 24. The question in that case was whether a person tried on indictment for the contravention of a Commonwealth criminal offence could waive a jury trial in favour of a trial by judge alone. Section 80 of

the Constitution provides that ‘[t]he trial on indictment of any offence against any law of the Commonwealth shall be by jury …’. It had been held in Brown v R (1986) 160 CLR 171 that jury trials for Commonwealth offences tried on indictment could not be waived. The applicant in Alqudsi sought to challenge that decision and have it overruled. A majority of the court (French CJ dissenting) upheld the decision in Brown. In the course of his dissenting judgment, French CJ summarised the principles applied by the court generally in deciding whether earlier precedent should be reconsidered. [page 265]

3.2.51C

Alqudsi v R [2016] HCA 24

French CJ: Overruling an earlier decision of the Court [65] Counsel for the applicant was permitted to argue that Brown should be overruled. [66] The criteria for reconsidering an earlier decision of the Court on any matter were set out in John v Federal Commissioner of Taxation [(1989) 166 CLR 417 at 438–439]: 1. Whether the earlier decision rested upon a principle carefully worked out in a significant succession of cases. 2. Whether there was a difference between the reasons of the Justices constituting a majority in the earlier decision.

3.

Whether the earlier decision had achieved a useful result or on the contrary caused considerable inconvenience. 4. Whether the earlier decision had been independently acted upon in a way which militated against reconsideration, as in Queensland v The Commonwealth (‘the Second Territory Senators Case’) [(1977) 139 CLR 585]. The approach to reconsideration of constitutional cases must take into account that the only other way in which the effect of a particular interpretation of the Constitution can be altered, if at all, is by constitutional amendment pursuant to s 128 of the Constitution. In the Second Territory Senators Case, Aickin J set out general considerations relevant to whether a previous constitutional decision should be overruled. They were (at 630): 1. Whether the error of the prior decision had been made manifest by later cases which had not directly overruled it. 2. Whether the prior decision went with a ‘definite stream of authority’ and did not ‘conflict with well established principle’. 3. Whether the prior decision could be confined as an authority to the precise question which it decided or whether its consequences would extend beyond that question. 4. Whether the prior decision was isolated as receiving no support from other decisions and forming no part of a stream of authority. 5. Whether the prior decision concerned a fundamental provision of the Constitution, or involved a question of such ‘vital constitutional importance’ that its consequences were likely to be far reaching although not immediately foreseeable in detail. His Honour referred to the abolition of appeals to the Privy

Council and said [at 630]: The fact that error can no longer be corrected elsewhere must change our approach to the overruling of our own decisions, at least to some extent. It remains however a serious step, not lightly to be undertaken. A related consideration was that constitutional decisions cannot generally be remedied by legislative amendment. [67] As I observed in Wurridjal v The Commonwealth [2009] 237 CLR 309 at 353], it is not always necessary to make a finding that a prior decision was ‘erroneous’ in order to justify overruling it. It may be that in some cases subsequent decisions have made clear that the decision which the Court is asked to overrule not only stands isolated but has proven to be [page 266] incompatible with the ongoing development of constitutional jurisprudence. Thus, Dixon CJ spoke of the possibility that an earlier decision had been ‘weakened’ by subsequent decisions or in the light of experience [Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 370]. The taxonomy of ‘correctness’ and ‘error’ is not always required to justify an overruling. An overruling may reflect an evolved understanding of the Constitution. Overarching all these considerations is a conservative cautionary principle against overruling earlier decisions without very good cause. The principle is manifested in the Court’s practice from time to time of declining to entertain argument that one of its previous decisions should be overruled. [His Honour considered that Brown should be re-opened and, in dissent, held that the decision should not be followed.]

Drawing implications 3.2.52 The majority in the Engineers’ case did not reject the utility of implications, only the implications that the earlier High Court had thought were necessary to protect the states. Knox CJ, Isaacs, Rich and Starke JJ said that ‘ordinary principles of construction are applied so as to discover in the actual terms of the instrument their expressed or necessarily implied meaning’: (1920) 29 CLR 129 at 155. Thus, even on the literalist approach of the Engineers’ court, we are not limited to the express language of the Constitution when we are trying to work out what it means and how it is to be applied. In West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 at 681–2, Dixon J said: Since the Engineers’ case a notion seems to have gained currency that in interpreting the Constitution no implications can be made. Such a method of construction would defeat the intention of any instrument, but of all instruments a written constitution seems the last to which it could be applied. I do not think that the judgment of the majority of the court in the Engineers’ case meant to propound such a doctrine.

Later, in Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 at 85, Dixon J said: We should avoid pedantic and narrow constructions in dealing with an instrument of government and I do not see why we should be fearful about making implications.

3.2.53 Certainly, the court has found that the parliament enjoys implied powers that are not expressly stated in the text of the Constitution, but can be properly assumed to exist in light of the judicial policy that the Constitution is ‘an instrument of government meant to endure and conferring powers expressed in

general propositions wide enough to be capable of flexible application to changing circumstances’: Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 at 71. For example, the Commonwealth’s power to regulate export trade, contained in s 51(i), includes an implied power to regulate matters that are incidental to the effective regulation of export trade, such as the meat-freezing temperatures in an abattoir in South Australia that had facilities geared to the export trade in meat: O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 4.1.12C. On one view, allowing the Commonwealth to use s 51(i) to regulate an intrastate activity would be beyond the Commonwealth’s power, which in [page 267] terms is restricted to interstate and overseas trade and commerce. But this view was rejected. Fullagar J, with whom Dixon CJ and Kitto J agreed, said (92 CLR at 597–8): I am of opinion that the regulations must be held valid on the broad general principle of constitutional interpretation adopted in the earliest days of this Court. In D’Emden v Pedder (1904) 1 CLR 91, the Court accepted the famous enunciation of the principle by Marshall CJ in McCulloch v Maryland (1819) 4 Wheat 316, at pp 321–3 (4 Law Ed 579, at pp 580, 581), as ‘a most welcome aid and assistance’ and said: ‘Where any power or control is expressly granted, there is included in the grant, to the full extent of the capacity of the grantor and without special mention, every power and every control the denial of which would render the grant itself ineffective’: (1904) 1 CLR, at p 110.

Each head of power includes the power to authorise acts, matters or things which are reasonably necessary to effectuate the purpose

of the power: Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55; Burton v Honan (1952) 86 CLR 167. This is the doctrine of implied incidental power. Thus, even though ordinarily production is not within the trade and commerce power, it may be that, in certain circumstances where it is necessary for the Commonwealth to effectuate the purpose of regulating interstate and overseas trade and commerce, it could regulate production: Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55. (For a detailed consideration and critique of the scope of the incidental power, see Stellios, 2015, pp 48–70). 3.2.54 Controversy has emerged when the development of an implied power is feared by some to extend too far beyond the text of the Constitution. In Davis v Commonwealth (1988) 166 CLR 79 7.5.59C, a majority of the court upheld the existence of what has become known as ‘the implied nationhood power’; that ‘the legislative powers of the Commonwealth extend beyond the specific powers conferred upon the parliament by the Constitution and include such powers as may be deduced from the establishment and nature of the Commonwealth as a polity’: 166 CLR at 93 per Mason CJ, Deane and Gaudron JJ (with whom Brennan J agreed). In Davis, Wilson and Dawson JJ (with Toohey J agreeing) cautioned against this approach, saying (166 CLR at 101): We agree with the conclusion reached by Mason CJ, Deane and Gaudron JJ and wish only to add some comments about the extent to which power is vested in the Commonwealth Parliament to make laws with respect to matters not specifically enumerated in s 51 or elsewhere in the Constitution. If the specifically enumerated powers are taken to include par (xxxix) of s 51, then we consider that in the ultimate analysis the Commonwealth Parliament does not possess any legislative power

which could not be assigned to a particular provision or combination of provisions.

3.2.55 The development of implied limitations on power can also be controversial. In the Engineers’ case, Knox CJ, Isaacs, Rich and Starke JJ said that the court should ‘discover in the actual terms of the instrument their expressed and necessarily implied meaning’: (1920) 28 CLR 129 at 155. But necessity is an elastic concept. The court, prior to that case, drew the reserve powers and implied immunities doctrines as implications from the federal character of the Constitution. Yet these implications were rejected in the Engineers’ case. Then, later, new implications emerged to fill a similar normative space (that is, the protection of state autonomy): Melbourne Corporation v Commonwealth (State Banking case) (1947) 74 CLR 31 6.2.30C. [page 268] 3.2.56 The recognition of implications from representative government gave rise to considerable controversy (as to which see Chapter 10). At the height of the disagreements within the High Court about legitimate interpretive approaches, McHugh J made the following observations about the judicial method — observations that generally capture the accepted principles. (See also his Honour’s judgment in Re Wakim; Ex parte McNally (1999) 198 CLR 511 3.2.11C). 3.2.57C Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104

McHugh J: In the practical business of interpreting legal instruments the courts must necessarily also take into account any fact or circumstance that was likely to have been present to the mind of its authors. The true meaning of a legal text almost always depends on a background of concepts, principles, practices, facts, rights and duties which the authors of the text took for granted or understood, without conscious advertence, by reason of their common language or culture. This is especially true of a Constitution, the provisions of which are frequently no more than an outline for government that is intended to endure for centuries. In interpreting the Commonwealth Constitution, for example, the rule of law may legitimately be taken into account although the Constitution does not mention it … To take into account the background circumstances that were present to the mind of the makers of the Constitution is not to assert that the actual intentions of the makers control the meaning of the Constitution. As Deane J pointed out in New South Wales v The Commonwealth (the Incorporation case) [(1990) 169 CLR 482 at 511]: ‘it is not permissible to constrict the effect of the words which were adopted by the people as the compact of a nation by reference to the intentions or understanding of those who participated in or observed the Convention Debates’. Those who drafted and enacted the Constitution intended it to endure indefinitely knowing that it had to be applied to the ever changing circumstances of a developing nation. The meaning that the Constitution has for the present generation is not necessarily the same meaning that it had for earlier generations or for those who drafted or enacted the Constitution. Each generation reads the provisions of the Constitution ‘in a new light, a light reflected from’ all the events including the decisions of this Court that shape our understanding of the federal system of government in Australia and Australia’s place in the world of nations. But each generation must read the provisions of the Constitution in their context and that includes the historical context of the Constitution.

If this Court is to retain the confidence of the nation as the final arbiter of what the Constitution means, no interpretation of the Constitution by the Court can depart from the text of the Constitution and what is implied by the text and the structure of the Constitution. To determine what are the implied meanings of a legal instrument is seldom an easy task. But it must be done. The search for implications in the language of a legal text is a necessary part of the task of legal interpretation whether the text be a contract or a Constitution. As Windeyer J pointed out in Victoria v The Commonwealth [(the Payroll Tax case) (1971) 122 CLR 353 at 402] in interpreting the Constitution ‘our avowed task is simply the revealing or uncovering of implications that are already there’. But in addition to those implications that are embedded in the language of a legal instrument, an implication may sometimes have to be made in respect of a legal instrument so that it can achieve its apparent purpose or be given a meaning that avoids absurdity or irrationality. Sections 92 and 117 of the Constitution are examples. Similarly, a necessary implication may arise from the need to protect the rights or [page 269] even the existence of a party named in a legal instrument. Thus in Melbourne Corporation v The Commonwealth [(1947) 74 CLR 31 at 83], Dixon J said that the need to protect the States ‘as separate governments in the system exercising independent functions’ gave rise to the necessary implication that ‘unless a given legislative power appears from its content, context or subject matter so to intend, it should not be understood as authorizing the Commonwealth to make a law aimed at the restriction or control of a State in the exercise of its executive authority’. Since the decision in the Engineers’ case, however, this Court has consistently held that it is not legitimate to construe the

Constitution by reference to political principles or theories that find no support in the text of the Constitution. The theory of constitutional interpretation that has prevailed since the Engineers’ case is that one starts with the text and not with some theory of federalism, politics or political economy. The Engineers’ case made it plain that the Constitution is not to be interpreted by using such theories to control, modify or organize the meaning of the Constitution unless those theories can be deduced from the terms or structure of the Constitution itself. It is the text and the implications to be drawn from the text and structure that contain the meaning of the Constitution. As Dawson J pointed out in Australian Capital Television [v Commonwealth (1992) 177 CLR 106 at 181]: ‘If implications are to be drawn, they must appear from the terms of the instrument itself and not from extrinsic circumstances’. A constitutional doctrine is unacceptable, therefore, unless it is based on some premise or premises that is or are contained in the Constitution itself. That is not to deny that theories of federalism, politics and economics or the principles of the common law may be used to interpret particular provisions of the Constitution. But it is legitimate to use them only when there are grounds for concluding that the meaning of the constitutional provision was intended to be understood by reference to such a theory or principle. Those grounds may arise from the very terms of particular constitutional provisions. They may arise from what was said and done at the Conventions leading up to the enactment of the Constitution, as was accepted in Cole v Whitfield and the Incorporation case. They may arise from the history of the nation and its institutions. The Commonwealth of Australia was not born into a vacuum, as Latham CJ once pointed out. It was created against the background of a system of constitutional conventions and common law rules and principles that governed the relationship between the Crown and the citizen. Those common law rules and principles are ‘the source of the legal conceptions that govern us in determining [the Constitution’s]

effect’ [Sir Owen Dixon, ‘The Common Law as an Ultimate Constitutional Foundation’ (1957) 31 Australian Law Journal 240 at 241, reprinted in Jesting Pilate (1965) 205].

Use of comparative and international law when interpreting the Constitution 3.2.58 Comparative law has long been a rich source of jurisprudential influence on Australian law, including constitutional law. As Aroney has commented: ‘Comparative law is frequently used in Australian constitutional law, and its use is not especially controversial’: Aroney, 2007, p 217. The recognition of the principle of judicial review under which legislative power is limited by a written Constitution interpreted and applied by an independent judiciary was based in part upon the foundational United States Supreme Court decision, Marbury v Madison (1803) 1 Cranch 137 1.2.40C. Similarly, McCulloch v Maryland 17 US 159 (1819), another watershed United States Supreme Court decision, is frequently cited in Australian constitutional law as authority for the propositions that Commonwealth legislative power be [page 270] read broadly (O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 (see 3.2.53) at 597); and that the legislative means adopted by the parliament should be appropriate and adapted to a legitimate objective within power: Jumbunna Coal Mine NL v Victorian Coal

Miners’ Association (1908) 6 CLR 309 at 357–8. Recent indications (for example, in the voting rights case of Roach v Electoral Commissioner (2007) 233 CLR 162 10.3.57C and the s 92 case of Betfair Pty Ltd v Western Australia (2008) 234 CLR 318 9.4.27C) suggest that the High Court will continue this trend where the comparative material is relevant to the constitutional issue in question. 3.2.59 The use of international law for the purposes of constitutional interpretation is more controversial. As is evident from the extract from Kirby J’s judgment in Al-Kateb v Godwin (2004) 219 CLR 562 3.2.15C, his Honour was a strong advocate of interpreting the Constitution consistently with international law norms, particular international human rights law. In Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513, Kirby J had earlier said (190 CLR at 657): Where the Constitution is ambiguous, this court should adopt that meaning which conforms to the principles of fundamental rights rather than an interpretation which would involve a departure from such rights.

3.2.60 His Honour said that, although the court should not adopt an interpretive principle which introduced, by the back door, treaties not yet incorporated into Australian law, the relationship between the two systems was ‘undergoing evolution’: 190 CLR at 657. Kirby J continued (190 CLR at 657–8): To the full extent that its text permits, Australia’s Constitution, as the fundamental law of government in this country, accommodates itself to international law, including insofar as that law expresses basic rights. The reason for this is that the Constitution not only speaks to the people of Australia who made it and accept it for their governance. It

also speaks to the international community as the basic law of the Australian nation which is a member of that community.

3.2.61 Kirby J referred to provisions of foreign constitutions which protected the right to just terms in the event of compulsory acquisition of property by government, and continued (190 CLR at 660–1): In effect, the foregoing constitutional provisions do no more than reflect universal and fundamental rights by now recognised by customary international law … When the foregoing principles, of virtually universal application, are remembered, it becomes even more astonishing to suggest that the Australian Constitution, which in 1901 expressly and exceptionally recognised and gave effect to the applicable universal principle, should be construed today in such a way as to limit the operation of that express requirement in respect of some laws made by its federal parliament but not others. Where there is an ambiguity in the meaning of the Constitution, as there is here, it should be resolved in favour of upholding such fundamental and universal rights … The Australian Constitution should not be interpreted so as to condone an unnecessary withdrawal of the protection of such rights. At least it should not be so interpreted unless the text is intractable and the deprivation of such rights is completely clear. Neither of these conditions applies here. Nor should arbitrary deprivation of property be lightly attributed to a constitution, such as the

[page 271] Australian Constitution, given the history of its origins and its purpose. That purpose is to be the basic law for the government of a free people in a nation which relates to the rest of the world in a context in which the growing influence of international law is of ever increasing importance.

3.2.62 In addition to his judgments in Al-Kateb and Newcrest, Kirby J restated these principles on a number of occasions: see, for example, Kartinyeri v Commonwealth of Australia (1998) 195 CLR 337 at 419; Re East; Ex parte Nguyen (1998) 196 CLR 354 at 380– 1; Austin v The Commonwealth (2003) 215 CLR 185 at 293; Bennett v Commonwealth (2007) 231 CLR 91 at 139. However, they have not been accepted by a majority of the court, and were labelled ‘heretical’ by McHugh J in Al-Kateb v Godwin (2004) 219 CLR 562 at 589. See also Roach v Electoral Commissioner (2007) 233 CLR 162 at 225 per Heydon J. For further discussion of this debate, see Willheim, 2005.

The political dimensions of constitutional interpretation 3.2.63 The political consequences of judicial decision-making can give rise to a perception that the High Court makes political decisions, or legal decisions motivated by political views, rather than legal decisions. As we will see, the distinction is problematic. One philosophy of judicial action that eschews consideration of the political consequences of decision-making is ‘legalism’. The phrase is associated with Dixon CJ’s recommendation that judges adopt an approach of ‘strict and complete legalism’ in constitutional cases on the basis that the Constitution placed the judicature in a passive role of merely declaring and applying the law. Dixon CJ believed that confidence in the impartiality of the process could only be realised if judges eschewed consideration of the political consequences of their decisions when they performed their functions. That is, judges were to apply legal, as opposed to political, methods of resolving disputes: Dixon, 1951.

3.2.64 Judges often defend the exercise of their discretion in constitutional cases on this basis. In South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373 5.3.4C, a case which raised the politically-charged issue of the relative taxing powers of the Commonwealth and states, Latham CJ said (65 CLR at 409) that the: … controversy before the court is a legal controversy, not a political controversy. It is not for this or any other court to prescribe policy or to seek to give effect to any views or opinions upon policy. We have nothing to do with the wisdom or expediency of legislation. Such questions are for parliaments and the people.

3.2.65 Principles of constitutional interpretation often reflect a self-conscious commitment to value-neutrality. As Kitto J observed in Fairfax v Commonwealth (1965) 114 CLR 1 at 6–7: The argument for invalidity not unnaturally began with the proposition that the question to be decided is a question of substance and not of mere form; but the danger quickly became evident that the proposition may be misunderstood as inviting a speculative inquiry as to which of the topics touched by the legislation seems most likely to have been the main preoccupation of those who enacted it. Such an inquiry has nothing to do with the question of constitutional validity … the question is always one of subject matter, to be determined by reference solely to the

[page 272] 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? (Emphasis added.)

3.2.66 Legalism emphasises the distinction that is said must exist between law and politics. But as Brennan J remarked in O’Toole v Charles David Pty Ltd (1990) 172 CLR 232 at 267: Nowadays nobody accepts that judges simply declare the law; everybody knows that, within their area of competence and subject to the legislature, judges make law.

Today, judges recognise that policy considerations can play a decisive role in the shaping of legal principles: Precision Data Holdings Pty Ltd v Wills (1991) 173 CLR 167 at 188–91. The authoritative exposition of the meaning of the Constitution necessarily involves attention to policy considerations, because ‘the Constitution is a political instrument’: Melbourne Corporation v Commonwealth (State Banking case) (1947) 74 CLR 31 at 82 per Dixon J. The judgments of the High Court in constitutional cases necessarily have political consequences, as they can result in the frustration of the activity of one or more governments. 3.2.67 Many modern judges have said that legalism, by itself, provides an insufficient basis for the resolution of constitutional problems. Former Chief Justice, Sir Anthony Mason, adverted to the philosophy of ‘legalism’ and said: The asserted advantage of a legalistic approach is that decisions proceed from the application of objective legal rules and principles of interpretation rather than from the subjective values of the justices who make the decisions. Unfortunately, it is impossible to interpret any instrument, let alone a constitution, divorced from values. To the extent

they are taken into account, they should be acknowledged and should be accepted community values rather than mere personal values. The ever present danger is that ‘strict and complete legalism’ will be a cloak for undisclosed and unidentified policy values … Constitutions are documents framed in general terms to accommodate the changing course of events, so that courts interpreting them must take account of community values. (Mason, 1986.)

Instead, the justices of the High Court play a critical role in establishing the context within which constitutional decisions are made, by establishing the principles of constitutional interpretation and developing methods of characterisation of federal laws in the course of resolving constitutional disputes. 3.2.68 In his review of the High Court’s constitutional work, Brian Galligan argued that the claimed technique of value-free legalism is a mask for an intensely political process. After noting that the Australian political climate is inherently hostile to active judicial review, because of the value of parliamentary supremacy inherited from British political tradition and the polarisation of Australian politics between labour and capital, Galligan pointed to the dominant liberal consensus of American political culture, which supports the policy-oriented approach of the United States Supreme Court. He then argued: [page 273] In the more difficult environment of Australian politics, legalism has been championed by the Court because it is an effective political strategy for exercising judicial review. By actively cultivating an impartial image

and professing an apolitical method, the High Court has been able to carry out its delicate political function with ease. (Galligan, 1987, p 39.)

3.2.69 The political role of the High Court is plain. If the Commonwealth Constitution defines the distribution of political power within Australia, by establishing spheres of activity for the central and regional governments and asserting a balance between public and private interests, then the process of attributing a functional meaning to that distribution and enforcing that distribution in particular cases will have a distinctly political significance. Galligan makes this point in his stimulating study of the High Court: In its adjudicative role, the court is involved in resolving high-level disputes that are thrown up by the on-going business of federal government … By interpreting the constitution which sets up the machinery of government and controls the political process, the Court is itself, to a significant extent, shaping the political system and process. (Galligan, 1987, pp 2–3.)

3.2.70 The existence of opposing interpretations of the Constitution inevitably raises questions about the motivations of judges who arrive at different views. The insights of the legal realist and critical legal studies movements demonstrate that the development of the law by judges is a discretionary exercise that involves leeways of choice: see Stone, 1965, pp 304–12. Judgment is both a public and a personal exercise and judges make choices that reflect their public and personal views. The Constitution is a political document (in the sense that it divides power among polities and creates the structures within which political behaviour takes place) and its interpretation today is a political exercise (‘political’ in the sense of subjective and discretionary decision-

making behaviour). Thus, it can be said that the Constitution is both about law and about politics. 3.2.71 As we noted above, constitutional law is contained in a combination of the text of the Constitution and the interpretations given to that text by the judiciary, principally the High Court. And, as Michael Coper has said, there is no single meaning of this text that is ‘just “out there”, revelling in its detached objectivity’, because language is ‘intrinsically rich in multiple meanings’: Coper, 1996. Judges give the words meaning in their judgments. Because judicial opinion is so critical to the substance of constitutional law, the way in which judges interpret the instrument is critical. 3.2.72 The function of assigning a meaning to the text of the Commonwealth Constitution and using that meaning to resolve disputes about the legitimacy of governmental action cannot be value-free. This point has been argued strongly by Gageler J, prior to his appointment to the High Court: ‘[L]egalism’, he wrote, ‘is incapable of fulfilling its own agenda’, because ‘a neutrally based a priori approach to constitutional line drawing is in its own terms impossible’, and because the High Court’s ‘choice between any number of reasonable alternative positions assumes an air of arbitrariness’: Gageler, 1987, p 178. 3.2.73 These considerations are inescapable. The reading of the constitutional text must reflect judicial choices about the way in which public authority should be organised and contained, because there is no other useful guide to those choices. For a discussion of the relationship

[page 274] between judicial choice and democracy, in the context of implied rights, see Winterton, and Patapan and Wood in Sampford and Preston, 1996. To deny the existence of these political values, to assert that constitutional decisions are dictated by the text of the Constitution (to insist on ‘strict and complete legalism’, as Dixon J urged) is to shield those values from the scrutiny and criticism which is crucial to the legitimacy of the High Court’s constitutional function. The comments of Sir Anthony Mason are directly on point: When judges fail to discuss the underlying values influencing a judgment, it is difficult to debate the appropriateness of those values. As judges who are unaware of the original underlying values, subsequently apply that precedent in accordance with the doctrine of stare decisis, those hidden values are reproduced in the new judgment — even though community values may have changed. (Mason, 1986, p 5.)

CHARACTERISATION Characterising a law 3.3.1 As the introductory comments to this chapter indicated, the process of characterisation is central to constitutional analysis. The determination of whether a Commonwealth law can be supported by a head of federal legislative power will depend on what the law does. The Commonwealth has enumerated powers, rather than the general legislative power that is vested in the states by their respective Constitutions: Attorney-General (Cth) v Colonial

Sugar Refining Co Ltd (1913) 17 CLR 644. The exercise of determining whether a law is supported by the head of power must begin with its character. Equally, the character of a law — whether Commonwealth or state — will be central to determining whether the law has contravened a constitutional limitation or to the question of whether a state law is inconsistent with a Commonwealth law for the purposes of s 109. 3.3.2 In Grain Pool of Western Australia v Commonwealth (2000) 202 CLR 479 3.1.5C at 492, the High Court identified characterisation in the following way: ‘[T]he character of the law in question must be determined by reference to the rights, powers, liabilities, duties and privileges which it creates’.

Sufficient connection 3.3.3 When the constitutional question is whether a Commonwealth law is supported by a head of legislative power, once the character of a law has been ascertained, it is then a question of whether that character bears a sufficient connection with the head of power. In the context of powers in ss 51 and 52, the existence of a sufficient connection allows us to conclude that the law is ‘with respect to’ the relevant head of legislative power. Of course, the question whether a law may be described as being ‘with respect to’ a head of power listed in s 51 or s 52 of the Constitution can involve questions of degree. As Toohey J explained in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 353: … in the end the question is whether there is a sufficient connection between the law and the subject matter to be able to say that the law is

one with respect to the subject matter. It may be said that some circularity is involved in a proposition expressed in these terms. But

[page 275] there is a qualitative assessment to be made and sufficiency of connection draws attention to the need for such an assessment. It emphasises that the connection must be substantial, not merely tenuous.

3.3.4 The tests to be applied to ascertain a sufficient connection will vary depending on the character of the power in question. In explaining this point, there is utility in differentiating between subject matter powers and purposive powers and, in the case of the former, between the core area of subject matter powers and the incidental area of such powers.

Subject matter powers vs purposive powers 3.3.5 Most heads of power are subject matter powers. For example, the trade and commerce power in s 51(i) is a subject matter power, the subject matter being the activities of interstate and overseas trade and commerce. The corporations power in s 51(xx) is also a subject matter power, the subject matter being the legal persons of trading, financial and foreign corporations. Similarly, the races power in s 51(xxvi) and the aliens power in s 51(xix) are persons powers — a distinct sub-set among the subject matter powers. There are also other types of subject matter; for example, we have seen that the subject matter of the marriage power in s 51(xxi) is the juristic classification of marriage.

3.3.6 These subject matter powers can be contrasted with purposive powers such as the defence power in s 51(vi): the legislative power supports laws enacted for the purpose of defence. As will be seen, the treaty implementation component of the external affairs power in s 51(xxix) has a purposive dimension: laws will be supported by the power if enacted for the purpose of implementing international obligations.

Core area vs incidental area of subject matter powers 3.3.7 In addition to classifying powers in this way, there is also utility in emphasising the distinction between the core area and the incidental area of a subject matter power. The sufficiency of the connection may be direct and immediate, with the legal or practical character of the law operating in what is often described as the core of the power. Thus, as will be seen, in the context of s 51(i) of the Constitution, a law that prohibits or regulates an activity of interstate or overseas trade and commerce will be a law that falls within the core area of that power: it operates directly on the subject matter of the power. 3.3.8 Alternatively, the connection might be more incidental. As Dixon CJ, McTiernan, Webb and Kitto JJ observed in Grannall v Marrickville Margarine Pty Ltd (1954) 93 CLR 55 at 77: The words ‘with respect to’ ought never be neglected in considering the extent of a legislative power conferred by s 51 or s 52. For what they require is a relevance to or connection with the subject assigned to the Commonwealth Parliament … 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 subject matter. … [in] the famous words of Marshall CJ in McCulloch v Maryland (1819) 4 Wheat 316 (1819): ‘Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional’: at 421.

[page 276] 3.3.9 To continue the example of s 51(i), on an orthodox view, a production process is not considered to form part of the activities of interstate and overseas trade and commerce that lie at the heart of the power. Thus, a law that regulates a production process cannot be supported in the core area of that power: it does not operate directly on an activity of interstate or overseas trade and commerce. But, it may, in some circumstances, be supported as a law incidental to the power.

Establishing a sufficient connection 3.3.10 When dealing with the core area of a subject matter power, a sufficient connection is typically established by showing that the law operates directly on the subject matter in question. As the court said in Plaintiff S156/2013 v Minister for Immigration and Border Protection (2014) 254 CLR 28 at 43: ‘[G]enerally speaking, once a federal law has an immediate operation within a field assigned to the Commonwealth as a subject of legislative power, that is enough. … No further inquiry is necessary’. Thus, in that

case, a law that required the removal of certain aliens from Australia operated directly on the subject matter of s 51(xix). Similarly, a law that prohibits or regulates an activity of interstate or overseas trade and commerce operates directly upon the subject matter of s 51(i) and a sufficient connection is thereby established: see, for example, Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1 4.1.29C. 3.3.11 By contrast, however, when determining whether a law has a sufficient connection with a purposive power, or when a law is said to be incidental to a subject matter power, the purpose of the law will be important (if not central) to the characterisation process. This will be explained further below.

Dual characterisation 3.3.12 If the rights, powers, liabilities, duties and privileges which a law creates are sufficiently connected to the subject matter of the power, then the court will uphold the law, even if it can also be characterised as dealing with some topic that is extraneous to the Commonwealth’s power under the Constitution. A classic statement on characterisation was made by Kitto J in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 5.1.43C. The case concerned federal legislation which removed tax exemptions from superannuation funds unless investments were made in public stocks and bonds. The legislation was challenged on the basis that its motive was to encourage or compel certain types of investment, rather than to raise revenue — it was therefore not a law ‘with respect to’ taxation. Kitto J, who delivered the leading judgment, dealt with the argument in the following way (114 CLR at 6–7):

The argument for invalidity not unnaturally began with the proposition that the question to be decided is a question of substance and not of mere form, but the danger quickly became evident that the proposition may be misunderstood as inviting a speculative inquiry as to which of the topics touched by the legislation seems most likely to have been the main preoccupation of those who enacted it. Such an inquiry has nothing to do with the question of constitutional validity under s 51 of the Constitution. Under that section 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’,

[page 277] 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?

Later, Kitto J said (114 CLR at 13): The legislative policy is obvious and may be freely acknowledged: it is to provide trustees of superannuation funds with strong inducement to invest sufficiently in Commonwealth and other public securities. The raising of revenue may be of secondary concern. But the enactment does not prescribe or forbid conduct. Its character is neither fully or fairly described by saying that it makes trustees of superannuation funds liable to pay for failing to do what the legislature wishes. To adapt the language of Higgins J in R v Barger (1908) 6 CLR 41 at 199, the substance of the enactment is the obligation which it imposes, and the only obligation imposed is to pay income tax. In substance as in form, therefore, the section is a law with respect to taxation.

3.3.13 As Kitto J indicated in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 6–7, if a federal law can be characterised as a law with respect to one of the parliament’s enumerated powers, it is irrelevant that the law may also be characterised as a law with respect to a subject matter outside Commonwealth power. This principle has been confirmed in numerous decisions. 3.3.14 In Murphyores Pty Ltd v The Commonwealth (1976) 136 CLR 1 4.1.29C, Commonwealth legislation prohibited, without approval, the export of minerals from Australia. The minister, before granting approval, could consider a report into the environmental impact of the relevant mining process. The purpose of doing so was to protect the environment, but the law operated directly on the subject matter of s 51(i) by prohibiting exports (that is, in the core area) and was therefore valid. As Mason J said (136 CLR at 22): It is one thing to say that the trade and commerce power does not enable the Commonwealth to regulate and control directly matters outside the subject matter of power, such as the environmental aspects of mining in Queensland. It is quite another thing to say that the Commonwealth cannot in the exercise of that power make laws which have a consequential and indirect effect on matters standing outside the power … It is no objection to the validity of a law otherwise within power that it touches or affects a topic on which the Commonwealth has no power to legislate.

3.3.15 In case) (2006) the validity employment

New South Wales v The Commonwealth (Work Choices 229 CLR 1 4.2.29C, a majority of the court upheld of Commonwealth legislation regulating certain relationships, relevantly the relationships of trading,

financial and foreign corporations and their employees. The majority (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ) held that, to attract the support of s 51(xx) of the Constitution, it was enough that the provisions operated on those relationships to create rights and obligations. It had been argued by the plaintiffs challenging the provisions that the Act’s operation on constitutional corporations was only incidental when compared with its creation of an industrial relations system and, thus, the law could not be characterised as being with respect to s 51(xx). In rejecting that argument, the majority said that ‘in speaking of “opposing” characterisations of the impugned provisions, the submission might be understood as embracing the long-discarded view that a law may have only a single character’: 229 CLR at 141. The characterisation [page 278] process must proceed from the accepted starting point that a law may have multiple characters. Their Honours said (229 CLR at 72): … effect must be given to some basic principles of constitutional interpretation that were not challenged in this litigation. In particular, it is necessary to give effect to the well-established proposition that a law may be characterised as a law with respect to more than one of the subject matters set out in s 51. To describe a law as ‘really’, ‘truly’ or ‘properly’ characterised as a law with respect to one subject matter, rather than another, bespeaks fundamental constitutional error.

The relevance of legislative purpose to

characterisation 3.3.16 Once a sufficient connection is found to exist, the High Court has traditionally demonstrated great deference to parliamentary choice of regulatory method. It has been said that the Commonwealth can make laws with such (otherwise constitutional) qualifications and limitations as it chooses: Arthur Yates & Co Pty Ltd v Vegetable Seeds Committee (1945) 72 CLR 37 at 74 per Starke J. This is an incident of parliamentary sovereignty. 3.3.17 Thus, the court has said that it will disregard the motive and policy of federal laws in determining whether a sufficient connection exists between a law and a constitutional power: Murphyores Pty Ltd v Commonwealth (1976) 136 CLR 1 at 22. However, some care has to be taken here. The purpose of the law might be quite relevant (even central) to the anterior question of whether a sufficient connection exists. 3.3.18 As already foreshadowed, for characterisation purposes, the purpose of a law is particularly relevant where a law is said to operate in the incidental area of a subject matter power or where a sufficient connection is said to exist between a law and a power that is purposive in nature. In those circumstances, the court may properly consider the purpose of the law, and whether the law is reasonably necessary or reasonably appropriate and adapted to the execution of the purpose. If it is not, then it might be concluded that the law is not sufficiently connected to the power. As the principle of dual characterisation applies to purposive powers and across the core and incidental areas of subject matter powers, purpose or effect can establish sufficiency of connection even if the law has another character outside Commonwealth power by reason

of its direct operation. In this context, the ‘purpose’ of a law ‘refers not to [the] underlying motive but to the end or object the legislation serves’: Cunliffe v Commonwealth (1994) 182 CLR 272 at 319. 3.3.19 There has been some resistance to the use of purposive tests in the context of incidental powers. In Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 88 and Cunliffe v Commonwealth (1994) 182 CLR 272 at 352, Dawson J insisted that the characterisation test in the context of incidental powers did not involve asking whether a law was reasonably appropriate and adapted to a legitimate end. Instead, his Honour said, the question was simply whether there was a sufficient connection. Similar comments were made in Leask v Commonwealth (1996) 187 CLR 579, a case concerning federal legislation which regulated reporting of monetary transactions. The legislation was challenged on the basis that its provisions were not reasonably appropriate or adapted to the federal parliament’s powers with respect to taxation (s 51(ii)) or currency (s 51(xii)). The court upheld the law. In doing [page 279] so, Brennan CJ cautioned against applying different tests to the core and incidental areas of subject matter powers (187 CLR at 590–1): The character of an Act is determined by its operation and effect; its operation by reference to the rights, duties, powers or privileges that the Act creates or affects; its effect by reference to its operation in the circumstances to which it applies. The statutory declaration of the object of an Act is relevant to the construction of a provision the construction

of which would otherwise be ambiguous (s 15AA of the Acts Interpretation Act 1901 (Cth)), but the declaration is not sufficient by itself to affect the operation and effect of the Act. The Parliament cannot legislate a measure into power merely by declaring its measure to be enacted for a valid object. When the operation and effect of an Act are ascertained, its connection or lack of connection with the subject matter of a head of power can be determined. Sometimes, as I pointed out in Cunliffe v The Commonwealth (1994) 182 CLR 272 at 319, ‘a connexion with a head of power may be revealed more clearly by stating the purpose or object which the law is appropriate and adapted to achieve than by describing the law’s effect and operation on particular rights, duties, powers or privileges’. But, as Dawson J points out, ‘purpose’ in this context refers to the purpose of the law, not the purpose of the head of the power [see Dawson J in Cunliffe v The Commonwealth (1994) 182 CLR 272 at 352]. The purpose of a law is the end or object which the law achieves or, putting it another way, it is the effect of a law expressed by reference to a field of activity, relationship or status. As Dawson J says, the purpose of a law is an aspect of ‘what the law does in fact’ so that the basic test of validity remains one of sufficient connection between the operation and effect of the law on the one hand and the head of power on the other. If the head of power is purposive (for example, the defence power), the existence of a connection may be determined more easily by comparing the purpose of the law and the purpose of the power. But if the relevant head of power is non-purposive (as the taxation and currency powers are non-purposive) the validity of the law is more likely to be determined by reference to its operation and effect.

3.3.20 Dawson J (182 CLR at 603) and Gummow J (182 CLR at 624) made similar comments. Six judges (Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ) held that the law was valid with respect to the currency power in s 51(xii). The connection to the core area of that head of power was clear and, thus, it was unnecessary for a view to be formed about the scope of

the incidental power. Despite these comments, it would seem that the traditional position, expressed in cases like Grannall v Marrickville Margarine Pty Ltd (1954) 93 CLR 55 (see 3.3.8), has survived. Professor Leslie Zines expressed the position after Leask in the following way: In respect of the principle of incidental power it is difficult to see that there has been any change in substance from the traditional approach. The attempts at reformation seem largely semantic. The issue is still in most cases whether the law can be regarded as an appropriate means to an end that relates to the subject matter of the power. There seems nothing to be gained by insisting that the only issue is one of ‘sufficient connection’ when it is obviously necessary to go through the above process [of comparing means and end] in situations where the law does not operate directly on the subject matter of the power. Whether or not one prefers to call the incidental aspect of a power ‘purposive’ is of little moment. Nor does the insistence that each power is a coherent unity deny the different approaches for determining the connection with power depending on whether the law operates directly on the subject matter and whether it does not. (Stellios, 2015, pp 62–3.)

[page 280] 3.3.21 The position is much clearer for constitutional limitations. As will be seen, the purpose of a law may be relevant (if not central) to the question of whether a law contravenes an applicable constitutional limitation. For example, a law that is not reasonably appropriate and adapted to a legitimate purpose will contravene the implied freedom of political communication: see Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 10.3.11C. Legislative purpose, particularly in relation to a

Commonwealth law, will also be important to determining whether there is an inconsistency between a Commonwealth law and a state law.

Proportionality and characterisation 3.3.22 Constitutional analysis will often involve the relation between the means and end of a law. This will be the case where the purpose of the law is constitutionally significant; for example, where a law is said to fall within the incidental area of a subject matter power or where the law is to be supported by a purposive power. As has already been highlighted, the purpose of a law may also be relevant to constitutional limitations; for example, the implied freedom of political communication. 3.3.23 The traditional way of expressing the requisite constitutional relation between statutory means and end was through the language of ‘reasonably necessary’, ‘reasonably appropriate or adapted’ or similar expressions. Thus, in the context of implied incidental power, Dixon CJ, McTiernan, Webb and Kitto JJ in Grannall v Marrickville Margarine Pty Ltd (1954) 93 CLR 55 at 77 identified the incidental ‘authority to legislate in relation to acts, matters and things the control of which is found necessary to effectuate’ the main purpose of the power. Following Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, a law that burdens protected political communication will be invalid unless it is ‘reasonably appropriate and adapted to serve a legitimate end’: 189 CLR 562. 3.3.24

The concept of proportionality has emerged within

constitutional law discourse and jurisprudence as a framework for assessing the requisite relation between statutory means and end. In Attorney-General v Adelaide City Corporation (2013) 249 CLR 1 at 37, French CJ explained the concept of proportionality in the following way: Proportionality is not a legal doctrine. In Australia it designates a class of criteria used to determine the validity or lawfulness of legislative and administrative action by reference to rational relationships between purpose and means, and the interaction of competing legal rules and principles, including qualifications of constitutional guarantees, immunities or freedoms. Proportionality criteria have been applied to purposive and incidental lawmaking powers derived from the Constitution and from statutes. They have also been applied in determining the validity of laws affecting constitutional guarantees, immunities and freedoms, including the implied freedom of political communication ….

3.3.25 However, proportionality is not a singular concept. The relation of means and end involves matters of degree, and different constitutional contexts call for different levels of judicial scrutiny of legislative choices. In relation to the incidental area of subject matter powers, there has been some disagreement (and uncertainty) about the appropriateness of applying a test of proportionality: see Stellios, 2015, pp 58–9. However, as Professor Zines put it, ‘once it is accepted that the issue of incidental powers is one of degree, it seems to be apparent that the [page 281] use of proportionality is inherent in the issue of whether a law is (or

can reasonably be regarded as) appropriate and adapted to an end within power’: Stellios, 2015, p 60. In other words, whether a law is reasonably necessary or reasonably appropriate and adapted to achieve an end necessarily involves an evaluation of the relation between means and end, and some elements of proportionality must be involved. 3.3.26 As will be seen, the court has required stricter forms of proportionality when dealing with limitations on power. In the context of the implied freedom of political communication, a majority of the High Court has now accepted a highly structured form of proportionality that has its origins in European human rights jurisprudence: McCloy v New South Wales (2015) 89 ALJR 857; [2015] HCA 34 10.3.42C. It is unclear whether the court’s endorsement of this formulation of proportionality will have any impact on the type of analysis applied to the incidental area of subject matter powers and purposive powers. 3.3.27 It remains to emphasise that proportionality of means and end is not relevant to the characterisation process in the core area of subject matter powers. Once a law is found to operate directly upon the subject matter of a power, the law is not to be further examined according to a test of proportionality. That position was settled in Theophanous v Commonwealth (2006) 225 CLR 101 at 128 and confirmed in Plaintiff S156/2013 v Minister for Immigration and Border Protection (2014) 254 CLR 28 at 45. For a discussion of the role of proportionality in constitutional analysis, see Barak, 2012; Kiefel, 2012; Kirk, 1997.

Chapter references

Articles and book chapters Allan and Aroney, ‘An Uncommon Court: How the High Court of Australia has Undermined Australian Federalism’ (2008) 30 Sydney Law Review 245 Aroney, ‘Comparative Law in Australian Constitutional Jurisprudence’ (2007) 26 University of Queensland Law Journal 217 Dixon, ‘The Functional Constitution: Re-reading the 2014 High Court Constitutional Term’ (2015) 43 Federal Law Review 455 Gageler, ‘Foundations of Australian Federalism and the Role of Judicial Review’ (1987) 17 Federal Law Review 162 Gibbs, ‘The Decline of Federalism?’ (1994) 18(1) University of Queensland Law Journal 1 Goldsworthy, ‘Originalism in Constitutional Interpretation’ (1997) 25 Federal Law Review 1 Kiefel, ‘Proportionality: A Rule of Reason’ (2012) 23 Public Law Review 85 Kirk, ‘Constitutional Guarantees, Characterisation and the Concept of Proportionality’ (1997) 21 Melbourne University Law Review 1 [page 282] Kirk, ‘Constitutional Interpretation and a Theory of Evolutionary Originalism’ (1999) 27 Federal Law Review 232

Mason, ‘A New Perspective on Separation of Powers’ (1996) 82 Canberra Bulletin of Public Administration 1 Mason, ‘The Role of a Constitutional Court in a Federation’ (1986) 16 Federal Law Review 1 Perry, ‘The High Court and Dynamic Federalism’ in Kildea, Lynch and Williams (eds), Tomorrow’s Federation: Reforming Australian Government, The Federation Press, Sydney, 2012, p 172 Wheeler, ‘Original Intent and the Doctrine of the Separation of Powers in Australia’ (1996) 7 Public Law Review 96 Willheim, ‘Globalisation, State Sovereignty and Domestic Law: The Australian High Court Rejects International Law as a Proper Influence on Constitutional Interpretation’ (2005) 1 Asia Pacific Journal on Human Rights and the Law 1 Books and texts Barak, Proportionality: Constitutional Rights and their Limitations, Cambridge University Press, Cambridge, 2012 Galligan, Politics of the High Court: A Study of the Judicial Branch of Government in Australia, University of Queensland Press, St Lucia, Qld, 1987 Sampford and Preston, Interpreting Constitutions: Theories, Principles and Institutions, The Federation Press, Sydney, 1996 Stellios, Zines’s The High Court and the Constitution, 6th ed, The Federation Press, Sydney, 2015 Stone, Human Law and Human Justice, 1965, Stanford

University Press, Stanford, Calif, pp 304–12 Papers and reports Coper, ‘Thinking about Constitutional Change’, paper presented to the Australian Society of Labor Lawyers 18th National Conference, Canberra, 4–6 October 1996 Other Convention Debates, Melbourne, 1898 Dixon, Swearing in of Sir Owen Dixon as Chief Justice (1951) 85 CLR xi per Dixon CJ at xiv

[page 283]

Commonwealth Legislative Powers

CHAPTER 4

TRADE AND COMMERCE POWER 4.1.1 The Commonwealth Constitution gives the Commonwealth Parliament a number of specific powers over selected commercial activities. Prominent among these are: s 51(v), which confers power to make laws with respect to ‘postal, telegraphic, telephonic, and other like services’ and has been held to include radio and television broadcasting (Herald & Weekly Times Ltd v Commonwealth (1966) 115 CLR 418) and ‘telecommunications services’ (Bayside City Council v Telstra Corporation Ltd (2004) 216 CLR 595 at 624 per Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ); and s 51(xiii) and (xiv), which confer power with respect to ‘banking’ and ‘insurance’ respectively. The Commonwealth has power over a number of other

commercial matters: ‘bills of exchange and promissory notes’ (s 51(xvi)); ‘bankruptcy and insolvency’ (s 51(xvii)); and ‘copyrights, patents of inventions and designs, and trade marks’: s 51(xviii). The taxation power in s 51(ii) has also been interpreted by the High Court in a way that allows the Commonwealth significantly to influence commercial and other behaviour: see Chapter 5. 4.1.2 There are two other provisions in the Constitution which give, or could be read as giving, broad power over commercial activity to the Commonwealth Parliament. These are the trade and commerce power in s 51(i) and the corporations power in s 51(xx). The first of these was regarded, for many years, as expressing all the Commonwealth’s broad regulatory power over commercial activities, for the High Court had read the corporations power very narrowly in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 (see 4.2.3). That narrow approach also affected the reading of the trade and commerce power, which was seen as having limited potential to support wide-ranging regulation of commercial activity. Partly because of the justices’ resistance to economic arguments relating to the interconnection between interstate and intrastate trade, and partly because of the continuing influence of the ‘reserved powers’ approach to constitutional interpretation adopted in cases like Huddart, Parker, the High Court has, by and large, insisted that the geographical [page 284] distinction between interstate and intrastate trade, said to be

implicit in s 51(i), must be strictly observed. The maintenance of the distinction has meant that, despite the economic interdependence of local and national commercial activity and the emergence of a national economy, the trade and commerce power — at least to date — has offered the Commonwealth a relatively narrow base on which to build its regulatory programs. The narrowness of that base is well illustrated by Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 4.1.23C. Debate on the proper scope of s 51(i) has gone into recess since the revolutionary High Court decision in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 4.2.5C, which rejected the restrictive Huddart, Parker reading of the corporations power. The breadth of s 51(xx) has since been powerfully affirmed in New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C. As a consequence, s 51(xx) is now the major source of Commonwealth regulatory power over commercial activity. In comparison, the development of s 51(i) by the High Court has ground to a halt and most of the s 51(i) cases date from earlier periods and have a ‘musty’ quality to them. Whether a future decision reactivates s 51(i) in the same way that Strickland v Rocla Concrete Pipes Ltd reactivated s 51(xx) remains to be seen: see generally Wheeler, 2007. 4.1.3 The regulation of commercial activity can face express constitutional restraint. Section 92 of the Constitution guarantees that ‘trade, commerce, and intercourse among the States … shall be absolutely free’. Section 92 is a restraint upon both the Commonwealth and the states. Any legislation which applies to interstate trade must run the gauntlet of s 92, though since Cole v

Whitfield (1988) 165 CLR 360 9.4.13C, s 92 imposes fewer limitations on Commonwealth and state regulatory action than was previously the case. The impact of this guarantee on the powers of the Commonwealth and the states is explored later in this book: see Chapter 9. Two other limitations affect only the Commonwealth. First, if Commonwealth legislation is regarded as involving an ‘acquisition of property’, ‘just terms’ must be provided (s 51(xxxi)): see Chapter 9. A second constraint is that posed by s 99 of the Constitution for a relatively narrow group of Commonwealth laws. This provision insists that no Commonwealth ‘trade, commerce, or revenue’ law can ‘give preference to one State or any part thereof over another State or any part thereof’: see further Chapter 6. 4.1.4E

Commonwealth Constitution

51 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: (i)

trade and commerce with other countries, and among the States; …

98 The power of the Parliament to make laws with respect to trade and commerce extends to navigation and shipping, and to railways the property of any State.

4.1.5 While the High Court has insisted on a sharp distinction between interstate and international trade on the one hand and

intrastate trade on the other, it has adopted a relatively open view of the concept of trade and commerce itself. In W & A McArthur Ltd v Queensland (1920) 28 CLR 530, Knox CJ, Isaacs and Starke JJ observed that ‘trade’ and ‘commerce’ were ‘not terms of art. They are expressions of fact, they are [page 285] terms of common knowledge, as well known to laymen as to lawyers, and better understood in detail by traders and commercial men than by Judges’: 28 CLR at 546. They went on to say that the activities which might be included in the phrase would depend on the growth of and changes in commercial activity (28 CLR at 546– 7): ‘Trade and commerce’ between different countries … has never been confined to the mere act of transportation of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far beyond it is a fact quite as undoubted. All the commercial arrangements of which transportation is the direct and necessary result form part of ‘trade and commerce’. The mutual communings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of that class of relations … which the world calls ‘trade and commerce’.

4.1.6 In Huddart Parker Ltd v Commonwealth (1931) 44 CLR 492, the High Court held that the Commonwealth could legislate to give preference to union members for work in loading or unloading ships involved in interstate and international trade. Dixon J stated that the legislation was valid because ‘it directly regulates the choice of persons to perform the work which forms

part of or is an incident in inter-State and external commerce. It does so in spite of the fact that it affects employers in the selection of their servants and in spite of the industrial aspect which the provision undeniably presents’: 44 CLR at 515–16. As Professor Zines has observed, Dixon J upheld the law in question on the basis that it directly regulated participation in the activity of interstate and overseas trade: Stellios, 2015, pp 38, 48. This view was applied in R v Wright; Ex parte Waterside Workers’ Federation of Australia (1955) 93 CLR 528, where the High Court confirmed the validity of parts of the Stevedoring Industry Act 1949 (Cth), giving the Court of Conciliation and Arbitration authority to prescribe conditions of employment in the stevedoring industry (wharf-side cargo handling) as regards ships travelling interstate or overseas: 93 CLR at 543–4. In R v Foster; Ex parte Eastern and Australian Steamship Co Ltd (1959) 103 CLR 256 at 309–11, Windeyer J observed that, under the trade and commerce power, the Commonwealth Parliament could regulate the employment of individuals working on board ships engaged in Australian interstate or overseas trade and commerce, a proposition which appears to be a natural extension of the Huddart Parker decision. 4.1.7 In Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29, the plaintiff challenged the validity of a Commonwealth Act which established a statutory commission with power to operate airline services between the states, and to and from and within the territories. The plaintiff argued that s 51(i) ‘contemplates the legislative regulation of overseas and interState trade and commerce and not the entry of the Government itself into that field of activity’: 71 CLR at 80. Dixon J rejected this argument, stating that (71 CLR at 81):

A law authorising the government to conduct a transport service for inter-State trade, whether as a monopoly or not, appears to me to answer the description, a law with respect to trade and commerce amongst the States. It is only by importing a limitation into the descriptive words of the power that such a law can be excluded.

Dixon J also rejected an argument that the trade and commerce power only covered the interstate carriage or transport of persons who were themselves engaged in commerce and [page 286] that it could not authorise the establishment of a government airline carrying people whose journeys were social or recreational. He said (71 CLR at 83): … if not all inter-State transportation, at all events all carriage for reward of goods or persons between States is within the legislative power, whatever may be the reason or purpose for which the goods or persons are in transit.

4.1.8 Although interstate trade is not confined to the act of transportation and includes intangible transfers such as interstate financial transactions (Commonwealth v Bank of NSW (Bank Nationalisation case) (1949) 79 CLR 497 at 632–3 (PC) and Bank of NSW v Commonwealth (Bank Nationalisation case) (1948) 76 CLR 1 at 381–2 per Dixon J), the High Court has emphasised that the concept of interstate trade has its limits. These limits have been drawn in the context of defining the freedom conferred by s 92. Their application to the Commonwealth’s powers under s 51(i) is modified by the notion that each of the Commonwealth’s

legislative powers carries with it power over incidental or ancillary matters: see Chapter 3. A Victorian health insurance organisation, which had contracted to pay benefits to its subscribers if those subscribers incurred medical expenses, was not engaged in interstate trade, even though some of its subscribers lived in other states: Hospital Provident Fund Pty Ltd v Victoria (1953) 87 CLR 1. No interstate trade was involved because the contract of insurance did not expressly require payment to be made across state borders (either by the contributors or by the insurer). Similarly, an agreement between petroleum refiners and distributors, under which one company supplied petroleum in state A to another company in return for that other company supplying petroleum in state B to the first company, did not involve interstate trade: HC Sleigh Ltd v South Australia (1977) 136 CLR 475. This was because the agreement did ‘not call for the sale or delivery of any product across State boundaries’: 136 CLR at 506 per Mason J. 4.1.9 Production is not part of interstate trade and commerce, even when it is earmarked for interstate trade: Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283; Bartter’s Farms Pty Ltd v Todd (1978) 139 CLR 499. Interstate trade in manufactured products only begins with the interstate movement of the products. Production is ‘a mere intra-State preparation for a proposed act of inter-State trade in manufactured goods, and is not itself a part of any inter-State trade’: 114 CLR at 304–5 per Kitto J. (The application to s 51(i) of these last two decisions has been moderated as a result of the High Court’s emphasis on the incidental aspects of s 51(i): see O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 4.1.12C.)

For some years, it was thought that the first sale, within a state, of goods imported from another state was not part of interstate trade: Wragg v New South Wales (1953) 88 CLR 353. That assumption has been reversed: Permewan Wright Consolidated Pty Ltd v Trewhitt (1979) 145 CLR 1. It would seem that second and subsequent sales of interstate products still lie outside the judicial concept of interstate trade. This does not mean they lie beyond the protection afforded by s 92, because the High Court’s decision in Cole v Whitfield (1988) 165 CLR 360 9.4.13C now prescribes a ‘practical’ approach to s 92 issues. However, it would mean that subsequent dealings in out-of-state commodities are not subject to Commonwealth regulation as an integral part of interstate trade and commerce. 4.1.10 The High Court’s view of the range of activities which can be controlled under s 51(i) has been expanded through the standard technique of allowing the power to be exercised in [page 287] relation to activities which are incidental or ancillary to interstate or international trade and commerce. This extension has been justified partly by reference to the text of s 51 and partly by appeal to general principle. In Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55, Dixon CJ, McTiernan, Webb and Kitto JJ explained why the Commonwealth might be able to control production or manufacture under s 51(i), even though those activities were not themselves part of trade and commerce (93 CLR at 77) (emphasis in original):

In the first place, the power is to legislate with respect to trade and commerce. The words ‘with respect to’ ought never be neglected in considering the extent of a legislative power conferred by s 51 or s 52. For what they require is a relevance to or connection with the subject assigned to the Commonwealth Parliament … In the next place, 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 subject matter.

4.1.11 A paradox has developed in the application of these principles of interpretation to s 51(i). The court has insisted that the range of activities open to Commonwealth control is sharply restricted by the phrase ‘with other countries, and among the States’. After conceding that ancillary or incidental matters might be regulated by the Commonwealth, in Wragg v New South Wales (1953) 88 CLR 353 Dixon CJ stated (88 CLR at 386): But even in the application of this principle to the grant of legislative power made by s 51(i) the distinction which the Constitution makes between the two branches of trade and commerce must be maintained. Its existence makes impossible any operation of the incidental power which would obliterate the distinction.

The ‘two branches of trade and commerce’ to which Dixon CJ referred were interstate (and international) trade, on the one hand, and intrastate trade, on the other. Running through High Court decisions on the scope of s 51(i) is the assumption that trade and commercial activity in Australia can be divided into those ‘two branches’ one of which lies outside the scope of s 51(i). The court has, on occasion, been urged to soften the distinction or to concede that some intrastate trade and commerce is so integrated with

interstate or international trade and commerce that its regulation should be seen as a Commonwealth, rather than a state, responsibility. In response, the court has made some concessions and refused others. The decisions of the court which follow review those concessions and refusals and suggest a pattern of acceptance, by the court, of arguments based on the physical integration of commercial activities and rejection of arguments based on economic integration. That is, the court has been willing to accept the ‘incidental’ nature of activities which are physically connected to interstate or international trade and commerce, but has refused to accept the ‘incidental’ nature of activities whose links with interstate or international trade and commerce are economic. 4.1.12C

O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565

[The Commerce (Meat Export) Regulations were made under the Customs Act 1901 (Cth). Regulation 4B provided that the export of meat was prohibited unless the meat had been treated and stored in premises registered under the regulations. Regulation 5 provided that [page 288] all premises ‘used for the slaughter, treatment and storage of meat … for export shall be registered’. A penalty was prescribed for breach of reg 5. Other provisions set down detailed standards for registration relating to matters such as the construction of buildings, drainage and the location of buildings and yards used in the treatment and storage of meat for export. Noarlunga Meat Ltd operated a slaughterhouse and abattoirs at

Noarlunga in South Australia. The company’s premises were registered under the Commerce (Meat Export) Regulations. The Metropolitan and Export Abattoirs Act 1936 (SA) provided that no person should ‘use any premises for the purpose of slaughtering stock for export’ unless that person held a licence issued by the state Minister of Agriculture: s 52a(1). The company did not hold such a licence. The company slaughtered and froze 152 lambs for export. All of these carcasses were sold and delivered to the Australian Meat Board and exported to the United Kingdom. The company was charged with using premises to slaughter meat for export, contrary to s 52a of the Metropolitan and Export Abattoirs Act 1936 (SA). The company pleaded that the state legislation was inconsistent with the Commonwealth regulations and therefore invalid. Fullagar J held that, assuming the Commonwealth regulations to be valid, they showed an intention ‘to express completely and exhaustively the requirements of the law with respect to the use of premises for the slaughter of stock for export’: 92 CLR at 592. That is, the Commonwealth law covered that field and, in so far as state law entered into that field, or attempted to regulate slaughter of stock for export, it would be invalid because of inconsistency. His Honour then turned to the validity of the Commonwealth regulations.] Fullagar J: The question which emerges is whether the Commonwealth power with respect to trade and commerce with other countries extends to authorising legislation regulating and controlling the slaughter of meat for export. In my opinion it does so extend. … [T]he expression ‘slaughter for export’ is used in the relevant legislation as a composite expression which would be understood objectively in the trade. Whether ‘slaughter for export’ is taking place is not, from the point of view of the legislator, a question which depends entirely on some intention in the mind of the owner or slaughterer of a beast — an intention which may change from time to time as operations proceed. The whole process from killing to packing will be conditioned in certain respects

by the predetermined destination of the meat, and ‘slaughter for export’ is, in the mind of the legislator, a definite objective conception distinct from slaughter for home consumption. It does not, of course, follow that any corresponding position exists with regard to any commodity other than meat. It may very well be, for example, that such an expression as ‘mining metals for export’ or ‘sowing wheat for export’ is meaningless except by reference to some subjective element. … It was argued that the regulations in question here are a direct regulation of the very subject matter of the power, that they control steps taken in the actual course of trade and commerce with other countries. But, even if counsel for the State of South Australia be right in saying that the course of commerce with other countries does not begin until a later stage, I am of opinion that the regulations must be held valid on the broad general principle of constitutional interpretation adopted in the earliest days of this Court. In D’Emden v Pedder (1904) 1 CLR 91, the Court … said: ‘Where any power or control is expressly granted, there is included in the grant, to the full extent of the capacity of the grantor and without special mention, every power and every control the denial of which would render the grant itself ineffective’ (at 110). It is true that the Commonwealth possesses no specific power with respect to slaughter-houses. But it is undeniable that the power with respect to trade and commerce with [page 289] other countries includes a power to make provision for the condition and quality of meat or of any other commodity to be exported. Nor can the power, in my opinion, be held to stop there. By virtue of that power all matters which may affect beneficially or adversely the export trade of Australia in any commodity produced or manufactured in Australia must be the legitimate

concern of the Commonwealth. Such matters include not only grade and quality of goods but packing, get-up, description, labelling, handling, and anything at all that may reasonably be considered likely to affect an export market by developing it or impairing it. It seems clear enough that the objectives for which the power is conferred may be impossible of achievement by means of a mere prescription of standards for export and the institution of a system of inspection at the point of export. It may very reasonably be thought necessary to go further back, and even to enter the factory or the field or the mine. How far back the Commonwealth may constitutionally go is a question which need not now be considered, and which must in any case depend on the particular circumstances attending the production or manufacture of particular commodities. But I would think it safe to say that the power of the Commonwealth extended to the supervision and control of all acts or processes which can be identified as being done or carried out for export. The ‘slaughter for export’ of stock is such an act or process, and, in my opinion, the Commerce (Meat Export) Regulations are within the legislative power conferred upon the Commonwealth by s 51(i). [Dixon CJ and Kitto J agreed with the judgment of Fullagar J. McTiernan, Webb and Taylor JJ held that there was no inconsistency between the state and Commonwealth law. McTiernan J held that the Commonwealth law was valid under s 51(i) of the Constitution. Webb and Taylor JJ did not decide that issue. As the court was evenly divided on the issue of inconsistency, the opinion of the Chief Justice prevailed.]

4.1.13 At one level, the decision in O’Sullivan v Noarlunga Meat Ltd is relatively straightforward. Production or preparation for international (or interstate) trade is so connected with that trade that it may be regulated under the trade and commerce power. This

approach assumes a direct, physical and causal link between the productive process in question and the international or interstate trade. Nonetheless, on closer examination, the reasons of Fullagar J in O’Sullivan v Noarlunga Meat Ltd raise some difficult questions. The Commonwealth regulations were valid because they dealt with production or preparation for export. They dealt with an activity which Fullagar J said was clearly identifiable as part of the chain of activities which made up the export trade in meat. It was identifiable as part of that chain because of some clear objective features of the activity in which the processor or producer was engaged, not because of the subjective intention of the processor or producer. What are the criteria by which the export-directed (or interstate trade-directed) character of production or a process is to be identified? Does meat pose a simple problem to solve? Fullagar J maintained that ‘slaughter for export’ was ‘a composite expression which would be understood objectively in the trade’: 92 CLR at 596. But in other industries, production for export or interstate trade will not be distinctive. For example, the techniques used for mining bauxite will not vary if the bauxite is intended for export rather than domestic sale. In these cases, a range of factors might need to be considered in order to decide whether the production is for those purposes or for intrastate trade: the existence of contracts of sale, committing the product to interstate trade (as in Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283); or the normal trading pattern, showing that as a rule the product entered international trade (implicit, [page 290]

according to Zines, in Swift Australian Co Pty Ltd v Boyd Parkinson (1962) 108 CLR 189 (see 4.1.15): Stellios, 2015, pp 84–5); or some other evidence of the producer’s intention. All of these may be potentially relevant. In United States v Darby 312 US 100 (1941), the United States Supreme Court held that Congress could, under its power to regulate commerce among the several states, control labour conditions in a furniture factory (at 117): … where an employer engaged … in the manufacture and shipment of goods in filling orders of extrastate customers, manufactures this product with the intent or expectation that according to the normal course of his business all or some part of it will be selected for shipment to those customers.

4.1.14 O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 recognises that, in certain circumstances, production and manufacture (activities which the High Court has said are not strictly trade: Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283) may be so integrated with international (or interstate) trade and commerce as to fall within the Commonwealth’s reach under s 51(i). A related issue is whether transactions directed towards intrastate trade and commerce (as opposed to production or manufacture) so affect other transactions in international or interstate trade and commerce that the transactions should be regarded as integrated and open to control under s 51(i). The High Court has not denied the possibility of this integration; rather, it has adopted a very cautious approach. In R v Burgess; Ex parte Henry (1936) 55 CLR 608, the High Court considered the validity of part of the Air Navigation Act

1920 (Cth) which authorised the Governor-General to make regulations for the purpose of controlling air navigation. The Commonwealth said that uniform control of all air navigation (including intrastate air traffic) was necessary if it was to preserve the safety of international and interstate air traffic, and argued that the Act was therefore supported by s 51(i). The court rejected this submission. ‘Considerations of wisdom or expediency’, said Latham CJ, could not ‘control the natural construction of’ s 51(i), which divided responsibility over international and interstate trade and intrastate trade, ‘although these subjects are obviously in many respects very difficult to separate from each other’: 55 CLR at 628. Dixon J said that s 51(i) compelled the distinction (between international and interstate trade and intrastate trade) ‘however artificial it may appear’ and no matter what ‘interdependence may be discovered’: 55 CLR at 672. Evatt and McTiernan JJ denied that ‘the possible “commingling”, in air routes and air ports’, of intrastate and interstate air traffic justified Commonwealth control of all air traffic: 55 CLR at 677. However, each of the justices left the way open for possible Commonwealth control of intrastate air traffic. This would depend, Latham CJ said, upon proving that foreign and interstate trade and intrastate trade were so intermingled that the Commonwealth could not regulate the former without regulating the latter: 55 CLR at 629. Evatt and McTiernan JJ made the same point. Commonwealth control of interstate trade must not ‘be entirely frustrated and nullified’: 55 CLR at 677. Dixon J said that intrastate trade could only be controlled ‘to the extent necessary to make effectual [the] exercise’ of the power over interstate commerce: 55 CLR at 671. 4.1.15

Some members of the court addressed questions of

integration in Swift Australian Co Pty Ltd v Boyd Parkinson (1962) 108 CLR 189. Swift operated a poultry killing and processing plant in Queensland. About 5 per cent of the plant’s output was exported from Australia, [page 291] the balance being sold in Queensland or interstate. Swift’s plant was registered under the Commerce (Meat Export) Regulations (Cth), which laid down detailed standards for the processing of meat for export, but not under the Poultry Industry Acts 1946– 1959 (Qld), which prohibited the slaughter of poultry for human consumption on premises not licensed under the Queensland Acts. Swift was prosecuted for a breach of the Poultry Industry Acts and argued that the Queensland legislation was invalid because it was inconsistent with the Commerce (Meat Export) Regulations. This argument depended on the conclusions, first, that the Commonwealth had intended, in the regulations, to regulate all meat processing in plants where only a part of the processed meat was to be exported and, second, that the trade and commerce power would support such an intention. A majority of the High Court (Dixon CJ, McTiernan, Kitto, Taylor, Windeyer and Menzies JJ) held that the Commonwealth regulations were only intended to regulate the processing of that poultry which was intended for export. They left the control of the other processing to state legislation. Of the majority justices, Dixon CJ, Kitto and Windeyer JJ did not refer to the constitutional issue; McTiernan, Taylor, Menzies and Owen JJ did. The basis of the argument for Commonwealth power was that

the organisation of Swift’s plant made necessary Commonwealth control over all processing at the plant. At the time of slaughter, treatment, packing or storage, no one could predict which birds would be exported and which would be sold on the domestic market. If export standards were to be maintained, the argument went, the whole of the processing had to be conducted according to those standards. McTiernan J rejected this submission on the ground that, quoting Latham CJ in R v Burgess; Ex parte Henry (1936) 55 CLR 608, the constitutional distinction between intrastate and other trade and commerce ‘must be fully recognised’: 108 CLR at 203. On the other hand, Menzies J said (108 CLR at 220) that it was: … within the power of the Commonwealth to prohibit slaughtering for home consumption in premises registered for slaughtering for export … or to regulate, in an establishment where slaughtering for export is carried on in the interests of overseas trade, operations not directly concerned with preparing goods for that trade.

Taylor J made a similar (though more equivocal) concession: 108 CLR at 213. Owen J, who dissented, found a Commonwealth intention and competence to regulate all meat processing on premises where meat was processed for export. He said (108 CLR at 226): I think it is undeniable that the trade and commerce power is wide enough to enable this to be done. To begin with it is difficult to imagine a state of affairs in which slaughter, treatment, storage and packing of meat for export is carried on in an establishment and the whole of the meat products resulting from those operations is ultimately exported. There must inevitably be some meat which, for a diversity of reasons, may be rejected for export yet be entirely suitable for home consumption. Again, as the facts in the present case show, it may be

impossible to predicate at the time of slaughter, treatment, storage or packing whether any particular carcass or any particular part of a carcass will ultimately be exported or whether it will go into home consumption. Finally if the slaughter, treatment, storage or packing of meat for export is carried on in the same establishment as the slaughter of meat for home consumption, it may well be necessary that the whole of the operations carried on in the establishment should be governed by the set of regulations which are directed to the preparation of meat for export lest the condition or quality of meat which finally goes

[page 292] into export be prejudicially affected by the conditions under which the slaughter of meat for the home market takes place.

4.1.16 In Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194, the High Court held that the Commonwealth could, under s 51(i), regulate an activity which combined interstate and intrastate trade. Several retailers of motor vehicle tyres sued five tyre manufacturers for damages under the Australian Industries Preservation Act 1906 (Cth), which prohibited any contract or combination ‘in relation to trade or commerce with other countries or among the States’ in restraint of trade: s 4(1). (This early legislative attempt to proscribe anti-competitive business practices was based on s 51(i), rather than s 51(xx)). The plaintiffs, whose businesses were located in Victoria, alleged that the tyre manufacturers had agreed among themselves not to supply the plaintiffs with tyres at wholesale prices because the plaintiffs were retailing tyres at a discount. The tyre manufacturers’ factories were located in three states; but two manufacturers, Dunlop and Olympic, had one of their factories in Victoria; and

one manufacturer, BF Goodrich, had its only factory in Victoria. They demurred to the plaintiffs’ statement of claim on the ground, inter alia, that the contract or combination alleged by the plaintiffs was in relation to intrastate as well as interstate trade and commerce. (Given the location of the Dunlop, Olympic and Goodrich factories and of the plaintiffs’ retail businesses, the factual basis for the demurrer was undeniable.) It followed, argued the manufacturers, that s 4(1) of the Australian Industries Preservation Act was invalid if it purported to prohibit the manufacturers’ alleged contract or combination. Dixon CJ, McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen JJ rejected that argument. Taylor J said that legislation would not exceed the power in s 51(i) merely because it dealt with activities which combined interstate and intrastate trade. It was not a sound objection to a Commonwealth law that some of the interstate trade activities (here, trading contracts or combinations) ‘may be found to relate also to other matters’: 110 CLR at 213. Menzies J conceded that s 51(i) ‘has never been regarded as having the scope which the Supreme Court of the United States has attributed to the trade and commerce power in the United States Constitution’ because the High Court had sought to uphold the distinction between intrastate and other trade. But (110 CLR at 220–1): … if a contract or combination is ‘in relation to trade or commerce with other countries or among the States’, the sub-section can validly apply to participation in it, notwithstanding that it is in relation to other matters as well. Thus, participation in one combination in restraint of overseas, inter-State and intra-State trade is validly within the scope of the section … It is, of course, clear that Commonwealth power over trade and commerce can only extend to such intra-State trade and commerce as is inseparably connected with inter-State trade and commerce, but full

acceptance of this limitation is quite consistent with according to the Commonwealth power to prohibit or regulate acts which relate to intraState trade and commerce if they relate to inter-State or overseas trade and commerce as well.

4.1.17 Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 involved the recognition that some commercial activities have a composite character and cannot easily be segregated into their intrastate, interstate and international aspects. This integrated character may be a result of the way in which a trader chooses to conduct business. In Redfern, it was alleged that the manufacturers had elected to make a single agreement, with effects on interstate and intrastate trade. If they had made two distinct agreements: (a) not to supply the Victorian retailers from [page 293] their interstate factories; and (b) not to supply those retailers from their Victorian factories; the Commonwealth could have regulated the former agreement under s 51(i) but not the latter. This is essentially the reasoning which lies behind Owen J’s approach in Swift Australian Co Pty Ltd v Boyd Parkinson (1962) 108 CLR 189 at 226 (see 4.1.15). The organisation of Swift’s processing plant inextricably mixed its export and domestic trade processes. To regulate the former, the Commonwealth was justified in regulating the whole. In other situations, the composite or integrated character of a trading activity may come from some inherent feature of that activity rather than from the trader’s chosen method of operations. The following decision illustrates that possibility.

4.1.18C Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 [The Air Navigation Regulations (Cth) were made under the Air Navigation Act 1920 (Cth). They provided for a system of licensing, to be controlled by the Commonwealth Director-General of Civil Aviation, of aircraft used for public transport. Until 10 October 1964 the regulations were limited, by reg 6(1), to: (a) international air navigation within Australia; (b) air navigation in relation to international and interstate trade and commerce; (c) air navigation within the territories; (d) air navigation to or from the territories; and (e) air navigation which affected the safety of air navigation specified in (a), (b) or (d). A new paragraph was added to reg 6(1) to take effect from 10 October 1964. It extended the regulations to all air navigation within Australia. The regulations included the following provisions: reg 198, which prohibited the use of aircraft in regular public transport operations unless licensed by the Director-General of Civil Aviation; reg 199, which provided that the Director-General, when deciding whether to issue a licence for an intrastate service, should consider matters relating to ‘safety, regularity and efficiency of air navigation and … no other matters’; and reg 200B, which provided that a licence issued under reg 198 gave the licensee complete authority to conduct aircraft public transport operations, irrespective of state law. The State Transport (Co-ordination) Act 1931 (NSW) and the Air Transport Act 1964 (NSW) provided that a person should not carry by aircraft between places in New South Wales any passengers or goods unless the person, the aircraft and the route were licensed by the New

South Wales Commissioner for Transport. In issuing a licence, the Commissioner was to take account of the needs of the state and particular areas of the state for air transport services and the encouragement of competition in air transport. Airlines of New South Wales Pty Ltd had held a licence under the State Transport (Co-ordination) Act to carry passengers and goods between Dubbo and Sydney. The New South Wales Commissioner for Transport cancelled that licence and later refused to issue a licence to the company under the Air Transport Act. The company applied to the Commonwealth Director-General of Civil Aviation, who granted it a licence under reg 198 of the Air Navigation Regulations covering the Dubbo-Sydney route. The company then commenced a suit in the High Court against the State of New South Wales, seeking a declaration that the State Transport (Co-ordination) Act and the Air [page 294] Transport Act were invalid because of their inconsistency with the Air Navigation Regulations; a declaration that the company, while it complied with the Air Navigation Regulations, was entitled to carry passengers and goods between Dubbo and Sydney; and an injunction to prevent the state from interfering with the plaintiff’s air transport operations on that route. Taylor J referred two questions to the Full Court: Were the Air Navigation Regulations valid? Were the regulations inconsistent with the state legislation?] Kitto J: Because neither intra-State air navigation nor air navigation generally is per se a subject of federal legislative power, a federal law cannot validly operate to affect any activity of intra-State air navigation unless, in so operating, it possesses the character of a law not only with respect to intra-State air navigation but also with respect to some topic or collection of topics in respect of which the Constitution gives the Parliament

power to make laws. This is not because of any doctrine of reserved powers, but simply because of the limited nature of the positive grants of power made by the Constitution to the federal Parliament. … … the licensing system in its application to wholly intraState air services is limited so as to serve only the purpose of aiding and protecting the safety, regularity and efficiency of air navigation generally. It is at this point that the crucial question arises. In so far as regs 198 and 199 aid and protect the safety, regularity and efficiency of intra-State air navigation, have they the character of a law with respect to any subject or subjects of federal legislative power? I pause to make the point that that and nothing else is the question. In The King v Burgess; Ex parte Henry (1936) 55 CLR 608 both Latham CJ and Dixon J took their stand against the introduction into Australian constitutional law of some of the vague standards which at times have been accepted in relation to the reach of the commerce power under the Constitution of the United States and have resulted in a greatly diminished importance in that country of the distinction between inter-State and intra-State commerce. … Thus it is held, upon consideration of economic effects, that the reach of the commerce power extends to ‘those intra-State activities which in a substantial way interfere with or obstruct the exercise of the granted power’: United States v Wrightwood Dairy Co (1942) 315 US 110 at 119; Wickard v Filburn (1942) 317 US 111 at 120–5. The doctrine rests on the premise that ‘in certain fact situations the federal government may find that regulation of purely local or intra-State commerce is “necessary or proper” to prevent injury to inter-State commerce’: Polish National Alliance v National Labour Relations Board (1944) 322 US 643 at 652. [Kitto J referred to criticisms voiced in the United States to this approach to the United States commerce clause, highlighting the claim

of Professor Bernard Schwartz in American Constitutional Law, Cambridge University Press, 1955, p 170 that the Supreme Court had ‘departed from the concept of dual federalism’: 113 CLR at 114. Kitto J then returned to s 51(i) of the Commonwealth Constitution:] The Australian union is one of dual federalism, and until the Parliament and the people see fit to change it, a true federation it must remain. This Court is entrusted with the preservation of constitutional distinctions, and it both fails in its task and exceeds its authority if it discards them, however out of touch with practical conceptions or with modern conditions they may appear to be in some or all of their applications. To import the doctrine of the American cases into the law of the Australian Constitution would in my opinion be an error. The Constitution supplies its own criteria of legislative power. To ask, as we are bound to do, whether a given federal law having an operation upon intra-State commerce is, in that [page 295] operation, a law ‘with respect to’ commerce with other countries or among the States (or is within some other head of federal power) is of course to ask a question which is not so precise that different answers may not appeal to different minds … It must, of course, be considered in the light of the nature of the particular form of commerce to which the law relates. It is, I think, a question as to whether, when the factual situation in which the law operates is understood, the law by its operation upon the intra-State section of the relevant form of commerce is seen to operate also upon the actual conduct of an activity or collection of activities in respect of which federal power exists, for example, the actual carrying on of activities forming part of the overseas and inter-State sections of that form of commerce. Where the intra-State activities, if the law were not to extend to them, would or might have a prejudicial effect upon matters

merely consequential upon the conduct of an activity within federal power, for example, where the profit or loss likely to result from inter-State commercial air navigation would or might be affected, that mere fact would not suffice, in my judgment, to make the law a law ‘with respect to’ that activity itself. But, by contrast, where the law, by what it does in relation to intra-State activities, protects against danger of physical interference the very activity itself which is within federal power, the conclusion does seem to me to be correct that in that application the law is a law within the grant of federal power. We must therefore answer the question before us in the light of the nature of air navigation as it exists as a phenomenon of life in Australia and its Territories at the present time. In respects which hardly need to be emphasised it is sui generis among methods of transport, and indeed among all forms of trade and commerce. The speed at which modern aircraft move through the skies; their constant liability to sudden and wide deviation in flight by reason of mechanical or human deficiencies, the vagaries of the weather, the behaviour of other aircraft and other causes; the multiplicity of flights required to satisfy the demands of modern life; the multiplicity and inter-relation of the routes to be served; all these matters and more combine to make air navigation in this country a complex of activities of such a kind that what happens at any given time and place in the course of an air operation may substantially, even dramatically, affect other air operations close or distant in time or space. The significance of distances, of geographical relationships, is necessarily different for a problem concerning air navigation than for a problem concerning any other form of transport … With all this in mind, it is impossible to assume in advance that any impairment of the safety, regularity or efficiency of intra-State air navigation will leave unimpaired the safety, regularity and efficiency of the other departments into which air navigation may be divided for constitutional purposes. It follows from these considerations, in my opinion, that a federal law which provides a method of

controlling regular public transport services by air with regard only to the safety, regularity and efficiency of air navigation is a law which operates to protect against real possibilities of physical interference the actual carrying on of air navigation, and therefore is, in every application that it has, a law ‘with respect to’ such air navigation as is within federal power, and none the less so because it is also legislation with respect to that intraState air navigation which is not within the power. In my opinion regs 198 and 199 are for these reasons valid laws of the Commonwealth, even in their application to regular public transport operations conducted wholly within the borders of a single State. [Kitto J referred to reg 200B, whose operation he described as follows:] [page 296] I can see no escape from recognising that the operation which reg 200B purports to have is, not to protect from State interference a ‘right’ acquired under federal law, but to supplement the grant of an exemption from a particular prohibition under federal law by conferring in addition an immunity from any prohibition which State law may impose. The character of the regulation in its application to intra-State operations is therefore not that of a law with respect to a matter within federal power, but is that of a law with respect to the application of State laws — a matter not within federal legislative competence. By no line of reasoning that I have found it possible to accept can reg 200B be supported as valid federal legislation. [Kitto J then considered whether the state legislation was inconsistent with the Commonwealth regulations:] The topic and the only topic to which regs 198 and 199 direct their attention, so far as they apply to intra-State

operations, is the safety, regularity and efficiency of air navigation. Regulation 199(4) makes that clear. The State Act, on the other hand, does not concern itself with that topic in any way. The fact that each piece of legislation sets up a licensing system operating independently of the licensing system established by the other may from time to time lead to a situation in which A, though holding a licence under the State Act for a proposed service, may be unable to obtain a licence for that service under reg 199, while B, though holding a licence for the service under reg 199, may be unable to obtain a licence for it under the State Act. But any ground for suggesting inconsistency disappears if the situation is more fully described, as by saying that consideration of matters concerning the safety, regularity and efficiency of air navigation has led the federal Director-General of Civil Aviation to conclude that A, though not B, should be debarred from conducting the service, while consideration of matters concerning public needs in relation to air transport services or concerning other topics mentioned in s 6(3) of the State Act has led the State Commissioner for Motor Transport to conclude that B, though not A, should be debarred from conducting the service. The federal Regulations and the State Act each employ a licensing system to serve a particular end; but the ends are different, and that means that the two sets of provisions are directed to different subjects of legislative attention. In my opinion there is no mutual inconsistency in any relevant sense. [Barwick CJ, Menzies, Windeyer and Owen JJ agreed that regs 198 and 199 were supported by the trade and commerce power. McTiernan J dissented on that point, but held that regs 198 and 199 were supported by the external affairs power (as did Barwick CJ, Menzies and Owen JJ). Taylor J held that the two regulations were supported by neither the trade and commerce power nor the external affairs power. All the members of the court agreed that reg 200B was invalid in its application to intrastate trade. All the members of the court, other than

Barwick CJ, held that the state legislation was not inconsistent with the Air Navigation Regulations. On reg 200B, Barwick CJ and Windeyer J made the following observations:] Barwick CJ: It is one thing to say that the safety of interState and international commercial air transport cannot be secured without including intra-State commercial air activities within the operation of the safety measures: it is quite another to say that the stimulation or authorisation of intra-State commercial air services is in any sense a safety measure. The non-existence of a commercial air transport service does not endanger the air operations of those who do operate commercial air transport services. Nor does the fact that inter-State air navigation profits by or to a significant extent depends upon the existence of [page 297] intra-State air navigation warrant the conclusion that in fostering inter-State and foreign trade, the Commonwealth may stimulate and encourage intra-State trade. Consequently, reg 200B in its operation upon intra-State air navigation derives no support from ss 51(i) or 51(xxix). In my opinion in its purported operation in respect of intra-State commercial air transport it is invalid. Windeyer J: But saying that regs 198 and 199 are valid to the extent that they prohibit the carrying on of regular transport operations without a Commonwealth airline licence and prescribe the conditions on which a licence may be had is one thing. It is another thing to say that Commonwealth law may make the grant of such a licence equivalent to the grant of a franchise or privilege to carry on such operations within a State with an immunity from the requirements of the State law and notwithstanding any prohibitions of the State law. That is what reg 200B purports to do — to give what counsel called a ‘positive

authority’, meaning a right in the licensee to conduct a regular air transport service within a State notwithstanding any State law to the contrary. But, as applied to a purely intra-State activity, this is obviously not a law with respect to inter-State or overseas commerce. The safety of air navigation, commerce by air, with other countries and among the States could not be imperilled by the absence of any regular air transport service between Sydney and Dubbo. Regulation 200B is thus beyond Commonwealth power and invalid so far as it relates to activities wholly within a State.

4.1.19 It is clear that in Airlines of New South Wales Pty Ltd v New South Wales (No 2) the court was prepared to accept the physical integration of interstate, international and intrastate trade and commerce. It was the danger to the physical safety of interstate and international aircraft posed by intrastate aircraft using the same air space which justified the Commonwealth in regulating those intrastate aircraft on the grounds specified in reg 199. Given the complexity and speed of commercial air traffic, the operations of some of that traffic could only be controlled, regulated and protected by controlling all of the air traffic. 4.1.20 There are several points in Airlines of New South Wales Pty Ltd v New South Wales (No 2) at which the court emphasised the physical nature of this integration. Take, for example, the observations of Kitto J on the relevance of an economic, as opposed to a physical, interference with interstate commerce. That interference ‘would not suffice’ to entitle the Commonwealth to regulate the activity which posed an economic threat, because such a threat or interference would be ‘upon matters merely consequential upon’ the interstate commerce: 113 CLR at 115.

Another example is the unequivocal rejection by the court of the argument that reg 200B was a valid law with respect to international and interstate commerce. It could not be such a law because it did nothing to advance the physical safety of that commerce. The Commonwealth had argued that, under s 51(i) of the Constitution, it could legislate to promote the economic wellbeing of international and interstate trade and commerce; that is, the Commonwealth said it could sponsor or promote intrastate air services, ensuring that adequate feeder services were developed, maintained and integrated with national and international services. But the court rejected this argument. The most that the Commonwealth could do was to exercise a veto over intrastate air services in the interests of safety, regularity and efficiency; it could not insist there be any intrastate service. The economic effect of intrastate air services in feeding passengers to, and stimulating business for, interstate and international air services was not relevant. For example, Barwick CJ dismissed as irrelevant ‘the fact that inter-State air [page 298] navigation profits by or to a significant extent depends upon the existence of intra-State air navigation’: 113 CLR at 88. The High Court was to return to this issue (the capacity of the Commonwealth to protect the economic health of interstate trade) in Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 4.1.23C. 4.1.21

In practical terms, the decision in Airlines of New South

Wales Pty Ltd v New South Wales (No 2) resulted in a stalemate. The Commonwealth regulations, prohibiting intrastate air services without a Commonwealth licence (issued on the basis of ‘safety, regularity and efficiency’), were valid. So, too, was the state legislation prohibiting intrastate air services without a state licence (issued on the basis of encouraging competition and filling state and local needs for air transport). Accordingly, no person could operate an air service from one part of New South Wales to another without two licences. Only Barwick CJ, who managed to invalidate reg 200B and still find inconsistency between the regulations and the state law, and Taylor J, who found all of the regulations invalid, avoided this inconvenient result. Some of the majority judges recognised the awkward results of their decision. Menzies J said (113 CLR at 144): It was urged that a decision of this Court leaving intra-State air transport services to the veto of both Commonwealth and State would create a situation of stalemate or deadlock. This argument is irrelevant. A constitutional division of legislative power which is not exclusive may sometimes mean that those who are subject to both Commonwealth and State control have two sets of restrictions to surmount before they can do that which they want to do. This possibility was recognised by the Privy Council in O’Sullivan v Noarlunga Meat Ltd [1957] AC 1 at 29, 30. The answer to stalemate or deadlock in such circumstances is cooperation.

Windeyer J said (113 CLR at 156–7): Unless the Commonwealth and the State can agree upon a person whom each will permit to carry on an air transport service between Sydney and Dubbo there can be no direct air service between those places. This is an inconvenience for members of the public who wish to travel by air. But the deadlock, as it has been called, does not demonstrate that the law of the State is inconsistent in the constitutional

sense with the law of the Commonwealth. It demonstrates only differing policies of the Commonwealth and State governments.

4.1.22 The outcome in Airlines of New South Wales Pty Ltd v New South Wales (No 2), in terms of the extent of the Commonwealth’s ability to reach intrastate air navigation in the incidental area of s 51(i), should be compared with the outcome in the following case. 4.1.23C Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 [The Australian National Airlines Act 1945 (Cth) created the Australian National Airlines Commission. Under s 19(1)(a) of the Act (read with s 19(2)), the commission was authorised to engage in commercial air transportation of passengers and goods on interstate, territorial and international routes. In 1973, the Act was amended by adding the following section: [page 299] 19B(1) The Commission may, to the extent provided by subsection (2), transport passengers or goods for reward by air or by land, or partly by air and partly by land, between places in the one State. (2) The powers of the Commission under sub-section (1) may be exercised for the purposes of the efficient, competitive and profitable conduct of the business of the Commission in respect of its function under paragraph (a) of sub-section (1) of section 19 or otherwise as incidental to the carrying on of that business.

The commission operated an airline under the name of TransAustralia Airlines (TAA). It proposed, in the words of Mason J (138 CLR at 518): … to commence a regular airline service between Perth and Darwin with an intermediate stop at Port Hedland [Western Australia] at which passengers and cargo from Perth and Darwin will be discharged and passengers and cargo bound for Perth and Darwin will be loaded. … Its proposal to commence such a service with an intermediate stopping place at Port Hedland is dictated by economic reasons for it seems that a direct service between Perth and Darwin would be uneconomic, whereas a service with an intermediate stopping place at Port Hedland may well prove profitable by reason of the traffic available at Port Hedland for Perth and Darwin respectively.] Stephen J: Does, then, s 51(i), by its grant of legislative power over interstate trade and commerce, incidentally include a grant of power to legislate for intrastate trade and commerce when its only relationship to interstate trade and commerce lies in the fact that the purpose of engagement in such intrastate activity is to conduce to the efficiency, competitiveness and profitability of the interstate activity? … It is notable that in considering the extent of the incidental power in the case of s 51(i) particular emphasis has always been placed upon the distinction drawn by the Constitution between those aspects of trade and commerce assigned to Commonwealth legislative competence and that which is left to the States. … The effect of this constitutional division of power over trade and commerce between the Commonwealth and the States has led to a quite narrowly confined ambit being given to the incidental power in the case of s 51(i), at least where what is in question is possible intrusion into the field of intrastate trade and commerce. …

… the permitted exercise of the power conferred by s 19B, and which is described in sub-s (2) as ‘incidental’, extends beyond the ambit of that incidental power which s 51(i) carries with it. It follows that the validity of s 19B cannot gain any support by reliance upon s 51(i) … [Stephen J went on to consider whether s 19B could be read down, through the application of s 15A of the Acts Interpretation Act 1901 (Cth). He concluded that s 19B could be confined to intrastate air transport which promoted the efficiency, competitiveness and profitability of territorial air services; and that, if read in that narrower way, s 19B would be valid because it would be a law ‘for the government of any territory’ within the power conferred by s 122 of the Constitution: 138 CLR at 511. After pointing out that the power granted by s 122 was ‘as large and universal a power of legislation as can be granted’ (138 CLR at 512), Stephen J conceded that a law enacted under s 122 might have to observe some constitutional constraints:] [page 300] [T]he only such constitutional requirement which it has been suggested that s 19B infringes is its failure to observe the division of trade and commerce into two parts and to restrict itself to that part, interstate, territorial and overseas trade and commerce, which the Constitution alone allocates to federal competence. When the power under s 122, as distinct from that under s 51(i), is in question I would regard it as impermissible to seek to qualify it by reference to this constitutional division of the power over trade and commerce; the power conferred by s 122 is not, I think, to be limited by reference to an implication drawn from the terms of s 51(i) or s 92. … In considering the permissible scope of laws enacted under s 122 there is, I think, no reason for the exclusion of laws whose

connexion with ‘the government of a territory’ is confined to the production of desirable qualities in functions of government; thus a law which has as its object the reduction in cost of or the improvement in the efficiency of some governmental activity related to a Territory is, I think, a law with respect to the government of that Territory. In this respect the position is in marked contrast to that governing the scope of incidental powers to be implied in s 51(i) and which I have already noticed. …

4.1.24 Murphy J held that s 19B was supported by both the trade and commerce power (s 51(i)) and the territories power (s 122). He criticised the narrow reading of s 51(i) as ‘the persistence of the doctrine that the national legislative powers are to be limited so that the reserved power of the States is not invaded’: 138 CLR at 529. That narrow reading, he said, ‘keeps the pre-Engineers ghosts walking’: 138 CLR at 530. Barwick CJ and Gibbs J agreed with Stephen J that s 19B could not be supported by s 51(i), whose distinction between intrastate and interstate trade ‘must be maintained however much interdependence may now exist between those two divisions of trade and however artificial the distinction may be thought to be’: 138 CLR at 502 per Gibbs J. Each of them emphasised that economic or commercial considerations could not be used to justify the Commonwealth regulating intrastate trading activities: 138 CLR at 499 per Barwick CJ; 503 per Gibbs J. However, both Barwick CJ and Gibbs J disagreed with Stephen J on the capacity of the territories power (s 122) to support s 19B. They saw economic considerations as equally irrelevant to the scope of s 122 as they were to the scope of s 51(i): 138 CLR 500–1 per Barwick CJ; 504–5 per Gibbs J. Mason J found it unnecessary to decide whether s 51(i)

supported s 19B because, like Stephen J, he held that the territories power (s 122) would support s 19B if that section of the Act were read down so as to authorise those intrastate air transport activities which promoted the efficient, competitive and profitable conduct of territorial air services: 138 CLR at 523–5. 4.1.25 The broad significance of Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 can be grasped if we reflect on the immediate practical implications of the decision. Trans-Australia Airlines, the Commonwealth owned airline, was permitted to use economic considerations to integrate intrastate air transport with its territory activities, but could not use those considerations to integrate intrastate air transport with its interstate activities. These immediate practical implications reveal a curious distinction in the High Court’s approach to the powers of the Commonwealth: one of those powers (s 122) will be read sufficiently broadly to allow the Commonwealth to regulate activities which have some economic connection with matters central to the power; but another power (s 51(i)) will not be [page 301] read in that way; more than economic connections must be shown before the Commonwealth will be permitted to regulate matters under the rubric of what is incidental to the power. To say that the case establishes this distinction is, of course, misleading. The decision reflects that distinction but only one of the five judgments (Stephen J) is built upon it. Barwick CJ and

Gibbs J appear to regard economic and commercial considerations as constitutionally irrelevant in this setting; they can never be used to expand the range of activities subject to Commonwealth legislative power. Murphy J also denied the distinction, but for him economic factors were relevant to the scope of all Commonwealth powers. Mason J was equivocal. While he expressly refrained from dealing with s 51(i), his discussion of the relevance of economic factors for the territories power was in such strong terms that its application to the trade and commerce power would be relatively straightforward. (See, for example, his reference to ‘the economic and technical factors which influence the establishment and organisation of commercial airline operations’: 138 CLR at 524). While this disagreement is partly over the relevance of economic factors to constitutional decision-making, the disagreement is also over the appropriate ‘federal balance’ for Australia. There is a strong current, running through most of the judgments, of concern for the powers of the states. The Commonwealth’s power over international and interstate trade and commerce must not be permitted to reach across the sharp dividing line into intrastate trade and commerce because the crossing of that line would reduce the powers of the states. But does this, as Murphy J claimed in Attorney-General (WA) v Australian National Airlines Commission, keep ‘the pre-Engineers ghosts walking’ (138 CLR at 530)? And is this approach to s 51(i) sustainable in light of the contemporary interpretation of the corporations power in s 51(xx) (see New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C)? 4.1.26 One factor which seems to have discouraged the court (or most members of the court) from allowing economic considerations to influence their approach to s 51(i) has been their understanding

of the United States Supreme Court’s approach to the commerce clause of the United States Constitution. In Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54 4.1.18C, Kitto J referred to the American cases and to criticisms of those cases and said that the adoption of the American approach ‘would … be an error’: 113 CLR at 115. The United States Constitution, art 1, §8, cl 3, gives to Congress the power ‘[t]o regulate Commerce with foreign Nations, and among the several States and with the Indian Tribes’. The United States Supreme Court, in a long series of decisions from 1895 to 1936, took a narrow view of Congress’s power under this clause. The turning point was National Labor Relations Board v Jones & Laughlin Steel Corporation 301 US 1 (1937). There the court upheld provisions of the National Labor Relations Act 1935 (US), which penalised unfair labour practices where those practices injured interstate commerce. While manufacture was not itself part of commerce, Congress’s power could be extended to control it (at 37): Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens or obstructions, Congress cannot be denied the power to exercise that control.

From 1937, the court proceeded to concede to Congress extremely broad powers under the commerce clause. Its breadth is illustrated by the decision in Wickard v Filburn 317 US 111 (1942), where the court was asked to decide whether Congress could limit a farmer’s production

[page 302] of wheat intended, not for interstate commerce, but for consumption on the farm. Evidence before the court established that the consumption of home-grown wheat had an effect on the market price of wheat in interstate trade (for example, by reducing local demand for interstate wheat, or reducing local competition for interstate wheat). The court held that the commerce clause authorised congressional control of the farmer’s domestic wheat production. It conceded that there had been (until then) no decision of the court that production or manufacture could be regulated where none of the production was ‘intended for interstate commerce or intermingled with the subjects thereof’. But it was important to consider the actual effects of the activity in question on interstate trade when deciding the extent of Congress’ power: at 120. 4.1.27 In Heart of Atlanta Motel v United States 379 US 241 (1964), the Supreme Court said that the commerce clause was wide enough to enable federal regulation of the rules applied by motels in the states, ostensibly an intrastate transaction, on the basis that such motels had ‘a direct and substantial relation to the interstate flow of goods and people’: 379 US at 250. In Garcia v San Antonio Metropolitan Transit Authority 469 US 528 (1985), the court split 5:4 on the question whether the commerce clause could authorise federal regulation of minimum-wage and overtime requirements in the San Antonio (Texas) metropolitan area. But the Rehnquist Court wound back the broad approach to the commerce clause in United States v Lopez 514 US 549 (1995). A high school student was charged under the federal Gun-Free

School Zones Act of 1990, which forbade any person from knowingly possessing a firearm in a school zone. He challenged the constitutional validity of the federal Act on the ground that it exceeded the commerce clause and the court agreed by 5:4 majority. The possession of a gun in an intrastate school zone had an insubstantial connection with interstate commerce to justify its regulation under the clause. In United States v Morrison 529 US 598 (2000), the court held that the civil liability provision of the federal Violence Against Women Act of 1994 (US) was not supported by the commerce clause on the grounds that it did not regulate activity that substantially affected interstate commerce and the crimes involved were not economic activity. In Gonzales v Raich 545 US 1 (2005) it was held that the commerce clause supported the application of the federal Controlled Substances Act of 1970 (US) to the intrastate growing and use of marijuana for medicinal ends. The prohibition of such intrastate activity was rationally related to the regulation of interstate commerce in the drug. The commercial activities regulated by the federal Act were ‘quintessentially economic’: at 25. In National Federation of Independent Business v Sebelius 132 S Ct 2566 (2012), the ‘individual mandate’ provision of the Patient Protection and Affordable Care Act of 2010 (US) required individuals to maintain a minimum level of health insurance coverage, and imposed a financial penalty upon those who did not comply. The majority held that the commerce clause did not support this provision. Roberts CJ held that the provision did ‘not regulate existing commercial activity’ but ‘compels individuals to become active in commerce by purchasing a product’: at 2587. Scalia, Kennedy, Thomas and Alito JJ held that ‘one does not regulate commerce that does not exist by compelling its existence’:

at 2644. A differently constituted majority upheld the individual mandate as an exercise of the taxing power of Congress. Care must be taken when comparing United States cases under the commerce clause with Australian cases under the trade and commerce power. First, the United States Constitution contains the Tenth Amendment, which expressly reserves powers to the states. The absence of a similar provision in the Australian Constitution was a significant (though [page 303] largely uncelebrated) factor in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129 3.2.22C. Second, the ebb and flow of commerce clause jurisprudence in the United States has much to do with changes in the composition of the bench. For example, Rehnquist CJ dissented vigorously in Garcia (1985) but was able to lead the majority in Lopez (1995). Finally, the United States Supreme Court has demonstrated a willingness to accept economic argument that gives their jurisprudence a distinct flavour. These factors combine to make the insights drawn from comparisons interesting and instructive, but not necessarily directly applicable. 4.1.28 There are, of course, ways in which the Commonwealth can use its relatively narrow power under s 51(i) as a lever so as to exercise control, however indirect, over other associated activities. The following case illustrates this ‘leverage’ approach. 4.1.29C

Murphyores Incorporated Pty Ltd v

Commonwealth (1976) 136 CLR 1 [Murphyores Inc and Dillingham Constructions had mining leases on Fraser Island in Queensland. The companies were engaged in extracting zircon and rutile concentrates from their mining leases and they intended to export these concentrates. The Customs (Prohibited Exports) Regulations (Cth) prohibited the export of zircon and rutile concentrates from Australia, except with the written approval of the Minister for Minerals and Energy: reg 9. Murphyores and Dillingham requested the approval of the minister for the export of the concentrates concerned. The Environment Protection (Impact of Proposals) Act 1974 (Cth) provided for the appointment of commissions of inquiry to investigate the environmental aspects of any Commonwealth Government proposals, works, projects, agreements, recommendations and decisions. The minister administering that Act appointed commissioners to inquire into ‘all of the environmental aspects of the making of decisions by or on behalf of the Australian Government in relation to the exportation from Australia of minerals (including minerals that have been subjected to processing or treatment) extracted or which may hereafter be extracted from Fraser Island in the State of Queensland’: see, for example, 136 CLR at 16. Murphyores and Dillingham sought injunctions to restrain the commissioners from holding the inquiry and from presenting their report. They also sought a declaration that the Minister for Minerals and Energy could not, when exercising the discretion to grant or withhold export approval under reg 9, consider any report on the environmental aspects of the mining concerned.] Mason J: The power to legislate with respect to trade and commerce with other countries, including as it does power to prohibit and regulate the exportation of goods from Australia, necessarily comprehends the power to select and identify the persons who engage in, and the goods which may become the subject of, that activity … It is then for Parliament in its wisdom

or for the person to whom Parliament delegates the power to decide who may export and what goods may be exported. The means and the criteria by which this choice is to be made are for Parliament to decide. There is nothing in the subject matter of the constitutional power which justifies the implication of any limitation on Parliament’s power of selection. It does not follow, for example, that because the subject of the power is trade and commerce, selection of the exporter or of the goods to be exported must be made by reference to considerations of trading policy. [page 304] It is enough that the law operates on the topic of trade and commerce with other countries. A law which absolutely or conditionally prohibits exportation of goods is a law that operates on that topic. It is not a law which ceases to deal with that topic because it confers a discretion, unlimited in scope, to permit exportation of particular goods. In this respect it differs from a law whose connexion with the subject matter of power is more remote, when the limits of a statutory discretion may become important in characterising the law … The point here is that by imposing a conditional prohibition on exportation, a prohibition which may be relaxed according to the exercise of a discretion, the law is dealing with exportation of goods, a matter at the heart of trade and commerce with other countries. It is not to the point that the selection may be made by reference to criteria having little or no apparent relevance to trade and commerce; it is enough that the law deals with the permitted topic and it does not cease to deal with that topic because factors extraneous to the topic may be taken into account in the relaxation of the prohibition imposed by the law. It is now far too late in the day to say that a law should be characterised by

reference to the motives which inspire it or the consequences which flow from it. … It is one thing to say that the trade and commerce power does not enable the Commonwealth to regulate and control directly matters standing outside the subject matter of power, such as the environmental aspects of mining in Queensland. It is quite another thing to say that the Commonwealth cannot in the exercise of that power make laws which have a consequential and indirect effect on matters standing outside the power, even by means of prohibiting conditionally engagement in trade and commerce with other countries. It is no objection to the validity of a law otherwise within power that it touches or affects a topic on which the Commonwealth has no power to legislate. … R v Barger (1908) 6 CLR 41, which might have been thought to assist the plaintiffs, can no longer be regarded as having authority. It depended on the now discredited doctrine of reserved powers. The minority who rejected this doctrine had no difficulty in holding the legislation to be valid. The decision of this court in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1, it should now be acknowledged, swept away the last vestigial remnants of Barger’s case. So much for the constitutional argument. On principle and authority there is no reason deriving from the limits of constitutional power with respect to trade and commerce which requires that the discretion to issue a written approval should be confined, as the plaintiffs would suggest. [McTiernan, Stephen and Murphy JJ delivered separate judgments to the same effect. Barwick CJ agreed with Stephen J. Gibbs and Jacobs JJ agreed with both Stephen and Mason JJ.]

4.1.30

Murphyores Incorporated Pty Ltd v Commonwealth

confirms that so long as a law of the Commonwealth operates directly upon some activity which is central to the power granted to the Commonwealth, neither the indirect effect of the law nor the motives or purpose of the Commonwealth in making that law can detract from the law’s validity. Here, the direct operation of the law was to prohibit the export of a commodity from Australia; that is, to prohibit an activity (exportation) central to trade and commerce with other countries. The court treated as irrelevant any prospect that the prohibition of the export would result in the abandonment of sand-mining on Fraser Island: that was an indirect effect [page 305] of the law, which imposed no legal obligation to abandon sandmining. Equally irrelevant were claims that the Commonwealth wished to achieve that result and the fact that the export prohibition might be waived if the Commonwealth were satisfied that the sand-mining would not damage the environment on Fraser Island. The prohibition on export remained a law with respect to trade and commerce with other countries regardless of its effect on sand-mining or environmental protection. This principle of characterisation, which operates to extend the Commonwealth’s sphere of influence, has been applied by the High Court to certain other heads of Commonwealth legislative power, most notably the taxation power in s 51(ii): see Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 5.1.43C. 4.1.31

It is probable that the Commonwealth law in Murphyores

Incorporated Pty Ltd v Commonwealth (1976) 136 CLR 1 would have exceeded the powers of the Commonwealth under s 51(i) if it had directly prohibited sand-mining on Fraser Island, or if it had attempted to impose standards of environmental protection on the sand-mining there. Indeed, this proposition was seemingly made explicit by Mason J (136 CLR at 22): It is one thing to say that the trade and commerce power does not enable the Commonwealth to regulate and control directly matters standing outside the subject matter of power, such as the environmental aspects of mining in Queensland. It is quite another thing to say that the Commonwealth cannot in the exercise of that power make laws which have a consequential and indirect effect on matters standing outside the power ….

How is that proposition to be reconciled with the decision in O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565 4.1.12C, where the court held that reg 5 of the Commerce (Meat Export) Regulations (Cth) was valid? That regulation prohibited the use of any premises for the slaughter of meat for export unless registered; other regulations made registration contingent on adherence to detailed standards. Why is direct control of meat processing for export within the trade and commerce power, and direct control of mining for export apparently outside that power? The resolution of this contradiction could lie in a more precise framing of the opposing propositions. In O’Sullivan’s case, the court held that the Commonwealth could control directly those aspects of export production which might ‘affect beneficially or adversely the export trade of Australia in any commodity’, quality, labelling and packaging, for example: 92 CLR at 598. In the Murphyores case, the court assumed that the Commonwealth could not control directly those aspects of export production which could

not affect the export trade (at least in the same way as on the facts of O’Sullivan), in particular, the local environmental impact of that production.

CORPORATIONS POWER 4.2.1E

Commonwealth Constitution

51 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: … (xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth; …

[page 306] 4.2.2 Section 51(xx) is the major source of the Commonwealth’s power to directly regulate economic activity. There are two fundamental questions: Over what types of corporation does the Commonwealth Parliament have control? What aspects of these corporations’ affairs are subject to Commonwealth control? One thing is clear. In its use of the corporations power, the Commonwealth Parliament is not frustrated by the distinctions which have afflicted the trade and commerce power. 4.2.3

But it was not always thus. In Huddart, Parker & Co Pty

Ltd v Moorehead (1909) 8 CLR 330, the High Court adopted, under the influence of the reserved powers doctrine, a restrictive interpretation of s 51(xx). The court was asked to rule on the validity of ss 5 and 8 of the Australian Industries Preservation Act 1906 (Cth). These sections prohibited combinations in restraint of trade and trade monopolies in relation to all trade and commerce within Australia by foreign corporations and trading and financial corporations formed within the Commonwealth. The court held by a majority (Griffith CJ, Barton, O’Connor and Higgins JJ, with Isaacs J dissenting) that the sections were invalid. Griffith CJ said that the words of s 51(xx) might, on their own, be capable of a wide construction. But the context of the Constitution, and in particular the reservation to the states of the power to enact domestic trade and commerce law and domestic criminal law, was critical. He held that s 51(xx) allowed the Commonwealth to legislate so as to control the legal capacity of corporations, but not so as to control those corporate activities which were within a corporation’s capacity (8 CLR at 354): [Section 51(xx)] ought not to be construed as authorising the Commonwealth to invade the field of State law as to domestic trade, the carrying on of which is within the capacity of trading and financial corporations formed under the laws of the State. In other words, I think that pl xx empowers the Commonwealth to prohibit a trading or financial corporation formed within the Commonwealth from entering into any field of operation, but does not empower the Commonwealth to control the operations of a corporation which lawfully enters upon a field of operation, the control of which is exclusively reserved to the States.

Barton J agreed. O’Connor J held that s 51(xx) was limited to supporting laws which provided for ‘the recognition as … legal entities’ of interstate or foreign corporations throughout the

Commonwealth: 8 CLR at 374. Higgins J gave s 51(xx) a broader meaning. The Commonwealth Parliament could regulate the status and capacity of corporations and ‘the conditions under which they shall be permitted to carry on business’ (8 CLR at 412), but it could not regulate the contracts into which corporations might enter: 8 CLR at 413. Isaacs J, in a strong dissent, said that s 51(xx) empowered the Commonwealth Parliament to regulate ‘the conduct of the corporations in their transactions with or as affecting the public’: 8 CLR at 395. He did offer some reservations. The power did not extend to regulating the formation or the internal affairs of companies, nor to providing for their liquidation. The Commonwealth could not prescribe the wages to be paid by corporations to their workers, nor the qualifications of directors: 8 CLR at 393–6. Despite those reservations, the power conceded by Isaacs J would have given the Commonwealth very substantial capacity to regulate economic activity throughout Australia, for a large part of that activity is conducted through corporations of the types listed in s 51(xx). 4.2.4 No doubt the commercial activities of individuals — of non-corporate business — can normally only be regulated under s 51(i) or specific powers such as s 51(xiii) (banking) or s 51(xiv) (insurance), but the non-corporate sector’s contribution to economic activity in Australia is [page 307] not nearly as great as that of corporations. The mining, production and manufacture of such basic commodities as iron, steel, bauxite,

aluminium, copper, coal, oil, uranium, natural gas and rubber is dominated by corporations. Corporations likewise dominate major communications media, the manufacture of consumer durables and the distribution and supply to the public of a wide range of commodities and services; in every sphere of industrial and commercial activity, corporations are the major, if not the only, participants. In some cases, corporations represent hundreds of thousands of shareholders. In other cases, they represent small companies or family businesses. If we concede to the Commonwealth, as Isaacs J did, the power to regulate the ‘external’ functions of corporations, their relations with persons (including other corporations) outside those corporations, we are conceding a substantial power to regulate commercial activity. Isaacs J’s view in Huddart, Parker was, of course, a minority one. However, the High Court’s emphatic rejection of the reserved powers doctrine in the Engineers’ case (1920) 28 CLR 129 3.2.22C clearly opened the way for a reversal of Huddart, Parker. However, it was not until 1971 that the court was invited to reconsider that case. 4.2.5C

Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468

[Section 35 of the Trade Practices Act 1965 (Cth) declared that certain agreements were ‘examinable’: agreements made between business competitors where one of the parties to the agreement was ‘a foreign corporation, or a trading or financial corporation formed within the limits of the Commonwealth’: s 7(2). Other subsections of s 7 extended the operation of s 35 to agreements connected with interstate trade, Commonwealth instrumentalities and territories. Section 7(4) provided that these subsections should not limit the operation of the Act. Section

42 obliged the parties to examinable agreements to furnish particulars of the agreements to the Commissioner of Trade Practices. Failure to provide this information constituted an offence: s 43. The defendant trading corporation was a party to an agreement which related exclusively to trade within Queensland. The agreement was allegedly designed to reduce competition between the manufacturers of concrete pipes and therefore examinable under the Trade Practices Act. The defendant company was charged under s 43 with having failed to provide particulars of an examinable agreement. The Commonwealth Industrial Court dismissed the charge on the basis that Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 rendered invalid that part of the Trade Practices Act dealing with the intrastate activities of corporations. The informant appealed to the High Court.] Barwick CJ: [Huddart, Parker] was decided … when the current doctrine of this court was that the construction of the words of the Constitution by which legislative power is granted to the Parliament should be approached on the footing that there were certain legislative areas reserved by the Constitution to the States and that the Constitution should not be read as authorising the Parliament to invade those areas unless as a necessary incident to the exercise of some granted power. This was the socalled reserved powers doctrine which was exploded and unambiguously rejected by this court in the year 1920 in the decision of the Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (‘the Engineers’ case’) (1920) 28 CLR 129 … [page 308] It is plain enough from a reading of the reasons given by the majority in Huddart, Parker … that the influence of the then current reserved powers doctrine was so strong that the court was driven to emasculate the legislative power given by s 51(xx) and

to confine it in substance to the statutory recognition of corporations falling within the terms of the paragraph and the fixing of the conditions upon which they might enter trade in Australia: for the rest, their trading activities in intrastate trade was a matter for the State legislation exclusively … … Section 107 of the Constitution so far from reserving anything to the States leaves them the then residue of power after full effect is given to the powers granted to the Commonwealth: and then subject to s 109. Section 51(i) contains no explicit or implicit prohibition and does not reserve the subject of intrastate trade to the States. It can thus be seen that the earlier doctrine virtually reversed the Constitution. The question in relation to the validity of a Commonwealth Act is whether it fairly falls within the scope of the subject matter granted to the Commonwealth by the Constitution. That subject matter will be determined by construing the words of the Constitution by which legislative power is given to the Commonwealth irrespective of what effect the construction may have upon the residue of power which the States may enjoy. I therefore conclude that the reasoning of this court in Huddart, Parker & Co Pty Ltd v Moorehead was in error and that it ought not be accepted now by this court. The question then remains whether the court’s decision that s 5(1) and s 8(1) were invalid ought to be overruled … They were clearly laws regulating and controlling amongst other things the trading activities of foreign corporations and trading and financial corporations formed within the limits of the Commonwealth. In my opinion such laws were laws with respect to such corporations. They dealt with the very heart of the purpose for which the corporation was formed, for whether a trading or financial corporation, by assumption, its purpose is to trade, trade for constitutional purposes not being limited to dealings in goods … If the corporation is exercising its powers it will be carrying out trade operations and in that pursuit making agreements with others in matters of trade. Agreements to restrict trade or endeavouring to monopolise it are activities in

trade with which the law has been familiar for centuries. Sections 5(1) and 8(1) in controlling such activities are, in my opinion, clearly laws with respect to the topic of s 51(xx). I would conclude therefore that s 5(1) and s 8(1) were valid and that the court’s decision to the contrary in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 should be overruled. However, … it does not follow … from the validity of those sections, that any law which in the range of its command or prohibition includes foreign corporations or trading or financial corporations formed within the limits of the Commonwealth is necessarily a law with respect to the subject matter of s 51(xx). Nor does it follow that any law which is addressed specifically to such corporations or some of them is such a law. Sections 5(1) and 8(1), in my opinion, were valid because they were regulating and controlling the trading activities of trading corporations and thus within the scope of s 51(xx). But the decision as to the validity of particular laws yet to be enacted must remain for the court when called upon to pass upon them. No doubt, laws which may be validly made under s 51(xx) will cover a wide range of activities of foreign corporations and trading and financial corporations: perhaps in the case of foreign corporations even a wider range than that in the case of other corporations: but in any case, not necessarily limited to trading activities. I must not be taken as suggesting that the question whether a particular law is a law within the scope of this power should be approached in any narrow or pedantic manner. We were invited in the argument of these appeals to set as it were the outer limits of the reach of the power under this paragraph of s 51. This for my part I am not prepared to do: [page 309] and indeed I do not regard the court as justified in doing so. The method of constitutional interpretation is the same as that with

which we have been long familiar in the common law. The law develops case by case, the court in each case deciding so much as is necessary to dispose of the case before it.

4.2.6 Barwick CJ went on to conclude that s 7(4) purported to extend the operation of Pts V and VI of the Act beyond those areas which were within the Commonwealth’s legislative power, and that s 7(4) could not be read down or severed from those Parts. Therefore, Pts V and VI, under which these proceedings had been brought, were invalid. The other members of the court (McTiernan, Menzies, Windeyer, Owen, Walsh and Gibbs JJ) held that Huddart, Parker was wrongly decided and should be overruled. Menzies, Windeyer, Owen and Walsh JJ agreed that, while the Commonwealth could legislate to control the anti-competitive activities of those corporations listed in s 51(xx), the Trade Practices Act 1965 (Cth) purported, in Pts V and VI, to go beyond the Commonwealth’s power and was, to that extent, invalid. McTiernan and Gibbs JJ dissented on this point, holding that s 7 could be read down so as to confine the operation of the Act to those activities over which the Commonwealth Parliament clearly had power. 4.2.7 The Commonwealth Parliament reacted quickly to the High Court’s decision in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 that Pts V and VI of the Trade Practices Act 1965 were invalid. Within 3 months of the decision, it passed the Restrictive Trade Practices Act 1971 in substantially identical terms to the 1965 Act but expressly limited in its application to agreements and practices in which corporations, of the types listed in s 51(xx), were involved.

4.2.8 The election of a federal Labor Government in 1972 led to a more assertive approach by the Commonwealth to the High Court’s expanded interpretation of s 51(xx). The Trade Practices Act 1974 (Cth) replaced the Restrictive Trade Practices Act 1971. The new Act considerably expanded the range of controls over the trading activities of corporations. New provisions dealing with mergers of corporations were added to strengthened provisions outlawing restrictive agreements and practices, and a code for consumer protection, Pt V of the Act, proscribed unfair marketing practices and gave consumers the protection of implied warranties. The Trade Practices Act 1974 has since been renamed the Competition and Consumer Act 2010 (Cth). 4.2.9 While the High Court rejected the narrow Huddart, Parker view of s 51(xx) in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468, the members of the court expressly refrained from defining the scope of the power. As Barwick CJ said: ‘The law develops case by case’: 124 CLR at 490. The judges were, as we have seen, prepared to indicate that a law dealing with agreements or practices restrictive of a s 51(xx) corporation’s trading activity was within s 51(xx). On this basis, the case is taken to have established that the trading activities of trading corporations fall within the power regardless of whether the trade concerned occurs across state borders. Proceeding ‘case by case’ from this finding, later decisions, notably Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 4.2.16C, Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.2.22C and, most importantly, New South Wales v Commonwealth (Work Choices case)

[page 310] (2006) 229 CLR 1 4.2.29C have now considerably expanded the scope of Commonwealth authority over the corporations named in s 51(xx). 4.2.10 In the decade following Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468, litigation involving s 51(xx) tended to focus, however, on the issue of identifying the corporations which were subject to Commonwealth control, rather than on the issue of the legitimate extent of those controls. In R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533, the High Court was asked to restrain proceedings before the Trade Practices Tribunal under the Restrictive Trade Practices Act 1971 (Cth) against the St George County Council. The Act authorised proceedings against ‘a foreign corporation, a trading corporation formed within the limits of the Commonwealth or a financial corporation so formed’, if it had attempted to monopolise the trade in any commodity. The St George County Council claimed it was not a ‘trading corporation’ (there was no suggestion that it fell into either of the other two categories) because it had been established under the Local Government Act 1919 (NSW), as a public utility, to supply electricity and electrical appliances at the lowest feasible price to consumers. The council was, it claimed, a local government corporation, not a trading corporation. A majority of the High Court (McTiernan, Menzies and Gibbs JJ; Barwick CJ and Stephen J dissenting) held that the council was not a ‘trading corporation’ and accordingly restrained the proceedings before the Trade Practices Tribunal. McTiernan J did not discuss the scope of the term as used in s 51(xx). He decided

that, as used in the Restrictive Trade Practices Act, ‘trading corporation’ referred to ‘a private enterprise company’: 130 CLR at 547. However, Menzies and Gibbs JJ proceeded on the basis that ‘trading corporation’, as used in the Act, had the same meaning as the term in s 51(xx). They rejected the argument that a trading corporation was to be recognised by its activities — that a trading corporation was a corporation which traded. Rather, they said, it was to be recognised from its basic charter. Thus, a trading corporation was one which had been incorporated for the purpose of trading. Gibbs J expressed this approach as follows (130 CLR at 562): It is necessary to determine the true character of the corporation, upon a consideration of all the circumstances that throw light on the purpose for which it was formed.

Here, the Local Government Act 1919 (NSW), which authorised the establishment of the council and defined its powers and structure, showed that the council was established for the purpose, Gibbs J said, ‘of fulfilling a function of local government’: 130 CLR at 565. Therefore, it was a local government corporation, not a trading corporation. Barwick CJ and Stephen J also approached the meaning of ‘trading corporation’ in the Act as if it was co-extensive with the same term in s 51(xx). For them, the activities of a corporation were of critical importance: [A] corporation whose predominant and characteristic activity is trading whether in goods or services will, in my opinion, satisfy the description: 130 CLR at 543 per Barwick CJ. [T]he use of the participle ‘trading’ necessarily involves reference to function, either to the activities which a corporation is intended to

undertake or to those which it in fact does undertake: 130 CLR at 568 per Stephen J.

A careful reading of the judgments of Barwick CJ and Stephen J shows that, while each of them regarded the current activities of a corporation as an important element in its identification, [page 311] Stephen J gave rather less emphasis to that factor than did Barwick CJ. Immediately before the passage quoted above, Stephen J had referred to the St George County Council as ‘especially created to perform [a trading] function and none other’, and that was a sufficient reason ‘to describe it as a trading corporation’: 130 CLR at 568. 4.2.11 The ambiguity inherent in Stephen J’s judgment surfaced in R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190. The majority (Barwick CJ, Mason, Jacobs and Murphy JJ; Gibbs, Stephen and Aickin JJ dissenting) decided that the Western Australian National Football League, the South Australian National Football League and the West Perth Football Club were trading corporations. Accordingly, they were subject to the Trade Practices Act 1974 (Cth), s 45 of which forbade any trading or financial corporation to make or give effect to contracts, arrangements or understandings which restricted the supply of services or substantially lessened competition. Mason J (with whom Jacobs J agreed) said that he preferred the minority view expressed by Barwick CJ in R v Trade Practices

Tribunal; Ex parte St George County Council (1974) 130 CLR 533 (see 4.2.10), and continued (143 CLR at 233–4): ‘Trading corporation’ is not and never has been a term of art or one having a special legal meaning. Nor, as the Chief Justice pointed out, was there a generally accepted definition of the expression in the nineteenth century. Essentially, it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation. … Not every corporation which is engaged in trading activity is a trading corporation. The trading activity of a corporation may be so slight and so incidental to some other principal activity, viz religion or education in the case of a church or school, that it could not be described as a trading corporation. Whether the trading activities of a particular corporation are sufficient to warrant its being characterised as a trading corporation is very much a question of fact and degree.

Mason J reviewed the activities of the two leagues and concluded (143 CLR at 235–6): The financial revenue of the Leagues is so great and the commercial means by which it is achieved so varied that I have no hesitation in concluding that trading constitutes their principal activity. In saying this I treat all their activities which I have listed and which produce revenue as trading activities. I do not limit the concept of trading to buying and selling at a profit; it extends to business activities carried on with a view to earning revenue. Likewise, in my opinion West Perth is a trading corporation, though it stands in a somewhat different category … The fact that no part of the club’s revenue or profit can be distributed to the members is a circumstance to be taken into account in deciding whether it is a trading corporation, though in my judgment it is outweighed by other considerations which point to the conclusion that West Perth is a trading corporation. …

The principal activity of the Club is its participation as a member club of the WA League in the competitions which it runs. Indeed, that is West Perth’s major source of income. The comment which Fletcher Moulton LJ made of the Crystal Palace Club … applies with equal force to West Perth. His Lordship said [1910] 1 KB at 92: ‘Here is a company that carries on the game of football as a trade, getting up and taking part in football matches.’ The only qualification to be made is that West Perth does not arrange or manage the competition matches.

[page 312] Barwick CJ, in his separate judgment, affirmed an activities test for identifying s 51(xx) trading corporations, stating that ‘a corporation … will satisfy the description … if trading is a substantial corporate activity’: 143 CLR at 208. Murphy J said that either a purpose of formation or a current activities test could be used; in the case of the latter, it was sufficient for a corporation to fall within s 51(xx) that its ‘trading is not insubstantial’: 143 CLR at 239. In dissent, Stephen J (with whom Gibbs and Aickin JJ agreed) said that the trading activities of the leagues and the club were incidental to their principal, non-trading objective — the promotion of sport. Thus they were not trading corporations because they were formed for a non-trading purpose and their functions were consistent with that purpose: 143 CLR at 218–20. 4.2.12 In State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282, a majority of the High Court (Mason, Murphy and Deane JJ; Gibbs CJ and Wilson J dissenting) held that the State Superannuation Board was a financial

corporation and so was subject to s 47(1) of the Trade Practices Act 1974 (Cth). Subsection (1) prohibited a trading or financial corporation from engaging ‘in the practice of exclusive dealing’. The State Superannuation Board was a body corporate established by the Superannuation Act 1925 (Vic) and maintained by the Superannuation Act 1958 (Vic). It was responsible for managing a superannuation fund for the payment of benefits to Victorian government employees and for the investment of that fund. In their joint judgment, Mason, Murphy and Deane JJ said that ‘the Court’s approach to the ascertainment of what constitutes a “financial corporation” should be the same as its approach to what constitutes a “trading corporation”, subject to making due allowance for the difference between “trading” and “financial”’: 150 CLR at 303. They said that R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 had ‘concluded that the relevant character of the football leagues and the football club was to be ascertained by reference to their established activities’ (150 CLR at 303) and continued (150 CLR at 304): [I]t was essential to the majority’s approach and to its rejection of St George that a corporation whose trading activities take place so that it may carry on its primary or dominant undertaking, eg, as a sporting club, may nevertheless be a trading corporation. The point is that the corporation engages in trading activities and these activities do not cease to be trading activities because they are entered into in the course of, or for the purpose of, carrying on a primary or dominant undertaking not described by reference to trade. As the carrying on of that undertaking requires or involves engagement in trading activities, there is no difficulty in categorising the corporation as a trading corporation when it engages in the activities. … If there be any difference in the comments made by the majority in

Adamson it is one of emphasis only.

After noting that the purpose for which an inactive corporation had been formed might well be relevant, Mason, Murphy and Deane JJ said that the term ‘financial corporation’ was ‘not a term of art’; it did ‘no more than describe a corporation which engages in financial activities or perhaps is intended so to do’: 150 CLR at 305. Having reviewed the activities of the State Superannuation Board, which included the investment of substantial sums of money in semigovernment loans, commercial loans and housing loans, they concluded (150 CLR at 306): The facts as we have recited them demonstrate beyond any question that the appellant engages in financial activities on a very substantial scale. Even if we confine our attention to such aspects of the appellant’s investment activities as involve the making of commercial

[page 313] and housing loans, its business in this respect is very substantial and forms a significant part of its overall activities. No doubt these activities are all entered into for the end purpose of providing superannuation benefits to contributors, but, as we have seen, this circumstance constitutes no obstacle to the conclusion that the appellant is a financial corporation.

In their dissenting judgment, Gibbs CJ and Wilson J held that the board was not a financial corporation within s 51(xx) because ‘[t]he predominant and characteristic activity of the Board is not to be described in terms of its financial dealings but by reference to the service it provides to government in Victoria by way of a superannuation scheme’: 150 CLR at 298.

4.2.13 The decision in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 was a decision of a majority of only a five-member bench. As such, it might not have been followed by a later court, just as Mason J had felt free, in R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 (see 4.2.11), to disregard R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533 (see 4.2.10): 143 CLR at 233. Any doubts about the authority of the majority’s view on the reach of s 51(xx), as expressed in State Superannuation Board v Trade Practices Commission, were settled by the decision in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.2.22C. Over three decades later, however, it seems that the court might possibly be willing to reconsider the tests established in these cases for identifying s 51(xx) trading and financial corporations: see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11, extracted and discussed at 4.2.36C. 4.2.14 In Fencott v Muller (1983) 152 CLR 570, one of the questions before the court was the proper description of a ‘shelf company’ (Oakland Nominees). Was it a trading or financial corporation and thus subject to the prohibition of misleading or deceptive conduct in the Trade Practices Act 1974 (Cth)? Oakland had been a ‘shelf company’, that is, an inactive company, for about 3 months after its formation. Its objects were ‘widely drawn, encompassing trading and financial activities’: 152 CLR at 595. It then accepted appointment as trustee of a unit trust, replacing another company in that position, for the purpose of recovering some outstanding money owing to the unit trust and

paying off the trust’s creditors. After its appointment, Oakland began legal proceedings to recover the outstanding debt (due under a contract between Muller and the former trustee) and began negotiations with the creditors. In these proceedings, Muller and the former trustee claimed that Oakland had breached the Trade Practices Act during its negotiations with the creditors of the trust. Oakland objected that it was neither a trading nor a financial corporation and so was immune from the Trade Practices Act. In a joint judgment, Mason, Murphy, Brennan and Deane JJ rejected Oakland’s argument that, under the activities test adopted in R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 (see 4.2.11), it could not be a trading or financial corporation. After conceding that Oakland had engaged in neither trading nor financial activities, they said (152 CLR at 601–2): And so the question arises whether a corporation with objects and powers appropriate for a trading or financial corporation can bear that character before it engages in any trading or financial activity. That question did not arise for consideration in Adamson’s case. The majority judgments in that case which held that the established activities of the football league concluded its character as a trading corporation did not suggest that trading activities

[page 314] are the sole criterion of character. Absent those activities, the character of a corporation must be found in other indicia. While its constitution will never be completely irrelevant, it is in a case such as the present where a corporation has not begun, or has barely begun, to carry on business that its constitution, including its objects, assumes particular

significance as a guide … Oakland’s memorandum and articles of association reveal that the objects for which it was established include engaging in financial activities and carrying on a large variety of businesses, though it lay dormant — ‘on the shelf’ — after its incorporation. In the circumstances of the present case, there is no better guide to its character than its constitution and its constitution establishes its character as a trading or financial corporation. It is immaterial whether it is a trading corporation or a financial corporation or which of those characters its future activities may give it.

The majority in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 (see 4.2.12) had foreshadowed this approach when they observed: ‘It might well be necessary to look to the purpose for which such a corporation [that is, a corporation which had not started to function, or was at the outset of operation] was formed in order to ascertain whether it is a corporation of the kind described’: 150 CLR at 304–5. Gibbs CJ, Wilson and Dawson JJ dissented in Fencott v Muller. Gibbs CJ considered that while the corporation’s purposes would be relevant where it had not yet begun activities, those purposes were not to be discovered only from the corporation’s stated objects, but from ‘[t] he whole of the evidence as to the intended operations of the corporation’: 152 CLR at 590. The evidence here showed that Oakland had not been intended to engage in trading or financial activities. 4.2.15 The different views put forward in R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533, R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 and State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 on the meaning of ‘trading corporation’ and ‘financial corporation’ lead to

an expansion or contraction of the Commonwealth’s power under s 51(xx). Clearly, the wider the interpretation the court gives to these expressions, the greater the range of corporations the Commonwealth can reach. However, the scope of s 51(xx) also depends, as noted above, on the question of which aspects of an acknowledged s 51(xx) corporation’s affairs are subject to Commonwealth control. After Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468, the High Court returned to this question in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169. 4.2.16C Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 [Section 45D(1)(b)(i) of the Trade Practices Act 1974 (Cth) prohibited a person engaging in conduct in concert with another person that hindered or prevented the supply of goods or services by a third person to a fourth person where the fourth person was a corporation and the conduct was engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the fourth person’s business. Section 45D(5) provided that, where two or more persons engaged in conduct in concert with one another and were members or officers of a trade union, the trade union was to be liable for that [page 315] conduct unless the trade union established that it took all reasonable steps to prevent the participants from engaging in that conduct. Section 45D(6) made the trade union responsible for any loss caused to a person

as a result of that conduct. According to s 4(1), a ‘corporation’ included a foreign corporation, and a trading or financial corporation formed within the limits of Australia. Fontana Films Pty Ltd was a film producer. It sought an injunction in the Federal Court of Australia, under s 45D of the Trade Practices Act, against Actors Equity (a trade union), two of its officers, and other specified persons, to restrain them from acting in concert with any person to hinder or prevent the supply of actors to Fontana Films by theatrical agents. The issue of the validity of s 45D of the Act was removed into the High Court. As Gibbs CJ noted, a distinctive feature of s 45D(1)(b)(i) was that it ‘imposes no obligation on a corporation. Its command is directed to persons who need not be corporations’ though it ‘protects a corporation from certain conduct which is intended and likely to cause substantial loss or damage to its business’: 150 CLR at 181. Was it a valid law with respect to s 51(xx)?] Gibbs CJ: The limits of the power granted by s 51(xx) have not yet been defined. That paragraph of the Constitution presents considerable difficulties of interpretation. In the first place, the power is conferred by reference to persons. Paragraph (xix), in so far as it refers to aliens, and para (xxvi) are the only other paragraphs of s 51 which confer power in that way. Paragraph (xxvi) stands in a special position, for it proceeds on the assumption that special laws may be deemed necessary for the people of a particular race. However, having regard to the federal nature of the Constitution, it is difficult to suppose that the powers conferred by paras (xix) and (xx) were intended to extend to the enactment of a complete code of laws, on all subjects, applicable to the persons named in those paragraphs. It is unlikely, for example, that it was intended that the Parliament might provide that the rights and duties of aliens should be determined by a special law, different from that which applies to Australian citizens, in relation to such matters as contracts, torts, succession and criminal responsibility. Similarly, in the case of the corporations described in s 51(xx), extraordinary

consequences would result if the Parliament had power to make any kind of law on any subject affecting such corporations … Other difficulties in relation to s 51(xx) are caused by the need to construe the Constitution as a whole, and thus to reconcile para (xx) with other parts of s 51 … However, it is unnecessary, and undesirable, to attempt in the present case to define the outer limits of the power conferred by s 51(xx). The method which the courts have followed in the past, of approaching the solution of the difficult problems presented by such a provision as s 51(xx) gradually and with caution, proceeding no further at any time than the needs of the particular case require, is the most likely, in the end, to achieve the proper reconciliation between the apparent width of s 51(xx) and the maintenance of the federal balance which the Constitution requires. The authorities in which s 51(xx) has been considered are opposed to the view that a law comes within the power simply because it happens to apply to corporations of the kind described in that paragraph. The descriptive adjectives, ‘foreign’, ‘trading’ and ‘financial’ are important. In Huddart, Parker & Co Pty Ltd v Moorehead (at 397) Isaacs J said: ‘Just as their incorporation distinguishes them from natural individuals, so their trading or financial capacities distinguish them from other corporations, and it is as necessary to give effect to the words “trading” and “financial” as to the word “corporation”.’ The words of para (xx) suggest that the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws, if they are to be valid … In other words, in the case of trading and financial corporations, laws which relate to their trading and financial activities will be within the power. This does not mean that a law [page 316] under s 51(xx) may apply only to the foreign activities of a

foreign corporation for ex hypothesi the law will be one for the peace, order and good government of the Commonwealth. It means that the fact that the corporation is a foreign corporation should be significant in the way in which the law relates to it. For present purposes, however, it is enough that it is established by Strickland v Rocla Concrete Pipes Ltd that a law which governs the trading activities of trading corporations formed within the limits of the Commonwealth is within the scope of s 51(xx): see especially [(1971) 124 CLR 468] at pp 490, 508, 525. Of course, the law in the present case does not regulate or govern the activities of trading corporations; it regulates the conduct of others. But the conduct to which the law is directed is conduct designed to cause, and likely to cause, substantial loss or damage to the business of a trading corporation formed within the limits of the Commonwealth. I can see no reason in principle why such a law should necessarily fall outside the scope of s 51(xx). A law may be one with respect to a trading corporation, although it casts obligations upon a person other than a trading corporation … A law will fall within the power if the conduct to which it is directed is so relevant to the subject of the power that a law rendering such conduct unlawful can be described as a law with respect to that subject. [Gibbs CJ went on to conclude that s 45D(5) was ‘reasonably incidental to the power conferred by s 51(xx)’ because it required ‘an organisation to take all reasonable steps to prevent its members from engaging in conduct intended and likely to cause’ the damage at which s 45D(1) was aimed: 150 CLR at 187, 188.] Stephen J: The law contained in s 45D(1)(b)(i) is composed of three elements: the existence of conduct by persons in concert which impedes a dealing in goods or services; the fact that that dealing is a dealing to which those persons are not themselves parties; and the presence of resultant and intended actual or likely detriment to one of the parties to the dealing, it being a corporation. It would no doubt be possible to describe the

law by reference to any one of these elements, the conduct, the dealing or the detriment suffered by a corporation, ignoring in each instance the two other elements. The law could thus be described as one about concerted action affecting dealings, about dealings in goods or services or about detriments to corporations. But each such description would suffer from excessive width since it is only certain forms of concerted action, only dealings between those not parties to such actions and only detriments of a particular kind, suffered by a corporation, that the law affects. Its true character can only be conveyed by a description which picks up each of the elements, as does the description of it as a law prohibiting concerted action directed against a corporation’s dealings in goods and services. Any attempt further to refine the description, while it may succeed in confining the subject matter of the law to one only of its elements, will necessarily lead to a departure from accuracy. What I have said touches upon one of the major difficulties involved in the process of characterisation. An accurate description of any at all complex law will necessarily be relatively detailed if it is to encompass the several elements which together go to make up the impugned law. However, constitutional grants of power such as those in s 51 are customarily expressed quite differently — succinctly and in terms of wide generality. Thus, when an accurate, and hence relatively detailed, description of a law is sought to be matched against one or other of the tersely expressed grants of legislative power contained in s 51 of the Constitution, it will not infrequently be found that different parts of the description of the law fall within different paragraphs of s 51; still other parts may be found to fall within none of those enumerated grants of power, because they concern elements of the law which are the subject only of State legislative power. [page 317]

The pattern of distribution of legislative power in Australia is not based on a concept of mutual exclusiveness. … Because the powers granted by s 51 are not exclusive, but instead remain available, so far at least as their subject matter permits, for exercise by the States, subject only to the terms of s 109 in the event of inconsistency, there is not, in Australia, the … need to seek for one sole or dominant character of each law. … Unaffected by restraints imposed by the existence of mutually exclusive grants of legislative power, this Court’s process of characterisation is free to recognise that laws may in truth possess a number of characters. … To recognise that a law may possess a number of quite disparate characters is, then, to accept reality. Few laws will involve only one element. Even the simplest form of law will commonly contain two elements when it forbids, regulates or mandates particular conduct on the part of a particular class of person. The conduct and the class will form distinct elements and if each happens to bear a relationship to different grants of legislative power the law may often be equally appropriately described by reference to either. If a law also includes reference to another class of persons, those affected by the conduct in question, a third element will thereby be introduced. Many laws will, because of the relatively complex concepts to which they give effect, involve still further elements. These elements may, of course, all bear one and the same character. However, where they do not, any search for a single character by which to describe the law is likely to prove fruitless. Were constitutional dogma to require such a search to be pursued, the difficulty in choosing between competing elements might readily lead different minds, perhaps influenced by quite subjective considerations, to varying conclusions as to the dominant character of a law. But to accept as constitutionally permissible the fact that a law may bear several characters, each as valid as the other because each is reasonably capable of fairly

describing the law as a whole, disposes of the need to rely upon what may prove to be quite subjective reasons for selecting one particular description only. With the disappearance of subjective criteria, the process of characterisation then becomes less uncertain and more a matter of logic than of idiosyncratic assertion. Once it is recognised that a law may possess several distinct characters, it follows that the fact that only some elements in the description of a law fall within one or more of the grants of power in s 51 or elsewhere in the Constitution will be in no way fatal to its validity. So long as the remaining elements, which do not fall within any such grant of power, are not of such significance that the law cannot fairly be described as one with respect to one or more of such grants of power then, however else it may also be described, the law will be valid. If a law enacted by the Federal legislature can be fairly described both as a law with respect to a grant of power to it and as a law with respect to a matter or matters left to the States, that will suffice to support its validity as a law of the Commonwealth. In characterising the law represented by s 45D(1)(b)(i) I have not had recourse to the context provided by the Act as a whole, and this not only because the law speaks for itself, bearing on its face its several characters, but also because those who attack its validity do not assert the existence of some covert character, not apparent on its face. The attack is rather designed to establish as the law’s sole character one only of its overt concerns, that of secondary boycotts. Accordingly, this is not a case where form and substance are to be distinguished; in this law they are at one. That characterisation does not require a search for one sole or predominant character where the law in question can be seen to possess several characters is now well established in Australian constitutional law.

[page 318] … in testing validity the task is not to single out one predominant character of a law which, because it can be said to prevail over all others, leads to the attaching to the law of one description only as truly apt. It will be enough if the law fairly answers the description of a law ‘with respect to’ one given subject matter appearing in s 51, regardless of whether it may equally be described as a law with respect to other subject matters. This will be so whether or not those other subject matters appear in the enumeration of heads of legislative power in s 51. If the task of characterisation be approached in this fashion, s 45D(1)(b)(i) may be seen clearly enough to possess the character of a law with respect to trading corporations, whatever other characters it may also possess. What it does is to forbid conduct which has for its purpose, and which in addition would have or be likely to have the effect, of causing substantial loss or damage to a corporation. To that may be added the fact that the forbidden conduct is described, in the opening words of s 45D(1), in terms directly relating it to the trading activities of corporations. Whatever other descriptions might also be assigned to it, to fail to include as one characterisation of it that of a law about corporations would seem to me to be to ignore the obvious. To describe it as a law with respect to trading corporations seems entirely apt; it does no more than recognise what is the manifest purpose and direct effect of the law. The connexion with corporations forms a crucial component of the law … The centrality of that connexion is emphasised rather than diminished, by the fact that the prohibition which the law imposes is not addressed to corporations but rather to those who act with a purpose of harming them. That the law takes this form is dictated by its aim of protecting corporations from a particular harm; in such a prohibitory law the focus will necessarily be upon the acts of those who intend harm. A law forbidding certain acts

of third parties for the reasons that they were both intended, and also likely, to harm aliens would surely be as central to the grant of power with respect to aliens as a law which required aliens to do or refrain from particular conduct: the intended object of another’s conduct is no less central, no less significant, in bestowing a character upon a law than is the actor to whom that law directly speaks. [Stephen J adopted the views of Mason J on the validity of s 45D(5) and (6).] Mason J: The judgments in [Strickland, St George County Council and Adamson] do not attempt to define the limits of the corporations power. They proceed upon the footing that the power extends to the regulation of the trading activities of foreign corporations and trading and financial corporations formed within the limits of the Commonwealth, without deciding whether it travels further. [Mason J referred to the argument by the Solicitor-General for the Commonwealth, to the effect that the power to prohibit trading activities of trading corporations was matched by a power to protect those activities:] The Solicitor-General’s submission is correct so long as it is understood that by a law which protects the trading activities of trading corporations he means a law which has a direct legal operation on the subject of the power. Such a law is within power and valid. … … [Section 45D(1)(b)(i)] operates directly on the trading activities of trading corporations. It protects them by prohibiting interference with their trading activities. … I should not wish it to be thought from what I have said that the corporations power is confined in its application to trading corporations to laws that deal with their trading activities.

The subject of the power is corporations — of the kind described; the power is not expressed [page 319] as one with respect to the activities of corporations, let alone activities of a particular kind or kinds. A constitutional grant of legislative power should be construed liberally and not in any narrow or pedantic fashion. … Nowhere in the Constitution is there to be found a secure footing for an implication that the power is to be read down so that it relates to ‘the trading activities of trading corporations’ and, I would suppose, correspondingly to the financial activities of financial corporations and perhaps to the foreign aspects of foreign corporations. Even if it be thought that it was concern as to the trading activities of trading corporations and financial activities of financial corporations that led to the singling out in s 51(xx) of these domestic corporations from other domestic corporations it would be mere speculation to say that it was intended to confine the legislative power so given to these activities. The competing hypothesis, which conforms to the accepted approach to the construction of a legislative power in the Constitution is that it was intended to confer comprehensive power with respect to the subject matter so as to ensure that all conceivable matters of national concern would be comprehended. The power should, therefore, in accordance with that approach, be construed as a plenary power with respect to the subjects mentioned free from the unexpressed qualifications which have been suggested. It sufficiently appears from what has already been said that, even if s 51(xx) be relevantly restricted to legislation which affects trading corporations in their trading activities, s 45D(1) (b)(i) is within power …

[Mason J then turned to s 45D(5):] The effect of sub-s (5) is that when two or more persons who are members or officers of a trade union engage in conduct in concert with one another the trade union is deemed to engage in that conduct in concert with the participants and to engage in that conduct for the purpose or purposes for which that conduct is engaged in by the participants, unless the organisation establishes that it took all reasonable steps to prevent the participants from engaging in that conduct. The subsection is not an onus of proof provision. To escape the deeming operation it will avail the trade union nothing to prove that it did not act in concert with the officers or that it did not act in concert for the relevant purpose. To escape it must go further and show that it took all reasonable steps to prevent the participants from engaging in that conduct. … In substance s 45D(5) is a law which makes a trade union responsible for a boycott affecting a corporation when that boycott is imposed by members or officers of the trade union, a responsibility which the trade union can only avoid if it demonstrates it has taken the action mentioned in the subsection. As such it is a law about trade unions; to me it has a very remote connexion with corporations, a connexion so remote that the provision cannot be characterised as a law with respect to corporations of the relevant class. In my opinion it is beyond power. The result is that sub-s (6), at least to the extent to which it has an operation consequential upon sub-s (5) by reason of the words ‘or is deemed by sub-section (5) to engage’, is also beyond power.

4.2.17 Murphy J held that s 45D, apart from s 45D(5) and (6), was within the corporations power, which was plenary and ‘enables Parliament to make comprehensive laws covering all internal and

external relations of foreign trading and financial corporations’ including legislation ‘to protect trading, financial and foreign corporations from others and to protect others from such corporations’: 150 CLR at 212. He concluded that s 45D(5) was invalid. [page 320] In his view, it was not supported by the corporations power and was at odds with the judicial power conferred on federal courts by Ch III of the Constitution because it required the courts ‘to make findings contrary to fact’: 150 CLR at 214. Brennan J said that it was not necessary to go beyond the decision in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 4.2.5C, to conclude that s 45D(1)(b)(i) was supported by the corporations power. He said that a law which protected the business of a trading corporation necessarily dealt with its trading activity. Accordingly, it was ‘not necessary to determine whether any law which discriminates between corporations mentioned in para (xx) and the public at large is a law falling within the ambit of the corporations power’: 150 CLR at 218. Brennan J concluded that s 45D(5) was invalid because it was not a law with respect to s 51(xx). He said (150 CLR at 223): The corporations power does not support a law which makes an organisation liable for conduct in which it has not engaged and which it has not counselled, aided or abetted.

Aickin J agreed with Mason J. Wilson J agreed with Gibbs CJ. In the result, the court declared s 45D(1)(b)(i) valid in its application

to trading corporations, and s 45D(5) and the references to that subsection in s 45D(6) invalid. 4.2.18 The judgments in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 showed a court split over the type of legislation which could be enacted under s 51(xx). While not absolutely committed to the position, Gibbs CJ (and Wilson J) showed a strong inclination to limit the Commonwealth’s power to regulating or protecting specified activities of the listed corporations. This limitation does not find any direct support in the language of s 51(xx), for the word ‘trading’ in the paragraph qualifies the type of corporation subject to Commonwealth control rather than the type of control which the Commonwealth might impose. Rather, the suggested limit on s 51(xx) derived from ‘the federal nature of the Constitution’ and the ‘extraordinary consequences’ which would follow from a broad reading: 150 CLR at 181, 182. To adopt the words of Murphy J in Attorney-General (WA) v Australian National Airlines Commission (1976) 138 CLR 492 4.1.23C, this approach ‘keeps the preEngineers ghosts walking’: 138 CLR at 530. It has since been rejected in New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C. On the other hand, Mason, Murphy and Aickin JJ asserted that s 51(xx) was a power to legislate with respect to the named corporations, not with respect to specified activities. As Mason J said, it should be ‘construed liberally’ and ‘[n]owhere in the Constitution is there to be found a secure footing for an implication that the power is to be read down so that it relates to “the trading activities of trading corporations”’: 150 CLR at 207. Standing in the middle were (or appeared to be) Stephen and

Brennan JJ. They indicated that the validity of s 45D(1)(b)(i) could be settled by applying the proposition in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 4.2.5C; namely, that s 51(xx) at least allowed the Commonwealth to legislate with respect to trading activities of trading corporations. They reserved, for a future case where the issue needed to be resolved, the question whether s 51(xx) would authorise wider-ranging legislation. One thing that the decision in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 did clarify is that Commonwealth legislation prohibiting, regulating or (in the manner of s 45D(1)(b)(i)) protecting the trading activities of a trading corporation ‘operates directly on the subject of the power’: 150 CLR at 205 per Mason J; see also at 183–5 per Gibbs CJ. As Professor Leslie Zines pointed out in his analysis of the case, consistent with [page 321] the characterisation principles adopted by the court, ‘the fact that the purpose of the law might have been to prevent secondary boycotts was irrelevant’: Stellios, 2015, p 123. 4.2.19 Is it significant that in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 the broadest view of the Commonwealth’s power under s 51(xx) was articulated by those judges (Mason and Murphy JJ) who had in R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 (see 4.2.11) taken the broadest view of the corporations that fall within s 51(xx)? And

that the narrowest view of the Commonwealth’s power was suggested by that judge (Gibbs CJ) who had consistently taken the narrowest view of the nature of s 51(xx) corporations? Also, why did the judges who articulated the broadest view of the Commonwealth’s power under s 51(xx) in Fontana Films hold that s 45D(5) exceeded that power, while the judges who suggested the narrowest reading of that power hold that s 45D(5) was valid? The opinion of the minority, that s 45D(5) was within s 51(xx) of the Constitution, was based on the incidental power inherent in s 51(xx). In the words of Gibbs CJ, s 45D(5) was ‘reasonably incidental to the power conferred by s 51(xx)’ because it required the trade union ‘to take all reasonable steps to prevent its members from engaging in the conduct [prohibited by s 45D(1)(b)(i)]: 150 CLR at 187. The Chief Justice was here referring to the wellestablished proposition, as Dixon CJ, McTiernan, Webb and Kitto JJ put it in Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77 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 subject matter.

4.2.20 Resort to the incidental nature of the Commonwealth’s powers need not generate the sharp difference of opinion seen in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169. In Fencott v Muller (1983) 152 CLR 570 (see 4.2.14) all seven justices agreed that s 82(1) of the Trade Practices Act 1974 (Cth) was a valid law, supported by s 51(xx). This provision enabled any person who had suffered loss because of

a corporation’s misleading or deceptive conduct (contrary to s 52(1) of the Act) to recover that loss from ‘any person involved in the contravention’. To the argument that s 82(1) did not fall under s 51(xx) because it did not sufficiently affect a corporation, Mason, Murphy, Brennan and Deane JJ responded (152 CLR at 598–9): The argument is too narrow. Once it is accepted, as it now is, that the corporations power extends to the regulation of the trading activities of trading corporations, it necessarily follows that, in some circumstances at least, the power must extend to the imposition of duties on natural persons. Two considerations combine to sustain this conclusion. The first is that corporations act through natural persons. The second — and it is a consequence of the first — is that, in order to be effective, a regulation of the activities of corporations calls for the imposition of duties on those natural persons who would, or might, in the ordinary course of events, participate in the corporate activities, the subject of the intended regulations. Accordingly, when in the legitimate exercise of the corporations power duties are imposed on corporations in relation to their trading activities, breach of which creates a civil liability, the power extends to the imposition of duties on natural persons, breach of which also creates a civil liability, not to engage in conduct which assists or facilitates a contravention by a

[page 322] corporation of duties thus imposed upon it. Then the imposition of duties on natural persons is seen to be an element or incident in the regulation of the corporate trading activities. Another way of expressing this approach is to say that where a law prescribing the way in which corporations shall conduct their trading activities is supported by the corporations power, an ancillary provision reasonably adapted to deter other persons from facilitating a contravention of the law by a corporation is supported by the same

power. It is within the competence of the Parliament to enact such a provision to secure compliance with a valid statutory command. A valid statutory command directed to a particular class may be strengthened by a provision imposing a liability upon other persons who are involved in a contravention by a person to whom the command is directed, provided that the ancillary provision is reasonably adapted to securing obedience to the command.

Gibbs CJ, Wilson and Dawson JJ held s 82(1) valid for the same reasons: 152 CLR at 583–4, 611, 620. See also R v Australian Industrial Court; Ex parte CLM Holdings Pty Ltd (1977) 136 CLR 235. 4.2.21 The differences of opinion in the High Court concerning the scope of s 51(xx) revealed by Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 and decisions such as R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 persisted in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1. 4.2.22C Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 [The Gordon River Hydro-Electric Power Development Act 1982 (Tas) authorised the Hydro-Electric Commission of Tasmania (the HEC) to build a dam on the Gordon River in south-west Tasmania (the ‘Gordon below Franklin Dam’). The HEC was a corporation established by the Hydro-Electric Commission Act 1944 (Tas) with responsibility for generating and distributing electricity in Tasmania. Construction of the dam started in July 1982.

The World Heritage Properties Conservation Act 1983 (Cth) was designed to stop construction of the dam. It relied on several Commonwealth powers, including the corporations power: 7 Where the Governor-General is satisfied that any identified property is being or is likely to be damaged or destroyed, he may, by Proclamation, declare that property to be property to which section 10 applies … 10 (1) In this section — ‘foreign corporation’ means a foreign corporation within the meaning of paragraph 51(xx) of the Constitution; ‘trading corporation’ means a trading corporation within the meaning of paragraph 51(xx) of the Constitution. (2) Except with the consent in writing of the Minister, it is unlawful for a body corporate that — (a) is a foreign corporation; (b) is incorporated in a Territory; or [page 323] (c) not being incorporated in a Territory, is a trading corporation formed within the limits of the Commonwealth, whether itself or by its servant or agent — (d) to carry out any excavation works on any property to which this section applies; (e) to carry out operations for, or exploratory drilling in connection with, the recovery of minerals on any property to which this section applies; (f) to erect a building or other substantial structure on any property to which this section applies or to do any act in the course of, or for the purpose of, the erection of a

building or other substantial structure on any property to which this section applies; (g) to damage or destroy a building or other substantial structure on any property to which this section applies; (h) to kill, cut down or damage any tree on any property to which this section applies; (j) to construct or establish any road or vehicular track on any property to which this section applies; (k) to use explosives on any property to which this section applies; or (m) if an act is prescribed for the purposes of this paragraph in relation to particular property to which this section applies, to do that act in relation to that property. (3) Except with the consent in writing of the Minister, it is unlawful for a body corporate of a kind referred to in subsection (2), whether itself or by its servant or agent, to do any act, not being an act the doing of which is unlawful by virtue of that sub-section, that damages or destroys any property to which this section applies. (4) Without prejudice to the effect of sub-sections (2) and (3), except with the consent in writing of the Minister, it is unlawful for a body corporate of the kind referred to in paragraph (2)(c), whether itself or by its servant or agent, to do, for the purposes of its trading activities, an act referred to in any of paragraphs (2)(d) to (m) (inclusive) or an act referred to in sub-section (3). The Governor-General declared, by proclamation, that s 10 applied to three areas in the south-west of Tasmania, including the area where the HEC was constructing the Gordon below Franklin Dam. At the same time, the Governor-General made regulations under the Act prescribing certain acts for the purposes of s 10(2)(m). These were carrying out works in the course of constructing, or preparatory to

constructing, or associated with construction of, a dam which would flood any part of the areas specified in the proclamations. Gibbs CJ held that the commission was not a ‘trading corporation’ because its ‘true character’, as revealed by its activities as well as the purposes of its formation, was ‘a corporation sui generis’, discharging ‘a public function of vital importance to the State’. ‘Its trading activities’ he said, ‘although significant, do not indicate its true character’: 158 CLR at 116–17.] Gibbs CJ: I further consider that, even if the Commission were a trading corporation, the provisions of ss 7 and 10 of the Act, if valid, could apply to the Commission only in relation to such of its activities as are properly regarded as trading activities. I adhere to the view which I expressed in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 182: ‘The authorities in which s 51(xx) has been considered are opposed to the view that a law comes within the power simply because it happens to apply to corporations of the kind described in that paragraph … The words of para (xx) suggest that the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws, if they are to be valid’. In view of the conclusions which I reach on other aspects of the case, I need not elaborate this matter further. It is clear, however, that [page 324] the activities of the Commission to which s 10, if valid, would apply, are not trading activities. The trade of the Commission is in respect of the supply of electricity; the acts prohibited by s 10 are anterior even to the generation of the electricity which is to be supplied. They may be regarded as acts preparatory to the trade; they certainly do not form part of it. It follows that, in my opinion, the provisions of s 10 of the Act,

if valid, would have no application to the Commission. Lest that view be not accepted, I should turn to consider the validity of the section. In my opinion, with the exception of one subsection, it is not a law with respect to trading corporations. This is made clear by the provisions of s 7, and by the scheme of the Act as a whole. As s 7 shows, s 10 applies only where the Governor-General is satisfied that any identified property is being or is likely to be damaged or destroyed. The object of ss 7 and 10, as appears from their own terms, is the protection of the heritage from damage or destruction. That conclusion is supported by a consideration of ss 9 and 11, which show that the same prohibitions as s 10 seeks to apply to corporations are made applicable by those other sections to cases which in no way involve corporations. In other words, for the purposes of the statute the character of the person who performs the forbidden acts is immaterial. Further, the prohibited acts are not such as might naturally be performed by a corporation in the course of trading. … Apart from s 10(4), the connection between ss 7 and 10 and the topic of trading corporations is not direct and substantial — it is exiguous and unreal. It is apparent that the relationship between trading corporations and the operative provisions of s 10 is merely incidental — the section is applied to trading corporations only in an attempt to use s 51(xx) as a source of power which would not otherwise exist. The true character of the section is not that of a law with respect to trading corporations. However, s 10(4) applies only where the forbidden acts are done by a body corporate of the kind described in the section ‘for the purposes of its trading activity’. Notwithstanding some doubts as to whether the connection made by s 10(4) with trading corporations by the use of those words is merely contrived, I consider that the subsection does have a sufficient connection with the topic of power granted by s 51(xx). I would therefore hold s 10(4) to be valid.

On this branch of the case I hold that s 10(4) is valid, but that the remainder of s 10 is invalid; that the Commission is not a trading corporation and that, in any case, such of its activities as would fall within the scope of s 10 if it were a trading corporation are not trading activities. [Mason J said that it had been established that s 51(xx) extends ‘to the regulation and the protection of the trading activities of trading corporations’: 158 CLR at 148. He continued:] Mason J: Whether the power goes further remains to be decided. Barwick CJ, Murphy, Brennan JJ and I have indicated that it does … It would be unduly restrictive to confine the power to the regulation and protection of the trading activities of trading corporations. After all, the subject matter of the power is persons, not activities. The suggested restriction might possibly deny to Parliament power to regulate borrowing by trading corporations, notwithstanding that there is much to be said for the view that one of the objects of s 51(xx) was to enable Parliament to regulate transactions between the categories of corporation mentioned and the public, indeed to enable Parliament to protect the public, should the need arise, in relation to the operations of such corporations. There is, certainly, no sound reason for denying that the power should extend to the regulation of acts undertaken by trading corporations for the purpose of engaging in their trading activities. … [page 325] However, it seems to me that there are three powerful objections to the adoption of this limited construction. The first is that this approach to the scope of the power in its application to the classes of corporations mentioned, though it

has some plausibility in the case of trading corporations, has none at all in the case of financial and foreign corporations. It can scarcely have been intended that the scope of the power was to be limited by reference to the foreign aspects of foreign corporations and the financial aspects of financial corporations. And it would be irrational to conclude that the power is plenary in the case of those corporations, but limited in the case of trading corporations. The second objection is that the interpretation fails to give effect to the principle that a legislative power conferred by the Constitution should be liberally construed. And the final objection is that a power to make laws with respect to corporations (of designated categories), as in the case of a power with respect to natural persons, would seem naturally to extend to their acts and activities. … There is nothing in the context of s 51(xx) which compels the conclusion that the language in which the power is expressed should be given a restricted interpretation. In this respect I mention, without repeating, what I said in Fontana … In the result we should recognise that the power confers a plenary power with respect to the categories of corporation mentioned. It is of some interest to note that Griffith CJ in Huddart, Parker made it clear that, but for the doctrine of reserved powers, this is the interpretation of s 51(xx) to which he would have been compelled. … The argument presented in the present case tends to obscure the difference between two distinct and separate questions: (1) what is the scope of the power; and (2) is the law in truth a law with respect to the subject matter of the power, once its scope has been ascertained. Characterisation, the name given to the process of arriving at an answer to the second question, cannot begin until the first question is answered. The Commission then argues that s 10 is not a law about trading and foreign corporations; rather it is a law about the

activities which are prohibited by the section or, alternatively, about the Western Tasmania Wilderness area. … It is now well settled (a) that a law upon a subject matter within Commonwealth power does not cease to be valid because it touches or affects a topic outside Commonwealth power or because it can be characterised as a law upon a topic outside power; and (b) that it is not necessary to characterise a law upon one topic to the exclusion of the other … The true principle is that the character of the law is to be ascertained from its legal operation, ie, by reference to the rights, duties, obligations, powers and privileges which it creates. This is not to deny the validity of a law which exhibits in its practical operation a ‘substantial connection’ with a relevant head of power. … The requirement that there should be a substantial connection between the exercise of the power and its subject matter does not mean that the connection must be ‘close’. It means only that the connection must not be ‘so insubstantial, tenuous or distant’ that it cannot be regarded as a law with respect to the head of power … In this respect the Commission submits that s 7 is invalid because it selects damage to or destruction of property as the basis of the power to make a proclamation and not an act or prohibited act of a foreign or trading corporation. An event having no necessary connection with trading or foreign corporations is made the occasion for prohibiting them from damaging property. This demonstrates something that is evident from other provisions of the Act, namely that the object of s 10 is to protect the Western Tasmania Wilderness area. The Parliament [page 326]

has exercised the corporations power to achieve this end, not for some overriding purpose having a connection with trading and foreign corporations. But the point is that the legislative power with respect to trading and foreign corporations is not, on the view which I have expressed, in any sense purposive. It is enough that the law has a real relationship with the subjects of the power; it matters not, when the power is not purposive, that the object of the exercise is to attain some goal in a field that lies outside the scope of the Commonwealth power. A law which prohibits trading and foreign corporations from doing an act is a law about trading and foreign corporations, notwithstanding that it is also a law about the act which is prohibited. It is a law which imposes obligations on such corporations, enforceable by injunctions. Consequently, it is simply impossible to say that the law has no substantial connection with trading and foreign corporations. In the result then … ss 7 and 10 are valid. The validity of s 10(4) is a necessary consequence of the validity of s 10(2) and (3). [Mason J turned to the question whether the Hydro-Electric Commission was a s 51(xx) trading corporation:] This question must be answered in the affirmative for reasons which may be shortly stated in this way: 1.

2.

The decision in R v Trade Practices Tribunal; Ex parte St George County Council (1974) 130 CLR 533, is no longer to be regarded as correct. A majority of the court in R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190, considered it to have been wrongly decided: see also State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 304. As Barwick CJ observed in his dissenting judgment in St

3.

George County Council (at 541), the connection of the corporation with the government of a state will not take it outside s 51(xx). In making this statement his Honour referred to certain features of the County Council in that case and stated that they did not take the County Council outside the category of ‘trading corporations’. The features were (1) that it was incorporated under the Local Government Act 1919 (NSW); (2) that it had power to levy a loan rate; (3) that there was a limitation on profit-making to ensure that the council performed a public service for the county district; and (4) that in reticulating electricity to the district it was performing a public service. The Commission’s connection with the government of Tasmania is certainly closer than the connection of St George County Council with the government of New South Wales. And the Commission’s position in the structure of government is certainly more important than that of the County Council. The Commission is the State authority responsible for generating and distributing electrical power in the state. It constructs and manages the relevant dams, generating plants and other works and makes the policy decisions and recommendations to the Minister in connection with its functions. … Section 15A [of the Commission’s Act] enables the Minister to notify the Commission of the policy objectives of the government with respect to any matter relating to generation, distribution, etc of electrical energy. Section 15B enables the Minister to give a direction to the Commission with respect to the performance of its functions, subject to certain limitations and qualifications. The Commission may object to the direction. If the Minister does not withdraw the direction or qualify it in a manner acceptable to the Commission, the matter is then submitted to the

Governor for decision (s 15B(4) [page 327]

4.

5.

6.

and (5)). The Commission is bound to comply with the direction, subject to any withdrawal or modification and subject to a decision of the Governor. However, it is specifically provided that the Minister’s power to give a direction does not make the Commission a servant or agent of the Crown or confer on the Commission any status, privilege or immunity of the Crown (s 15B(9)). … The trading activities of the Commission therefore form a much less prominent feature of its overall activities than was the case with St George County Council. The Commission has an important policy-making role. It is the generator of electrical power for Tasmania for distribution to the public and for this purpose it engages on a large scale in the construction of dams and generating plants. In this respect its operations are largely conducted in the public interest. However, WA National Football League demonstrates that these considerations do not exclude the Commission from the category of ‘trading corporations’. The majority judgment in State Superannuation Board (1982) 150 CLR 282 at 304 pointed out that the case decided that a trading corporation whose trading activities take place so that it may carry on some other primary or dominant undertaking (which is not trading) may nevertheless be a trading corporation. The agreed facts show that the Commission sells electrical power in bulk and by retail on a very large scale. This activity in itself designates the Commission as a trading corporation.

7.

The final question, one raised on behalf of the Commission, is whether it is possible to treat, for the purposes of s 51(xx), a corporation as a trading corporation in relation to its trading activities and as a non-trading corporation in relation to its non- trading activities. My earlier conclusion that the legislative power is not confined to the trading activities of trading corporations is in one sense an answer to this submission. The other answer is that s 51(xx) designates as the subject of the power the corporate persona itself, ie the artificial person created by incorporation. There is no suggestion in the paragraph that it is looking to some hypothetical or notional incorporation which covers only the trading activities of a trading corporation.

I therefore conclude that the Commission is a trading corporation within the meaning of s 10 of the Commonwealth Act. And in my opinion the Commission is constructing the dam and associated works for the purposes of its trading activities. The dam will provide additional electrical energy for supply and sale by the Commission. [Brennan J concluded that the HEC was a trading corporation, noting that it sold power, in bulk and by retail, to the value of more than $160 million in 1981–82: 158 CLR at 239–40. He continued:] Brennan J: … are the prohibitions contained in s 10 laws with respect to trading corporations? Laws with respect to trading corporations are laws with respect to artificial persons. To be such a law, the law must discriminate: that is to say, it must be a law which operates to confer a benefit or impose a burden upon those persons when its operation does not confer a like benefit or impose a like burden on others … Section 10 of the Act is discriminatory. It imposes a restriction upon the use of property by the several categories of corporations mentioned in paras (a), (b) and (c) of s 10(2), which include trading corporations formed

within the limits of the Commonwealth, but it does not impose a like restriction on other persons. Section 10(2) and (3) direct their commands to trading corporations without any relevant qualification; s 10(4) directs its commands to trading corporations where the [page 328] corporation does the relevant act in contravention of a command ‘for the purposes of its trading activities’. Sub-sections (2) and (3) give rise to the question whether a law which merely prohibits trading corporations from doing an act that may be unconnected with its trade is a law with respect to trading corporations. That question has not hitherto been decided by this court. … If sub-s (4) of s 10 applies to the HEC’s construction of the dam the question need not be decided now. … I should not wish to decide a question wider than the circumstances of the case require. The acts prohibited by sub-s (4) are the acts referred to in sub-ss (2) and (3), and the qualification ‘for the purposes of its trading activities’ results in the affection of the trading activities of trading corporations. It is clearly a law with respect to trading corporations, but can its validity be sustained without deciding the validity of sub-ss (2) and (3)? [Brennan J held that subs (4) could stand apart from subss (2) and (3) and thus that he did not need to decide whether subss (2) and (3) were valid.] Does sub-s (4) apply to the HEC’s activities in constructing the dam? The agreed facts show that the HEC land has been vested in the HEC for the purpose of carrying out the Gordon below Franklin Scheme in order to produce electrical energy, the commodity in which the HEC trades. The dominant, if not exclusive, purpose of constructing the dam is to provide

additional generating capacity for the HEC system, an element in the HEC’s co-ordinated activity of generation, distribution and sale of electrical energy. The carrying out of the Gordon below Franklin Scheme is thus for the purpose of the HEC’s trading activities. Upon the agreed facts, the construction activities of the HEC fall within s 10(4).

4.2.23 Deane J held that the HEC was a trading corporation within s 51(xx) and that ss 7 and 10 of the Act were valid laws with respect to that power. He declined to accept the commission’s argument that s 51(xx) should be confined to laws dealing with the trading activities of trading corporations (158 CLR at 270): The trading activities and the non-trading activities are likely to be conducted in the context of overall corporate strategy and financial planning and restraints. Their viability and financial stability are likely to be interdependent. Power and success on one side are likely to contribute to power and success on the other. Failure on one side is likely to involve failure of the whole. In my view, the legislative power conferred by s 51(xx) is not restricted to laws with respect to trading corporations in relation to their trading activities. It is a general power to make laws with respect to trading corporations.

Murphy J delivered a separate judgment in which he held that ss 7 and 10 were within s 51(xx) for substantially the same reasons as Mason J. He also found that the HEC was a trading corporation. Wilson J and Dawson J, in separate judgments, concluded that no part of s 10 could be supported as a law with respect to the subject of trading corporations in s 51(xx). In this respect, they differed from Gibbs CJ, who upheld s 10(4) of the Act. In the result, the court declared that ss 7 and 10(1) and (4) of the World Heritage Properties Conservation Act 1983 (Cth) were

valid. It was, the court declared, ‘unnecessary to determine the validity of subss (2) and (3) of s 10’: 158 CLR at 325. The court also declared that the facts as placed before the court established that the HEC was a trading corporation: 158 CLR at 325. [page 329] 4.2.24 As in Actors and Announcers Equity Association v Fontana Films Pty Ltd (1982) 150 CLR 169 4.2.16C, the Tasmanian Dam case presented two opposing views on the scope of the corporations power: a narrow view supported by Gibbs CJ, Wilson and Dawson JJ, and a broad view supported by Mason, Murphy and Deane JJ. And, as in Fontana Films, Brennan J expressly declined to commit himself to one view or the other; that is, he managed to decide what he saw as the issue before the court (could the Commonwealth legislate so as to stop the HEC building a dam on the Gordon River below the Franklin River?) without going beyond the narrower view of s 51(xx). This issue of the reach of the corporations power was, perhaps surprisingly, not resolved until 2006. Perhaps unsurprisingly, a wide view has prevailed: New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C. 4.2.25 The Tasmanian Dam case (1983) 158 CLR 1 did, however, resolve some matters. The finding that s 10(4) of the Act was within s 51(xx) demonstrated that the corporations power could, whatever else it authorised, support laws dealing with (1) trading activities of trading corporations; and (going further than previous decisions) (2) acts done by trading corporations for the

purposes of their trading activities (such as, in the case of the HEC, building a dam to generate electricity for sale to consumers). Significantly, the fact that s 10(4) was enacted to thwart construction of the dam for heritage reasons was not a barrier to validity. As Mason J said (158 CLR at 153): It is enough that the law has a real relationship with the subjects of the power; it matters not, when the power is not purposive, that the object of the exercise is to attain some goal in a field that lies outside the scope of the Commonwealth power.

4.2.26 Additionally, in the Tasmanian Dam case (1983) 158 CLR 1, the Hydro-Electric Commission was held to be a trading corporation because trading was ‘a substantial part of its overall activities, if not the predominant part’ (158 CLR at 240 per Brennan J); even though it had ‘wide semi-governmental powers and functions’, and might ‘be described as a “public utility” corporation’, nevertheless its substantial sales of electricity made it a trading corporation within s 51(xx): 158 CLR at 293 per Deane J (see also at 156 per Mason J; 179 per Murphy J). So a clear majority of the court unequivocally endorsed the view taken by Mason, Murphy and Deane JJ in State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 (see 4.2.12), that a trading corporation was to be identified primarily by reference to its activities; not its predominant or characteristic activities but any of its significant or substantial activities. 4.2.27 The differences in judicial approach to the range of conduct that can be regulated under s 51(xx) were not resolved by the court’s decision in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323. Under ss 127A and 127B of the Industrial Relations Act

1988 (Cth), the Australian Industrial Relations Commission could review and set aside or vary a contract for services where the commission was satisfied that the contract was ‘unfair’, ‘harsh’ or ‘against the public interest’: s 127A(2). Section 127C(1) provided that ss 127A and 127B applied only in relation to certain contracts including: (a) … a contract to which a constitutional corporation is a party; (b) … a contract relating to the business of a constitutional corporation; (c) … a contract entered into by a constitutional corporation for the purposes of the business of the corporation; …

[page 330] Mr and Mrs Wagner had a contract with Tasmanian Pulp and Forest Holdings Ltd to extract and cart timber for the corporation. They subcontracted some of the work to Mr and Mrs Dingjan and to Mr and Mrs Ryan respectively. On the application of a trade union supporting the subcontractors, the commission varied the subcontracts on the basis that s 127C(1)(b) of the Act applied, there being no dispute that Tasmanian Pulp and Forest Holdings Ltd was a trading corporation. Mr and Mrs Wagner applied to the High Court for relief on the ground that s 51(xx) did not authorise the commission’s actions. A majority of the High Court (Brennan, Dawson, Toohey and McHugh JJ; Mason CJ, Deane and Gaudron JJ dissenting) agreed that s 127C(1)(b) did not supply a sufficient nexus with s 51(xx) and that the scheme was invalid to that extent. Several different approaches to the scope of s 51(xx) and to the characterisation of the legislation emerged. Brennan J said that for a law to fall within s 51(xx) (183 CLR at

336) ‘it is not enough that the law applies to constitutional corporations and to other persons indifferently. To attract that support, the law must discriminate between constitutional corporations and other persons, either by reference to the persons on whom it confers rights or privileges or imposes duties or liabilities or by reference to the persons whom it affects by its operation.’ Brennan J accepted that ‘[a] law conferring power to vary or set aside a contract between a constitutional corporation and an independent contractor for work to be done for the purposes of the corporation’s business … would be a law supported by s 51(xx)’ since ‘such a law would limit the corporation’s freedom to contract and qualify its contractual rights to have the work done for the purposes of its business’: 183 CLR at 339. However, under his test of ‘discriminatory treatment’, s 127C(1)(b) was invalid as it extended ‘to contracts that may have no effect on constitutional corporations or on their businesses’: 183 CLR at 339. This approach, with its explicit focus on discrimination, was not taken by any other member of the majority. Dawson J, the second member of the majority, affirmed the narrow view of s 51(xx) he had adopted in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.2.22C, stating that ‘[f]or a law to be a valid law with respect to a trading or financial corporation, the fact that it is a trading or financial corporation should be significant in the way in which the law relates to it’: 183 CLR at 346. He found that s 127C(1)(b) ‘does not require that the contract should … affect the business — let alone the trading or financial activities — of the corporation’ and thus did not validly support the scheme as ‘[t]he nature, indeed the existence, of a corporation is not in these circumstances significant

as an element in the conduct which the law is attempting to regulate’: 183 CLR at 347. Toohey J said that s 51(xx) ‘is a plenary power’ that should have a broad construction: 183 CLR at 352–3. However, in terms of characterisation, he emphasised that the nexus between the law and the power ‘must be substantial, not merely tenuous’ (183 CLR at 353), explaining that (183 CLR at 353): … the law must operate on the rights, duties, powers or privileges of corporations in such a way as to evidence a sufficient connection between the law and the corporations. It is not enough to identify corporations as a reference point so as to affect the activities of others.

On the facts, Toohey J concluded that this ‘sufficient connection’ was absent as regards s 127C(1)(b) as ‘there may be no connection other than that the contract sought to be reviewed relates in some unidentified way to the business of such a corporation the contract may have only the most indirect effect on the corporation or none at all’: 183 CLR at 354. McHugh J, the final member of the majority, also said that s 51(xx) is ‘plenary’ and should ‘be construed with all the generality that its words will admit’: 183 CLR at 368. Disagreeing [page 331] with Dawson J, he accepted that ‘laws that regulate the activities, functions, relationships or business of corporations are clearly laws with respect to corporations’ and ‘s 51(xx) also extends to any subject that affects the corporation’: 183 CLR at 368. This did not mean, however, that any law referring to s 51(xx) corporations was

valid; rather, said McHugh J, for a law to come within s 51(xx) it should ‘in its legal or practical operation’ have ‘significance for the corporation’, that is, ‘some significance for the activities, functions, relationships or business of the corporation’: 183 CLR at 369. As ‘the jurisdiction conferred by s 127C(1)(b) is not dependent upon the contract having any effect on, or any other significance for, the corporation’ (183 CLR at 371), it was invalid. Mason CJ, Deane and Gaudron JJ dissented. Gaudron J (with whom Mason CJ and Deane J agreed) said that ‘s 51(xx) extends, at the very least, to the business functions and activities of constitutional corporations and to their business relationships’ and ‘to the persons by and through whom they carry out those functions and activities and with whom they enter into those relationships’: 183 CLR at 365. She articulated a different view of the ambit of s 127C(1)(b) of the Act to the majority, stating (183 CLR at 365–6): … when regard is had to the type of contract with which ss 127A and 127B are concerned, namely, a contract for the performance of work by an independent contractor, it is clear that [a contract falling within s 127C(1)(b) and not s 127C(1)(a) or (c)] … will inevitably have as its other party a person who performs the business functions or carries out the business activities of a constitutional corporation or a person who is in a business relationship with that corporation. That other party is within the reach of … s 51(xx) … at least to the extent of those functions and activities or that business relationship.

On this basis, she concluded that the provisions were valid in the circumstances arising in this case and that it was not necessary to consider other, potentially different, circumstances: 183 CLR at 366–7. 4.2.28

After many years of uncertainty, an expansive view of the

conduct that can be regulated under the corporations power was upheld in New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1. In 2005, the Commonwealth Parliament, controlled by the Howard Government, substantially amended the Workplace Relations Act 1996 (Cth). In his Second Reading Speech, the Minister for Employment and Workplace Relations described the amendments as designed to promote ‘a flexible, simple and fair system of workplace relations laws’ that would ‘create a new wave of productivity growth’ in the Australian economy: Cth Hansard, House of Representatives, 2 November 2005, pp 16–17, 23. As part of these changes, the government intended, he said, to ‘use the corporations power in the Constitution to move towards a national [workplace relations] system’: p 18. The states and certain trade unions challenged the constitutional validity of these amendments. The High Court found that none of the challenges succeeded. The five judges who formed the majority delivered a joint judgment. Kirby J and Callinan J dissented in separate judgments. 4.2.29C New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 (most footnotes omitted) Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ: The most notable change effected by the [Workplace Relations Amendment (Work Choices) Act 2005 (Cth)] was an alteration of the [page 332]

constitutional basis of the [Workplace Relations] Act [1996 (Cth)]. … [the] general framework [of the previous Act] was based upon the power conferred by s 51(xxxv) (the conciliation and arbitration power). … the new Act is now, in large part, an exercise of the corporations power. The definition of ‘employee’ in s 5(1) is an individual so far as he or she is employed … by an employer. Section 6(1) provides the ‘basic definition’ of ‘employer’ … ‘… employer means: (a) a constitutional corporation, so far as it employs … an individual …’. [Section 6(1)(b)–(f) supplied further definitions of ‘employer’ relying on Commonwealth powers other than s 51(xx).] The term ‘constitutional corporation’ is defined in s 4 to mean a corporation to which s 51(xx) of the Constitution applies. … Part 7 is headed ‘The Australian Fair Pay and Conditions Standard’. The purpose of the Part is to set out ‘key minimum entitlements of employment’ relating to basic rates of pay and casual loadings, maximum ordinary hours of work, annual leave, personal leave, and parental leave … Central to the operation of Pt 7 is the Australian Fair Pay Commission (the AFPC) … The AFPC has … a wage-setting function … [The AFPC provides] a safety net for the low paid and provid[es] minimum wages for certain kinds of employee. … … Div 3 of Pt 7 provides … a ‘guarantee of maximum ordinary hours of work’. In brief, an employee must not be required … by an employer to work more than thirty-eight hours per week and reasonable additional hours. … Division 4 of Pt 7 deals with annual leave … Division 5 of Pt 7 prescribes certain entitlements to … ‘personal leave’. Division 6 of Pt 7 does the same in relation to parental leave.

Part 8 … is headed ‘Workplace agreements’. It also applies only to s 6(1) employers and their employees. It provides for the making, variation and termination of particular kinds of agreement, called workplace agreements. … Workplace agreements must not contain ‘prohibited content’. … What matters are prohibited content is the subject of the Regulations which have prescribed … terms relating to the deduction from wages of union membership dues, terms which confer a … remedy in relation to termination of employment for a reason that is harsh, unjust or unreasonable, and terms that deal with matters that do not pertain to the employment relationship. … Part 9 … is headed ‘Industrial action’. It applies only to s 6(1) employers and their employees. … Most of Pt 9 … deals with the taking of lawful industrial action (protected action) in limited circumstances … Part 9 also prohibits industrial action not permitted by the Act … Part 10 … is headed ‘Awards’. It applies only to s 6(1) employers and their employees. … The AIRC [Australian Industrial Relations Commission] can make an award only to give effect to the outcome of an award rationalisation process and not otherwise. Awards … may only include terms about ‘allowable award matters’ … Part 12 … is headed ‘Minimum entitlements of employees’. It supplements the minimum conditions of employment established by … Pt 7. … Division 4 of Pt 12 deals with termination of employment. Subdivision B of Div 4 provides that employees as defined in s 5(1) … have a right to make application to the AIRC for relief in respect of the termination of their employment on the ground that the termination was harsh, unjust or unreasonable (unfair dismissal). … [page 333]

Subdivision C prohibits an employer from terminating an employee’s employment for any one of a range of specified reasons (unlawful dismissal). … Division 5 of Pt 15 is headed ‘Entry for OHS purposes’. In Pt 15 … ‘employer’ and ‘employee’ have their ordinary meaning. Division 5 prohibits the exercise by an official of a registered organisation of the right to enter premises conferred by an ‘OHS law’ (that is, an occupational health and safety law of a State or Territory prescribed … by the Regulations) unless the official holds a permit under Pt 15 … Division 5 applies … to premises that are occupied or otherwise controlled by constitutional corporations … Part 16 … is headed ‘Freedom of association’. … Divisions 3–8 prohibit a range of conduct by persons in relation to forming, or being or not being a member of, industrial associations, or participating or not participating in industrial action. … Schedule 1 [‘Registration and Accountability of Organisations’] provides for the registration and regulation of organisations of employees and employers. … The associations which may apply for registration … are those which are ‘federally registrable’. An association of employers is federally registrable … if it is a constitutional corporation or if the majority of its members are ‘federal system employers’. Federal system employers include constitutional corporations … Federally registrable employee associations are those which are constitutional corporations or which have as a majority of their members ‘federal system employees’. … … [the plaintiffs] submitted that s 51(xx) permits the making of a law with respect to only the external relationships of constitutional corporations, not their internal relationships, and that the relationship between a … corporation and its employees should be classified as ‘internal’. Secondly, … it was submitted that it is insufficient for a law to be characterised as a law with

respect to constitutional corporations that the law confers rights or imposes obligations upon them. … the preferred test was said to be a distinctive character test — that the nature of the corporation is significant as an element in the nature or character of the laws. Thirdly, … it was submitted that s 51(xx) is to be read down, or confined in its operation, by reference to s 51(xxxv) [the conciliation and arbitration power], with the consequence that the Parliament has no power to legislate with respect to the relationship between a constitutional corporation and its employees except pursuant to s 51(xxxv). … [A] distinction … between the external relationships of a constitutional corporation and its internal relationships, does not assist the resolution of the issues … in these matters. It is a distinction rooted in choice of law rules which cannot … be transposed into the radically different area of determining the ambit of a constitutional head of legislative power. It is a distinction which finds no support in the Convention Debates or drafting history of s 51(xx). It is a distinction of doubtful stability but, if it were to be adopted, there seems every reason to treat relationships with employees as a matter external to the corporation. … … there seems little reason to assign relationships between the corporation and its employees to the class of ‘internal’ relationships. … A distinction between ‘internal’ and ‘external’ matters relating to a corporation … is a distinction that may have utility in the context of choice of law. That was its origin. … But using [such] a distinction … for the radically different task of identifying whether a particular law is within or outside a constitutional head of legislative power invites attention to some underlying assumptions that its use entails. … [This distinction was based on a principle of comity]. Notions of comity do not have any useful place in considering the questions about ambit of legislative power that arise in

[page 334] the present matters. Comity assumes the legislative competence of each of the jurisdictions concerned and would have one jurisdiction give effect to rules whose content is prescribed by the law of the other jurisdiction. But in a federation, the extent of the legislative power of the several integers of the federation is the very question that must be examined. It is not a question whose answer may be assumed, or resolved by appeal to notions of comity. Moreover, relying on notions of comity is apt to invoke presuppositions about allocation of legislative power … that are not easily distinguished from a reserved powers doctrine. … To draw the line between what is internal and what is external, … between matters of formation and corporate powers and objects on the one hand, and the corporation’s operations on the other, necessarily reflects a conclusion about the content of federal legislative power which stems not from the terms in which the power is granted, but from a priori assumptions about division of power. … … the Amending Act does not depend for validity upon the federal Parliament having ‘a general industrial relations power’. It is necessary always to bear steadily in mind that the Amending Act is directed to the relationships between constitutional corporations and their employees, not industrial relations generally. … [The plaintiffs claimed that two possible tests of the scope of the corporations power were suggested by the cases]: a ‘distinctive character test’, and an ‘object of command test’ — the former of which was to be preferred, and the latter to be regarded as having been rejected, or at least not endorsed, in the cases. The ‘distinctive character test’ was said to be: ‘the fact that the corporation is a foreign, trading or financial corporation should be significant in the way in which the law relates to it’ (cf

Tasmanian Dam Case (1983) 158 CLR 1 at 316 per Dawson J) if the law is to be valid. The ‘object of command test’ was said to be: that a constitutional corporation is ‘an “object of command” [of a law], permitting or prohibiting a trading or financial corporation from engaging in conduct or forming relationships’. … What is described as the ‘distinctive character test’ builds largely upon statements made in cases where the laws in question have concerned the trading activities of trading corporations. The argument that the distinctive character test has been, or should be, adopted takes what has been said about what is distinctive of a trading corporation and treats that as indicating that the adjectives ‘foreign’, ‘trading’, and ‘financial’ are the considerations on which the power turns. ‘Trading’ and ‘financial’ are said to refer to a corporation’s activities; ‘foreign’ refers to a corporation’s status or origin. Yet it is acknowledged that the power is to make laws with respect to particular juristic persons. It is … ‘a persons power’ — it is not ‘a power with respect to a function of government, a field of activity or a class of relationships’. Treating the character of the corporations mentioned in s 51(xx) (as foreign, trading or financial) as the consideration on which the power turns produces awkward results. Why should the federal Parliament’s power with respect to Australian corporations focus upon their activities, but the power with respect to foreign corporations focus only upon their status? More fundamentally, however, … the ‘distinctive character test’ is put forward by the plaintiffs … as an additional filter through which it is said the law must pass if it is to be regarded as having a sufficient connection with s 51(xx). This is a contention that … necessarily invokes notions of federal balance. … It is an approach which would read the power as confined to making laws with respect to the trading activities of Australian trading corporations and the financial activities of Australian

financial corporations. But that, of course, is not what s 51(xx) says. [page 335] It is an approach that presents a particular difficulty with foreign corporations. The character of a foreign corporation is fixed by its status, not by its activities. The power to legislate with respect to foreign corporations would be very narrow if the law must focus upon the status of the corporation. There is no immediately evident reason for there to be such disconformity between the ambit of legislative power with respect to Australian corporations and the ambit of legislative power with respect to foreign corporations. … The dissenting members of the Court in Re Dingjan [(1995) 183 CLR 323], Mason CJ, Deane and Gaudron JJ, took a view of the reach of s 51(xx) wider than that of the majority. Particular reference need now be made only to the reasons of Gaudron J (with which Deane J agreed). Her Honour’s reasoning proceeded by the following steps. First, the business activities of corporations formed within Australia signify whether they are trading or financial corporations, and the main purpose of the power to legislate with respect to foreign corporations must be directed to their business activities in Australia. Secondly, it follows that the power conferred by s 51(xx) extends ‘at the very least’ to the business functions and activities of constitutional corporations and to their business relationships. Thirdly, once the second step is accepted, it follows that the power ‘also extends to the persons by and through whom they carry out those functions and activities and with whom they enter into those relationships’. This understanding of s 51(xx) was subsequently amplified by Gaudron J in her reasons in Re Pacific Coal Pty Ltd; Ex parte

Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 at 375 where her Honour said: I have no doubt that the power conferred by s 51(xx) of the Constitution extends to the regulation of the activities, functions, relationships and the business of a corporation described in that sub-section, the creation of rights, and privileges belonging to such a corporation, the imposition of obligations on it and, in respect of those matters, to the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business. This understanding of the power should be adopted. It follows, as Gaudron J said, that the legislative power conferred by s 51(xx) ‘extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations’. … An important element underpinning … all of the plaintiffs’ arguments about s 51(xx), was that it is necessary to limit the reach of the power. The step of taking ‘a different approach’ to s 51(xx) was said … to be required because s 51(xx) is a power with respect to persons. But what necessarily underpins the proposition that a different approach is required … is an implicit assertion about federal balance and, in particular, an implicit assertion that to give the ordinary scope to … s 51(xx) could or would distort that balance. … And if there is no underlying assertion about federal balance, there could be no reason to adopt a different approach to determining the sufficiency of connection between an impugned law and the relevant head of power. The bare fact that s 51(xx) is a power to legislate with respect to particular persons rather than functions, activities or relationships, requires no such conclusion. …

[page 336] … the fundamental question which lies behind the plaintiffs’ submissions is: what exactly is the content of the proposition that a particular construction of s 51(xx) would, or would not, impermissibly alter the federal balance? It is a proposition that stops well short of asserting that the favoured construction must be adopted lest the States could no longer operate as separate governments exercising independent functions. Instead it is advanced by proposing particular limitations to the connection which must be established to demonstrate that a law is a law with respect to constitutional corporations and is advanced in that form on the basis that the result is said to be evidently desirable, even necessary. … But to be valuable, the proposition, that a particular construction of s 51(xx) would or would not impermissibly alter the federal balance, must have content, and the plaintiffs made no attempt to define that content. … In so far as the plaintiffs contended that a test of distinctive character or discriminatory operation is to be adopted it is enough to say that … the impugned provisions of the Amending Act which depend upon s 51(xx) either single out constitutional corporations as the object of statutory command (and in that sense have a discriminatory operation) or, like the legislation considered in Fontana Films [(1982) 150 CLR 169], are directed to protecting constitutional corporations from conduct intended and likely to cause loss or damage to the corporation. In so far as the plaintiffs’ contentions required tests of distinctive character or discriminatory operation to be understood as inserting a new or different filter into the process of characterisation those contentions should be rejected. A law which prescribes norms regulating the relationship between constitutional corporations and their employees, or affecting constitutional corporations in the manner considered and upheld

in Fontana Films or … ‘laws prescribing the industrial rights and obligations of [constitutional] corporations and their employees and the means by which they are to conduct their industrial relations’ are laws with respect to constitutional corporations. … The [plaintiff] AWU [Australian Workers’ Union] … relied upon s 51(xxxv) [the conciliation and arbitration power] as providing a powerful reason … favouring a narrow construction of s 51(xx) so as to deny its use to provide for industrial relations. … … several difficulties with [these] submissions … appear. First, the text of s 51(xxxv) … is concerned with a narrower subject matter than industrial matters or relations … Why should … s 51(xx), which [is] relied upon by the Commonwealth as supporting a law such as Pt 7, be construed as not doing so for the reason that s 51(xxxv) identifies particular means for the prevention and settlement of certain industrial disputes? The other heads of power should not be so construed. Secondly, it is contrary to established principle, in the case of a law which may bear several characters, one of which attracts a particular head of legislative power, to ask, as a requirement of validity, whether there is anything in that head of power which suggests it may be used to deal with those other matters. … None of [these] … submissions … should be accepted. Their rejection is favoured by a consideration of the text and structure of the Constitution and by the course of authority in this Court since at least the demise of the reserved powers doctrine in 1920. … [It has been] held that the phrase in s 51(xiii) ‘other than State banking’ imposes a restriction upon federal legislative power generally, rather than a restriction only upon the ambit of s 51(xiii). Other examples of positive prohibitions or restrictions are found in the paragraphs of s 51 dealing with taxation (s 51(ii)) —

‘but so as not to discriminate between States or parts of States’; bounties (s 51(iii)) — ‘but so that such bounties shall be uniform [page 337] throughout the Commonwealth’; insurance (s 51(xiv)) — ‘other than State insurance’; and medical and dental services (s 51(xxiiiA)) — ‘but not so as to authorise any form of civil conscription’. Paragraph (xxxv) is to be read as a whole; it does not contain any element which [constitutes] … a positive prohibition or restriction upon what otherwise would be the ambit of the power conferred by that paragraph. Accordingly, there does not arise the further question … whether other paragraphs of s 51, in particular para (xx), are to be construed subject to … s 51(xxxv). … Much of the new Act turns … on the definition of employer set out in s 6 … The employers identified in para (a) of the definition of employer in s 6(1) are constitutional corporations. The definition of employee in s 5(1) depends upon the identification of an employer (as defined). … Part 7 … provides for ‘key minimum entitlements of employment’ … Part 7 obliges an ‘employer’ (and thus a constitutional corporation) to provide employees with not less than the specified entitlements of employment. … In so far as the provisions of Pt 7 … apply to employers as described in para (a) of the definition in s 6(1), they single out constitutional corporations as the object of the statutory command. In that sense they have a discriminatory operation. It is constitutional corporations that must provide their employees with not less than the prescribed minimum entitlements. These are laws with respect to constitutional corporations. …

The same analysis is to be made of Pts 8 and 10, [and] Divs 1 and 2 of Pt 12 … Each of these Parts relates to the terms and conditions of employment to be provided by constitutional corporations to their employees. … Part 8 [workplace agreements], in so far as it applies to employers as described in para (a) of the definition in s 6(1), like Pt 7, prescribes norms with which a constitutional corporation, making … agreements with its … employees, must comply. Those provisions … have a discriminatory operation; they are provisions that are directed at constitutional corporations. They are laws with respect to constitutional corporations. … Part 10 [awards] raises no different question about s 51(xx) from those presented by … Pts 7 and 8. … Divs 1 and 2 of Pt 12 provide for certain minimum entitlements of employees, including in respect of meal breaks … and public holidays … The norms created by Divs 1 and 2 of Pt 12 [minimum entitlements of employees] … present no different question about s 51(xx) from those dealt with in relation to Pt 7. The plaintiffs’ challenges to Pts 8 and 10, [and] Divs 1 and 2 of Pt 12 … in so far as they apply to constitutional corporations, fail. [Part 9 (industrial action)] focuses primarily upon the conduct of employees, or organisations of employees, which is directed at an employer as defined in s 6(1). But the Part also includes some provisions which forbid employers (as defined), and thus constitutional corporations, from engaging in certain conduct. … To the extent to which Pt 9 prescribes norms governing what industrial action constitutional corporations may take against their employees, it is valid for the same reasons that other provisions … prescribing what a constitutional corporation may or may not do in relations with their employees are valid. And in so far as Pt 9 prescribes norms governing what industrial action the

employees of constitutional corporations may take against their employer, it is properly characterised as a law with respect to constitutional corporations; the norms it [page 338] creates give constitutional corporations rights or immunities. If, as was held in Fontana Films [(1982) 150 CLR 169], … a law forbidding any person from engaging in certain conduct, in trade or commerce, that will, or would, be likely to have substantially adverse effects on a constitutional corporation is a law with respect to constitutional corporations, then a law which regulates the relationship between constitutional corporations and their employees is no less of that character. It is only if … ‘a new or different filter’ is inserted into the process of characterisation that the need to demonstrate actual or likely damage to a constitutional corporation would take on significance. For the reasons given earlier, that contention should be rejected. … [The court subsequently considered the validity of ss 365 (seeking to include prohibited content in an agreement) and 366 (misrepresentations about prohibited content):] It was submitted that neither section required that the person to whom the prohibition was directed be a party or proposed party to a workplace agreement or a proposed agreement … It is critically important, however, to recognise that … ss 365 and 366 have operation in relation to … workplace agreements with constitutional corporations. A law which forbids any person from making a misrepresentation in relation to [a] … workplace agreement, that a particular term does not contain prohibited content, is connected with the subject matter of s 51(xx) — constitutional

corporations. It is connected in a way that is not ‘insubstantial, tenuous or distant’. The connection is not insubstantial, tenuous or distant because the provisions … form an integral part of a set of provisions directed to forbidding employers and employees from making or seeking to make workplace agreements with prohibited content. Section 365 prevents any person from seeking the inclusion of such a term; s 366 is evidently intended to prevent reckless misrepresentations about the effect of … agreements. In their operation with respect to those employers which are constitutional corporations, both ss 365 and 366 are supported by s 51(xx). … Part 15 … deals with rights to enter premises. … Section 756 provides that an official of an ‘organisation’ … who has a right under an OHS law, must not exercise that right unless the official holds a permit under Pt 15 and exercises the right during working hours. … … the premises to which the right of entry is controlled are premises ‘occupied or otherwise controlled by’ a constitutional corporation. This is a sufficient connection with s 51(xx), whether or not the entry that is thus regulated concerns a business being conducted on the premises by that corporation. The connection lies in the controlling of entry to a constitutional corporation’s premises. … [The court then considered the validity of Pt 16 (Freedom of association):] [Part 16 applies] to several kinds of conduct: conduct by a constitutional corporation …, conduct against a constitutional corporation …, conduct that does, or is intended to, adversely affect a constitutional corporation … or that does, or is intended to, adversely affect a[n] … employee or contractor of a constitutional corporation …, and conduct that consists of … encouraging … a constitutional corporation to do, or not do,

certain things … The first two forms of conduct (conduct by or against a constitutional corporation) raise no … different issue from those considered in connection with … Pts 7, 8, 10, [and] Divs 1 and 2 of Pt 12 [of the Act] … For the reasons given in connection with those provisions, the challenge to [their] validity … fails. [page 339] The prohibition of … conduct whose … purpose or effect is to cause harm to a constitutional corporation is to be supported as not materially different from [the] legislation … upheld in Fontana Films [(1982) 150 CLR 169]. And those provisions … which proscribe conduct done with the intent to cause harm to constitutional corporations are to be supported on the same basis. It is important to notice that the provisions about conduct directly affecting … employees or contractors of constitutional corporations … describe the relevant conduct as conduct affecting a person ‘in the capacity of’ employee or contractor. The reference to capacity reveals that the conduct proscribed is conduct which affects the … relationship between an employee or contractor and a constitutional corporation. That being so, [these provisions] … are properly characterised as laws with respect to constitutional corporations. The prohibition … against persons … encouraging … a constitutional corporation, is to be supported on the same basis as the law creating the principal prohibition of conduct by the constitutional corporation the incitement of which is forbidden. … [The court then considered the validity of Sch 1 (Registration and Accountability of Organisations):] One of the stated intentions of the Parliament in enacting Sch 1 was to enhance relations [between] … ‘federal system

employers’ and ‘federal system employees’ and to reduce the adverse effects of industrial disputation by requiring associations of such persons to meet the standards set out in Sch 1 in order to gain the rights and privileges accorded to associations under the new Act … The terms ‘federal system employer’ and ‘federal system employee’ are defined … in terms which … fix upon employment by ‘a constitutional corporation’. Part 2 of Ch 2 of Sch 1 sets up a system of registration. Application may (not must) be made to the AIRC by bodies including ‘a federally registrable association of employers’ and ‘a federally registrable association of employees’. … An employers association may apply for registration if it itself is a constitutional corporation, or the majority of its members are federal system employers … An association of employees may apply if it itself is a constitutional corporation, or the majority of its members are federal system employees … … contrary to the principal submission of those attacking its validity, Sch 1 is supported as an exercise of the power with respect to constitutional corporations. … If it be accepted … that it is within the corporations power for the Parliament to regulate employer–employee relationships and to set up a framework for this to be achieved, then it also is within power to authorise registered bodies to perform certain functions within that scheme of regulation. It also is within power to require, as a condition of registration, that these organisations meet requirements of efficient and democratic conduct of their affairs. … … the plaintiffs’ several challenges to the validity of the Amending Act all fail. …

4.2.30

The decision in New South Wales v Commonwealth (Work

Choices case) was clearly a significant victory for the Commonwealth. Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ accepted that provisions that ‘single out constitutional corporations as the object of statutory command … or, like the legislation considered in Fontana Films, are directed to protecting constitutional corporations from conduct intended and likely to cause loss or damage to the corporation’ are laws with respect to s 51(xx): 229 CLR at 121. Their endorsement [page 340] (229 CLR at 114–15) and application of Gaudron J’s view of s 51(xx) in Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 means that s 51(xx), in Gaudron J’s words in that earlier case (203 CLR at 375): … extends to the regulation of the activities, functions, relationships and the business of a [constitutional] corporation … the creation of rights, and privileges belonging to such a corporation, the imposition of obligations on it and, in respect of those matters, to the regulation of the conduct of those through whom it acts, its employees and shareholders and, also, the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business.

Note that this passage does not purport to be an exhaustive statement of the limits of the power. It is also significant that the outcome in the Work Choices case conforms to orthodox principles of characterisation in that the connection of the legislative measures with the topic of industrial relations did not prevent those measures being characterised as laws with respect to 51(xx).

4.2.31 In many respects, the outcome in New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 can be seen as the natural and inevitable consequence of the approach to reading the Constitution adopted in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129 3.2.22C. In particular, the majority in the Work Choices case rejected the plaintiffs’ arguments based on ‘notions of federal balance … whether … explicit or only implicit’, the joint judges claiming that such arguments lacked ‘content’: 229 CLR at 120–1. As Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ stated: ‘[W]hen it is said that there is a point at which the legislative powers of the federal Parliament and the legislative powers of the States are to be divided lest the federal balance be disturbed, how is that point to be identified?’: 229 CLR at 120. In their opinion, the plaintiffs did not provide a satisfactory answer to this question. Their refusal to narrow s 51(xx)’s ambit by reference to s 51(xxxv) is also consistent with the Engineers’ case. 4.2.32 While it is clear that s 51(xx) gives the Commonwealth wide-ranging regulatory authority, it does not, even after New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1, confer a general power over the national economy. The subject of the power remains ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’. In the Work Choices case, Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ recognised that one of the Commonwealth’s aims, in amending the Workplace Relations Act 1996 (Cth), was to move to a national system of workplace relations law. However, they noted that the legislation did not apply to all Australian workers (229 CLR at 69):

The Explanatory Memorandum, citing a report of the Australian Bureau of Statistics, said that ‘[u]se of the corporations power, together with other heads of power such as the Territories power and powers referred by Victoria, to expand the federal system would mean that up to 85 per cent of Australian employees would be covered by the federal system’. Large and medium sized businesses in Australia are almost invariably incorporated. The figure of 85 per cent was accompanied by an assertion that 49 per cent of small businesses employing staff are currently incorporated.

[page 341] 4.2.33 As regards those bodies with corporate status, the Commonwealth’s regulatory capacity depends not only on the types of law that are ‘with respect to’ s 51(xx) — a category that New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 says is very broad — but also on the interpretation given to the corporations listed in s 51(xx). On this latter issue, the majority in the Work Choices case were silent, observing that on the facts ‘there is no occasion now to consider, what kinds of corporation fall within the constitutional expression “trading or financial corporations formed within the limits of the Commonwealth”. Any debate about those questions must await a case in which they properly arise’: 229 CLR at 75. Following the decision, there was speculation that the High Court might revisit aspects of the meaning of ‘trading corporation’: L Zines, ‘The High Court and the Constitution in 2006’ (2007) 30 University of New South Wales Law Journal 174 at 181. See also Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11 4.2.36C.

4.2.34 In Williams v Commonwealth (No 1) (2012) 248 CLR 156, the plaintiff challenged an agreement between the Commonwealth and Scripture Union Queensland (SUQ) under which the Commonwealth paid SUQ for delivery of chaplaincy services at the government school where the plaintiff’s children were enrolled. The agreement included the guidelines covering the National School Chaplaincy Programme but was not given effect by a specific Commonwealth law. The majority held that the agreement fell outside the Commonwealth’s executive power in s 61 of the Constitution and was invalid. As part of its executive power argument, the Commonwealth submitted that the provision of funding to SUQ could be given effect as a law enacted under the corporations power. Hayne J stated (248 CLR at 276–7): It was submitted that SUQ was … a trading or financial corporation and that it followed that a law regulating the activities of SUQ in its provision of chaplaincy services would be a law with respect to trading or financial corporations. … The [National School Chaplaincy Programme] Guidelines did not require that a project sponsor be a trading or financial corporation. If … SUQ met that description, its being so was wholly irrelevant to the operation and engagement of the Guidelines. The hypothetical law under consideration would not in any way hinge on the constitutional conception of trading or financial corporations. It would not be a law authorising or regulating the capacity of constitutional corporations generally or of a particular corporation to make a contract. … it would not be a law authorising or regulating the activities, functions, relationships or business of constitutional corporations generally or any particular constitutional corporation; it would not be a law regulating the conduct of those through whom a constitutional corporation acts nor those whose conduct is capable of affecting its activities, functions, relationships or business. The

hypothetical law would be no more than a law authorising or requiring the making of a particular kind of contract in which one contracting party could be, but need not be, a constitutional corporation providing services for reward. The hypothetical law would not be a law supported by s 51(xx).

Kiefel J similarly stated (248 CLR at 368): The Guidelines did not require a party to a funding agreement entered into pursuant to the NSCP [National School Chaplaincy Programme] to be a trading or financial corporation. Any statute authorising the Funding Agreement could not be said to be concerned with the regulation of the activities, functions, relationships and business of a corporation, the rights

[page 342] and privileges belonging to a corporation, the imposition of obligations upon it, or the regulation of the conduct of those through whom it acts. More generally, any legislation supporting the Funding Agreement would not single out constitutional corporations as the object of its statutory command.

The other members of the court in Williams v Commonwealth (No 1) (French CJ, Gummow, Heydon, Crennan and Bell JJ) did not find it necessary to consider the scope of the corporations power. 4.2.35 Following the outcome in Williams v Commonwealth (No 1) (2012) 248 CLR 156, the Commonwealth enacted legislation designed to support the funding agreement held invalid in that case and a range of other funding arrangements potentially affected by the decision. The court considered that legislation in Williams v

Commonwealth (No 2) (2014) 252 CLR 416. While the ‘National School Chaplaincy and Student Welfare Program’ was named in the legislation, the court found that the remedial scheme, in its application to that program, was not a valid law with respect to s 51(xx) (or, as also argued, with respect to ‘benefits to students’ under s 51(xxiiiA)). Accordingly, the question whether SUQ was a s 51(xx) trading corporation did not arise. In their joint judgment, French CJ, Hayne, Kiefel, Bell and Keane JJ (Crennan J agreeing on s 51(xx)) said (252 CLR at 460–1): SUQ’s reliance on s 51(xx) may be dealt with shortly. The impugned provisions seek to provide authority for the Commonwealth to make agreements and payments. For [present] … purposes … it may be assumed that the opposite party to an agreement made for … the National School Chaplaincy and Student Welfare Program and the recipient of payments made under that program can be, even must be, a trading or financial corporation. A law which gives the Commonwealth the authority to make an agreement or payment of that kind is not a law with respect to trading or financial corporations. The law makes no provision regulating or permitting any act by or on behalf of any corporation. The corporation’s capacity to make the agreement and receive … the payments is not provided by the impugned provisions. Unlike the law considered in New South Wales v The Commonwealth (Work Choices Case) (2006) 229 CLR 1, the law is not one authorising or regulating the activities, functions, relationships or business of constitutional corporations generally or any particular constitutional corporation; it is not one regulating the conduct of those through whom a constitutional corporation acts or those whose conduct is capable of affecting its activities, functions, relationships or business. It is not necessary to consider whether SUQ is a trading or financial corporation. In particular, it is not necessary to decide whether … the corporation was properly classified as a trading or financial corporation

simply because it made agreements with the Commonwealth which obliged it to provide services in return for payment.

At first blush, this is a straightforward application of New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C on the basis that a general law that extends to constitutional corporations as potential payees would not, as Kiefel J said in Williams v Commonwealth (No 1) (2012) 248 CLR 156 at 368, ‘single out constitutional corporations as the object of its statutory command’. Yet, looking more closely at what was said in Williams v Commonwealth (No 2), if a payee under a funding agreement ‘must be’ a s 51(xx) corporation, it is surely arguable that a law so providing creates ‘rights’ or ‘privileges belonging to such a corporation’: see Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 (see 4.2.30) at 375 per Gaudron J. The extent to which Williams [page 343] v Commonwealth (No 2) represents a retreat from the breadth of the Work Choices case in this respect awaits further clarification. 4.2.36C

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11 (footnotes omitted)

[In this case, the court returned to the question of the entities falling

within s 51(xx). The case concerned the Queensland Rail Transit Authority established by the Queensland Rail Transit Authority Act 2013 (Qld) (QRTA Act). Under the QRTA Act, the authority had several features associated with corporate status, but the Act stipulated that it ‘is not a body corporate’: s 6(2). The authority supplied labour (personnel) to a related entity, Queensland Rail Limited. The plaintiff unions argued that the authority was a s 51(xx) trading corporation and, as such, the Fair Work Act 2009 (Cth) applied to the authority’s relations with its employees. The court found that the authority was a trading corporation under s 51(xx).] French CJ, Hayne, Kiefel, Bell, Keane and Nettle JJ: Is the Authority a ‘trading or financial corporation formed within the limits of the Commonwealth’ within … s 51(xx) of the Constitution? If it is, the relations between the Authority and its employees are governed by federal industrial relations legislation. If it is not, State industrial relations legislation applies. The Authority accepts that it is an artificial legal entity formed within the limits of the Commonwealth. … [But] it submits, it is an entity which is not a ‘corporation’ and which is not a ‘trading or financial’ corporation. … Section 51(xx) The questions stated by the parties assume that it is useful to direct separate attention to what is a ‘corporation’ and what is a ‘trading corporation’ within the meaning of s 51(xx). … But this must not obscure the obvious importance of recognising that the subject matter of s 51(xx) is not ‘corporations’; it is ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’. And neither the word ‘corporations’ … nor the collocation ‘trading or financial corporations formed within the limits of the Commonwealth’ is to be construed without regard to the context within which the expression appears.

The competing submissions The chief point of difference between the plaintiffs and the Authority was whether the Authority is a ‘corporation’ within the meaning of the second limb of s 51(xx). The plaintiffs submitted that ‘an entity established under law with its own name, and with separate legal personality and perpetual succession, is a corporation within the meaning of s 51(xx)’. … By contrast, the Authority … submitted that not all artificial entities having separate legal personality are corporations. The Authority submitted that ‘the intention of Parliament is the defining feature of whether an artificial juristic entity is created as a corporation, and that intention is manifested either by express words or by necessary implication’. Hence, so the Authority submitted, the express provision, by s 6(2) of the QRTA Act, that the Authority ‘is not a body corporate’ … requires the conclusion that the Authority is not a ‘corporation’. … [page 344] The Authority further submitted that, even if it is a ‘corporation’, it is not a ‘trading or financial corporation’. … The Authority accepted that … an ‘activities’ test determines whether it is a ‘trading corporation’. But it submitted that its activities do not warrant it being classed as a trading corporation because its only activity is to provide employees to a company not at arm’s length … for an amount which yields no profit for the Authority. A ‘corporation’? For the purposes of deciding this case, it is not necessary … to state exhaustively the defining characteristics of a corporation (whether a ‘foreign corporation’ or a ‘trading or financial corporation’). …

The QRTA Act creates the Authority as a distinct entity. The Authority can have rights and duties. It is, therefore, a separate legal entity … … the Authority expressly disclaimed any argument that ‘corporation’ as used in either limb of s 51(xx) should be read as restricted to corporations of a kind that were known to foreign law or to English or colonial law at the time of federation. And the Authority was right to do so. It is not to be supposed that the only kinds of ‘foreign corporations’ and ‘trading or financial corporations’ with respect to which s 51(xx) gives legislative power are bodies constituted … in the way in which corporations of those kinds were constituted … in 1900. … There is no reason to read s 51(xx) as granting power to deal only with classes of artificial legal entities having characteristics fixed at the time of federation. To read the provision in that way would hobble its operation. … And there is no textual or contextual reason to conclude that the Parliament’s power with respect to trading or financial corporations formed within the limits of the Commonwealth should be frozen in time by limiting the power to entities of a kind that existed at federation. … … what is it that marks an artificially created legal entity as a ‘trading or financial corporation formed within the limits of the Commonwealth’? As has been noted, the Authority sought to answer this question by reference only to whether the Parliament providing for the creation of the entity ‘intended’ to create a ‘corporation’. But this answer gave no fixed content to what is a ‘corporation’. The Authority’s submissions proffered no description … of what it means to say that the entity created is or is not a ‘corporation’. … Rather, it was an intention to apply, or in this case not to apply, a particular label. A labelling intention of this kind provides no satisfactory criterion for determining the content of federal legislative power. …

… the [Authority’s] submissions took as their premise that there is a class of artificial right and duty bearing entities (other than bodies politic) called either ‘corporations’ or ‘bodies corporate’ and a class of those entities which are not, and cannot be, described by either expression. The assumed division … cannot be made. No criteria which would differentiate between the two supposed classes of entities were identified. … The premise for the Authority’s submissions is not established. … … a State Parliament cannot determine the limits of federal legislative power. … whether an entity is a corporation of a kind referred to in s 51(xx) presents an issue of substance, not mere form or label. … [Thus while the judges accepted that s 6(2) of the QRTA Act had certain consequences for how the authority was treated under Queensland enactments (HCA at [29]–[30]), they [page 345] found that s 6(2) did not prevent the authority from being classified as a corporation under s 51(xx) of the Constitution:] … the Authority is created as a separate right and duty bearing entity. It may own, possess and deal with real or personal property. It is an entity which is to endure regardless of changes in those natural persons who control its activities and, in that sense, has ‘perpetual succession’. Its constituting Act provides for mechanisms by which its assumption of rights and duties may be formally recorded and signified. The Authority has ‘the full character of a corporation’. A ‘trading corporation’?

As already noted … the Authority submitted that it dealt only with a related entity, QRL [Queensland Rail Limited], and made no profit from those dealings, and that these … activities did not make it a trading corporation. … … some of the interveners … advanced detailed submissions about what test or tests should be applied in deciding whether a corporation is a trading corporation. In order to decide this case, however, it is not necessary to examine those submissions in any detail. Instead, it is enough to conclude that no matter whether attention is directed to the constitution and purposes of the Authority, or what it now does, or some combination of those considerations, the Authority must be found to be a trading corporation. The QRTA Act established the Authority as an entity having functions which included ‘managing railways’, ‘controlling rolling stock on railways’, ‘providing rail transport services, including passenger services’ and ‘providing services relating to rail transport services’. The QRTA Act provides that the Authority is to ‘carry out its functions as a commercial enterprise’. Provision is made for the Authority to pay dividends to the State and, to that end, the Authority is obliged to give the responsible Ministers … an estimate of its profit for the financial year. … the Authority is [also] liable to pay to the [State] Treasurer … amounts equivalent to the amounts for which the Authority would have been liable if it had been liable to pay [Commonwealth] tax … In light of these provisions, the conclusions that the Authority was constituted with a view to engaging in trading and doing so with a view to profit are irresistible. Even if the Authority is treated as now doing nothing more than supplying labour to QRL (a related entity) … and even if … the Authority chooses to supply that labour at a price which yields it no profit, those features of its activities neither permit nor require the conclusion that the Authority is not a trading

corporation. Labour hire companies are now a common form of enterprise. The engagement of personnel by one enterprise for supply of their labour to another enterprise is a trading activity. That the parties to the particular supply arrangement are related entities does not deny that characterisation of the activity. That the prices for supply are struck at a level which yields no profit to the supplier likewise does not deny that the supplier is engaged in a trading activity. In combination, these considerations require the conclusion that the Authority is a trading corporation. It is not necessary to consider which of them is or are necessary or sufficient to support the conclusion. … [In his separate judgment, Gageler J found that the authority was a corporation for reasons similar to the other judges. Gageler J also found that the authority was a trading corporation within s 51(xx), adopting an expansive view of the meaning of that expression:] [page 346] Gageler J: … Not being a term of art … ‘trading’ in s 51(xx) is to be interpreted and applied with the same liberality as ‘trade’ in ss 51(i) and 92. There is no reason to consider that ‘trading’ must be descriptive of every ‘trading corporation’ in the same way. … Murphy J in Adamson’s Case … state[d] that ‘[t]he constitutional description of trading corporations includes those bodies incorporated for the purpose of trading; and also those corporations which trade’. Those two ways in which his Honour identified the constitutional description of trading corporation as capable of applying to a corporation — by reference to its trading purpose or alternatively by reference to its trading activity — must each be qualified to exclude that which is insubstantial. This is

not a case which calls for any examination of that qualification or for any consideration of how purpose and activity might interact in a case where the substantiality of a trading purpose or of a trading activity might be marginal. The basic point that the constitutional description of trading is capable of being applied to a corporation either by reference to its substantial trading purpose (irrespective of activity) or by reference to its substantial trading activity (irrespective of purpose) is sound in principle and is supported by authority. I would reject on both of those bases the submission made on behalf of the Attorney-General for Victoria which attempts to … substitute an inquiry into a corporation’s ‘true character’, to be evaluated by reference to that corporation’s ‘characteristic activity’. … Looking to its statutory functions, and irrespective of its activities (if any) from time to time, it is sufficient to conclude that [the Authority] … answers the constitutional description of a trading corporation that those functions include the provision of services of and relating to rail transport. Whilst it can be observed that [the Authority] … is statutorily obliged to carry out its statutory functions as a commercial enterprise, a profit-making objective is not essential to trade. Looking alternatively to its current activities, and independently of any consideration of its statutory functions, it is sufficient to conclude that [the Authority] … answers the constitutional description of a trading corporation that [it] … in fact provides the services of its employees under contract to Queensland Rail Limited. It is not to the point that Queensland Rail Limited is its only customer. Nor is it to the point that Queensland Rail Limited is its wholly owned subsidiary. Nor is it to the point that the services are supplied only on a cost recovery basis. …

4.2.37 Gageler J accepted a test of either ‘substantial trading purpose’ or ‘substantial trading activity’ as sufficient to identify a corporation as a trading corporation: HCA at [70]. By contrast, the joint judgment (HCA at [40]–[43]) was non-committal about the test to be used even though the Queensland Rail Transit Authority had, in accordance with previous decisions, assumed that ‘an “activities” test’ applied to it: HCA at [14]. This again raises the possibility (see 4.2.33) that the court might in future revisit the activities-based test, established in R v Federal Court of Australia; Ex parte WA National Football League (Adamson’s case) (1979) 143 CLR 190 (see 4.2.11), State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 (see 4.2.12) and Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.2.22C for identifying s 51(xx) ‘trading or financial corporations’. While that aspect of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11 dealing with [page 347] the meaning of ‘trading’ corporations and (by extension) ‘financial’ corporations generates some uncertainty, the court’s finding that the authority was a corporation, despite the statement in its parent Act denying this, shows, as James Stellios has pointed out, that the validity of legislation seeking to evade s 51(xx) in this way ‘will be assessed as a matter of substance not form’: Stellios, 2015, p 109. 4.2.38 The remaining case to consider is New South Wales v Commonwealth (Incorporation case) (1990) 169 CLR 482, decided

after Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 and before New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C. New South Wales v Commonwealth (Incorporation case) (1990) 169 CLR 482 concerned the ambit of the expression in 51(xx) ‘formed within the limits of the Commonwealth’ and underscores the fact that not every decision on Commonwealth legislative powers is determined in favour of the Commonwealth. 4.2.39C

New South Wales v Commonwealth (Incorporation case) (1990) 169 CLR 482

[The Corporations Act 1989 (Cth) provided for the incorporation of companies by the Australian Securities Commission, an agency established by the Australian Securities Commission Act 1989 (Cth). Incorporation was available only where the subscribers to the proposed company had lodged an activities statement, stating that trading activities (defined to include financial activities) would be the whole or a substantial part of the company’s activities; that the company would carry on as its sole or principal business the business of banking; or that persons other than the subscribers would take control of the company: s 153. A company incorporated under the Corporations Act was required to lodge annual activities statements (s 156), and any company which ceased to be either a trading corporation or a banking corporation was to be wound up: s 158. Section 112 of the Corporations Act prohibited the formation, otherwise than under the Act, of a partnership or association of more than 20 persons formed for gain and capable of being incorporated under the Corporations Act. Section 113 prohibited the incorporation, under state or territory law, of a body that would, on

its incorporation, be a trading corporation. Section 9 defined trading corporation to include a financial corporation. The questions reserved for the consideration of the Full Court asked whether the provisions of the Corporations Act dealing with the incorporation of trading and financial corporations and prohibiting their incorporation under state or territory law were valid.] Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ: The power conferred by s 51(xx) is not expressed as a power with respect to a function of government, a field of activity or a class of relationships but as a power with respect to persons, namely, corporations of the classes therein specified … The Commonwealth contention is that the words ‘formed within the limits of the Commonwealth’ serve merely to distinguish local trading or financial corporations from foreign corporations. No doubt the words do serve that function but their plain meaning goes beyond the mere drawing of that distinction. The expressions ‘trading or financial’ and ‘formed within the limits of the Commonwealth’ serve to restrict the classes of domestic corporation which can be the subject of Commonwealth power. To fall within one limb of the power, a corporation must satisfy two conditions: it must be formed within the limits of the Commonwealth and it must be a trading or financial corporation. To fall [page 348] within the other limb, a corporation must be a foreign corporation, that is, a corporation formed outside the limits of the Commonwealth. The distinction based on the place of formation is obvious, but the basis of the distinction is formation. The word ‘formed’ is a past participle used adjectivally, and the participial phrase ‘formed within the limits of the Commonwealth’ is used to describe corporations which have been or shall have been created

in Australia. (Clearly enough, the phrase is used to describe corporations formed after as well as those formed before federation.) The subject of a valid law is restricted by that phrase to corporations which have undergone or shall have undergone the process of formation in the past, present or future. That is to say, the power is one with respect to ‘formed corporations’. That being so, the words ‘formed within the limits of the Commonwealth’ exclude the process of incorporation itself. Such corporations are distinguished from corporations which have been or shall have been created outside the limits of Australia. No doubt, as the Commonwealth submitted, the words ‘with respect to’ in s 51 of the Constitution are words of wide import and par (xx), being a grant of legislative power, ‘should be construed with all the generality which the words used admit’ … But the generality imported by the words ‘with respect to’ cannot expand a power over existing (‘formed’) corporations into a power to form corporations. The power conferred by s 51(xx) to make laws with respect to artificial legal persons is not a power to bring into existence the artificial legal persons upon which laws made under the power can operate. Both precedent and history support this construction of the text of s 51(xx). In Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 the five members of the court were unanimously of the opinion that the subject matter of s 51(xx) is confined to corporations already in existence and does not extend to the creation of corporations. That, they said, is the plain meaning of the words ‘formed within the limits of the Commonwealth’. Obviously the legislative power of the Commonwealth could not embrace the creation of foreign corporations and, it was pointed out, if a distinction was intended between the power to legislate with respect to foreign corporations and the power to legislate with respect to trading or financial corporations, express words were to be expected. The words ‘formed within the limits of the Commonwealth’ were, it was observed, inappropriate for this purpose. Such express words were to be found in s 51(xiii)

which confers power to make laws with respect to ‘Banking … also … the incorporation of banks’ and their absence in s 51(xx) indicated the limited scope of that paragraph … In contesting the construction placed upon the words ‘formed within the limits of the Commonwealth’ in Huddart Parker, the Commonwealth submitted that the judgments in that case were permeated by the reserved powers doctrine under which the legislative powers of the Commonwealth were interpreted restrictively upon the footing that certain powers were reserved by the Constitution to the States. This approach, which involved the interpretation of Commonwealth legislative power by reference to preconceptions of the extent of the residue of legislative power retained by the States, was categorically rejected in the Engineers’ Case: Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129. Huddart Parker was concerned with the validity of ss 5 and 8 of the Australian Industries Preservation Act 1906 (Cth). Those sections prohibited certain restrictive or monopolistic practices on the part of foreign, trading or financial corporations. In concluding that the relevant provisions were beyond power, a majority (Griffith CJ, Barton and O’Connor JJ) placed reliance upon the doctrine of reserved powers. But the question of the power to legislate for the creation of corporations was determined by all the members of the Court by reference to purely textual considerations, quite apart from the now discarded doctrine. … [page 349] In Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 this Court dealt with the validity of certain sections of the Trade Practices Act 1965 (Cth). In considering the scope of s 51(xx), it declined to follow Huddart Parker, recognizing that the reserved powers doctrine played no small part in the reasoning of the majority which led them to adopt a restrictive interpretation of

that paragraph. But the rejection of the decision in Huddart Parker did not extend to the views expressed in that case concerning the power of the Commonwealth to provide for the creation of corporations … Judicial opinion after the Engineers’ Case accepted that the Commonwealth had no power under s 51(xx) to make laws with respect to the incorporation of companies: Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29 at 57; Bank of NSW v Commonwealth (1948) 76 CLR 1 at 202, 255–6, 304; Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78 at 86. … Moreover, the history of s 51(xx) confirms that the language of the paragraph was not directed towards the subject of incorporation. That the Convention Debates may be used to establish the subject to which the paragraph was directed is made clear by Cole v Whitfield (1988) 165 CLR 360 at 385 … And the draft bills prepared by the Conventions of 1891, 1897 and 1898 have long been considered a legitimate aid in the interpretation of the provisions of the Constitution: see Tasmania v The Commonwealth and Victoria (1904) 1 CLR 329 at 333, 350.

4.2.40 The justices noted that the 1891 draft of the Constitution included a legislative power on the topic of ‘[t]he status in the commonwealth of foreign corporations, and of corporations formed in any state or part of the commonwealth’, which evidently did not confer authority over corporate formation: 169 CLR at 502. The 1897 draft of the Constitution referred to ‘[f]oreign corporations, and trading corporations formed in any State or part of the Commonwealth’, but, said the justices, ‘there is no reason to suppose that, by deleting the words “the status in the commonwealth of” and inserting the word “trading”, those who

drafted the provision intended to alter the meaning of the words “formed in”’: 169 CLR at 502. Deane J dissented. He said that to deny the Commonwealth power over the formation of corporations, because s 51(xx) used the word ‘formed’, would be akin to saying that the Commonwealth’s power over lighthouses, conferred by s 51(vii), ‘does not extend to laws governing the erection of lighthouses since, until it is … erected … [no] lighthouse exists as such’: 169 CLR at 505–6. Rather, the word ‘formed’ was ‘part of an adjectival phrase which is without temporal significance’ and applied to both future and past events: 169 CLR at 506. Deane J also claimed (at 506) that the majority judgment in the present case had ‘disinterred and selectively dissected for the occasion’ Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330. He said that the judgments of a majority in that case had been ‘permeated by the doctrine of the reserved powers of the States’: 169 CLR at 507. As regards the use of history in the joint judgment in the present case, Deane J retorted (169 CLR at 511): [I]t is not permissible to constrict the effect of the words which were adopted by the people as the compact of a nation by reference to the intentions or understanding of those who participated in or observed the Convention Debates …

4.2.41 The decision in New South Wales v Commonwealth (Incorporation case) (1990) 169 CLR 482 concerned the scope of the subject matter of the power in s 51(xx) and, as New South [page 350]

Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 4.2.29C demonstrates, has not prevented the High Court taking an expansive approach to those laws that will be held to have a sufficient connection with that subject matter (being ‘formed’ corporations, whether foreign, trading or financial in nature). In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail [2015] HCA 11 4.2.36C, French CJ, Hayne, Kiefel, Bell, Keane and Nettle JJ noted that the Incorporation case had not been challenged in the proceedings before them: HCA at [20]. The Incorporation case has likewise not prevented the establishment in Australia of a national system of corporations law, including provisions for formation of corporations. This has been made possible by a referral of power by the states to the Commonwealth under s 51(xxxvii) of the Constitution: Corporations Act 2001 (Cth) s 3.

EXTERNAL AFFAIRS 4.3.1 The ambit of the external affairs power expanded as Australia’s international personality expanded and as dealings between nations on a variety of topics became more frequent. As Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ explained in Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 at 482 4.3.34C: [T]he Commonwealth of Australia was established at a time of evolving law and practice in the external relations between sovereign powers and between the self-governing units of the Empire. It would be a serious error to construe par (xxix) as though the subject matter of those relations to which it applied in 1900 were not continually expanding. Rather, the external relations of the Australian colonies were in a condition of continuing evolution and, at that time, were regarded as such. Accordingly, it is difficult to see any justification for treating the content of the phrase ‘external affairs’ as crystallised at the commencement of federation, or as denying it a particular application on the ground that the application was not foreseen or could not have been foreseen a century ago.

4.3.2 In New South Wales v Commonwealth (Seas and Submerged Lands case) (1975) 135 CLR 337 at 373, Barwick CJ outlined Australia’s progress towards full international status in the following passage: Whilst the new Commonwealth was upon its creation the Australian colony within the Empire, the grant of the power with respect to external affairs was a clear recognition … that it was the Commonwealth which would in due course become the nation state, internationally recognised as such and independent. The progression from colony to

independent nation was an inevitable progression, clearly adumbrated by the grant of such powers as the power with respect to defence and external affairs. Section 61, in enabling the Governor-General as in truth a Viceroy to exercise the executive power of the Commonwealth, underlines the prospect of independent nationhood which the enactment of the Constitution provided. That prospect in due course matured, aided in that behalf by the Balfour Declaration and the Statute of Westminster and its adoption.

4.3.3 These passages reflect two concerns that permeate the law in this area. One is the separation of powers between the Commonwealth legislature and executive, and the other is federalism, the division of power between the Commonwealth and the states. [page 351] The first concern is raised by the fact that, as Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said in Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 at 476, the Commonwealth possesses ‘two kinds’ of constitutional power over external affairs; namely: [t]he executive power conferred by s 61 of the Constitution … [which] extends to the signing and ratification of treaties. The legislative power conferred by s 51(xxix) on the Parliament is to be distinguished from the executive power. The former extends to the enactment of laws implementing the provisions of treaties entered into by the Executive …

The second concern, federalism, is also a central theme of the cases. In part this arises because the Commonwealth executive can enter into international treaties (sometimes also described as

international agreements or conventions) on any topic: see, for example, Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C at 303 per Dawson J. Is this capacity on the part of the Commonwealth executive matched by a capacity on the part of the Commonwealth Parliament to legislate under s 51(xxix) so as to give effect within Australia to the terms of any treaty that binds Australia? Or may the Commonwealth Parliament only implement the terms of those treaties which relate to matters otherwise within its legislative competence, leaving implementation of other international agreements to state parliaments? Much of the High Court litigation on s 51(xxix) has focused on these questions. 4.3.4 Before turning to this and other issues concerning the scope of the legislative power with respect to s 51(xxix), it is important to understand the basic steps involved in the executive treaty-making process and the effect of that process. Under international law, the adoption by the executive government of the Commonwealth of treaty obligations may involve several stages. The first stage will be negotiation between the potential parties to a proposed treaty. In the Australian system, the negotiation of treaties is a function of the Commonwealth executive. Once the negotiation process has been concluded, representatives of the parties may initial the text of the treaty to indicate approval of the text for subsequent signature. The text of the treaty will then be signed by Heads of State or their authorised delegates. This signature may be sufficient to attach the international obligations expressed in the treaty to the signatory parties. However, in many cases, the further stage of ratification is

necessary before obligations arise. Ratification consists of two acts (Senate Legal and Constitutional References Committee, Trick or Treaty? Commonwealth Power to Make and Implement Treaties (1995), p 33): first, the domestic act of decision by the Governor-Generalin-Council; and second, the international step of lodging an instrument of ratification, affirming that Australia agrees to be bound by the treaty, either with or without reservations. 4.3.5 While treaty-making is a Commonwealth executive function, since 1996 there have been procedures in place to enable the Commonwealth Parliament to scrutinise new treaties prior to Australia becoming bound by them. This is done by the Joint Standing Committee on Treaties (JSCOT), which examines and reports on proposed treaty actions tabled in the Senate and House of Representatives. The Commonwealth executive also consults with the states and territories over treaty proposals, including via the Standing Committee on Treaties, which has members from all states and territories. (See, in relation to this and the discussion at 4.3.4, and follow the links to ‘International relations’ and ‘Treaty making process’.) [page 352] 4.3.6 Under Australian law, signature and ratification of a treaty have no direct effect on the domestic law of Australia. This was the common law position at the time of federation (Walker v Baird

[1892] AC 491 at 497) and remains the case today: Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 at 480–1. In Attorney-General for Canada v Attorney-General for Ontario [1937] AC 326 at 347 4.3.34C, the Privy Council remarked: Within the British Empire there is a well-established rule that the making of a treaty is an executive act, while the performance of its obligations, if they entail alteration of the existing domestic law, requires legislative action. Unlike some other countries, the stipulations of a treaty duly ratified do not within the Empire, by virtue of the treaty alone, have the force of law.

This does not mean that Australia’s international treaty obligations, of themselves, have no impact on domestic law. For ways in which Australia’s treaty obligations may indirectly influence domestic Australian law, including the processes of statutory interpretation, evolution of the common law and administrative decision-making, see D Rothwell, S Kaye, A Akhtarkhavari and R Davis, International Law: Cases and Materials with Australian Perspectives, 2nd ed, Cambridge University Press, Australia, 2014, [4.5], [4.8]. 4.3.7 The primary, direct means by which international law enters into the domestic legal system is through the external affairs power in s 51(xxix). Generally speaking, this power enables the Commonwealth to legislate with respect to four matters: matters geographically external to Australia; the implementation of treaties and other international agreements; matters of international concern that are not otherwise the

subject of treaty provisions; and relations with other countries. Each of these applications of the legislative power is discussed in turn. 4.3.8E

Commonwealth Constitution

51 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: … (xxix) external affairs; …

Matters geographically external to Australia 4.3.9 In New South Wales v Commonwealth (Seas and Submerged Lands case) (1975) 135 CLR 337, several members of the court confirmed that s 51(xxix) enables the regulation of ‘external affairs’ in the geographical sense, that is, affairs external to Australia. The case concerned the constitutional validity of the Seas and Submerged Lands Act 1973 (Cth). Australia was a party to the Convention on the Territorial Sea and the Contiguous Zone and the Convention on the Continental Shelf. These Conventions declared that rights [page 353]

(essentially the same as those covered by the Act) over the territorial sea and the continental shelf were vested in coastal states. However, each of the Conventions subjected these rights to qualifications and obligations which were not covered by the Act. The Act declared that ‘the sovereignty in respect of the territorial sea’ was vested in the Commonwealth (s 6) and that the ‘sovereign rights of Australia … in respect of the continental shelf of Australia, for the purpose of exploring it and exploiting its natural resources’ were vested in the Commonwealth: s 11. A majority of the court held that the Act was supported by s 51(xxix). Barwick CJ, McTiernan, Mason, Jacobs and Murphy JJ held that the Act was valid because it gave effect to the two Conventions. Three (perhaps four) members of the majority reasoned that another aspect of the external affairs power could support the Act. Barwick CJ said (135 CLR at 360): The power extends … to any affair which in its nature is external to the continent of Australia and the island of Tasmania subject always to the Constitution as a whole. For this purpose, the continent of Australia and the island of Tasmania are, in my opinion, bounded by the low-water mark on the coasts.

Mason J made a similar point, stating that the external affairs power ‘extends to matters or things geographically situated outside Australia’: 135 CLR at 471. Jacobs J said that the power gave the Commonwealth ‘the power to make laws in respect of any person or place outside and any matter or thing done or to be done or prohibited to be done outside the boundaries of the Commonwealth’: 135 CLR at 497. Jacobs J referred to the territorial limitation on the powers of the states and concluded (135 CLR at 498):

The words of s 51 of the Constitution do not import any similar territorial limitation and there now is none in the case of the Australian legislature. The words ‘external affairs’ can now be given an operation unaffected by any concept of territorial limitation. The result is that the Commonwealth, outside the boundaries of the States and subject to any particular constitutional injunctions, may make laws on all subject matters in exercise of its sovereignty.

Murphy J was not so explicit but said that the Seas and Submerged Lands Act would be a law with respect to external affairs, even if there were no conventions: 135 CLR at 503–4. 4.3.10 The proposition that s 51(xxix) will support legislation dealing with persons, activities or things outside Australia was endorsed by five members of the High Court (Mason CJ, Deane, Dawson, Gaudron, and McHugh JJ) in Polyukhovich v Commonwealth (1991) 172 CLR 501. The justices concluded that the external affairs power supported Commonwealth legislation which provided that certain acts of violence committed in Europe during World War II were punishable as crimes in Australia. Mason CJ expressed his conclusion in the following terms (172 CLR at 530–1): The legislation makes conduct outside Australia unlawful, thereby visiting that conduct with legal consequences under Australian law … [T]o the extent that s 9 operates upon conduct which took place outside Australia and makes that conduct a criminal offence, the section is properly characterised as a law with respect to external affairs … [I]t is not necessary that the Court should be satisfied that Australia has an interest or concern in the subject matter of the legislation in order that its validity be sustained. It is enough that Parliament’s judgment is that Australia has an interest or concern.

[page 354] Deane J said that (172 CLR at 602): … any law which can properly be characterised as a law with respect to any matter, thing or person occurring or situate outside Australia is a law with respect to ‘External affairs’ for the purposes of s 51(xxix). In referring to ‘a law with respect to any matter … occurring … outside Australia’, I intend to include … what Jacobs J described [in the Seas and Submerged Lands case, at 497] as ‘any matter or thing done or to be done or prohibited to be done outside the boundaries of the Commonwealth’.

Dawson J said that s 51(xxix) provided ‘the authority for Commonwealth legislation extending to circumstances which are geographically external to Australia, without reference to the other legislative powers conferred by s 51 of the Constitution’: 172 CLR at 634. Gaudron J said that the Seas and Submerged Lands case (1975) 135 CLR 337 (see 4.3.9) gave ‘considerable support’ to the proposition that any law enacted by the Commonwealth Parliament ‘is necessarily a law with respect to external affairs to the extent that it operates upon acts, matters or things external to Australia’: 172 CLR at 696. This proposition should be adopted, she explained, because ‘more fundamentally, it is a view which proceeds from the ordinary meaning of the words “[e]xternal affairs”’: 172 CLR at 696. McHugh J said that ‘the term “external affairs” should be interpreted to include any matter, thing, event or relationship existing or arising or which might exist or arise outside Australia’: 172 CLR at 714. On the other hand, Brennan and Toohey JJ gave s 51(xxix) a narrower operation. Brennan J said that before the Commonwealth

Parliament could legislate with respect to some matter outside Australia there must be some genuine connection between the external matter and Australia. While it was for parliament to make the initial assessment as to the existence of such a connection, ‘if the legislative judgment cannot reasonably be supported, the law will be held to be outside the power’: 172 CLR at 552. Brennan J concluded that the challenged provisions were not supported by this aspect of s 51(xxix) because they attached legal sanctions to conduct whose perpetrators and victims may have had, at the time of the conduct, no connection with Australia: 172 CLR at 552–6. Toohey J also held that s 51(xxix) required that there be some connection between Australia and the external matter so that the matter was one ‘in which Australia has an interest’: 172 CLR at 653. Although Toohey J said that it was for parliament to ascertain whether Australia had such an interest, he nonetheless went on to find that, in view of Australia’s involvement in World War II and the fact that the Act applied only to persons who were now Australian citizens or residents, Australia had an interest in the subject matter of the challenged provisions: 172 CLR at 655. 4.3.11 The question whether some type of connection between the subject matter of the legislation and Australia might be required, as Brennan and Toohey JJ indicated in Polyukhovich v Commonwealth (1991) 172 CLR 501, was apparently left open in Horta v Commonwealth (1994) 181 CLR 183. In that case, federal legislation implemented a bilateral maritime boundary treaty between Australia and Indonesia relating to petroleum exploration and mining in the Timor Gap, an area of continental shelf between East Timor and mainland Australia, over which both countries claimed rights under international law. Horta challenged the constitutional validity of the legislation,

arguing that the treaty between Australia and Indonesia was ineffective because Indonesia’s annexation of East Timor was invalid under international law. In a joint judgment of the same seven justices that had decided Polyukhovich, the High Court sidestepped this delicate question by upholding the [page 355] legislation on the simple ground that it dealt with a place beyond Australia (the Timor Gap). On the question of the need for a connection between the legislation’s subject matter and Australian concerns, the court acknowledged that while five of its members in Polyukhovich v Commonwealth had not required such a connection, the connection was in any event clearly established on these facts: 181 CLR at 194. 4.3.12 A passage in Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 4.3.34C at 485 subsequently endorsed the wide view of the Commonwealth’s capacity under s 51(xxix) to reach matters geographically external to Australia. In that case, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ approved the following proposition from Dawson J’s judgment in Polyukhovich v Commonwealth (1991) 172 CLR 501 at 632 about the scope of the external affairs power: [T]he power extends to places, persons, matters or things physically external to Australia. The word ‘affairs’ is imprecise, but is wide enough to cover places, persons, matters or things. The word ‘external’ is precise and is unqualified. If a place, person, matter or thing lies outside the

geographical limits of the country, then it is external to it and falls within the meaning of the phrase ‘external affairs’.

Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said that this view ‘must now be taken as representing the view of the Court’: 187 CLR at 485. 4.3.13 The broad test enunciated in Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 was applied by a majority of the High Court in XYZ v Commonwealth (2006) 227 CLR 532. Provisions of the Crimes Act 1914 (Cth) prohibited Australian citizens or residents from engaging in sexual intercourse or acts of indecency outside Australia with individuals under the age of 16. XYZ challenged the constitutional validity of these provisions on the basis that s 51(xxix) could not support laws with respect to things that were merely geographically external to Australia. Four members of the court rejected this argument and upheld the legislation: Gleeson CJ (227 CLR at 538–9), Gummow, Hayne and Crennan JJ (227 CLR at 546–8). Kirby J expressed reservations about the potential breadth of ‘the geographical externality principle’ (227 CLR at 571–2) but did not have to apply the principle as he held ‘that the contested law is one with respect to the international relationships of Australia with other nation states and international organisations and on that basis is within the external affairs power of the Constitution’: 227 CLR at 575. In so deciding, Kirby J accepted that the prosecution in Australia of an Australian citizen for conduct occurring overseas engaged Australia’s relations with the other nation concerned: 227 CLR at 576–7. By contrast, Callinan and Heydon JJ dissented, specifically rejecting s 51(xxix)’s extension to matters geographically external to

Australia whether or not a connection with Australia was established. They stated that this aspect of the decision in Polyukhovich v Commonwealth (1991) 172 CLR 501 (see 4.3.10) should be overturned: 227 CLR at 604. In their opinion, the law did not fall within any other aspect of the power. 4.3.14 The approach of Callinan and Heydon JJ in XYZ v Commonwealth (2006) 227 CLR 532 remains a dissenting view, and the majority approach in that case prevails. In Thomas v Mowbray (2007) 233 CLR 307 4.5.4C, Gummow and Crennan JJ held that part of the Commonwealth’s anti-terrorist control order system contained in Div 104 of the Criminal [page 356] Code (Cth) was supported by s 51(xxix) on the basis that it dealt with matters geographically outside Australia. They said (233 CLR at 365): The legislative scheme … for prevention through the interim control order system of ‘terrorist acts’ done or threatened with the intention of coercing or influencing by intimidation the government of a foreign country … or intimidating the public … of a foreign country is a law with respect to a ‘matter or thing’ which lies outside the geographical limits of Australia. The ‘matter or thing’ is the apprehended intimidation or injury to the government or public of a foreign country.

Gleeson CJ agreed with Gummow and Crennan JJ on s 51(xxix): 233 CLR at 324. The other members of the court did not address the geographic externality argument.

Implementation of international agreements 4.3.15 It is now recognised that s 51(xxix) will support Commonwealth legislation that implements an obligation contained in an international agreement to which Australia is a party into Australian law. As noted above, a key theme of the cases in this area is the effect of this reading of s 51(xxix) on the residual powers of the states. A preliminary question is whether the obligation on which the exercise of the Commonwealth’s power is based is indeed an international obligation. While the executive branch selects and enters into treaties, for the purpose of s 51(xxix) the courts are responsible for ensuring that an international obligation actually exists: Queensland v Commonwealth (Tropical Rainforests case) (1989) 167 CLR 232. In the Tropical Rainforests case, the World Heritage Properties Conservation Act 1983 (Cth) authorised the Governor-General to proclaim certain property to be subject to s 9 of the Act. Once the property was proclaimed, certain acts in relation to that property were prohibited. The property that could be made the subject of a proclamation included property entered on the World Heritage List (a list maintained at international level under the Convention for the Protection of the World Cultural and Natural Heritage) where protection of that property by Australia was a matter of international obligation. On the Commonwealth’s nomination, certain rainforest areas in north-east Queensland were added to the World Heritage List. The Governor-General then made a proclamation bringing the rainforests within s 9 of the Act. Queensland disputed the validity of the proclamation on the ground that it had not been shown that

the Commonwealth was under an international obligation to protect the rainforests. Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ rejected Queensland’s claim. The judges said that the existence of an obligation was ultimately a question of fact for the court to determine in the circumstances of the case: 167 CLR at 239. They continued (167 CLR at 240): The existence of an international duty depends upon the construction which the international community would attribute to the Convention and on the operation which the international community would accord to it in particular circumstances. The municipal [domestic] court must ascertain that construction and operation as best it can in order to determine the validity of a law of the Commonwealth …

Applying this approach, they concluded that, there being ‘no suggestion of bad faith either in the nomination or in the listing’ of the relevant property, ‘the inclusion of the property in the [page 357] [World Heritage] List is conclusive of its status in the eyes of the international community’ and ‘conclusive of Australia’s international duty to protect and conserve it’: 167 CLR at 242. 4.3.16 The foundation case on treaty implementation is R v Burgess; Ex parte Henry (1936) 55 CLR 608. There the High Court considered the validity of a provision of the Air Navigation Act 1920 (Cth) that authorised the Governor-General to make regulations to give effect to the Paris Convention for the Regulation of Aerial Navigation.

All members of the court (Latham CJ, Starke, Dixon, Evatt and McTiernan JJ) held that the section was valid and that the Commonwealth Parliament could legislate under s 51(xxix) to implement the provisions of the Convention, even though some of those provisions dealt with matters otherwise within the competence of the states. However, the reasons offered by the justices differed. Evatt and McTiernan JJ said that it was ‘no longer possible to assert that there is any subject matter which must necessarily be excluded from the list of possible subjects of international negotiation, international dispute or international agreement’: 55 CLR at 681. They continued (55 CLR at 681): In truth, the King’s power to enter into international conventions cannot be limited in advance of the international situations which may from time to time arise. And in our view the fact of an international convention having been duly made about a subject brings that subject within the field of international relations so far as such subject is dealt with by the agreement.

Evatt and McTiernan JJ concluded that the power in s 51(xxix) was wide but not unlimited. They said (55 CLR at 687): It would seem clear, therefore, that the legislative power of the Commonwealth over ‘external affairs’ certainly includes the power to execute within the Commonwealth treaties and conventions entered into with foreign powers. The legislative power in s 51 is granted ‘subject to this Constitution’ so that such treaties and conventions could not be used to enable the Parliament to set at nought constitutional guarantees elsewhere contained, such, for instance, as ss 6, 28, 41, 80, 92, 99, 100, 116, or 117. But it is not to be assumed that the legislative power over ‘external affairs’ is limited to the execution of treaties or conventions; and … the Parliament may well be deemed competent to legislate for the carrying out of ‘recommendations’ as well as the ‘draft international

conventions’ resolved upon by the International Labour Organisation or of other international recommendations or requests upon other subject matters of concern to Australia as a member of the family of nations.

Their Honours also implied that, in order to provide the basis for legislation under s 51(xxix), a treaty must not be ‘merely a device to procure for the Commonwealth an additional domestic jurisdiction’: 55 CLR at 687. Latham CJ adopted a similarly broad view of the power in s 51(xxix), although he did not comment on Evatt and McTiernan JJ’s proposition that the power extended to implementing recommendations of international agencies. His Honour rejected the argument that only particular topics could be drawn into the field of international affairs (55 CLR at 640) and said that it was ‘impossible to say a priori that any subject is necessarily such that it could never properly be dealt with by international agreement’: 55 CLR at 641. He recognised that s 51(xxix) is subject to limitations found elsewhere in the Constitution: 55 CLR at 642. He concluded (55 CLR at 644): [page 358] The Commonwealth Parliament was given power to legislate to give effect to international obligations binding the Commonwealth or to protect national rights internationally obtained by the Commonwealth whenever legislation was necessary or deemed to be desirable for this purpose.

Starke J was more equivocal on the scope of s 51(xxix). While not committing himself to any definite view, his Honour said (55 CLR at 658):

It may be … that the laws will be within power only if the matter is ‘of sufficient international significance to make it a legitimate subject for international co-operation and agreement’.

Dixon J also appeared to take a narrower view of s 51(xxix) than Latham CJ, Evatt and McTiernan JJ. His Honour said (55 CLR at 669): If a treaty were made which bound the Commonwealth in reference to some matter indisputably international in character, a law might be made to secure observance of its obligations if they were of a nature affecting the conduct of Australian citizens. On the other hand, it seems an extreme view that merely because the Executive Government undertakes with some other country that the conduct of persons in Australia shall be regulated in a particular way, the legislature thereby obtains a power to enact that regulation although it relates to a matter of internal concern which, apart from the obligation undertaken by the Executive, could not be considered as a matter of external affairs.

Dixon J concluded (as had Starke J) that the Aerial Navigation Convention dealt with matters which were ‘indisputably international in character’ (these included ‘the international recognition of sovereignty over the air and the relations of governments to the aircraft of other governments’: 55 CLR at 669) and, accordingly, the Commonwealth Parliament could legislate to implement its terms. All members of the court agreed that, when the Commonwealth Parliament claimed to implement an international agreement, ‘the particular laws or regulations which are passed by the Commonwealth should be in conformity with the convention which they profess to be executing’: 55 CLR at 688 per Evatt and McTiernan JJ. Apart from Starke J, the justices held that the regulations made under the Act were inconsistent with the

Convention and therefore fell outside the regulation-making power and were invalid. However, the court suggested that the Commonwealth had some latitude in implementing a treaty. For instance, Dixon J said (55 CLR at 674–5): [T]he nature of this power necessitates a faithful pursuit of the purpose, namely, a carrying out of the external obligation, before it can support the imposition upon citizens of duties and disabilities which otherwise would be outside the power of the Commonwealth. No doubt the power includes the doing of anything reasonably incidental to the execution of the purpose. But wide departure from the purpose is not permissible, because under colour of carrying out an external obligation the Commonwealth cannot undertake the general regulation of the subject matter to which it relates.

4.3.17 In the years following R v Burgess; Ex parte Henry (1936) 55 CLR 608, the High Court occasionally addressed the use of s 51(xxix) to implement international agreements: see, for example, Airlines of New South Wales Pty Ltd v New South Wales (No 2) (1965) 113 CLR 54. However, it was not until 1982 in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 that it again examined this aspect of the power in detail. [page 359]

4.3.18C

Koowarta v Bjelke-Petersen (1982) 153 CLR 168

[Australia ratified the International Convention on the Elimination of All Forms of Racial Discrimination. Among the provisions of the Convention were the following articles:

2 (1) States Parties condemn racial discrimination and undertake to pursue by all appropriate means and without delay a policy of eliminating racial discrimination in all its forms … and, to this end: … (d) Each State Party shall prohibit and bring to an end, by all appropriate means, including legislation as required by circumstances, racial discrimination by any persons, group or organisation; … 5 … States Parties undertake … to guarantee the right to everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law, notably in the enjoyment of the following rights: … (d) (v) The right to own property alone as well as in association with others; … (ix) The right to freedom of peaceful assembly and association; … (e) (i) The rights to work, to free choice of employment, to just and favourable conditions of work, to protection against unemployment, to equal pay for equal work, to just and favourable remuneration; … (iii) The right to housing; … The Commonwealth enacted the Racial Discrimination Act 1975, which provided as follows: 9 (1) It is unlawful for a person to do any act involving a distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life. (2) The reference in sub-section (1) to a human right or fundamental freedom in the political, economic, social, cultural or

any other field of public life includes a reference to any right of a kind referred to in Article 5 of the Convention. … 12 (1) It is unlawful for a person … (a) to refuse or fail to dispose of any estate or interest in land, or any residential or business accommodation, to a second person; (b) to dispose of such an estate or interest or such accommodation to a second person on less favourable terms and conditions than those which are or would otherwise be offered; (c) to treat a second person who is seeking to acquire or has acquired such an estate or interest or such accommodation less favourably than other persons in the same circumstances; (d) to refuse to permit a second person to occupy any land or any residential or business accommodation; or (e) to terminate any estate or interest in land of a second person or the right of a second person to occupy any land or any residential or business accommodation, by reason of the race, colour or national or ethnic origin of that second person or of any relative or associate of that second person. [page 360] In 1976, the Aboriginal Land Fund Commission contracted with the lessees of certain Crown land in Queensland to purchase that leasehold on behalf of a group of Indigenous Australians. The agreement was expressed to be subject to approval by the Queensland Minister for Lands as required by the Land Act 1962 (Qld). The Minister for Lands refused to approve the lease transfer. The minister explained that this refusal reflected Queensland government policy that ‘view[ed] unfavourably proposals to acquire “large areas of

additional freehold or leasehold land for development by Aborigines or Aboriginal groups in isolation”’: 153 CLR at 208 per Stephen J describing these facts as ‘common ground’ in the case. Mr Koowarta began proceedings against the Premier of Queensland under the Racial Discrimination Act 1975 (Cth). Queensland began proceedings against the Commonwealth, seeking a declaration that the Racial Discrimination Act was invalid.] Gibbs CJ: It has never been doubted that the words of s 51(xxix) are wide enough to empower the Parliament, in some circumstances at least, to pass a law which carries into effect within Australia the provisions of an international agreement to which Australia is a party. [It was established, Gibbs CJ said, that s 51(xxix) was not ‘limited to laws dealing with matters and things occurring outside Australia’ and ‘even on the narrowest view of the power, laws which regulate conduct within Australia by Australians may be laws with respect to external affairs’: 153 CLR at 190, 191. He also noted that s 51(xxix) was conferred subject to express and implied limitations on Commonwealth power. He continued:] The crucial question … is whether under the power given by s 51(xxix) the Parliament can enact laws for the execution of any treaty to which it is a party, whatever its subject matter, and in particular for the execution of a treaty which deals with matters that are purely domestic and in themselves involve no relationship with other countries or their inhabitants … … no question arises as to the power of Australia to enter into the Convention. The Governor-General, exercising the prerogative power of the Crown, can make treaties on subjects which are not within the legislative power of the Commonwealth … The power of the Parliament to carry treaties into effect is not necessarily as wide as the executive power to make them …

There are strong arguments which support the conclusion that s 51(xxix) does not empower the Parliament to give effect in Australia to every international agreement, whatever its character, to which Australia is a party. If the Parliament is empowered to make laws to carry into effect within Australia any treaty which the Governor-General may make, the result will be that the executive can, by its own act, determine the scope of Commonwealth power … If the view of Evatt and McTiernan JJ is correct, the executive could, by making an agreement, formal or informal, with another country, arrogate to the Parliament power to make laws on any subject whatsoever … the Commonwealth would be able to acquire unlimited legislative power. The distribution of powers made by the Constitution could in time be completely obliterated; there would be no field of power which the Commonwealth could not invade, and the federal balance achieved by the Constitution could be entirely destroyed … [Gibbs CJ said that the court was unlikely to find that the Commonwealth had entered into any treaty ‘as a mere device’ or in ‘bad faith’: ‘The doctrine of bona fides would at best be a frail shield, and available in rare cases’: 153 CLR at 200. His Honour continued:] [page 361] … a narrower interpretation of para (xxix) would at once be more consistent with the federal principle upon which the Constitution is based, and more calculated to carry out the true object and purpose of the power which, after all, is expressed to relate, not to internal or domestic affairs, but to external affairs. I conclude, therefore, that the view of Evatt and McTiernan JJ must be rejected, and that a law which gives effect within Australia to an international agreement will only be a valid law under s 51(xxix) if the agreement is with respect to a matter which itself can be described as an external affair …

Since the law whose validity is to be tested is one that gives legal effect within Australia to the provisions of the agreement, the test must be whether the provisions given effect have themselves the character of an external affair, for some reason other than that the executive has entered into an undertaking with some other country with regard to them … What I have said is not intended to suggest that there is a limited class of matter which, by their nature, constitute external affairs, and that only such matters are subject to the power conferred by s 51(xxix). Any subject matter may constitute an external affair, provided that the manner in which it is treated in some way involves a relationship with other countries or with persons or things outside Australia. A law which regulates transactions between Australia and other countries, or between residents of Australia and residents of other countries, would be a law with respect to external affairs, whatever its subject matter … An Australian law which is designed to forbid racial discrimination by Australians against Australians within the territory of Australia does not become international in character, or a law with respect to external affairs, simply because other nations are interested in Australia’s policies and practices with regard to racial discrimination … For these reasons ss 9 and 12 of the Act were not within the legislative power conferred by s 51(xxix) and are invalid … Stephen J: … the natural contextual meaning of para (xxix) includes, although it extends rather further than, what may be called the highest common factor to be deduced from the judgments in this court concerning the meaning of the paragraph: namely, a power to implement by legislation within Australia such treaties, on matters international in character and hence legitimately the subject of agreement between nations, as Australia may become party to. This minimal meaning, upon which all would agree, may be deduced from … the leading authorities in this court …

[Stephen J said that s 51(xxix) was subject to specific limitations on Commonwealth legislative authority such as s 92, and that its scope was ‘not to be restricted by reference to the limited legislative competence conferred by the other paragraphs of s 51’: 153 CLR at 213. The difficult question was ‘the extent to which the federal nature of the Constitution requires that limits be imposed upon the broad power to implement international obligations seemingly conferred by para (xxix)’: 153 CLR at 213.] But where the grant of power is with respect to ‘external affairs’ an examination of subject matter, circumstance and parties will be relevant whenever a purported exercise of such power is challenged. It will not be enough that the challenged law gives effect to treaty obligations. A treaty with another country, whether or not the result of a collusive arrangement, which is on a topic neither of especial concern to the relationship between Australia and that other country nor of general international concern will not be likely to survive that scrutiny. The great post-war expansion of the areas properly the subject matter of international agreement has … made it difficult indeed to identify subject matters which are of their nature [page 362] not of international but of only domestic concern … But this does no more than reflect the increasing awareness of the nations of the world that the state of society in other countries is very relevant to the state of their own society. Thus areas of what are of purely domestic concern are steadily contracting and those of international concern are ever expanding. Nevertheless the quality of being of international concern remains, no less than ever, a valid criterion of whether a particular subject matter forms part of a nation’s ‘external affairs’. A subject matter of international concern necessarily possesses the capacity to affect a country’s

relations with other nations and this quality is itself enough to make a subject matter a part of a nation’s ‘external affairs’. And this being so, any attack upon validity, either in what must be the very exceptional circumstances which could found an allegation of lack of bona fides or where there is said to be an absence of international subject matter, will still afford an appropriate safeguard against improper exercise of the ‘External affairs’ power … That prohibition of racial discrimination, the subject matter of the Racial Discrimination Act, now falls squarely within that concept I regard as undoubted. That a consequence would seem to be an intrusion by the Commonwealth into areas previously the exclusive concern of the States does not mean that there has been some alteration of the original federal pattern of distribution of legislative powers. What has occurred is, rather, a growth in the content of ‘external affairs’. This growth reflects the new global concern for human rights and the international acknowledgment of the need for universally recognised norms of conduct, particularly in relation to the suppression of racial discrimination. … … the international post-war developments in the area of racial discrimination … show that the topic has become for Australia, in common with other nations, very much a part of its external affairs and hence a matter within the scope of s 51(xxix). [Stephen J accordingly found that the Racial Discrimination Act was supported by s 51(xxix), it being accepted that the provisions at issue conformed to the Convention which was binding on Australia: 153 CLR at 221.] Mason J: The [external affairs] power applies to a treaty to which Australia is a party, for it is not in question that such a treaty is an external affair or a matter of external affairs, subject only to the qualification, if it be a qualification, that the treaty is

a genuine treaty … It would seem to follow inevitably from the plenary nature of the power that it would enable the Parliament to legislate not only for the ratification of a treaty but also for its implementation by carrying out any obligation to enact a law that Australia assumed by the treaty. It is very difficult to see why such a law would not be a law with respect to an external affair, once it is accepted that the treaty is an external affair … Burgess has been regarded as a landmark decision, notwithstanding that the outcome seems to have been so inevitable. Any other result would have been plainly unacceptable, not only because it would have entailed a failure to acknowledge the plenary nature of the power and the important purpose which it served, but also because the consequence of the failure would have been to leave the decision on whether Australia should comply with its international obligations in the hands of the individual States as well as the Commonwealth, for the Commonwealth would then lack sufficient legislative power to fully implement the treaty. The ramifications of such a fragmentation of the decision-making process as it affects the assumption and implementation by Australia of its international obligations are altogether too disturbing to contemplate. Such a division of responsibility between the Commonwealth [page 363] and each of the States would have been a certain recipe for indecision and confusion, seriously weakening Australia’s stance and standing in international affairs … The exercise of the power is of course subject to the express and to the implied prohibitions to be found in the Constitution. The Commonwealth could not, in legislating to give effect to a treaty, evade the constitutional prohibitions contained in ss 92, 113 and 116 … Likewise the exercise of the power is subject to

the implied general limitation affecting all the legislative powers conferred by s 51 that the Commonwealth cannot legislate so as to discriminate against the States or inhibit or impair their continued existence or their capacity to function … [Mason J noted that the states claimed that the Constitution drew a distinction between internal and external affairs, and continued:] The Constitution does not draw any distinction between external affairs and internal affairs so as to give power over the former but deny all power over the latter … The fallacy in the argument is compounded by the assumption on which it proceeds — that affairs are either internal or external in the sense that the two categories are mutually exclusive. The assumption is false. An affair will very often have characteristics which endow it with both internal and external qualities. Burgess provides us with an instructive example. Australia’s entry into the Paris Convention, an act affecting our relationships with other countries, was an external affair. But the question whether Australia should enter the Convention, a matter of domestic concern and consequence, was also an external affair. Likewise, the implementation of the Convention by legislation was both an external and an internal affair — external because it related to the treaty and carried it into effect, internal because the legislation was domestic, operating substantially, though not entirely, within Australia. So it was that the law was with respect to external affairs, even though the operation of many of its provisions was inside, rather than outside, Australia … [Mason J stated that notions of reserved state powers were ‘decisively rejected’ in the Engineers’ case (1920) 28 CLR 129, and continued:] The consequence is that it is quite illegitimate to approach any question of interpretation of Commonwealth power on the footing that an expansive construction should be rejected

because it will effectively deprive the States of a power which has hitherto been exercised or could be exercised by them … Doubtless the framers of the Constitution did not foresee accurately the extent of the expansion in international and regional co-operation which has occurred since 1900. … It is that expansion, rather than any change in the meaning of ‘external affairs’ as a concept, that promises to give the Commonwealth an entree into new legislative fields … As the object of conferring the power was to equip the Commonwealth with comprehensive capacity to legislate with respect to external affairs, it is not to the point to say that such is the scope of external affairs in today’s world that the content of the power given to the Commonwealth is greater than it was thought to be in 1900. The consequence of the expansion in external affairs is that in some instances the Commonwealth now legislates on matters not formerly within the scope of its specific powers, to the detriment of the exercise of state powers. But in the light of current experience there is little, if anything, to indicate that there is a likelihood of a substantial disturbance of the balance of powers as distributed by the Constitution. To the extent that there is such a [page 364] disturbance, then it is a necessary disturbance, one essential to Australia’s participation in world affairs. … Nor is there a solid foundation for implying a restriction that the treaty must relate to a matter which is international in character or of international concern, if the intended restriction is intended to convey more than that the treaty is a genuine treaty. It is difficult to perceive why a genuine treaty, especially when it is multi-lateral and brought into existence under the auspices of

the United Nations or an international agency, does not in itself relate to a matter of international concern and is not in itself an external affair. It is scarcely sensible to say that when Australia and other nations enter into a treaty the subject matter of the treaty is not a matter of international concern — obviously it is a matter of concern to all the parties … Agreement by nations to take common action in pursuit of a common objective evidences the existence of international concern and gives the subject matter of the treaty a character which is international. I speak of course of a treaty which is genuine and not of a colourable treaty, if that can be imagined, into which Australia has entered solely for the purpose of attracting to the Commonwealth Parliament the exercise of a legislative power over a subject matter not specifically committed to it by the Constitution. [Mason J concluded that s 51(xxix) supported implementation of the Convention because it was ‘an international treaty … which binds Australia in common with other nations to enact domestic legislation in pursuit of the common objective of the elimination of all forms of racial discrimination’: 153 CLR at 234. He found that ss 9 and 12 of the Act were valid laws with respect to external affairs.] Brennan J: When a particular subject affects or is likely to affect Australia’s relations with other international persons, a law with respect to that subject is a law with respect to external affairs … Where a particular aspect of the internal legal order of a nation is made the subject of a treaty obligation, there is a powerful indication that that subject does affect the parties to the treaty and their relations one with another. They select that aspect as an element of their relationship, the obligee nations expecting and being entitled in international law to action by the obligor nation in performance of the treaty. And therefore to subject an

aspect of the internal legal order to treaty obligation stamps the subject of the obligation with the character of an external affair … It follows that to search for some further quality in the subject, an ‘indisputably international’ quality, is a work of supererogation. The international quality of the subject is established by its effect or likely effect upon Australia’s external relations and that effect or likely effect is sufficiently established by the acceptance of a treaty obligation with respect to that subject. … a law with respect to a particular subject would not necessarily attract the support of para (xxix) if a treaty obligation had been accepted with respect to that subject merely as a means of conferring legislative power upon the Commonwealth Parliament. Such a colourable attempt to convert a matter of internal concern into an external affair would fail because the subject of the treaty obligation would not in truth affect or be likely to affect Australia’s relations with other nations … [Brennan J held that ss 9 and 12 of the Racial Discrimination Act gave effect to the Convention obligation to end racial discrimination and were valid. Murphy J also upheld these provisions under s 51(xxix) because they implemented the Convention. He found that [page 365] the power in s 51(xxix) extended to the implementation of any treaty to which Australia was a party, no additional test of international character or concern being required: 153 CLR at 241. Murphy J also said that s 51(xxix) extended to the enactment of legislation on a matter of international concern, independent of the existence of any treaty obligation: 153 CLR at 242. Aickin and Wilson JJ agreed with Gibbs CJ.]

4.3.19 If R v Burgess; Ex parte Henry (1936) 55 CLR 608 (see 4.3.16) supported a broad reading of the treaty implementation aspect of s 51(xxix), Koowarta v Bjelke-Petersen (1982) 153 CLR 168 may appear to have narrowed the reading. In Koowarta, a majority of the court upheld the validity of ss 9 and 12 of the Racial Discrimination Act 1975 (Cth) but, at the same time, a differently constituted majority said that the Commonwealth could legislate to implement only those treaties which dealt with particular topics. However, it is difficult to accept that the decision in Koowarta v Bjelke-Petersen established a narrow reading for s 51(xxix). The view expressed by Gibbs CJ, Aickin and Wilson JJ, that the Commonwealth could only implement those treaties which dealt with a subject ‘which itself can be described as an external affair’ (153 CLR at 200), was rejected by the majority, which upheld the validity of the Racial Discrimination Act. The view of Stephen J that the Commonwealth could only implement those treaty obligations which dealt with a subject matter of ‘international concern’ was rejected by the other six members of the court. Yet, in theoretical terms, Stephen J’s view could be described as the ‘lowest common denominator’; that is, the narrowest view of s 51(xxix) consistent with the result of the case. 4.3.20 In Koowarta v Bjelke-Petersen (1982) 153 CLR 168, a number of justices suggested that s 51(xxix) could not be used to implement a bogus treaty. Stephen J indicated that one ‘safeguard against improper exercise of the “External affairs” power’ was the requirement that the implemented treaty has been entered into in good faith; however, he recognised that absence of good faith would be ‘exceptional’: 153 CLR at 217. Gibbs CJ described the restriction as ‘at best … a frail shield’: 153 CLR at 200. Mason J said he was not speaking of ‘a colourable treaty, if that can be

imagined, into which Australia has entered solely for the purpose of attracting to the Commonwealth Parliament the exercise of a legislative power over a subject matter’: 153 CLR at 231. Brennan J spoke of a treaty obligation undertaken merely as a means of conferring legislative power upon the Commonwealth Parliament’ as ‘a colourable attempt … [which] would fail’: 153 CLR at 260. The caveat had previously been expressed in R v Burgess; Ex parte Henry (1936) 55 CLR 608 by Latham CJ (55 CLR at 642) and Evatt and McTiernan JJ (at 687). 4.3.21 As these statements suggest, there are substantial difficulties in applying any such restriction to the treaty-making power of the Commonwealth executive and to the treaty implementation power of the Commonwealth Parliament. In Koowarta v Bjelke-Petersen, Gibbs CJ recognised that the restriction could not be invoked simply because the executive entered into a treaty in the full knowledge that parliament had no power, outside s 51(xxix), to legislate on the subject: 153 CLR at 200. There are also difficult questions concerning the capacity of the courts to look behind high-level executive policy decisions such as entry into an international agreement: see, generally, G Lindell, ‘Judicial Review of International Affairs’ in B Opeskin and D Rothwell (eds), International Law and Australian Federalism, Melbourne University Press, Australia, 1997. The restriction has never been successfully invoked. [page 366]

4.3.22C Commonwealth v Tasmania (Tasmanian Dam

case) (1983) 158 CLR 1 [The United Nations Educational, Scientific and Cultural Organisation (UNESCO) adopted the Convention for the Protection of the World Cultural and Natural Heritage. Australia ratified the Convention in 1974. Among the provisions of the Convention were the following: Article 4 Each State Party to this Convention recognises that the duty of ensuring the identification, protection, conservation, presentation and transmission to future generations of the cultural and natural heritage referred to in Articles 1 and 2 and situated on its territory, belongs primarily to that State … Article 5 provided that the parties were to ensure that effective measures were taken for the protection, conservation and presentation of cultural and natural heritage situated on their property. These measures included: the adoption of policies which gave the heritage a function in the life of the community; the establishment of services for its protection; the development of research methods to counteract dangers to it; the taking of appropriate legal, scientific, technical, administrative and financial measures necessary for its identification, protection, conservation, presentation and rehabilitation; and the development of training centres for its protection. Article 6 (1) Whilst fully respecting the sovereignty of the States on whose territory the cultural and natural heritage mentioned in Articles 1 and 2 is situated, and without prejudice to property rights provided by national legislation, the States Parties to this Convention recognise that such heritage constitutes a world heritage for whose protection it is the duty of the international community as a whole to co-operate.

Article 6 also contained an undertaking by the parties to refrain from damaging the cultural and natural heritage of other parties (cl 3) and to assist in its protection in certain circumstances: cl 2. Article 11 of the Convention provided for the nomination by a state party of property forming part of its cultural and natural heritage and the listing, by the World Heritage Committee, of those nominated properties which were regarded ‘as having outstanding universal value’ on the World Heritage List. Article 34 of the Convention was a ‘federal clause’. It provided that, where implementation of provisions of the Convention came ‘under the legal jurisdiction of the federal or central legislative power, the obligations of the federal or central government shall be the same as for those States Parties which are not federal States’. Where implementation of provisions of the Convention came ‘under the legal jurisdiction of individual constituent States … the federal government shall inform the competent authorities of such States … of the said provisions, with its recommendation for their adoption’. In 1981, the Premier of Tasmania requested the Commonwealth Government to nominate three national parks in the south-west of that state for listing on the World [page 367] Heritage List. In 1982, the World Heritage Committee entered those national parks onto the World Heritage List. In the meantime (and after a change of government in Tasmania), the Tasmanian Parliament enacted the Gordon River Hydro-Electric Power Development Act 1982, which authorised the Hydro-Electric Commission of Tasmania to construct a dam (the Franklin Dam) on the Gordon River within the World Heritage listed area. The Governor-General subsequently made the World Heritage (Western Tasmania Wilderness) Regulations 1983. The regulations prohibited ‘the construction of a dam or associated works’ and a wide

variety of other activities in the area covered by the Tasmanian legislation, ‘[e]xcept with the consent of the [federal] Minister’. The Commonwealth Parliament also enacted the World Heritage Properties Conservation Act 1983, s 9 of which provided: 9 (1) Except with the consent in writing of the Minister, it is unlawful for a person … — (a) to carry out any excavation works on any property to which this section applies; (b) to carry out operations for, or exploratory drilling in connection with, the recovery of minerals on any property to which this section applies; (c) to erect a building or other substantial structure on any property to which this section applies or to do any act in the course of, or for the purpose of, the erection of a building or other substantial structure on any property to which this section applies; (d) to damage or destroy a building or other substantial structure on any property to which this section applies; (e) to kill, cut down or damage any tree on any property to which this section applies; (f) to construct or establish any road or vehicular track on any property to which this section applies; (g) to use explosives on any property to which this section applies; or (h) if an act is prescribed for the purposes of this paragraph in relation to particular property to which this section applies, to do that act in relation to that property. Section 6 identified the property to which s 9 applied: 6 (2) A Proclamation may … be made under sub-section (3) in relation to identified property that is in a State and is property to which one or more of the following paragraphs applies or apply:

(a) the Commonwealth has, pursuant to a request by the State, submitted to the World Heritage Committee under Article 11 of the Convention that the property is suitable for inclusion in the World Heritage List … whether the request by the State was made before or after the commencement of this Act and whether or not the property was identified property at the time when the request was made; (b) the protection or conservation of the property by Australia is a matter of international obligation, whether by reason of the Convention or otherwise; (c) the protection or conservation of the property by Australia is necessary or desirable for the purpose of giving effect to a treaty (including the Convention) or for the purpose of obtaining for Australia any advantage or benefit under a treaty (including the Convention); (d) the protection or conservation of the property by Australia is a matter of international concern (whether or not it is also a matter of domestic concern), whether by reason [page 368] that a failure by Australia to take proper measures for the protection or conservation of the property would, or would be likely to, prejudice Australia’s relations with other countries or for any other reason; … (3) Where the Governor-General is satisfied that any property in respect of which a Proclamation may be made under this subsection is being or is likely to be damaged or destroyed, he may, by Proclamation, declare that property to be property to which section 9 applies.

The Governor-General issued proclamations under s 6(3) of the Act, declaring that the Act applied to the area covered by the Tasmanian Act. For the purposes of s 9(1)(h) of the Act, a regulation was made prescribing building of a dam in the area in question. The Commonwealth began proceedings in the High Court against Tasmania, seeking declarations that construction of the Franklin Dam was unlawful. Tasmania began proceedings against the Commonwealth, seeking declarations that the Commonwealth legislation was invalid. Mason J referred to the different approaches to s 51(xxix) taken by the justices in Koowarta v Bjelke-Petersen (1982) 153 CLR 168, and continued:] Mason J: If we take the decision as turning on Stephen J’s view of the power, because it reflects the narrowest expression of it by the justices who constituted the majority, the case is authority for the proposition that the power authorises a law which gives effect to an obligation imposed on Australia by a bona fide international convention or treaty to which Australia is a party, at any rate so long as the subject matter of the convention or treaty is one of international concern, or of concern to the relationship between Australia and the other party or parties … [Mason J outlined three tests of international concern put forward by Tasmania: whether the law implements an obligation under the Convention; whether the subject matter falls within relations with other countries (whether or not it is also a domestic activity); or whether the subject involves matters outside Australia.] Mason J: The first of the three tests seeks to express the idea that it is the implementation of an obligation imposed on Australia by a treaty that attracts the external affairs power, that it is the treaty obligation and its implementation that constitutes the relevant subject or matter of external affairs. To my mind this is too narrow a view …, the treaty itself is a matter of external

affairs, as is its implementation by domestic legislation … there is no persuasive reason for thinking that the international character of the subject matter or the existence of international concern is confined to that part of a treaty which imposes an obligation on Australia. A provision in a treaty which is designed to secure to Australia a benefit may be just as much a matter of international concern, possessing an international character, with a potential to affect Australia’s relationships with other countries, as a provision in a treaty which imposes an obligation upon Australia. [Mason J referred to the problem of determining when a subject matter affected Australia’s external relations and when it did not. His Honour said ‘[n]o doubt this problem might have been more readily answered in 1900’ when ‘international discussion, negotiation, cooperation and agreement took place on a very limited scale in relation to limited subjects’; yet today, when we ‘are accustomed to discuss, negotiate, cooperate and agree on an ever-widening range of topics, it is impossible to enunciate a criterion by which potential for [page 369] international action can be identified from topics which lack this quality’: 158 CLR at 124. Mason J pointed to ‘many instances of the common pursuit by nations of common objectives’, including international conventions on economic, social and cultural rights; racial discrimination; the political rights of women; education; freedom of association; employment discrimination; and equal remuneration for men and women. He concluded: ‘[T]here are virtually no limits to the topics which may hereafter become the subject of international cooperation and international treaties or conventions’: 158 CLR at 124. Mason J continued:] It is submitted that the suggested requirement that the subject matter must be ‘of international concern’ means that it

must be international in character in the sense that there is a mutuality of interest or benefit in the observance of the provisions of the convention. Thus, we are invited to say that a convention by which the contracting parties agree to enact domestic laws requiring persons in motor vehicles to wear seat belts does not deal with a matter of international concern because no nation can derive a benefit from the wearing of seat belts in another country. This is by no means self-evident. Drivers and passengers cross international boundaries. They are likely to observe in other countries the practices which they observe at home. International cooperation resulting in a convention insisting on compliance with uniform safety standards may well benefit all countries. The illustration is instructive because it demonstrates how difficult it is to say with accuracy of any treaty or convention that observance of its provisions will not benefit a contracting party. The point is that, if a topic becomes the subject of international cooperation or an international convention it is necessarily international in character — the existence of cooperation and the making of a convention establish that the subject matter is an appropriate vehicle for the creation of international relationships or, in the case of a bilateral treaty, a relationship between the parties to it. And participation in a convention indicates a judgment on the part of participating nations that they will derive a benefit from it. All this indicates an absence of any acceptable criteria or guidelines by which the court can determine the ‘international character’ of the subject matter of a treaty or convention. The existence of international character or international concern is established by entry by Australia into the convention or treaty. In any event … the court would undertake an invidious task if it were to decide whether the subject matter of a convention is of international character or concern. On a question of this kind the court cannot substitute its judgment for that of the executive government and Parliament. The fact of entry into, and of ratification of, an international convention, evidences the

judgment of the executive and of Parliament that the subject matter of the convention is of international character and concern and that its implementation will be a benefit to Australia. Whether the subject matter as dealt with by the convention is of international concern, whether it will yield, or is capable of yielding, a benefit to Australia, whether non-observance by Australia is likely to lead to adverse international action or reaction, are not questions on which the court can readily arrive at an informed opinion. Essentially they are issues involving nice questions of sensitive judgment which should be left to the executive government for determination. The court should accept and act upon the decision of the executive government and upon the expression of the will of Parliament in giving legislative ratification to the treaty or convention … It is, of course, possible that the framers of the Constitution thought or assumed that the external affairs power would have a less extensive operation than this development has brought about and that Commonwealth legislation by way of implementation of treaty [page 370] obligations would be infrequent and limited in scope. The framers of the Constitution would not have foreseen with any degree of precision, if at all, the expansion in international and regional affairs that has occurred since the turn of the century, in particular the cooperation between nations that has resulted in the formation of international and regional conventions. But it is not, and could not be, suggested that by reason of this circumstance the power should now be given an operation which conforms to expectations held in 1900. For one thing it is impossible to ascertain what those expectations may have been. For another the difference between those expectations and subsequent events as they have fallen out seems to have been a

difference in the frequency and volume of external affairs rather than a difference in kind. Only if there was a difference in kind could we begin to construct an argument that the expression ‘external affairs’ should receive a construction which differs from the meaning that it would receive according to ordinary principles and interpretation. Even then mere expectations held in 1900 could not form a satisfactory basis for departing from the natural interpretation of words used in the Constitution … Accordingly, it conforms to established principle to say that s 51(xxix) was framed as an enduring power in broad and general terms enabling the Parliament to legislate with respect to all aspects of Australia’s participation in international affairs and of its relationship with other countries in a changing and developing world and in circumstances and situations that could not be easily foreseen in 1900 … [Mason J referred (158 CLR at 128) to the rejection of the reserved powers doctrine in the Engineers’ case (1920) 28 CLR 129; and said that the Melbourne Corporation principle (Melbourne Corporation v Commonwealth (1947) 74 CLR 31 6.2.30C) was all that could ‘be distilled from the federal nature of the Constitution and ritual invocations of “the federal balance”’: 158 CLR at 129. His Honour continued:] If the carrying out of, or the giving effect to, a treaty or convention to which Australia is a party is a matter of external affairs, and so much is now accepted, it is very difficult to see why a law made under s 51(xxix), that is, a law with respect to the matter of external affairs, should be limited to the implementation of an obligation. To say this is to import an arbitrary limitation into the exercise of the power, one which might deprive Australia of the benefits which a treaty or convention seeks to secure. Take, for example, a treaty by which another country undertakes to provide technological and other benefits in connection with a joint enterprise to be undertaken in

this country between Australia and the other party to the treaty. Why would the power not extend to Commonwealth legislation facilitating the enjoyment by Australia of the benefits promised by the treaty and to facilitating the carrying on of the activities for which it makes provision? … I reject the notion that once Australia enters into a treaty Parliament may legislate with respect to the subject matter of the treaty as if that subject matter were a new and independent head of Commonwealth legislative power. The law must conform to the treaty and carry its provisions into effect. The fact that the power may extend to the subject matter of the treaty before it is made or adopted by Australia, because the subject matter has become a matter of international concern to Australia, does not mean that Parliament may depart from the provisions of the treaty after it has been entered into by Australia and enact legislation which goes beyond the treaty or is inconsistent with it. [Mason J said that arts 4, 5 and 6 of the Convention imposed binding obligations on Australia: 158 CLR at 132–4. He concluded that the World Heritage (Western Tasmania Wilderness) Regulations were ‘appropriate and adapted to the desired end … the protection [page 371] and conservation of property which has been entered in the World Heritage List’: 158 CLR at 138–9. So, too, were the relevant provisions of the World Heritage Properties Conservation Act 1983: 158 CLR at 142–4. Neither the regulations nor the Act infringed any relevant constitutional limitations. Accordingly, the regulations and s 9 of the Act were valid laws with respect to external affairs.] Brennan J: … I would adhere to the view that I expressed in Koowarta (1982) 153 CLR 168 at 259–60: a treaty obligation stamps the subject of the obligation with the character of

an external affair unless there is some reason to think that the treaty had been entered into merely to give colour to an attempt to confer legislative power upon the Commonwealth Parliament. Only in such a case is it necessary to look at the subject matter of the treaty, the manner of its formation, the extent of international participation in it and the nature of the obligations it imposes in order to ascertain whether there is an international obligation truly binding on Australia. Applying the test which I hold to be appropriate to the circumstances of the present case, the acceptance by Australia of an obligation under the Convention suffices to establish the power of the Commonwealth to make a law to fulfil the obligation. But even if one applies a stricter test — a test that satisfies the qualification expressed by Stephen J — the subject of an obligation accepted by Australia under the Convention is a matter of international concern. The qualification expressed by Stephen J is not difficult to satisfy. … It is difficult to imagine a case where a failure by Australia to fulfil an express obligation owed to other countries to deal with the subject matter of a treaty in accordance with the terms of the treaty would not be a matter of international concern, a matter capable of affecting Australia’s external relations … … Applying the test proposed by Stephen J [in Koowarta], the subject of an obligation binding upon Australia under the Convention enlivens the Commonwealth power. The more fundamental question is whether the Convention imposes an obligation upon Australia. If the Convention does not impose an obligation, it would be necessary to consider whether the subject with which it deals is nevertheless a matter of international concern. In such a case … it would be necessary to determine whether the subject affects or is likely to affect Australia’s relations with other international persons, an inquiry of some difficulty. [Brennan J said that the balance to be struck between federal and state powers must not be construed as at federation and, referring to

O’Connor J in Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) 6 CLR 309 at 367–8, said that the Constitution must be interpreted broadly in accordance with varying conditions over time: 158 CLR at 220–1.] In the present case, the scope of the external affairs power invoked by the Commonwealth cannot depend upon the undoubted power of a State to legislate for and to control the use of its waste lands; the scope of the external affairs power here depends upon the existence and content of an obligation owed by Australia to other countries by virtue of the operation of international law upon the provisions of the Convention. I should wish to guard against the suggestion that it is necessary to find such an obligation before one can find an external affair which enlivens the power under s 51(xxix), but in the circumstances of the present case no other foundation for the power appears. [Brennan J concluded that the Convention imposed ‘a clear obligation upon Australia to act under Arts 4 and 5’ because Australia’s failure to protect and conserve world heritage property would ‘affect Australia’s relations with other nations and communities’: 158 CLR at 226. [page 372] He held that the World Heritage (Western Tasmania Wilderness) Regulations were valid as ‘reasonably … conducive to the performance of the obligation imposed by the Convention’: 158 CLR at 232 (and generally at 232–4); that s 9(1)(a)–(g) and (2) of the Act went too far to be described as an implementation of the Convention (158 CLR at 236–8) but that s 9(1)(h) and the regulations made thereunder were valid: 158 CLR at 238–9. In concluding that s 9(1)(a)–(g) of the Act did not conform to the Convention, Brennan J said:]

The difficulty with paras (a) to (g) of s 9(1) is that they generally prohibit the kinds of acts therein specified whenever done on any property to which s 9 applies or may be made to apply. It is impossible to say that such provisions, in their application to all such properties at all times, would conduce to the protection and conservation of those properties. [Brennan J said that the minister’s capacity to relax the prohibitions in s 9(1)(a)–(g) did not alter matters as the Act did not provide an administrative scheme to facilitate exercise of this discretion: 158 CLR at 237. Deane J referred to R v Burgess; Ex parte Henry (1936) 55 CLR 608. He accepted and agreed with ‘the views expressed by a majority of the court in Burgess’ case’ — ‘that the “substantial subject matter of external affairs” includes “the carrying out”, within or outside Australia, of an agreement binding the Commonwealth in relation to other countries whatever the subject matter of the agreement may be’: 158 CLR at 258. His Honour continued:] Deane J: It is … relevant for present purposes to note that the responsible conduct of external affairs in today’s world will, on occasion, require observance of the spirit as well as the letter of international agreements, compliance with recommendations of international agencies and pursuit of international objectives which cannot be measured in terms of binding obligation … On the other hand, a law cannot properly be characterised as a law with respect to external affairs if its direct operation is upon a domestic subject matter which is not in itself within the ambit of external affairs and if it lacks the particular operation which is said to justify such characterisation. Thus, a law would not properly be characterised as a law with respect to external affairs if it failed to carry into effect or to comply with the particular provisions of a treaty which it was said to execute … or if the treaty which the law was said to carry into effect was demonstrated to be no more than a device to attract domestic

legislative power … More importantly, while the question of what is the appropriate method of achieving a desired result is a matter for the Parliament and not for the court … the law must be capable of being reasonably considered to be appropriate and adapted to achieving what is said to impress it with the character of a law with respect to external affairs … Implicit in the requirement that a law be capable of being reasonably considered to be appropriate and adapted to achieving what is said to provide it with the character of a law with respect to external affairs is a need for there to be a reasonable proportionality between the designated purpose or object and the means which the law embodies for achieving or procuring it. Thus, to take an extravagant example, a law requiring that all sheep in Australia be slaughtered would not be sustainable as a law with respect to external affairs merely because Australia was a party to some international convention which required the taking of steps to safeguard against the spread of some obscure sheep disease which had been detected in sheep in a foreign country and which had not reached these shores. The absence of any reasonable proportionality between the law and the purpose of discharging the obligation under the convention would preclude characterization as a law with respect to [page 373] external affairs notwithstanding that Tweedledee might, ‘contrariwise’, perceive logic in the proposition that the most effective way of preventing the spread of any disease among sheep would be the elimination of all sheep. The law must be seen, with ‘reasonable clearness’, upon consideration of its operation, to be ‘really, and not fancifully, colourably, or ostensibly, referable’ to and explicable by the purpose or object which is said to provide its character … In that regard, the

‘peculiar’ or ‘drastic’ nature of what the law provides or the fact that it pursues ‘an extreme course’ is relevant to characterization … [Deane J also dealt with the topic of specificity of international obligations:] International agreements are commonly ‘not expressed with the precision of formal domestic documents as in English law’ … That absence of precision does not, however, mean any absence of international obligation. In that regard, it would be contrary to both the theory and practice of international law to adopt the approach which was advocated by Tasmania and deny the existence of international obligations unless they be defined with the degree of precision necessary to establish a legally enforceable agreement under the common law … However loosely such obligations may be defined, it is apparent that Australia, by depositing its instrument of ratification, bound itself to observe the terms of the Convention and assumed real and substantive obligations under them … Those obligations include the primary ‘duty of ensuring’, among other things, the protection, conservation and presentation of the relevant property (Art 4) and an express undertaking to ‘endeavour, in so far as possible, and as appropriate for each country’, to ‘take the appropriate legal, scientific, technical, administrative and financial measures necessary for the identification, protection, conservation, presentation and rehabilitation’ thereof (Art 5(d)) … [Deane J referred to the federal clause in the Convention:] It was submitted on behalf of Tasmania that the effect of the provisions of Art 34 is to absolve the Commonwealth of the obligation to carry the Convention into effect in so far as the protection or conservation of properties situated within a State is concerned. In my view, there is a plain answer to that submission. Article 34 acts on the distribution of powers under the

Constitution. … under that distribution of powers, the carrying into effect of the Convention is within the paramount legal jurisdiction of the Commonwealth Parliament by virtue of the express grant of legislative power contained in s 51(xxix). It follows that, far from absolving the Commonwealth of the obligation to implement the provisions of the Convention, Art 34 underlines, in express terms, the ‘obligations’ of the Commonwealth in that regard. [Deane J found that the World Heritage (Western Tasmania Wilderness) Regulations were capable of being considered to be an implementation of the Convention, principally because their ‘extremely wide’ restrictions applied only in that area of the national parks where the Hydro-Electric Commission was constructing a dam: 158 CLR at 278–9. However, Deane J held that s 9(1)(a)–(g) of the Act could not be supported by s 51(xxix) and were invalid. Like Brennan J, this was because ‘all of the prohibitions contained in paragraphs (a) to (g) … are automatically imposed in respect of any property which is proclaimed by the Governor-General pursuant to s 6(3) regardless of their appropriateness for the purpose of protecting or conserving the property and regardless of whether any relationship at all exists between all or any of the prohibited acts and the nature and source of likely damage to the property’: 158 CLR at 266. There was ‘a lack of any reasonable proportionality between the provisions … and the purpose of protecting and conserving the relevant property … and thereby [page 374] complying with the obligations under the Convention’: 158 CLR at 266–7. By contrast, Deane J considered that s 9(1)(h) conformed to the Convention and fell within s 51(xxix). Deane J went on to find that the World Heritage (Western Tasmania Wilderness) Regulations effected an acquisition of property without just terms and were invalid under s 51(xxxi) of the

Constitution. He considered this not to be so in relation to s 9(1)(h) of the Act (and the regulation made thereunder) which were accordingly valid laws with respect to s 51(xxix). In dissent, Gibbs CJ concluded that, ‘although the Convention imposes on the States Parties to the Convention certain obligations, Arts 4, 5 and 6 do not impose on any State Party an obligation to take any specific action, and there is no other provision of the Convention which imposes any legal obligation on Australia to take action to protect the Parks from possible or actual damage’: 158 CLR at 92. His Honour stated that ‘[t]he federal nature of the Constitution requires that some limits be imposed on the power to implement international obligations conferred by para (xxix)’: 158 CLR at 99. In saying this, he reasoned that s 51(xxix) ‘differs from the other powers conferred by s 51 in its capacity for almost unlimited expansion’ because there was ‘almost no aspect of life which under modern conditions may not be the subject of an international agreement, and therefore the possible subject of Commonwealth legislative power’: 158 CLR at 100. Gibbs CJ continued:] Gibbs CJ: Section 51(xxix) should be given a construction that will, so far as possible, avoid the consequence that the federal balance of the Constitution can be destroyed at the will of the executive. To say this is of course not to suggest that by the Constitution any powers are reserved to the States. It is to say that the federal nature of the Constitution requires that ‘no single power should be construed in such a way as to give the Commonwealth Parliament a universal power of legislation which would render absurd the assignment of particular carefully defined powers to that Parliament’ … It is not altogether clear what Stephen J meant [in Koowarta] when he insisted that the subject of a treaty must be of international concern if legislation with regard to it is to come within the power conferred by s 51 (xxix). He clearly did not mean that it was necessary that the subject of the agreement must itself be an external affair, for it was on that question that

he differed from the minority. However, he cannot have meant that the mere fact that a matter has become the subject of an international agreement means that it is a matter of international concern, because he expressly said that it is not enough that the challenged legislation gives effect to treaty obligations. … Whether a matter is of international concern depends on the extent to which it is regarded by the nations of the world as a proper subject for international action, and on the extent to which it will affect Australia’s relations with other countries. For myself, I should have preferred a more precise test. However, the result is that unlike some other powers, but like the defence power, the application of the external affairs power ‘depends upon facts, and as those facts change so may its actual operation as a power enabling the legislature to make a particular law’ … The Convention … deal[s] with matters entirely domestic — matters which contemplate action within Australia, which involve no reciprocity of relationship with other nations (as a convention regarding the protection of historic memorials from bombardment might do) and which do not directly affect the interests of other nations, for example, by protecting them from actual or potential risks (as a convention relating to the eradication of diseases or the prohibition of the illegal export of cultural property might do). The protection of the environment and the cultural heritage has been of increasing interest in recent times, but it cannot be said to have become such a burning international issue that a failure by one [page 375] nation to take protective measures is likely adversely to affect its relations with other nations, unless of course damage or pollution extends beyond the borders. … I regard as decisive the fact that the Convention does not impose any obligation on the Commonwealth to enact legislation for the protection of any part

of the national heritage within Australia … I also take into account my opinion that relations with other countries are not likely to be significantly affected by whatever action Australia takes in relation to the protection of the Parks. These considerations, and the nature of the matters with which the Convention … deal[s], lead me to the conclusion that the external affairs power has not been attracted in the present case. [Gibbs CJ said that the fact that the Convention did not (in his opinion) subject Australia to any applicable obligations was a further, independent ground for his finding that s 51(xxix) was not available: 158 CLR at 102–7. He concluded that the World Heritage (Western Tasmania Wilderness) Regulations and ss 6(2)(a)–(d) and 9 of the Act were not supported by s 51 (xxix) and were invalid.]

4.3.23 Of the remaining justices in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1, Murphy J expressed a broad view of the ambit of s 51(xxix). He said it extended to the implementation of any international agreement; also, the implementation of ‘any recommendation or request of the United Nations organisation or subsidiary organisations’: 158 CLR at 171. He accepted that even without a treaty, the Commonwealth could legislate on any matter of international concern: 158 CLR at 171– 2. He concluded that the regulations and the Act implemented the obligations imposed on Australia by the Convention and were valid. In dissent, Wilson J delivered a separate judgment to the same effect on s 51(xxix) as Gibbs CJ. Also in dissent, Dawson J adopted a similar approach to s 51(xxix) as Gibbs CJ and Wilson J. He held that the Commonwealth could not legislate to implement the Convention because the subject matter of the Convention was not of sufficient ‘international concern’ to make it part of Australia’s

external affairs (158 CLR at 310–11) and was not otherwise relevantly ‘international in character’: 158 CLR at 311–12. He did not decide whether the Convention imposed obligations on Australia. In the result, the court decided that the World Heritage (Western Tasmania Wilderness) Regulations were invalid, as was s 9(1)(a)–(g) of the World Heritage Properties Conservation Act. But s 9(1)(h) of the Act was held to be valid and, as a result, it was unlawful for any person (except with the Commonwealth minister’s consent) to carry out any works associated with the construction of the Franklin Dam. 4.3.24 The decision in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 generated a strongly critical reaction from defenders of the states’ political autonomy. In Richardson v Forestry Commission (1988) 164 CLR 261 4.3.30C, Dawson J stated that as there was now ‘no practical limit to the scope of the external affairs power’, s 51(xxix) ‘has the potential to obliterate the division of legislative power otherwise effected by s 51’: 164 CLR at 321. When compared to Koowarta v Bjelke-Petersen (1982) 153 CLR 168 4.3.18C, the court’s decision in the Tasmanian Dam case certainly involved an expansion of the scope of s 51(xxix). A majority of the court now concluded that the Commonwealth Parliament could legislate to implement any international obligation which the Commonwealth Government had assumed under a bona fide international treaty, and that the subject matter of the obligation, which might otherwise lie outside the powers conferred on the Commonwealth, was not relevant to this proposition.

[page 376] 4.3.25 Although the majority conclusion in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 expanded the Commonwealth’s legislative authority, the decision did not represent an unequivocal endorsement of Commonwealth legislative hegemony. In particular, Brennan J saw the presence of an obligation as integral to the treaty implementation aspect of s 51(xxix). In his opinion, in the absence of a relevant obligation in the treaty, the Commonwealth Parliament could only legislate under the external affairs power to implement the treaty where its subject matter was of international concern. The question would be ‘whether the subject affects or is likely to affect Australia’s relations with other international persons’, which posed, Brennan J conceded, ‘an inquiry of some difficulty’: 158 CLR at 220. By contrast, the other members of the majority said that the existence of a genuine international treaty was enough to activate s 51(xxix): Mason J (158 CLR at 123–5, 129–30), Murphy J (at 171) and Deane J (at 258). As Mason J explained: ‘The existence of international character or international concern is established by entry by Australia into the convention or treaty’: 158 CLR at 125. This view was subsequently accepted by Gaudron J in Richardson v Forestry Commission (1988) 164 CLR 261 at 342 and seemingly also by Toohey J in the same case at 332–3. 4.3.26 How much of a restriction on the expansionist use of s 51(xxix) was Brennan J suggesting? Although he stressed the need to locate an obligation in the treaty, he demonstrated a ‘rather liberal’ approach to the location of such an obligation in the Convention: M Crommelin, ‘Comment on the External Affairs

Power’ (1984) 14 Federal Law Review 208 at 213. This was not, in Brennan J’s words, an exercise in ‘jurisprudential analysis of the terms of the Convention’; rather, the question was whether failure to observe the terms of the World Heritage Convention would ‘affect Australia’s relations with other nations and communities’ and ‘[u]nless Australia were to attribute hypocrisy and cynicism to the international community, only an affirmative answer is possible’: 158 CLR at 226. This approach was broadly similar to that of Mason J (at 132–4) and Deane J (at 261–3). Commenting on this aspect of the decision in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1, Crommelin suggested ‘that the occasions upon which the approach of Brennan J leads him to differ in the result from the rest of the … majority may be few’: M Crommelin, ‘Comment on the External Affairs Power’ (1984) 14 Federal Law Review 208 at 213. 4.3.27 A key theme in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 4.3.18C and Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C was concern for the relative power of the states. In the Tasmanian Dam case, Gibbs CJ stressed the need to take account of the federal character of the Constitution. To accept that s 51(xxix) included the power to implement any treaty obligation on any topic, he said, would enlarge the Commonwealth’s authority to embrace ‘literally all fields of activity’ and ensure that ‘[t]he division of powers between the Commonwealth and the States which the Constitution effects could be rendered quite meaningless’: 158 CLR at 100. This approach was criticised by Mason J as one of the ‘ritual invocations of “the federal balance”’: 158 CLR at 129. He implied that it was based on an assumption of state ‘reserved powers’ (at 128), as did Deane J (at 254).

Gibbs CJ sought to anticipate and avoid this criticism. He denied that he was suggesting ‘that by the Constitution any powers are reserved to the States’. Rather, he was asserting that no single legislative grant should be interpreted so as to arm the Commonwealth with what he termed, quoting from an earlier decision of the court, ‘a universal power of legislation’: 158 CLR at 100. However, the majority in the Tasmanian Dam case rejected this attempt to confine s 51(xxix). It was their view that the topics which might be brought within s 51(xxix) depended upon the evolving international order, not upon the conception of federalism in the minds of the [page 377] 19th century drafters of the Constitution. For example, Brennan J said that the Commonwealth’s legislative powers should be read broadly so as to give ‘the Constitution a dynamic force which is incompatible with a static constitutional balance’, acknowledging that ‘[t]he complexity of modern commercial, economic, social and political activities … carries an expanding range of those activities into the sphere of Commonwealth legislative competence’: 158 CLR at 221. 4.3.28 The majority justices’ view of the World Heritage Convention’s ‘federal clause’, art 34, is broadly reflective of their attitude to the minority’s references to the federal character of the Constitution. Article 34, Deane J said, ‘acts on the distribution of powers under the Constitution’, which gave to the Commonwealth Parliament the authority to carry the Convention into effect. Far

from denying the obligatory nature of the Commonwealth’s commitments under the Convention, the federal clause ‘underline[d], in express terms’, the Commonwealth’s obligations: 158 CLR at 263. See also Mason J at 136; Murphy J at 178; Brennan J at 228. Of the minority justices, Gibbs CJ was non-committal on this point (158 CLR at 106–7), but Wilson and Dawson JJ said art 34 operated to confine the Commonwealth’s obligation under the Convention to informing state authorities of the substantive provisions of the Convention and recommending that they take action to implement the Convention: Wilson J at 195; Dawson J at 313. 4.3.29 The one clearly viable limitation on the treaty implementation power which emerged from Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 is the requirement that legislation which implements a treaty must conform to that treaty. For Brennan and Deane JJ, this required showing that legislation enacted in reliance on the Convention could ‘reasonably be considered conducive to the performance of the obligation imposed by the Convention’ (158 CLR at 232 per Brennan J) or was capable of being reasonably seen ‘to be “really, and not fancifully, colourably, or ostensibly, referable” to … the purpose’ of the Convention: 158 CLR at 260 per Deane J. Applying that approach, those justices found the parts of s 9(1) (other than para (h)) to go beyond what was required to implement the Convention and, accordingly, joined Gibbs CJ, Wilson and Dawson JJ in holding those parts invalid. It is not immediately clear that Mason and Murphy JJ had a different view of the necessary degree of conformity that was required with the Convention. Murphy J wrote of legislation which

‘may reasonably be regarded as appropriate for implementation of provisions of the treaty’: 158 CLR at 172. Mason J wrote that ‘the legislative provisions [must be] appropriate and adapted to the desired end’: 158 CLR at 138. It may be, given the relatively imprecise nature of these various formulations of the conformity test, that the differences of judicial opinion over the validity of the bulk of s 9(1) of the Act merely reflected different assessments of the requirements of the Convention and of the terms of the Act. The issue of conformity with the Convention also divided the court in Richardson v Forestry Commission (1988) 164 CLR 261. 4.3.30C

Richardson v Forestry Commission (1988) 164 CLR 261

[The Lemonthyme and Southern Forests (Commission of Inquiry) Act 1987 (Cth) provided for a commission of inquiry into two areas in Tasmania for the purpose of determining whether the areas were of world heritage status within the World Heritage Convention (the [page 378] Convention). (The central parts of the Convention are set out in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C.) Section 16(1) of the Act declared that it was unlawful for any person to engage in specified activities in the areas concerned, except with the written consent of the minister, until 42 days after the end of the period of 1 year from 8 May 1987 or after the minister’s receipt of the commission’s final report. The specified activities were: (a) for the purposes of, or in the course of carrying out,

forestry operations, to kill, cut down or damage a tree in, or remove a tree or a part of a tree from, the protected area; (b) to construct or establish a road or vehicular track within the protected area; (c) to carry out any excavation works within the protected area; (d) to do any other act prescribed for the purposes of this paragraph, being an act capable of adversely affecting the protected area. According to s 18(1), the minister was to ‘have regard only to Australia’s obligations under the Convention’ when deciding whether to grant consent under s 16. The two areas to which the Act applied consisted of some 283,300 hectares (close to 4.5 per cent of the land area of Tasmania). They were adjacent to the world heritage area in the south-west of Tasmania which was at the centre of the dispute in the Tasmanian Dam case. The bulk of the two areas were wilderness owned by the State of Tasmania and used by the timber industry. The Commonwealth Minister for the Environment and the Arts began proceedings in the High Court for an injunction to restrain the Forestry Commission of Tasmania and a private forestry company from acting in contravention of s 16 of the Act. Mason CJ and Brennan J held that the Convention imposed an obligation on each party to identify, protect, conserve and present the world heritage within its territory, and that ‘in the matter of identification … the obligation rests exclusively, not primarily’ with the relevant party: 164 CLR at 289. They said that the obligation to identify property which may become the subject of protection was ‘an element in the duty to ensure protection’; therefore ‘the Convention does not sustain the view that the duty to ensure protection does not arise or attach to land until the State identifies and delineates that land as part of the heritage’:164 CLR at 290. They continued:]

Mason CJ and Brennan J: It is for each State to determine what it will do by way of protecting a particular property pending resolution of its status as part of the heritage. But the taking of action by a State to protect or conserve a particular property in its territory pending resolution of the status of that property as part of the heritage is to carry out and give effect to the Convention because the taking of the action is incidental to the State’s duty to ensure protection of the heritage and to the attainment of the object of the Convention. Granted ultimate identification of the property as part of the heritage, the absence of such action by way of interim protection in the meantime would expose the property to the possibility of irreparable damage. The taking of action by way of interim protection pursuant to the external affairs power, eg, by the enactment of legislation prohibiting destruction of, or damage to, particular property, pending a determination of its status as a property to be nominated for inclusion in the World Heritage List may be supported as action which can reasonably be considered appropriate and adapted to the attainment of the object of the Convention, namely the protection of the heritage. [page 379] [Mason CJ and Brennan J rejected the defendants’ argument that the prohibitions imposed by the Act went beyond Australia’s obligations under the Convention:] No doubt some of the acts prohibited by s 16(1)(a), (b) and (c) may be so trivial that they do not present a significant risk of real impairment to the world heritage characteristics of the land in question. None the less the class of acts prohibited, namely tree-felling and removal in the course of forestry operation, road and track construction and excavation, are generally speaking acts involving a potential risk of injury to any

qualifying areas which may be in the Lemonthyme and Southern Forests areas. It is therefore appropriate to single them out as objects of prohibition unless the plaintiff consents in writing to them. We should have thought that only by such a means of regulation is it possible to ensure protection of the land in conformity with the Convention. But it is not necessary to go so far. It is enough to say that [subject to there being reasonable grounds for believing the areas might have world heritage qualities] … the provisions are a means for effectuating a desired end which is within power, namely ensuring protection of land which may be identified as part of the world heritage. [Finally, Mason CJ and Brennan J rejected the defendants’ argument that there was no reasonable basis for believing that the areas to which the Act applied might have world heritage qualities and for extending the protections in s 16 over the areas in full throughout the interim protection period:] … [the] evidence indicates that there are particular stands of rare timber, aboriginal cave dwellings and archaeological sites. It also indicates that the area, especially the Southern Forests area, which is less well known, may possess important world heritage characteristics, particularly cave dwellings and archaeological sites, as yet unidentified … The matters to which we have referred provide a basis for a legislative judgment that substantial parts of the area, the location of which cannot be identified at this time with any certainty, may conceivably possess world heritage characteristics which should be protected. If part of an area might possess world heritage characteristics and if that part might be damaged unless the area is protected by legislative measures appropriate to preserve that part, a failure to take those measures involves a risk that the Convention obligation will not be discharged. It is only by taking those measures that the risk of failing to discharge the Convention obligation can be avoided. As the external affairs power is a plenary power, it extends to support a law calculated to

discharge not only Australia’s known obligations but also Australia’s reasonably apprehended obligations. The power extends to support a law … which is required to ensure the discharge of a treaty obligation which is reasonably apprehended to exist. In making provision for the establishment of the Commission of Inquiry and for the regime of interim protection of the protected area, Parliament has made a legislative judgment about the situation and the Convention obligation that may be proved to exist. It is not for us to impugn the bona fides of that judgment. It is enough that the legislative judgment could reasonably be made or that there is a reasonable basis for making it. Particularly is this so when the ultimate decision to be made by the Executive Government, whether the area, or parts of it, should be proposed for inclusion in the World Heritage List, involves a calculus of factors, including factors which are cultural, economic and political. Of course, if the legislative judgment cannot reasonably be supported, the Court will not hesitate to declare that it is invalid as an excess or abuse of power … [page 380] Consequently we would answer the first question by declaring that the Act is valid in its entirety. Deane J: … [A] purpose or object which the Act as a whole is designed to serve is the identification, delineation and protection of actual and potential world heritage areas and the procurement of information and advice with respect to that identification and delineation and with respect to related questions, such as the relationship between world heritage areas and adjoining areas and the availability of alternative resources. Those are all matters involved in, or conducive to, the identification, discharge and pursuit of the international obligations, aspirations and objectives which Australia undertook

… by becoming a party to the Convention. That being so an underlying purpose or object which the Act manifests is a legitimate subject of external affairs, namely, the discharge and pursuit of obligations, aspirations and objectives imposed or recognised and accepted by an international treaty to which Australia is a party. It will, on occasion, be convenient to refer to that purpose or object as ‘the international purpose or object’. [Deane J held that Pt II of the Act, establishing the commission of inquiry, clearly fell within s 51(xxix): 164 CLR at 313–14. His Honour continued:] As has been said, the protection of actual and potential world heritage areas is a purpose or object to which Australia has subscribed by becoming a party to the Convention. It is, however, far from self-evident that a law establishing a conservation regime of direct Commonwealth control, in relation to domestic matters which are not of themselves subjects of Commonwealth legislative or administrative powers, over a large area of State territory containing no listed or nominated world heritage areas, can properly be characterised, for the purposes of s 51(xxix), as a law with respect to external affairs simply because the affected territory is adjacent to World Heritage areas or is said to include some parts which could be considered as natural or cultural heritage appropriate for nomination for World Heritage listing. Even if it be accepted that the international purpose or object underlies the provisions of the Act imposing the restrictive Commonwealth regime, those provisions will, as has been seen, bear the character of a law with respect to external affairs for the purposes of s 51(xxix) only if it appears that their domestic operation to impose and provide for the enforcement of restrictions and restraints in relation to the protected areas is reasonably capable of being seen as appropriate and adapted to the genuine pursuit of that purpose or object … [Deane J referred to the existence within the areas subject to the Act of

‘freehold land owned by individuals’: 164 CLR at 316.] [T]he material before the Court leads inevitably to the conclusion that there has been no real effort made to confine the prohibitions of the overall protective regime, with the overriding of the ordinary rights of citizens and the ordinary jurisdiction of the State of Tasmania which it would involve, to activities which it might reasonably be thought represented some real actual or potential threat to what might properly be seen, for the purposes of the Convention, as natural or cultural heritage … On the material before the Court, it is impossible to say that it appears that there is reasonable proportionality between the provisions … imposing that overall restrictive regime and the designated intention, purpose or object. That being so, those provisions are not, when so viewed, capable of being reasonably considered to be appropriate and adapted to achieve the purpose or object which is said to provide them with the character of a law with respect to external affairs. Accordingly, the provisions of Pt III [page 381] of the Act [interim protection] cannot, taken collectively, be sustained by s 51(xxix) of the Constitution. The question arises whether those provisions of Pt III are all invalid or whether some of them are severable and either valid, when viewed independently, or susceptible of being read down to validity. [Deane J concluded that s 16(1)(b), (c) and (d) were wholly invalid but that only part of s 16(1)(a) was invalid; namely, its prohibition on the removal of a tree or part of a tree.]

4.3.31

Dawson J indicated that he continued to regard the

decision in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C as inconsistent with the Constitution. However, as the instant case had been argued on the basis of the correctness of that earlier decision, he was prepared to assume its authority: 164 CLR at 321–2. On the basis of that assumption, he upheld the legislation under s 51(xxix). Wilson J said he was bound by the precedent set by the Tasmanian Dam case to the effect that the Convention imposed obligations on Australia which the Commonwealth could legislate to implement: 164 CLR at 298–9. On this basis, he upheld the Act for similar reasons to Mason CJ and Brennan J. Toohey J delivered judgment in substantially the same terms as Mason CJ and Brennan J. Gaudron J delivered judgment in terms similar to those of Deane J, holding that s 16(1)(d) was invalid and, on the information before the court, s 16(1)(a), (b) and (c) were also invalid. She explained her view as follows (164 CLR at 347–8): Because s 16 must be viewed as affording general environmental protection rather than protection of the qualities and features which may be of outstanding universal value, it is not on the material before the court reasonably capable of being viewed as appropriate or adapted to the circumstances that the areas may be or contain areas constituting part of the world heritage. It cannot on the available material be characterised as a law with respect to external affairs. Nor, in my view, is that conclusion altered by the possibility that the proscription may be relaxed with the consent of the Minister.

4.3.32 The willingness of the court in Richardson v Forestry Commission (1988) 164 CLR 261 to find in the Convention an obligation on Australia to identify property of world heritage value and to uphold legislation designed to protect property (albeit on a temporary basis) with such potential pending its identification and

recognition, indicates an expansive view of the s 51(xxix) power. This approach was underscored by Mason CJ and Brennan J’s recognition that s 51(xxix) ‘extends to support a law calculated to discharge not only Australia’s known obligations but also Australia’s reasonably apprehended obligations. The power extends to support a law … which is required to ensure the discharge of a treaty obligation which is reasonably apprehended to exist’: 164 CLR at 295. 4.3.33 Yet the judgments in Richardson v Forestry Commission showed a division on the court, also apparent in Commonwealth v Tasmania (Tasmanian Dam case) 158 CLR 1, over the degree of judicial deference to be accorded to the judgment of parliament on the measures appropriate for the purpose of implementing international treaty obligations. Deane J clearly employed a more rigorous standard of review than the majority. The question, he said, was whether the protective measures in s 16 of the Act were ‘reasonably capable of being seen as appropriate and adapted to the genuine pursuit’ of giving effect to the Convention: 164 CLR [page 382] at 314. In his opinion, the Commonwealth had not sufficiently tailored its legislative means to that objective and thus it was ‘impossible to say that it appears that there is reasonable proportionality between the provisions … and the designated … object’: 164 CLR at 317. While the majority judges employed a similar conformity test, they were evidently prepared to concede more latitude to parliament in choosing how to implement the obligation to identify

and protect world heritage sites. The difficult questions of perception and degree that are inherent in assessing whether legislation conforms with treaty provisions are demonstrated by comparing Brennan J’s approach to this issue in Richardson v Forestry Commission with his earlier approach in the Tasmanian Dam case. 4.3.34C

Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416

[The Industrial Relations Act 1988 (Cth) was amended by the Industrial Relations Reform Act 1993 (Cth) and the Industrial Relations Amendment Act (No 2) 1994 (Cth). Victoria, South Australia and Western Australia started High Court actions arguing that a number of these amendments were invalid. The joint judgment of Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ began by outlining the basic issues in the case as they related to s 51(xxix) of the Constitution:] Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ: In general terms, the provisions of the Act which are challenged in these proceedings allow for the imposition of, or impose, obligations on employers with respect to minimum wages, equal pay, termination of employment, discrimination in employment and family leave, and provide as well for collective bargaining and the right to strike. The Commonwealth claims that many of the provisions in question were enacted pursuant to its power with respect to external affairs … This is because a number of these matters are the subject of Conventions which have been adopted by the General Conference of the International Labour Organisation (the ILO) and ratified by Australia … Some matters

are the subject of Recommendations adopted by the General Conference of the ILO … However, the plaintiff States argue that, contrary to what was said in the judgments of the majority in The Commonwealth v Tasmania (the Tasmanian Dam Case) (1983) 158 CLR 1, the power to legislate with respect to external affairs does not extend to the implementation of treaty obligations unless the subject matter of the treaty is one of international concern. According to their argument, the ILO Conventions and Recommendations on which the provisions in question are based are not concerned with matters of that kind. As well, they argue that the ILO Conventions and Recommendations do not impose obligations or, if they do, the provisions in question are not capable of being viewed as appropriate or adapted to their implementation. In some instances, they say, the provisions are simply not directed to any relevant external affair. [The justices proceeded to examine the external affairs power:] Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ: As things stood in 1900, the subjects of treaties were various. This is significant for the present case, because it indicates that the limited view of the scope of federal legislative power, urged by the plaintiff States, [page 383] does not proceed from an accurate understanding of the range of subject matter to which s 51(xxix) applied as it stood as long ago as federation. [The justices said it was apparent at federation that there had been ‘continual expansion in the range of the subject matter of treaties entered into between Great Britain and other states’: 187 CLR at 478. They referred to a range of international agreements and institutions

which existed prior to federation, including the International Telegraph Union (1865), the Universal Postal Union (1874), the International Convention for the Protection of Industrial Property (1883), the Hague Convention for the Pacific Settlement of International Disputes (1899), and other agreements ‘in the fields of what now would be called international human rights, world health and environmental protection’: 187 CLR at 479. Their Honours continued:] It would be a serious error to construe par (xxix) as though the subject matter of those relations to which it applied in 1900 were not continually expanding. Rather, the external relations of the Australian colonies were in a condition of continuing evolution and, at that time, were regarded as such. Accordingly, it is difficult to see any justification for treating the content of the phrase ‘external affairs’ as crystallised at the commencement of federation, or as denying it a particular application on the ground that the application was not foreseen or could not have been foreseen a century ago … There was some suggestion in the submissions of the plaintiff States in the present case that what has come to pass with the legislation they seek to impugn is something beyond contemplation at the time of the adoption of the Constitution. Any such proposition is, as we have endeavoured shortly to illustrate, too widely stated. The treaties which were part of the subject matter of foreign relations in 1900, and the treaties that have since been made, embrace an ever-expanding range of topics. [The justices referred to the states’ argument for a return to the narrow view of the treaty implementation aspect of the external affairs power consistent with Stephen J’s view in Koowarta v Bjelke-Petersen (1982) 153 CLR 168:] … the Solicitor-General for Victoria contended for a criterion of validity which resembled that adopted by Stephen J or alternatively that of the minority judges in Koowarta. He

submitted that, even upon this limited footing, the result in the Tasmanian Dam case (1983) 158 CLR 1 would have been the same. Therefore, the submission proceeded, there was no occasion to seek leave to reopen the correctness of the Tasmanian Dam Case. The difficulty in the path of these submissions is that subsequently the majority in the Tasmanian Dam Case adopted the broader view. It is not to the point that the same result might have been achieved by application of the view previously taken by Stephen J. It is to seek to distort the principles of stare decisis and of ratio decidendi … to contend that a decision lacks authority because it might have been reached upon a different path of legal reasoning to that which was actually followed. That would be to replace what was decided by that which might have been decided. According to basic constitutional principle, and with qualifications not presently relevant, the intrusion of Commonwealth law into a field that has hitherto been the preserve of State law is not a reason to deny validity to the Commonwealth law provided it is, in truth, a law with respect to external affairs … There may be some treaties which do not enliven the legislative power conferred by s 51(xxix) even though their subject matter is of international concern. For example, Professor Zines has suggested that a treaty expressed in terms of aspiration (for example, ‘to promote [page 384] full employment’) cannot support a law which adopts one of a variety of possibly contradictory ways that might be selected to fulfil the aspiration. He writes (Zines, The High Court and the Constitution, 3rd ed (1992), p 250 (emphasis in original)):

Accepting … that the agreement by nations to take common action in pursuit of a common objective amounts to a matter of external affairs, the objective must, nonetheless, be one in relation to which common action can be taken. Admittedly, this raises questions of degree; but a broad objective with little precise content and permitting widely divergent policies by parties does not meet the description. When a treaty is relied on under s 51(xxix) to support a law, it is not sufficient that the law prescribes one of a variety of means that might be thought appropriate and adapted to the achievement of an ideal. The law must prescribe a regime that the treaty has itself defined with sufficient specificity to direct the general course to be taken by the signatory states … However, Deane J has pointed out in the Tasmanian Dam Case (1983) 158 CLR 1 at 261–262: [A]bsence of precision does not, however, mean any absence of international obligation. In that regard, it would be contrary to both the theory and practice of international law to adopt the approach which was advocated by Tasmania and deny the existence of international obligations unless they be defined with the degree of precision necessary to establish a legally enforceable agreement under the common law. Where the legislative power is said to be enlivened by a treaty binding on the Commonwealth of Australia, and the law prescribes a regime affecting a domestic subject matter, a question arises as to the connection which must exist between the law and the treaty. To be a law with respect to ‘external affairs’, the law must be reasonably capable of being considered appropriate and adapted to implementing the treaty. Thus, it is for the legislature to choose the means by which it carries into or gives effect to the treaty provided that the means chosen are reasonably capable of being considered appropriate and adapted to that end … But that is not to say that an

obligation imposed by treaty provides the outer limits of a law enacted to implement it … The term ‘purpose’ has been used to identify the object for the advancement or attainment of which a law was enacted. Hence, the statement by Brennan J in Cunliffe v The Commonwealth (1994) 182 CLR 272 at 322 that the external affairs power has ‘a purposive aspect’. As this phrase indicates, care is required in relevant analysis. Where a treaty relating to a domestic subject matter is relied on to enliven the legislative power conferred by s 51(xxix) the validity of the law depends on whether its purpose or object is to implement the treaty. This was explained, in a passage with which we respectfully agree, by Dawson J in Richardson v Forestry Commission (1988) 164 CLR 261 at 326: The power to make laws with respect to external affairs contains no expression of purpose and in that respect it is like most of the other powers contained in s 51 of the Constitution. It is not a power to make laws for the purpose of cementing international relations or achieving international goodwill or even for implementing international treaties. The implementation of treaties falls within the power because it is a subject matter covered by the expression ‘external affairs’. And the purpose of legislation which purports to implement a treaty is considered not to see whether it answers a requirement of purpose to be found in the head of power itself, but to see whether the legislation operates in fulfilment of the treaty and thus upon a subject which is an aspect of external affairs. [page 385] In this context, purpose is not something found in the head of power. Rather, it is a test for determining whether the law in question is reasonably capable of being considered as giving

effect to the treaty and therefore as being a law upon a subject which is an aspect of external affairs. It has been said that a law will not be capable of being seen as appropriate and adapted in the necessary sense unless it appears that there is ‘reasonable proportionality’ between that purpose or object and the means adapted by the law to pursue it … The notion of ‘reasonable proportionality’ will not always be particularly helpful. The notion of proportion suggests a comparative relation of one thing to another as respects magnitude, quantity or degree; to ask of the legislation whether it may reasonably be seen as bearing a relationship of reasonable proportionality to the provisions of the treaty in question appears to restate the basic question. This is whether the law selects means which are reasonably capable of being considered appropriate and adapted to achieving the purpose or object of giving effect to the treaty, so that the law is one upon a subject which is an aspect of external affairs. [Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ addressed the issue of whether a law invoking the treaty implementation dimension of s 51(xxix) must give effect to the relevant treaty in its entirety. They said:] It would be a tenable proposition that legislation purporting to implement a treaty does not operate upon the subject which is an aspect of external affairs unless the legislation complies with all the obligations assumed under the treaty … But the Tasmanian Dam Case and later authorities confirm that this is not an essential requirement of validity … Deficiency in implementation of a supporting Convention is not necessarily fatal to the validity of a law; but a law will be held invalid if the deficiency is so substantial as to deny the law the character of a measure implementing the Convention or it is a deficiency which, when coupled with other provisions of the law, make it substantially inconsistent with the Convention.

[Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ concluded that the provisions of the Act dealing with minimum wages, equal remuneration for work of equal value, parental leave and certain protection of strike action fell within s 51(xxix) because they gave effect to the terms of the international instruments they purported to implement. In doing so, the justices considered the provisions of the Act concerning equal remuneration for work of equal value which gave effect to international conventions and to international recommendations. Section 170BC(3)(b) provided that the Industrial Relations Commission could only issue an order for equal remuneration if, among other things, ‘(b) the order can reasonably be regarded as appropriate and adapted to giving effect to: (i) one or more of the AntiDiscrimination Conventions; or (ii) the provisions of … [ILO Recommendation No 90 or 111]’. Their Honours said:] The power of the [Industrial Relations] Commission in s 170BC(3) to make an order [for equal remuneration] is conditional upon the requirement that the order ‘can reasonably be regarded as appropriate and adapted to giving effect to’ one of the Conventions or Recommendations referred to. That wording plainly reflects the criterion for validity of a law enacted in reliance on s 51(xxix) to implement a treaty … If the broad provisions of the Division had the effect that they allowed the Commission to make orders that were not so limited, arguably the section would be beyond power. The limitation has the effect that the general nature of the provision is confined in effect by the constitutional limit on the power of the Parliament to enact such legislation … [page 386] The section refers separately to a measure being reasonably

regarded as appropriate and adapted for giving effect to Recommendation No 90 or Recommendation No 111. That provision can be supported under s 51(xxix) if, but only if, the terms of these Recommendations themselves can reasonably be regarded as appropriate and adapted to giving effect to the terms of the Conventions to which they relate. In our view, they can be so regarded. Hence measures that fall within the terms of s 170BC(1) and implement the terms of the Recommendations will fall within the terms of s 170BC(3)(b)(i). On this line of reasoning, the words ‘can reasonably be regarded as appropriate and adapted to’ in s 170BC(3)(b) may be superfluous in relation to the Recommendations but are obviously designed to cover the situation where the Recommendations are relied upon of themselves to support an exercise of the external affairs power. This is a point which, at this stage, it is not necessary to decide. [Though the Family Responsibilities Convention did not specify maternity, paternity or parental leave, their Honours said that provisions in the legislation establishing a parental leave scheme implemented the Convention and were thus supported by s 51(xxix).] The Family Responsibilities Convention itself does not refer to maternity, paternity or parental leave. It rises no higher than Arts 1, 3 and 4 which relevantly provide: Article 1 1 This Convention applies to men and women workers with responsibilities in relation to their dependent children, where such responsibilities restrict their possibilities of preparing for, entering, participating in or advancing in economic activity … Article 3 1 With a view to creating effective equality of opportunity and treatment for men and women workers, each Member shall make it an aim of national policy to enable persons with

family responsibilities who are engaged or wish to engage in employment to exercise their right to do so without being subject to discrimination and, to the extent possible, without conflict between their employment and family responsibilities. … Article 4 With a view to creating effective equality of opportunity and treatment for men and women workers, all measures compatible with national conditions and possibilities shall be taken: (a) to enable workers with family responsibilities to exercise their right to free choice of employment; and (b) to take account of their needs in terms and conditions of employment and in social security. Further, Art 7 provides: All measures compatible with national conditions and possibilities, including measures in the field of vocational guidance and training, shall be taken to enable workers with family responsibilities to become and remain integrated in the labour force, as well as to re-enter the labour force after an absence due to those responsibilities. [page 387] Also relevant are the terms of the Family Responsibilities Recommendation … Paragraph 22 of that Recommendation provides: (1) Either parent should have the possibility, within a period immediately following maternity leave, of obtaining leave

of absence (parental leave), without relinquishing employment and with rights resulting from employment being safeguarded. (2) The length of the period following maternity leave and the duration and conditions of the leave of absence referred to in subparagraph (1) of this Paragraph should be determined in each country by one of the means referred to in Paragraph 3 of this Recommendation. (3) The leave of absence referred to in subparagraph (1) of this Paragraph may be introduced gradually. Paragraph 3 of the Recommendation refers to applying the provisions of the Recommendation by ‘laws or regulations, collective agreements, work rules, arbitration awards, court decisions or a combination of these methods, or in any other manner consistent with national practice’. The quoted Articles of the Family Responsibilities Convention impose obligations on Australia and, whilst they are expressed in more than terms of aspiration, they are set forth in general terms. There is no specific provision relating to parental leave. Nevertheless, in the conditions of society and industrial organisation in this country, an obvious means of discharging the obligations imposed by Arts 3, 4 and 7 is to provide for parental leave. Thus, the challenged provisions are reasonably capable of being considered appropriate and adapted to fulfilling one element of Australia’s obligations under the Family Responsibilities Convention. That is because the law falls within the terms of the obligation imposed by Arts 4(b) and 7. These specify that ‘all measures … shall be taken … to take account of their needs in terms and conditions of employment’ (Art 4(b)) and to enable them to ‘become and remain integrated in the labour force’ (Art 7). Division 5 can reasonably be seen as an attempt to do this. That is reinforced by the reference to parental leave in the Family Responsibilities Recommendation. This confirms the

appropriateness of a law relating to parental leave to fulfilling Australia’s obligations under the Family Responsibilities Convention … the circumstance that only part of the broad obligations imposed on Australia by the Family Responsibilities Convention is implemented in the Division of itself is no objection to its validity … [Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ held that certain provisions of the Act (ss 170DE(2) and 170EDA(1)(b)) dealing with termination of employment went ‘beyond the terms of the [Termination of Employment] Convention to a constitutionally impermissible degree’: 187 CLR at 518. Although the Convention, in art 4, prohibited termination of employment in the absence of a valid reason (and provided, in art 5, a non-exhaustive list of reasons that were not valid), the legislation, by also proscribing ‘harsh, unjust or unreasonable’ termination, had inserted ‘an additional ground of unlawful termination that goes beyond the requirement for the reason for termination to be valid’: 187 CLR at 517. In so concluding, their Honours pointed out that ‘harsh, unjust or unreasonable’ went ‘to the overall effects of the termination’, ‘not to the reason for termination’: 187 CLR at 518. Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ also held that provisions prohibiting termination of a worker’s employment on the ground of age, sexual preference or physical disability were a valid exercise of the external affairs power because the provisions [page 388] discharged an obligation assumed by Australia under the Discrimination (Employment and Occupation) Convention. Articles 2 and 3 of the Convention obliged each party to legislate for the purpose of eliminating discrimination in employment. Article 1 defined discrimination to include any distinction based on certain specified characteristics (such as race and sex) and any other distinction

determined by a party to the Convention ‘after consultation with representative employer’s and worker’s organisations’. The Commonwealth had nominated, as further forms of employment discrimination covered by the Convention, age, sexual preference, physical disability and mental disability. The Commonwealth had carried out the required consultation in relation to the first three grounds, but could not demonstrate that it had consulted in relation to discrimination by reason of mental disability. The joint judgment held that the provisions dealing with discrimination on the first three grounds fell within s 51(xxix). However, because the nomination of mental disability had not undergone the required consultation, inclusion of that ground in the Act fell outside s 51(xxix): 187 CLR at 532. Dawson J said that he supported the view he had put in previous cases, ‘that the mere fact that a treaty is international in character does not mean that the matters with which it deals cease to be of a domestic nature and become part of a country’s external affairs’: 187 CLR at 566. His Honour continued:] Dawson J: A law with respect to treaties or the implementation of treaties would operate on treaties as a subject matter. Thus it might deal with the nature of the obligations which could be undertaken by treaty or the manner in which they were to be implemented — for example, whether by regulation or statute. Such a law would be a law with respect to external affairs because it would operate upon a matter which is external to Australia, namely, treaties with other countries. But a law actually implementing a treaty is a law with respect to the subject matter of the treaty and the nature of that subject matter is to be found ‘by reference to the nature of the rights, duties, powers and privileges which it changes, regulates or abolishes’ (See Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 7, per Kitto J). It may or may not be with respect to matters external to Australia. And, of course, such a law may deal with matters both internal and external to Australia, and be a law with respect to

external affairs. The view of the external affairs power which I favour is not based on the incorrect assumption that ‘affairs are either internal or external in the sense that the two categories are mutually exclusive’ (See Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 226, per Mason J). Indeed, in my opinion, it is the prevailing view which involves a characterisation fallacy. That fallacy is to characterise a law which implements a treaty as a law with respect to treaties even though such a law does not operate upon treaties as a subject matter … [Dawson J said that this conclusion followed not from federal implications but from ‘a distinction which is expressly made by the language used in s 51(xxix) and is not dependent upon implication’: 187 CLR at 568. He disputed Mason J’s assessment in Koowarta v BjelkePetersen (1982) 153 CLR 168 4.3.18C that a narrow view of treaty implementation under s 51(xxix) would lead to an undesirable fragmentation of responsibility for the fulfilment of Australia’s international commitments and undermine Australia’s international standing. ‘Australia is a federation’, said Dawson J, ‘and a “fragmentation” of the decision-making process is part and parcel of a federal system’: 187 CLR at 568. Dawson J went on to reject the test of ‘international concern’ as the basis for enlivening s 51(xxix), reasoning instead that the correct test was one of ‘externality’: 187 CLR at 571. He said:] [page 389] The external affairs power is a broad power but for a law to fall within its terms, it must, in my view, operate upon something which is external to Australia. That is to give the power no narrow construction. A glance at the many treaties entered into by Australia in recent years shows that laws implementing the vast majority of them would deal with matters having an external aspect sufficient to satisfy such a test (eg, to name but a few

subjects, Australia is a party to treaties dealing with extradition, the law of the sea, marine pollution, the exploration for and exploitation of petroleum resources in areas of the continental shelf, air navigation, atmospheric pollution, diplomatic representation, international telecommunications, international child abduction, drug trafficking, conservation of migratory animals, smuggling of endangered species, and international trade.) But a law which has an entirely domestic operation cannot, in my view, be a law with respect to external affairs merely because it implements a treaty or is upon a subject matter which is of international concern. [Dawson J concluded that as the parties had not sought to overturn the Tasmanian Dam case, he would, on the basis of precedent, agree with the majority’s orders.]

4.3.35 In the Industrial Relations Act case, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ affirmed, and applied, the ratio in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C. The argument for adoption of the more limited view of s 51(xxix) taken by Stephen J in Koowarta v BjelkePetersen (1982) 153 CLR 168 at 216–17 4.3.18C, that a law implementing a treaty must be on a subject ‘of especial concern to the relationship between Australia and that other country’ or ‘of general international concern’, was rejected. The joint judges noted that, in the Tasmanian Dam case, a majority of the court had instead ‘adopted the broader view’; that is, that the presence of a treaty obligation provided a conclusive indication that a matter was of international concern: 187 CLR at 484. 4.3.36

Despite its affirmation of the ratio in Commonwealth v

Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 (or possibly because of that affirmation), the joint judges in Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416 identified a new constraint on the use of s 51(xxix) to implement international treaties: that of ‘specificity’. Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ described this requirement as follows (187 CLR at 486): When a treaty is relied on under s 51(xxix) to support a law, it is not sufficient that the law prescribes one of a variety of means that might be thought appropriate and adapted to the achievement of an ideal. The law must prescribe a regime that the treaty has itself defined with sufficient specificity to direct the general course to be taken by the signatory states.

Adopting the view of Professor Leslie Zines, their Honours suggested that an international commitment ‘to promote full employment’ would not satisfy this requirement because of the ‘variety of possibly contradictory ways that might be selected to fulfil the aspiration’: 187 CLR at 486. Interestingly, the issue of specificity did not arise on the facts of the Industrial Relations Act case: none of the Conventions relied on by the Commonwealth to support its industrial relations legislation was found to fail the test. It is thus unclear how significant a constraint on the ambit of s 51(xxix) it will prove to be. On the issue of specificity, see Stellios, 2015, pp 435–6. 4.3.37 In Thomas v Mowbray (2007) 233 CLR 307 4.5.4C, the Commonwealth argued that provisions in the Criminal Code (Cth) enabling the issue of anti-terrorism control orders could be supported by s 51(xxix) on the basis that they implemented an international obligation

[page 390] contained in a United Nations Security Council resolution. The resolution stipulated, among other things, ‘that all States shall … [t]ake the necessary steps to prevent the commission of terrorist acts’; it did not, however, define terrorism. Applying Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416, Kirby J held that the resolution did not satisfy the specificity requirement. In so concluding, he observed that the terms used in the resolution were not defined and that the language of the resolution was ‘of almost limitless reach’; it had also elicited diverse responses within the international community: 233 CLR at 408 (and generally at 402–9). 4.3.38 Specificity was also considered by Heydon J in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 5.4.24C. There he found that a commitment, arising out of a recent period of global financial turmoil, by the G20 (an informal international economic grouping of which Australia was a member) to ‘[u]se fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability’ (238 CLR at 158) was merely ‘aspirational’ and too imprecise to support legislation under s 51(xxix): 238 CLR at 162 (and generally at 162–3). 4.3.39 In Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1, Deane J had suggested that, in determining whether Commonwealth legislation conforms to a treaty, there must be ‘reasonable proportionality between the designed purpose or object and the means which the law embodies for achieving or

procuring it’: 158 CLR at 260. However, in Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said that explicit use of the language of proportionality in this setting should be avoided. They explained (187 CLR at 488): The notion of ‘reasonable proportionality’ will not always be particularly helpful. The notion of proportion suggests a comparative relation of one thing to another as respects magnitude, quantity or degree; to ask of the legislation whether it may reasonably be seen as bearing a relationship of reasonable proportionality to the provisions of the treaty in question appears to restate the basic question. This is whether the law selects means which are reasonably capable of being considered appropriate and adapted to achieving the purpose or object of giving effect to the treaty, so that the law is one upon a subject which is an aspect of external affairs.

As suggested in Stellios, 2015, p 59, this wariness of ‘proportionality’ as a consideration in determining whether a law can be said to be ‘with respect to’ a non-purposive head of power, such as s 51(xxix), may reflect a concern on the part of the court to emphasise the legalistic nature of the characterisation process; in other words, that the court is not involved with the merits of legislation, only with whether the law has a sufficient connection to the head of power: see Chapter 3. Yet recognising that ‘proportionality’ invites the court to consider difficult questions of degree, it is clear that the test of ‘reasonably capable of being considered appropriate and adapted’ does so as well: Stellios, 2015, p 60. 4.3.40 One of the most difficult aspects of Victoria v Commonwealth (Industrial Relations Act case) (1996) 187 CLR 416

is its treatment of the implementation of international recommendations. On the facts, the Conventions found to support the Commonwealth legislation all imposed obligations on Australia. Early in their judgment, Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ appeared to approve the view expressed by Evatt and McTiernan JJ in R v Burgess; Ex parte Henry (1936) 55 CLR 608 4.3.16 at 687 that s 51(xxix) extends to giving effect to international recommendations: 187 CLR at 483. [page 391] Yet, when it came to considering whether the Commonwealth could implement ILO recs 90 and 111, their Honours appeared to say that the recommendations could not independently activate s 51(xxix); rather, they could only be implemented when sufficiently linked to specific Convention obligations: 187 CLR at 509 (on another view of this part of their reasons, the joint judges left open whether a recommendation can independently activate the external affairs power). This tension in the judgment also makes it difficult to say whether, as Mason J maintained in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1, a law carrying a treaty into effect is necessarily on the subject of external affairs, without the need to identify an obligation in that treaty: see S Joseph and M Castan, Federal Constitutional Law: A Contemporary View, 4th ed, Lawbook Co, Sydney, 2014, p 139.

4.3.41C

R v Tang (2008) 237 CLR 1 (some footnotes omitted)

[The Criminal Code 1995 (Cth) provided: 270.1 Definition of slavery … slavery is the condition of a person over whom any or all of the powers attaching to the right of ownership are exercised, including where such a condition results from a debt or contract made by the person. … 270.3 Slavery offences (1) A person who, whether within or outside Australia, intentionally: (a) possesses a slave or exercises over a slave any of the other powers attaching to the right of ownership; … is guilty of an offence. Penalty: Imprisonment for 25 years. The court unanimously held that these provisions were supported by the external affairs power as an implementation of the International Convention to Suppress the Slave Trade and Slavery (1926). Gleeson CJ examined the conformity between these provisions and the Convention.] Gleeson CJ: The word ‘slave’ in s 270.3(1)(a) is not defined. It takes its meaning from the definition of ‘slavery’ in s 270.1. That definition, in turn, derives from, although it is not identical to, the definition of ‘slavery’ in Art 1 of the International Convention to Suppress the Slave Trade and Slavery (1926) (the 1926 Slavery Convention) 212 UNTS 17. That definition was taken up in Art 7 of the Supplementary Convention on the

Abolition of Slavery, the Slave Trade, and Institutions and Practices similar to Slavery (1956) (the 1956 Supplementary Convention) 266 UNTS 3, which dealt with institutions and practices similar to slavery ‘where they still exist and whether or not they are covered by the definition of slavery contained in article 1 of the [1926] Slavery Convention’ (Art 1). … Article 1 of the 1926 Slavery Convention was in the following terms: … ‘(1) Slavery is the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised. (2) The slave trade includes all acts involved in the capture, acquisition or disposal of a person with intent to reduce him to slavery; all acts involved in the acquisition of a [page 392] slave with a view to selling or exchanging him; all acts of disposal by sale or exchange of a slave acquired with a view to being sold or exchanged, and, in general, every act of trade or transport in slaves.’ … in 1926, in the case of many of the parties to the Convention, including Australia, the legal status of slavery did not exist, and legal ownership by one person of another was impossible. … [T]he definition of slavery in Art 1 referred to the status or condition of a person. Status is a legal concept. Since the legal status of slavery did not exist in many parts of the world, and since it was intended that it would cease to exist everywhere, the evident purpose of the reference to ‘condition’ was to cover slavery de facto as well as de jure. … The slave trade was not, and is not, something that could be suppressed merely by withdrawal of legal recognition of the incidents of slavery. It is

one thing to withdraw legal recognition of slavery; it is another thing to suppress it. The Convention aimed to do both. … In its application to the de facto condition … of slavery, the definition was addressing the exercise over a person of powers of the kind that attached to the right of ownership when the legal status was possible; not necessarily all of those powers, but any or all of them. In a 1953 Memorandum, the Secretary-General of the United Nations listed such powers as including the capacity to make a person an object of purchase, the capacity to use a person and a person’s labour in a substantially unrestricted manner, and an entitlement to the fruits of the person’s labour without compensation commensurate to the value of the labour. … Although the definition of ‘slavery’ in s 270.1 of the Code is plainly based on the definition in Art 1 of the 1926 Slavery Convention, the wording is not identical. … s 270.1 refers to ‘condition’, not ‘status or condition’. The explanation for the difference [is that] … [t]here is no status of slavery under Australian law. Legal ownership of a person is impossible. Consequently s 270.1, in its application to conduct within Australia, is concerned with de facto slavery. In s 270.1, the reference to powers attaching to the right of ownership, which are exercised over a person in a condition described as slavery, is a reference to powers of such a nature and extent that they are attributes of effective … ownership. … In the result, the definition of ‘slavery’ in s 270.1 falls within the definition in Art 1 of the 1926 Slavery Convention, and the relevant provisions of Div 270 are reasonably capable of being considered appropriate and adapted to give effect to Australia’s obligations under that Convention (cf Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 486–488). They are sustained by the external affairs power.

[Gummow, Hayne, Heydon, Crennan and Kiefel JJ agreed with Gleeson CJ. Kirby J held that the provisions were ‘reasonably proportionate to a law giving effect to Australia’s obligations under the 1926 Slavery Convention’: 237 CLR at 40.]

Matters of international concern 4.3.42 A number of statements in the authorities suggest that s 51(xxix) may support Commonwealth legislation directed to matters of international concern even where those matters are not included in a treaty to which Australia is a party. However, as Callinan and Heydon JJ observed in XYZ v Commonwealth (2006) 227 CLR 532 4.3.13 at 607, as a matter of precedent ‘[t]here is no case in this Court deciding that the international concern doctrine [page 393] exists’. As their Honours also recognised, it is unclear how the notion of international concern should be defined in this context: 227 CLR at 608–10. 4.3.43 In Koowarta v Bjelke-Petersen (1982) 153 CLR 168 4.3.18C, a number of justices suggested that a topic of international concern might, independently of treaty provisions, fall within s 51(xxix). For example, Stephen J said (153 CLR at 217): … the quality of being of international concern remains … a valid criterion of whether a particular subject-matter forms part of a nation’s ‘external affairs’. A subject-matter of international concern necessarily

possesses the capacity to affect a country’s relations with other nations and this quality is itself enough to make a subject-matter a part of a nation’s ‘external affairs’.

In Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C, several justices again suggested that ‘international concern’ might provide an alternative basis for the Commonwealth to invoke s 51(xxix). Deane J said (158 CLR at 259): Circumstances could well exist in which a law which procured or ensured observance within Australia of the spirit of a treaty or compliance with an international recommendation or pursuit of an international objective would properly be characterised as a law with respect to external affairs, notwithstanding the absence of any potential breach of defined international obligations or of the letter of international law.

See also 158 CLR at 131–2 per Mason J; 172 per Murphy J. 4.3.44 That possibility received qualified confirmation in Polyukhovich v Commonwealth (1991) 172 CLR 501 (see 4.3.10), where the High Court upheld amendments made in 1988 to the War Crimes Act 1945 (Cth). The amendments provided that certain acts of violence committed in Europe between 1 September 1939 and 8 May 1945 were punishable as crimes in Australia. The majority held that these amendments were laws with respect to external affairs because they dealt with events or occurrences which had occurred outside Australia: see 4.3.10. Two members of the court, Brennan and Toohey JJ, also considered whether the amendments could be supported by other aspects of s 51(xxix). After acknowledging that the external affairs power was not limited to the implementation of international obligations,

Brennan J asked whether there was an ‘international concern’ in the punishment of war criminals which could support the amendments. Brennan J explained his view of the term ‘international concern’ as follows (172 CLR at 561–2): One purpose of the external affairs power is to furnish the Commonwealth with legislative authority to ensure that Australia acts in accordance with standards expected of and by the community of nations, even though those standards are not, or have not yet achieved the status of, obligations in international law. The observation of those standards may rightly be regarded as a matter of international concern. However, unless standards are broadly adhered to or are likely to be broadly adhered to in international practice and unless those standards are expressed in terms which clearly state the expectation of the community of nations, the subject of those standards cannot be described as a true matter of international concern. It may be that there are few occasions when the external affairs power is enlivened by the existence of a matter of international concern without a corresponding obligation in international law, but whether the enlivening factor be an obligation or a concern it is necessary to define it with some precision in order to ascertain the scope of the power … It would be erroneous

[page 394] to attribute a scope to the external affairs power which depended on the broadest meaning which could be given to the imprecise phrase ‘international concern’; that phrase is not a constitutional text and is used to indicate that the power relates to matters affecting Australia’s external relations even if those matters are not obligations under international law.

Brennan J concluded that there was ‘insufficient material to show that the apprehension and trial of … war criminals before courts of

countries other than those in which the crimes were committed were ever matters of international concern’: 172 CLR at 562. (It is likely that Brennan J’s conclusion that the apprehension and trial of war criminals did not constitute a matter of international concern calls for re-consideration in the light of more recent developments, such as the establishment of an International Criminal Court and the International Criminal Tribunals for the Former Yugoslavia and Rwanda). Toohey J agreed with Brennan J that the amendments to the War Crimes Act did not discharge an international obligation of Australia and did not deal with a matter which had been shown to be of ‘international concern’, a term which he regarded as extending to ‘a matter touching the public business of Australia in relation to an event outside Australia’: 172 CLR at 657 (and see generally at 656–8). 4.3.45 However, in their dissenting judgment in XYZ v Commonwealth (2006) 227 CLR 532 4.3.13, Callinan and Heydon JJ cast doubt upon the availability of ‘international concern’ as a source of legislative power. They referred, among other things, to the ‘volatility’ of the notion (‘at different times a matter may not be of international concern, may then become of international concern, and may then cease to be of international concern again’) as well as ‘the elusiveness connected with attempts to define “international concern”’: 227 CLR at 608 (and see generally at 607–12). See also the concerns of Kirby J: 227 CLR at 572–5. A majority of the court found it unnecessary to consider this issue in any detail: 227 CLR at 543 per Gleeson CJ; 552–3 per Gummow, Hayne and Crennan JJ. Subsequently, in Pape v Federal Commissioner of Taxation (2009)

238 CLR 1 at 161 5.4.24C, Heydon J specifically rejected the proposition that a subject may fall within s 51(xxix) if it can be established that it is of international concern. The other members of the court did not address the question.

Relations with other countries 4.3.46 Another aspect of the legislative power conferred by s 51(xxix), the general power to legislate with respect to relations with other countries, was explored in R v Sharkey (1949) 79 CLR 121. Sharkey had been convicted of sedition under the Crimes Act 1914 (Cth). The offence consisted of publishing any matter with a ‘seditious intention’, which was defined in s 24A(1)(c) to include an intention ‘to excite disaffection against the Government or Constitution of any of the King’s Dominions’. When Sharkey challenged the validity of those provisions, the High Court held that s 24A(1)(c) was valid under the external affairs power because it was concerned with the relations of the Commonwealth with other countries. Latham CJ expressed this view in the following terms (79 CLR at 136–7): The relations of the Commonwealth with all countries outside Australia, including other Dominions of the Crown, are matters which fall directly within the subject of external affairs,

[page 395] a subject with respect to which the Commonwealth Parliament has power to pass laws — Constitution, s 51(xxix). The preservation of

friendly relations with other Dominions is an important part of the management of the external affairs of the Commonwealth.

See also 79 CLR at 149 per Dixon J; 157 per McTiernan J; 163 per Webb J. 4.3.47 In Koowarta v Bjelke-Petersen (1982) 153 CLR 168 4.3.18C, Gibbs CJ offered a formulation of the scope of s 51(xxix) that expands on what was said in R v Sharkey (1949) 79 CLR 121. Gibbs CJ stated (153 CLR at 201–2): Any subject-matter may constitute an external affair, provided that the manner in which it is treated in some way involves a relationship with other countries or with persons or things outside Australia. A law which regulates transactions between Australia and other countries, or between residents of Australia and residents of other countries, would be a law with respect to external affairs, whatever its subject-matter.

Earlier in his judgment, Gibbs CJ gave examples of laws that would ‘clearly’ be upheld under s 51(xxix); they included ‘laws providing that diplomatic representatives of other countries should be recognised and given diplomatic privileges within Australia, or providing how fugitive offenders from another country should be dealt with in Australia’: 153 CLR at 190–1. 4.3.48 It follows that regulation of international extradition, for example, falls within s 51(xxix) as part of the ‘international relations’ application of the power: Vasiljkovic v Commonwealth (2006) 227 CLR 614 at 630 per Gleeson CJ; 643 per Gummow and Hayne JJ (with whom Heydon J agreed); 675–6 per Kirby J. In that case Gleeson CJ, Gummow and Hayne JJ referred with approval to French J’s view in Hempel v Attorney-General (Cth) (1987) 29 A Crim R 133 at 162 that ‘the subject-matter of

extradition is directly concerned with international relations … The nature of extradition is such that a law with respect to it is likely to be a law with respect to external affairs whether or not there is in existence any supporting treaty’. 4.3.49 The external affairs power may also extend to measures to combat terrorism, at least in certain circumstances. Thomas v Mowbray (2007) 233 CLR 307 4.5.4C concerned the constitutional validity of provisions of the Criminal Code (Cth) allowing for anti-terrorism control orders. Section 104.4 of the Code empowered an ‘issuing court’ to make an interim control order in relation to a person if it was satisfied of certain matters, including either ‘that making the order would substantially assist in preventing a terrorist act’ or ‘that the person has provided training to, or received training from, a listed terrorist organisation’. In addition, the court needed to be satisfied ‘that each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act’. Section 100.1 of the Code defined a ‘terrorist act’ to mean a specified act or threat intended to intimidate certain bodies, including a foreign government or the public of a foreign country. Gummow and Crennan JJ (with whom Gleeson CJ agreed) held that, to this extent, the control order scheme could be upheld under s 51(xxix). They said (233 CLR at 364): The pursuit and advancement of comity with foreign governments and the preservation of the integrity of foreign states may be a subject matter of a law with respect to external affairs.

[page 396] In XYZ v The Commonwealth (2006) 227 CLR 532 at 543 [18], Gleeson CJ noted (with evident approval) that it was accepted that the external affairs power at least includes power to make laws in respect to matters affecting Australia’s relations with other countries. The commission of ‘terrorist acts’ in the sense defined in s 100.1 of the Code is now, even if it has not been in the past, one of these matters.

Hayne, Callinan and Heydon JJ did not address s 51(xxix). Kirby J found that s 51(xxix) did not support the control order scheme: 233 CLR at 402–11. See also the discussion of Thomas v Mowbray at 4.3.14.

THE ‘RACES’ POWER 4.4.1E

Commonwealth Constitution

51 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: … (xxvi) the people of any race, other than the aboriginal race in any State, for whom it is deemed necessary to make special laws; …

4.4.2 The words ‘other than the aboriginal race in any State’ were deleted from s 51(xxvi) in 1967 by the fifth of Australia’s

eight successful constitutional referendums. Former s 127, also deleted by that referendum, provided: In reckoning the numbers of the people of the Commonwealth, or of a State or other part of the Commonwealth, aboriginal natives shall not be counted.

Section 25 of the Constitution, which remains part of the document, states: For the purposes of the last section [s 24], if by the law of any State all persons of any race are disqualified from voting at elections for the more numerous House of the Parliament of the State, then, in reckoning the number of the people of the State or of the Commonwealth, persons of that race resident in that State shall not be counted.

Section 24 provides that the House of Representatives is ‘chosen in the several States … in proportion to the respective numbers of their people’. 4.4.3 The relationship between ss 24 and 25 of the Constitution, as well as the former s 127, is discussed in the 9th edition of this book at 2.4.1–2.4.14 and in Twomey, 2012, at 129– 32. On the origins of s 25, compare Twomey, 2012 and Lino and Davis, 2012. A detailed discussion, in the context of the Constitution, of the history of the enfranchisement (and disenfranchisement) of Aboriginal and Torres Strait Islander peoples, can be found in the 9th edition of this book at 2.3.25– 2.3.28, 2.4.15–2.4.25. [page 397]

4.4.4 Reporting in 2012, the Expert Panel on Constitutional Recognition of Indigenous Australians advocated the repeal of both ss 25 and 51(xxvi): Expert Panel, 2012, p 153. In 2015, the Joint Select Committee on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples (a committee of the Commonwealth Parliament) recommended likewise: Joint Select Committee, 2015, p 22. The issue of constitutional reform in this area is explored at 4.4.11–4.4.13, 4.4.38–4.4.42. First, however, the historical background to s 51(xxvi) is considered.

The original s 51(xxvi) 4.4.5 The original s 51(xxvi) gave parliament power to make laws with respect to ‘the people of any race, other than the aboriginal race in any State, for whom it is deemed necessary to make special laws’. At the 1891 Constitutional Convention, Samuel Griffith proposed that the Commonwealth be able to deal with ‘alien races’ in Australia: Williams and Bradsen, 1997, at 106– 7; French, 2003, p 182. As Sawer explains, the power was designed to extend to British subjects and to authorise racial discrimination of a kind prohibited (at the state level) by the United States Constitution’s ‘equal protection’ clause (Amendment XIV, §1). 4.4.6C Sawer, ‘The Australian Constitution and the Australian Aborigine’ (1966) 2 Federal Law Review 17 … [S]econdary sources … make it clear that [s 51](xxvi) was intended to enable the Commonwealth to pass … laws which before 1900 had been passed by many States concerning ‘the

Indian, Afghan and Syrian hawkers; the Chinese miners, laundrymen, market gardeners, and furniture manufacturers; the Japanese settlers and Kanaka plantation labourers of Queensland, and the various coloured races employed in the pearl fisheries of Queensland and Western Australia’ (Harrison Moore, The Constitution of the Commonwealth of Australia, 2nd ed, 1910, p 464). Such laws were designed ‘to localize them within defined areas, to restrict their migration, to confine them to certain occupations, or to give them special protection and secure their return after a certain period to the country whence they came’ (Quick and Garran, The Annotated Constitution of the Australian Commonwealth, 1901, p 622). Quick and Garran illustrate the position by citing Yick Wo v Hopkins ((1886) 118 US 356), in which the Supreme Court of the USA held invalid a San Francisco bylaw which conferred on officials an arbitrary power to license laundries … exercised so as to refuse licences to Chinese while issuing them to other applicants. The ground of the decision was denial of equal protection of the laws … [They] observe that no such guarantee is contained in the Australian Constitution … [although of course the Commonwealth could not enact general laundry licensing laws, only laws relating to licensees of particular races]. … [A]s Harrison Moore points out, … [s] 51(xxvi) seems in terms designed to avoid … the necessity for agonising about the scope of the ‘aliens’ power (xix) … … Griffith … said: ‘… I have … in … mind … the immigration of coolies from British India, or any eastern people subject to civilised powers. The Dutch and English governments in the east do not allow their people to emigrate to serve in any foreign country unless there is a special law … of that country protecting them, and affording special facilities for their going and coming … [N]o state should be allowed, because the federal parliament did not choose to make a law on the subject, to allow the state to be flooded by such people …’

[page 398] … Everything Griffith was concerned about could have been achieved under the immigration aliens and external affairs powers … … The discussion … tended to be in terms of ‘aliens’, but Barton showed clearly that … the persons coming under it might well be British subjects. Nor need they be migrants; they could well be born in Australia. Nor need they be coloured, nor from uncivilised [sic] countries … [N]o one suggested that laws discriminating against racial minorities were … undesirable …

4.4.7 The ‘races’ power ‘had little or no legal impact for a long time’, there being no case turning on it between 1903 and 1982 and just one referring to it: French, 2009, p 128. Similarly, only one of 1316 opinions of Commonwealth Attorneys-General given between 1901 and 1923 mentioned it in passing: French, 2003, p 186. 4.4.8 Federation was just 9 years old when proposals to give the Commonwealth power over Indigenous Australians began to be raised by church, academic and philanthropic organisations: French, 2003, p 186. The suggestion that s 51(xxvi) be amended to cover ‘the aboriginal race’ was raised before the 1929 Royal Commission on the Constitution. The commission’s response (quoted in Williams and Bradsen, 1997, at 117) reflected 1920s ‘Aboriginal protection’ standards: We recognise that the effect of the treatment of aborigines on the reputation of Australia furnishes a powerful argument for a transference of control to the Commonwealth. But we think that on the whole the States are better equipped for controlling aborigines than the

Commonwealth. The States control the police and the lands, and they to a large extent control the conditions of industry.

4.4.9 Indigenous Australians themselves and anthropologists took up the call for Commonwealth involvement from the 1930s: French, 2003, p 187. Proposals to expand Commonwealth power were raised in 1944 (by the Labor Government), 1959 (by a parliamentary committee), 1964 (by the Opposition) and 1966 (by backbencher W C Wentworth: see 4.4.39E). The proposal to alter the Constitution in the form eventually achieved by the 1967 referendum was introduced by Prime Minister Holt in March 1967 and supported by Opposition Leader Whitlam. See Hanks, 1984; Attwood and Markus, 1997; Williams and Bradsen, 1997. The lack of a specific Commonwealth power over Indigenous Australians did not affect the Commonwealth’s ability to give the Commonwealth vote to Aboriginal and Torres Strait Islander peoples under its power to control its own franchise (ss 51(xxxvi) and 30) in 1962. That power was not limited by implications based on the omission, before 1967, of ‘the aboriginal race in any State’ from s 51(xxvi).

The 1967 referendum 4.4.10 The words ‘other than the aboriginal race in any State’ were deleted from s 51(xxvi) by constitutional amendment in 1967. After 1967, the power extended to people of the ‘Aboriginal race’ and Torres Strait Islanders. However, this power remained one shared with the states. By contrast, the powers of the dominion of Canada, and most of those of the United States Congress, in relation to Indigenous peoples are exclusive powers.

[page 399] The ‘yes’ vote in the referendum on ‘the Aborigines question’ (the two questions about ss 51(xxvi) and 127) was the largest ever: 91 per cent nationally, and over 90 per cent in three states (Victoria, New South Wales and Tasmania). However, the ‘no’ vote was much higher in Western Australia and in rural areas: Bennett, 1985. The referendum’s success was attributable to a remarkable political campaign conducted by the Federal Council for the Advancement of Aborigines and Torres Strait Islanders (FCAATSI): see Attwood and Markus, 1997; Bandler, 1989. FCAATSI’s campaign centred on the idea that the Constitution denied Aboriginal people ‘citizenship’. It sought to bring the Commonwealth’s considerable financial resources to bear on the poor material conditions of Indigenous Australians in the states. However, the ‘citizenship’ plank of the campaign ignored the fact that Indigenous Australians had been enfranchised everywhere since 1965: see the 9th edition of this book at 2.3.25–2.3.28 and 2.4.15–2.4.22. The ‘financial’ plank ignored the Commonwealth’s similar record in the exercise of its existing power over Indigenous Australians in the territories (under s 122, discussed in the 9th edition of this book in Ch 4) and its ‘State grants’ power under s 96, which could be used to fund improvements in Aboriginal and Torres Strait Islander living conditions. A key reason for constitutional change lay in the continued existence of state ‘protection’ laws in Queensland and Western Australia. An amended s 51(xxvi) would allow Commonwealth legislation to override these laws. This eventually occurred with the Aboriginal and Torres Strait Islanders (Queensland Discriminatory Laws) Act 1975 (Cth) and Aboriginal and Torres Strait Islanders

(Queensland Reserves and Communities Self-Management) Act 1978 (Cth), although the Commonwealth was reluctant to implement these laws’ full effect. The referendum’s bare deletion of words, however, presented a problem for constitutional interpretation: what account should be taken, in reading the amended provision, of the new intention behind the referendum result, considering that the provision’s drafting still reflected the constitutional framers’ intention? For discussion of this interpretive problem, see Reilly, 1999; Detmold, 1997.

Proposals to replace s 51(xxvi) 4.4.11 The Expert Panel on Constitutional Recognition of Indigenous Australians, in its 2012 Report, proposed that s 51(xxvi) be replaced by a new s 51A, to be preceded by a statement of recognition of, and respect for, Aboriginal and Torres Strait Islander cultures and first possession and an acknowledgment of the enduring relationship of Australia’s first peoples with their lands and waters. The panel also proposed an acknowledgement of ‘the need to secure the advancement of Aboriginal and Torres Strait Islander Peoples’, though it has been suggested that this wording might be perceived as unduly negative: Expert Panel, 2012, p 230 ‘Draft Bill’; cf Joint Select Committee, 2015, pp 24–5, 30. The power proposed by the Expert Panel is in the following terms (Expert Panel, 2012, p 230 ‘Draft Bill’): [T]he Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to Aboriginal and Torres Strait Islander peoples.

[page 400]

4.4.12E Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution: Report of the Expert Panel (2012) At its early meetings, the … Panel came to the view that, in order to recognise Aboriginal and Torres Strait Islander peoples in the Constitution, there was a case for removing the two provisions that contemplate discrimination against them (as well as against people of any so-called ‘race’) … section 25 and the race power in s 51(xxvi) … … It became clear to the Panel … that Australians have increasingly rejected the concept of ‘race’ as having any place in the Constitution … … [N]otwithstanding the 1967 referendum, section 51(xxvi) retains its original discriminatory character: it is able to be turned to the advantage or disadvantage of any group identified in or affected by relevant legislation by reference to ‘race’ … In 1988, the Constitutional Commission recommended that the race power be deleted and replaced by a provision empowering the Commonwealth Parliament to make laws with respect to Aboriginal and Torres Strait Islander peoples: It is inappropriate to retain section 51(xxvi) because the purposes for which […] it was inserted no longer apply […] Australia has joined the many nations which have rejected race as a legitimate criterion on which legislation can be based. The attitudes now officially adopted to discrimination on the basis of race are in striking contrast to those which motivated the Framers of the Constitution. It is appropriate

that the change in attitude be reflected in the omission of section 51(xxvi). … The Panel is not aware of any piece of Commonwealth legislation currently enacted in reliance on section 51(xxvi) that is applicable to a ‘race’ of people, other than Aboriginal and Torres Strait Islander peoples … Since 1967, the Commonwealth Parliament has enacted laws pursuant to section 51(xxvi) specifically applicable to Aboriginal and Torres Strait Islander Australians in the areas of cultural heritage, corporations and native title. The risks of the removal of section 51(xxvi), without the conferral of a new head of power, are that important existing or future laws: might no longer be supported by a grant of legislative competence; or might no longer be able to be validly enacted by the Commonwealth Parliament in certain areas … …The Panel … recommends that the repeal of section 51(xxvi) and the insertion of a new head of power, ‘section 51A’, be proposed together … in a single referendum question.

4.4.13 The Joint Select Committee on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples also recommended that s 51(xxvi) be removed from the Constitution and replaced by ‘a persons power so that the Commonwealth … may legislate for Aboriginal and Torres Strait Islander peoples as per the 1967 referendum result’: Joint Select Committee, 2015, p 22. [page 401]

Judicial interpretation of s 51(xxvi) 4.4.14 To understand why it is now proposed to replace s 51(xxvi), it is necessary to consider four (sometimes overlapping) issues arising from the drafting of the amended s 51(xxvi): (1) the definition of the ‘people’ to whom it relates; (2) what constitutes a ‘special’ law, rather than one of the ordinary kind enacted under another s 51 head of power; (3) who ‘deem[s] necessary’ such laws, and how; and (4) that, without re-writing s 51(xxvi) (rather than simply striking out words as the 1967 amendment did), the referendum’s inclusive spirit could not of itself control judicial interpretation of a power originally framed to permit discrimination against particular racial groups. These issues are explored, in turn, below. There may be a lesson here about not allowing the political mood of the moment to overwhelm collective judgment about the effect of legal change. Before the 1967 referendum, Sawer (1966, at 35) cautioned: Having regard to the dubious origins of the section, and the dangerous potentialities of adverse discriminatory treatment which it contains, the complete repeal of the section would seem preferable to any amendment intended to extend its possible benefits to the aborigines.

‘[T]he people of any race’ 4.4.15 There are three words of significance in the phrase ‘the people of any race’ in s 51(xxvi): ‘people’, ‘any’ and ‘race’. All of the cases on s 51(xxvi) have concerned laws with respect to the Aboriginal (or Torres Strait Islander) ‘races’; that is, they have all

arisen under the amended power. Indeed, it appears that parliament has never needed to rely on s 51(xxvi) to legislate with respect to other ‘races’, although this prospect cannot be ruled out: French, 2003, p 207. In Koowarta v Bjelke-Petersen (1982) 153 CLR 168, the first case to consider s 51(xxvi), the High Court emphasised that the power is concerned with the people of any, not all, races. Five judges (Gibbs CJ, Stephen, Aickin, Wilson and Brennan JJ; Mason J not deciding; Murphy J not deciding but inclined to dissent) held that the ‘race’ power did not support the Racial Discrimination Act 1975 (Cth). 4.4.16C

Koowarta v Bjelke-Petersen (1982) 153 CLR 168

Gibbs CJ: [I]t is clear that under s 51(xxvi) … the Parliament has power to make laws prohibiting discrimination against people of the Aboriginal race by reason of their race. However ss 9 and 12 [of the Racial Discrimination Act] … prohibit discrimination generally on the ground of race; that is, they protect the persons of any race from discriminatory action by reason of their race … [T]he Commonwealth … submitted that the Act is a special law within par (xxvi) because it selects as its subject the people of any race against whom discrimination on racial grounds is, or may be, practised. This argument … gives insufficient weight to the [page 402] words ‘for whom it is deemed necessary to make special laws’. It is true that … ‘any’ can be understood as having the

effect of ‘all’, but it would be self-contradictory to say that a law which applies to the people of all races is a special law. It is not possible to construe par (xxvi) as if it read simply ‘The people of all races’. In … context … the word ‘any’ is used in the sense of ‘no matter which’. The Parliament may deem it necessary to make special laws for the people of a particular race, no matter what the race …

4.4.17 The problematic nature of ‘race’ is explored in the 9th edition of this book at 2.1.17–2.1.21 and in Expert Panel, 2012, pp 139–42. As the Expert Panel observed at p 139: ‘In contemporary practice and scholarship, the dominant view among biological scientists, anthropologists and social theorists is that the concept of “race” is socially constructed, imprecise, arbitrary and incapable of definition or scientific demonstration’. 4.4.18 The issue of ‘race’ was considered in the context of s 51(xxvi) in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1. Controls imposed by the World Heritage Properties Conservation Act 1983 (Cth) on land in Tasmania included prohibitions on destruction of Aboriginal sites, including the archaeologically significant Kutikina and Deena-Reena caves. A majority (Mason, Murphy, Brennan and Deane JJ) held that provisions of this kind were supported by s 51(xxvi), although they operated on land, not ‘people’. 4.4.19C

Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1

Brennan J: … ‘Race’ … is not a precise concept … There

is, of course, a biological element in the concept … … Actual proof of descent from ancestors who were acknowledged members of the race or actual proof of descent from ancestors none of whom were members of the race is admissible to prove or to contradict … an assertion of membership of the race. Though the biological element is … an essential element …, it does not ordinarily exhaust the characteristics of a racial group. Physical similarities, and a common history, a common religion or spiritual beliefs and a common culture are factors that tend to create a sense of identity among members of a race and to which others have regard in identifying people as members of a race … … A law which, on its face, does not discriminate in favour of the people of a race, may nevertheless be valid if it discriminates in favour of those people by its operation upon the subject-matter to which it relates … If the power under par (xxvi) were restricted to a discriminatory conferring of legal rights or a discriminatory imposition of legal obligations on the people of a race, laws for the general protection of historical memorabilia, of religious or spiritual shrines or of cultural practices which are of particular significance to the people of particular races would not be valid. The things which are a focus of the life of the race would lie outside the boundaries of a power which is expressed to authorize special laws for its people … Deane J: … Plainly, the words [‘people of any race’ in s 51(xxvi)] have a wide and nontechnical meaning … The phrase is … apposite to refer to all Australian Aboriginals [page 403] collectively. Any doubt, which might otherwise exist in that regard, is removed by reference to the wording of par (xxvi) in its

original form. The phrase is also apposite to refer to any identifiable racial sub-group among Australian Aboriginals. By ‘Australian Aboriginal’ I mean, in accordance with what I understand to be the conventional meaning of that term, a person of Aboriginal descent, albeit mixed, who identifies himself as such and who is recognized by the Aboriginal community as an Aboriginal … … Tasmania … submitted that … a law for the protection and conservation of sites if, and only if, they are of significance to the whole of mankind is the antithesis of a special law for the people of a particular race … … The relationship between the Aboriginal people and the lands which they occupy lies at the heart of traditional Aboriginal culture and traditional Aboriginal life … [A] law whose operation is to protect and preserve sites of universal value which are of particular importance to the Aboriginal people is also a special law for those people … … The reference to ‘people of any race’ includes all that goes to make up the personality and identity of the people of a race: spirit, belief, knowledge, tradition and cultural and spiritual heritage. A power to legislate ‘with respect to’ the people of a race includes the power to make laws protecting the cultural and spiritual heritage of those people by protecting property which is of particular significance to that spiritual and cultural heritage.

4.4.20 See also 158 CLR at 158–9 per Mason J; 181 per Murphy J; compare Gibbs CJ at 110–11. This approach was affirmed by the joint judgment in Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373.

4.4.21C Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373 Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ: Under the common law, as stated in Mabo (No 2), Aboriginal people and Torres Strait Islanders who are living in a traditional society possess, subject to the conditions stated in that case, native title to land that has not been alienated or appropriated by the Crown. The … enjoyment of the title is precarious under the common law: it is defeasible by legislation or by the exercise of the Crown’s (or a statutory authority’s) power to grant inconsistent interests in the land or to appropriate the land and use it inconsistently with enjoyment of the native title … The Act removes the common law defeasibility of native title, and secures the Aboriginal people and Torres Strait Islanders in the enjoyment of their native title subject to … prescribed exceptions … The Act confers its protection upon native title holders who, ex hypothesi, are members of a particular race …

‘… for whom it is deemed necessary to make special laws’ 4.4.22 The difference between the second and third requirements, that a law be ‘special’ and that it be ‘deemed necessary’, was explained in the joint judgment (with which Dawson J agreed) in Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373. The

[page 404] judges rejected an approach to ‘special’ and ‘necessary’ taken by Stephen J in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 4.4.16C at 210, where his Honour had said: … I regard the reference to special laws as confining what may be enacted under this paragraph to laws which are of their nature special to the people of a particular race. It must be because of their special needs or because of the special threat or problem which they present that the necessity of the law arises; without this particular necessity as the occasion for the law, it will not be a special law such as s 51(xxvi) speaks of.

However, the court in the Native Title Act case upheld that Act as a ‘special law’ because it treated Indigenous peoples differently from other people and governments, imposing restrictions on the latter’s use and allocation of native title land. The task of deeming a law ‘necessary’, the judges said, was for parliament, not the court. However, the judges did insist that parliament direct its ‘mind’ to this question, rather than simply adopting a ‘special law’ produced by someone else. As a result, they held one provision of the Native Title Act 1993 (Cth) unconstitutional on both s 51(xxvi) ‘deemed necessary’ grounds and separation of powers grounds. That provision was s 12, which declared that the common law of Australia in respect of native title was to have the force of a law of the Commonwealth. 4.4.23C Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373

Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ: … If, as th[e] passage [from Stephen J’s judgment in Koowarta] suggests, the requirement that a law enacted under s 51(xxvi) be special were held to evoke a judicial evaluation of the needs of the people of a race or of the threats or problems that confronted them in order to determine whether the law was, or could be deemed to be, ‘necessary’, the Court would be required to form a political value judgment. Yet it is clear that that judgment is for the Parliament, not for the Court. If the Court retains some supervisory jurisdiction to examine the question of necessity against the possibility of a manifest abuse of the races power, this case is not the occasion for an examination of that jurisdiction. The removal of the common law general defeasibility of native title by the Native Title Act is sufficient to demonstrate that the Parliament could properly have deemed that Act to be ‘necessary’. ‘Special’ qualifies ‘law’; it does not relate to necessity. Therefore the special quality of a law must be ascertained by reference to its differential operation upon the people of a particular race, not by reference to the circumstances which led the Parliament to deem it necessary to enact the law. A special quality appears when the law confers a right or benefit or imposes an obligation or disadvantage especially on the people of a particular race. The law may be special even when it confers a benefit generally, provided the benefit is of special significance or importance to the people of a particular race. That was the view of the majority in the Tasmanian Dam Case … … [T]he Native Title Act is ‘special’ in that it confers uniquely on the Aboriginal and Torres Strait Islander holders of native title (the ‘people of any race’) a benefit protective of their native title. Perhaps the Act confers a benefit on all the people of those races. The special quality of the law thus appears. Whether it was ‘necessary’ to enact that law was a matter for the Parliament to decide and, in the light of Mabo (No 2), there are

no grounds on which this Court could review the Parliament’s decision, assuming it had power to do so … [page 405] … If s 12 be construed as an attempt to make the common law a law of the Commonwealth, the attempt encounters some constitutional obstacles. There can be no objection to the Commonwealth making a law by adopting as a law of the Commonwealth a text which emanates from a source other than the Parliament. In such a case the text becomes, by adoption, a law of the Commonwealth and operates as such. But the common law is not found in a text; its content is evidenced by judicial reasons for decision … If the ‘common law’ in s 12 is understood to be the body of law which the courts create and define, s 12 attempts to confer legislative power upon the judicial branch of government. That attempt must fail … … If one construes s 12 as importing the common law as an organic, developing but unwritten body of law, a further objection to validity arises … [Section] 51(xxvi) can support a law only if that law is one which the Parliament has deemed necessary for the people of a race. The content of any such law is one which the Parliament must itself consider although a delegation to the Executive Government to make a law of a regulatory kind to implement an Act of the Parliament can find support in that paragraph. The common law relating to native title is not regulatory; it is substantive law the content of which is declared from time to time by the courts. Mabo (No 2) is a dramatic example of how the declaration of the common law relating to native title can change when a new judicial examination is made of the basic legal principles which underlie a proposition earlier accepted. Ex hypothesi, when a court declares a change in the common law, the Parliament has not considered

whether it is necessary to make that change as a special law for the people of a race …

Laws discriminating against Indigenous Australians 4.4.24 Amendments, enacted under the Howard Government, to two Commonwealth Acts that depended for their constitutionality on s 51(xxvi) excited debate about the scope of the amended power. The Hindmarsh Island Bridge Act 1997 (Cth) ousted the application of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) to an area of land in South Australia which had been the subject of a long-running heritage dispute. Amendments to the Native Title Act 1993 (Cth) permitted native title to be extinguished or suppressed where other property rights are not so treated. These developments raised questions about whether the amended power allows laws which discriminate against, as well as for the benefit of, Indigenous Australians, contrary to the political sentiments of the 1967 referendum. There is no decision which conclusively resolves this debate, although the answer appears to be that the power continues to permit adverse as well as benign discrimination. 4.4.25 A difficulty associated with the suggestion that the power should be limited by reference to the referendum intention — leaving aside the difficulty of ascertaining this intention with precision — is, as Lindell observes, ‘the lack of an institutional competence on the part of the courts to determine whether a law benefits any particular race’: Lindell, 1998, at 275 (emphasis in original). Lindell explains (at 275, emphasis in original):

The ability of judges to disagree amongst themselves on such a subjective issue hardly needs explanation, particularly where, unlike the position faced by the courts with the guarantee against discrimination in ss 92 and 117 of the Constitution, discrimination or detriment is not related to some other guiding principle or object. The courts would not find it easy

[page 406] to determine whether a law benefits groups of people when it consists of a package of measures which both benefit and discriminate against such groups; or where, for example, the legislature and government have struck a complex compromise which could involve the adjustment of competing economic, social and political rights and interests. Such a difficulty could only be heightened by the fact that social and political values and ideals can and do change over time.

4.4.26 There are dicta from the 1980s suggesting that the power is limited to laws benefiting Indigenous Australians. Murphy J expressed this view in Koowarta v Bjelke-Petersen (1982) 153 CLR 168 4.4.16C at 242 and Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.4.19C at 180. In the former case, he maintained that ‘for’ in s 51(xxvi) ‘means “for the benefit of”. It does not mean “with respect to”, so as to enable laws intended to affect adversely the people of any race’: 153 CLR at 242 (note this reading of the power limits it to beneficial laws generally). In the Tasmanian Dam case, Brennan J suggested that (1) the Constitution Alteration (Aboriginals) 1967 (Cth) (which the referendum approved) amounted to ‘an affirmation of the will of the Australian people that the odious policies of oppression and neglect of Aboriginal citizens were to be at an end, and that the

primary object of the power is beneficial’; and (2) the Racial Discrimination Act 1975 (Cth) ‘manifested the Parliament’s intention that the power will hereafter be used only for the purpose of discriminatorily conferring benefits upon the people of a race for whom it is deemed necessary to make special laws’: 158 CLR at 242. Deane J said in the Tasmanian Dam case that ‘s 51(xxvi) remains a general power to pass laws discriminating against or benefiting the people of any race. Since 1967, that power has included a power to make laws benefiting the people of the Aboriginal race’: 158 CLR at 273. However, the view that the power allows laws discriminating against Aboriginal and Torres Strait Islander peoples and people of other ‘races’ is also supported by dicta: see, for example, Koowarta v Bjelke-Petersen (1982) 153 CLR 168 at 186 per Gibbs CJ; Western Australia v Commonwealth (Native Title Act case) 183 CLR 373 4.4.23C at 461. 4.4.27 Because of their facts — prohibition of racial discrimination and protection of Aboriginal sites — neither Koowarta v Bjelke-Petersen (1982) 153 CLR 168 nor Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 required the court to consider the ‘benefit or detriment?’ question. The judges touched briefly on this question in Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373 because, as part of its challenge to the constitutionality of the Native Title Act 1993 (Cth), the Western Australian Government argued that that Act was inoperative for inconsistency with the earlier Racial Discrimination Act 1975 (Cth). However, the court held (183 CLR at 483–4) that the two Acts were not inconsistent. In any event, for the purposes of assessing the Native Title Act’s constitutional character, the justices considered the Racial

Discrimination Act standards irrelevant. Rather, as the extract at 4.4.21C suggests, the court assessed the Act’s operation by reference to the background common law. The Native Title Act, they said, substantially improved the position of most native title holders by comparison with their ‘precarious’ (183 CLR at 452) common law position. The use of the common law, rather than the existing statute book, as a base against which to measure a law’s operation is orthodox constitutional interpretation. The judges’ global assessment of the nature of the Native Title Act also allowed them to gloss over the negative impact of certain discriminatory ‘title validation’ provisions contained within it on particular native titles, [page 407] apparently bearing out the type of concerns raised by Lindell, 1998 (see 4.4.25) about the courts’ capacity to assess complex policy deals.

Kartinyeri v Commonwealth 4.4.28 Kartinyeri v Commonwealth (1998) 195 CLR 337 was just one episode in a long-running political and legal controversy. The South Australian Government had approved a proposed tourism development on Hindmarsh Island, and the construction of a bridge from the mainland to the island. The plaintiffs applied to the Commonwealth Minister for Aboriginal and Torres Strait Islander Affairs for a declaration under the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) protecting the area from being ‘injured or desecrated’ by construction of the

bridge. The minister received an independent report, based on which he made the declaration sought. However, the declaration was quashed by the Federal Court because of the minister’s failure to take account of evidence of ‘women’s business’ which formed the basis of the report: Tickner v Chapman (1995) 57 FCR 451. The minister appointed a new reporter, but her appointment was held invalid in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 8.4.20C. Following a royal commission at state level and a change of government at federal level, the Commonwealth Parliament passed the Hindmarsh Island Bridge Act 1997, which deprived the minister of Heritage Protection Act functions in relation to the bridge area. 4.4.29 The plaintiffs in Kartinyeri v Commonwealth (1998) 195 CLR 337 challenged the validity of the Hindmarsh Island Bridge Act on the basis that it discriminated against Ngarrindjeri people and was therefore not authorised by s 51(xxvi). However, five of the six judges who sat upheld the Bridge Act simply as a partial repeal of the Heritage Protection Act. They concluded, as Brennan CJ and McHugh J put it, that ‘[t]he power to make laws includes a power to unmake them’: 195 CLR at 355. For these two justices, that was the end of the matter. Since there was no dispute that s 51(xxvi) empowered parliament to enact the Heritage Protection Act, and since the Bridge Act did not ‘so [change] the character of [the Heritage Protection Act] … as to deprive that Act of its constitutional support’ (195 CLR at 357), s 51(xxvi) also authorised the Bridge Act. There was no need, said Brennan CJ and McHugh J, to consider whether the power was limited to laws which ‘benefited’ Indigenous Australians: see generally 195 CLR at 354– 8. However, Gaudron, Gummow and Hayne JJ (who characterised

the Bridge Act in the same way as Brennan CJ and McHugh J) also considered the scope of s 51(xxvi) generally, as did Kirby J in dissent. The plaintiffs also argued that the Ngarrindjeri people were not a ‘race’ for the purposes of s 51(xxvi). 4.4.30C

Kartinyeri v Commonwealth (1998) 195 CLR 337

Gaudron J: … [T]he bare deletion of an exception or limitation on power is not … capable of effecting a curtailment of power … [T]he consequence of an amendment of that kind is to augment power. Accordingly, if, prior to 1967, s 51(xxvi) authorised special laws which were not for the benefit of the people of a particular race, the referendum did not … alter that position … [page 408] The criterion for the exercise of power under s 51(xxvi) is that it be deemed necessary—not expedient or appropriate — to make a law which provides differently for the people of a particular race … Clearly, it is for the Parliament to deem it necessary to make a law of that kind. To form a view as to that necessity, however, there must be some difference pertaining to the people of the race involved or their circumstances or, at least, some material upon which the Parliament might reasonably form a political judgment that there is a difference of that kind. Were it otherwise, the words ‘for whom it is deemed necessary to make special laws’ would have no operation and s 51(xxvi) would simply be a power to make laws for the people of any race. … [T]wo things follow. The first is that s 51(xxvi) does not authorise special laws affecting rights and obligations in areas

in which there is no relevant difference between the people of the race to whom the law is directed and the people of other races … [Her Honour gave as an example the irrelevance of race to citizenship laws.] The second … is that the law must be reasonably capable of being viewed as appropriate and adapted to the difference asserted … Unless [that is the case] … it could not be concluded that the Parliament formed the view that there was such a difference … … Because the power … [is limited in this way] its scope necessarily varies according to circumstances as they exist from time to time. In this respect the power … is not unlike the power conferred by s 51(vi) … with respect to defence … … [I]t is difficult to conceive of circumstances in which a law presently operating to the disadvantage of a racial minority would be valid. It is even more difficult to conceive of a present circumstance pertaining to Aboriginal Australians which could support a law operating to their disadvantage … [P]rima facie, at least, the circumstances which presently pertain to Aboriginal Australians are circumstances of serious disadvantage, which disadvantages include their material circumstances and the vulnerability of their culture … [P]rima facie, at least, only laws directed to remedying their disadvantage could reasonably be viewed as appropriate and adapted to their different circumstances. … … [T]he test of constitutional validity is not whether it is a beneficial law. Rather, the test is whether the law … is reasonably capable of being viewed as appropriate and adapted to a real and relevant difference which the Parliament might reasonably judge to exist. It is the application of that test to today’s circumstances … that leads to the conclusion that … s 51(xxvi) presently only

authorises laws which operate to the benefit of Aboriginal Australians. … Gummow and Hayne JJ: …The … plaintiffs [submit] … that the Bridge Act lacked ‘a sufficient level of generality’ to found support by s 51(xxvi). This was because, whilst the Ngarrindjeri people are members of the Aboriginal race, they do not constitute the entirety of that race … Th[is] construction of s 51(xxvi) … would cripple the reach of the legislative power to deal with social, economic or other conditions which particularly afflicted certain members or groups of Aboriginals … [and] imperil the validity of the Heritage Protection Act itself … The state of authority in this Court affirms that the phrase is ‘apposite to refer to any identifiable racial sub-group among Australian Aboriginals’ … The plaintiffs further submitted that the word ‘special’ gave to s 51(xxvi) a ‘fluctuating content’ and a ‘purposive aspect’ like the defence power [so that] … the permissible purpose of the Bridge Act must be one which did not ‘discriminate against’ the Aboriginal race. [page 409] The plaintiffs eschewed the suggestion that the benefits conferred by the Heritage Protection Act, once conferred upon them, were ‘constitutionalised’ and insusceptible of any repeal. However, they contended that the Bridge Act inflicted upon the Ngarrindjeri people a discriminatory detriment by loss of the opportunity to obtain the declaration under [it] … These submissions should be rejected. … A law will only answer the constitutional description in s 51(xxvi) if it (i) is ‘deemed necessary’ (ii) that ‘special laws’ (iii) be made for ‘the people of any race’.

… Here, the judgment as to what is ‘deemed necessary’ is that of the Parliament. Nevertheless, it may be that the character of a law purportedly based upon s 51(xxvi) will be denied to a law enacted in ‘manifest abuse’ of that power of judgment (Native Title Act case (1995) 183 CLR 373 at 460). Even if such a restraint … exists there is no occasion for its application to the Bridge Act … … There is no ‘manifest abuse’ of its power of legislative judgment for the Parliament to accelerate matters by determining that, in respect of particular areas, the Ministerial power of declaration was withdrawn … … ‘[D]ifferential operation’ … gives … any law based upon s 51(xxvi) its character as a ‘special’ law. Once it is accepted, as it has been, that a law may make provision for some only of a particular race, it follows that a valid law may operate differentially between members of that race. That is the situation with the Bridge Act … …The differential operation of the one law may, upon its obverse and reverse, withdraw or create benefits. That which is to the advantage of some members of a race may be to the disadvantage of other members of that race or of another race … … It was submitted that the circumstances surrounding the [1967 referendum] … favoured, if they did not require, a construction of s 51(xxvi) in its amended form which would support only those special laws which were for the ‘benefit’ of the indigenous races … … The text is not limited by any [such] implication … The circumstances surrounding the [1967 referendum] …, assuming regard may properly be had to them, may indicate an aspiration of the legislature and the electors to provide federal legislative powers to advance the situation of persons of the Aboriginal race. But it does not follow that this was implemented by a change to

the constitutional text which was hedged by limitations unexpressed therein. … The treatment in the ‘yes’ case of the proposed alteration to the power of the Commonwealth legislature emphasised considerations of federalism. It did not speak of other limitations upon the nature of the special laws beyond confirming that they might apply to the people of the Aboriginal race ‘wherever they may live’ rather than be limited to the Territories. Further, the proposed law took its form after the expression of [Sawer’s] learned opinion that complete repeal of s 51(xxvi) would have been preferable … [Kirby J dissented, finding that the Bridge Act was invalid.] Kirby J: … I have concluded that the race power in par (xxvi) of s 51 of the Constitution does not extend to the enactment of laws detrimental to, or discriminatory against, the people of any race (including the Aboriginal race) by reference to their race … … First, the power is not simply to make laws with respect to ‘[t]he people of any race’ … [P]ar (xxvi) is to be contrasted with par (xix) which affords such a plenary power … with respect to ‘aliens’. In par (xxvi), words have been added which must have work to do … Secondly, the words of qualification in par (xxvi) must be read as a composite idea … The word ‘for’ is ambiguous. It could mean ‘for the benefit of’. Or it could mean ‘in respect of’. The history of the power in its original form tends to favour the latter meaning. However, a [page 410] textual argument against that meaning is that, where the framers … intended that idea, it was so expressed … in pars (xxxi), (xxxvi)

(‘in respect of’); in par (xxii) (‘in relation thereto’); and in par (xxxii) (‘with respect to’). The test of necessity in par (xxvi) is a strong one. It is to be distinguished from advisability, expedience or advantage. Its presence in par (xxvi) indicates that a particular need might enliven the necessity to make a special law … … Thirdly, a crucial element in the history of the constitutional text is the amendment of par (xxvi) in 1967. Because there have been so few amendments to the Australian Constitution, it has not hitherto been necessary to develop a theory of the approach to be taken to the meaning of the text where a provision is altered … [C]onventional rules of statutory construction permit a court to take into account the legislative change. But this is much more important in elucidating a constitutional text … especially so in Australia because of the necessity, exceptionally, to involve the electors … in the lawmaking process … [T]his Court, to understand the amendment, should appreciate, and give weight to, the purpose of the change. The stated purpose here was to remove two provisions in the Constitution which … discriminated against Australian Aboriginals. Whatever the initial object of the original exception to par (xxvi), by the time that the words were removed, the amendment did not simply lump the Aboriginal people of Australia in with other races as potential targets for detrimental or adversely discriminatory laws … To construe the resulting power in par (xxvi) as authorising the making of laws detrimental to, and discriminatory against, people on the ground of race, and specifically Aboriginal race, would be a complete denial of the clear and unanimous object of the Parliament in proposing the amendment … … The criterion of ‘manifest abuse’ is inherently unstable. The experience of racist laws in Germany … and South Africa … was that of gradually escalating discrimination … By the time a stage of ‘manifest abuse’ … is reached, courts have generally lost the capacity to influence or check such laws …

… The Bridge Act itself is … detrimental to all Aboriginals, as it removes their opportunity of making an application under the Heritage Protection Act in regard to the Hindmarsh Island Bridge area. This has a particularly telling impact on the Ngarrindjeri people … … The Commonwealth … argued that, under the maxim ‘what Parliament may enact it may repeal’, if the Heritage Protection Act is constitutionally valid (as was conceded by all parties), the Bridge Act must also be valid … But in my view, the maxim cannot be sustained in the face of a constitutional provision that does not permit laws made to the detriment of, or which discriminate against, a people by reference to their race …

Should the Constitution prohibit racially discriminatory laws? 4.4.31 As Sawer’s discussion of the framers’ intentions regarding the Commonwealth’s ‘races’ power (see 4.4.6C) indicates, they contemplated that s 51(xxvi) could be used to discriminate adversely on racial grounds. Moreover, s 117 of the Constitution, the ‘non-discrimination against state residents’ provision, was framed narrowly so that it would not interfere with state ‘Factory Acts’, which discriminated against non-‘white’ labour: Williams, 1996, esp at 13–16. Should the Constitution today expressly prohibit racially discriminatory laws? [page 411]

Effect of the Commonwealth Racial Discrimination Act on the states and state laws 4.4.32 Any ‘right’ or freedom to discriminate on racial grounds has been abolished under international law by the Convention on the Elimination of All Forms of Racial Discrimination, and domestically by legislation implementing it. That legislation includes the Racial Discrimination Act 1975 (Cth) (RDA), which employs concepts drawn directly from, and depends for its constitutionality on, the Convention: see 4.3.18C. 4.4.33E

Racial Discrimination Act 1975 (Cth)

Part II Prohibition of Racial Discrimination Exceptions 8(1) This Part does not apply to, or in relation to the application of, special measures to which paragraph 4 of Article 1 of the Convention applies … Racial discrimination to be unlawful 9(1) It is unlawful for a person to do any act involving a distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life. … (2) A reference in this section to a human right or fundamental freedom in the political, economic, social, cultural or any other field of public life includes any right of a kind referred to in Article 5 of the Convention. …

Rights to equality before the law 10(1) If, by reason of, or of a provision of, a law of the Commonwealth or of a State or Territory, persons of a particular race, colour or national or ethnic origin do not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or enjoy a right to a more limited extent than persons of another race, colour or national or ethnic origin, then, notwithstanding anything in that law, persons of the first-mentioned race, colour or national or ethnic origin shall, by force of this section, enjoy that right to the same extent as persons of that other race, colour or national or ethnic origin. (2) A reference in subsection (1) to a right includes a reference to a right of a kind referred to in Article 5 of the Convention. …

4.4.34E International Convention on the Elimination of All Forms of Racial Discrimination Article 1 1. … ‘racial discrimination’ shall mean any distinction, exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, [page 412] on an equal footing, of human rights and fundamental

4.

freedoms in the political, economic, social, cultural or any other field of public life. … Special measures taken for the sole purpose of securing adequate advancement of certain racial or ethnic groups or individuals requiring such protection as may be necessary in order to ensure such groups or individuals equal enjoyment or exercise of human rights and fundamental freedoms shall not be deemed racial discrimination, provided, however, that such measures do not, as a consequence, lead to the maintenance of separate rights for different racial groups and that they shall not be continued after the objectives for which they were taken have been achieved.

[Article 5 contains a long list of the civil, political and other rights that the Convention protects.]

4.4.35 As pointed out in Twomey (2012, pp 138, 141), the RDA is not a constitutional standard: it can be repealed or amended (expressly or impliedly) as in the case of any other Commonwealth Act. Although the language of s 10 of the RDA suggests that it limits Commonwealth laws, principles of parliamentary sovereignty mean that it cannot prevent subsequent enactment of a discriminatory Commonwealth law. The fact that the RDA could be repealed has led to calls for constitutional entrenchment of a racial non-discrimination clause: see, for example, Council for Aboriginal Reconciliation, 2000, Ch 10; and 4.4.38–4.4.42. 4.4.36 Despite its status as ordinary legislation, however, the RDA has effectively operated as a constitutional constraint on the states and territories, for three reasons:

(1) Section 10 is a remedial provision: its language is supplementary of the position under state and territory laws as well as Commonwealth ones. (2) Where the RDA provisions are inconsistent with state laws detracting from racial equality, the Commonwealth provisions operate through s 109 of the Constitution to invalidate those state provisions. This effect emerged out of six cases, all but one of which dealt with racial discrimination against Aboriginal people or Torres Strait Islanders: Gerhardy v Brown (1985) 159 CLR 70; Koowarta v Bjelke-Petersen (1982) 153 CLR 168; Viskauskas v Niland (1983) 153 CLR 280; University of Wollongong v Metwally (1984) 158 CLR 447; Mabo v Queensland (No 1) (1988) 166 CLR 186; and Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373. The detail of these cases is discussed in Ch 2 of the 7th edition of this book. (3) Leaving aside situations where the states are protected by inter-governmental immunity (see Chapter 6), s 9 of the RDA applies to actions of the states: Koowarta v BjelkePetersen (1982) 153 CLR 168. 4.4.37 The semi-constitutional operation of the RDA on the states provides an insight into how a constitutional guarantee of equality, or perhaps even a constitutional limitation on discriminatory laws, might operate in Australia. It highlights the complexity of the judicial task of measuring these abstract concepts against the detail of legislation or government conduct. For a recent example, see Maloney v R (2013) 252 CLR 168; and, generally, Rees, Rice and Allen, 2014, pp 215–36.

[page 413]

Proposed constitutional reform 4.4.38 There have been several proposals to amend the Constitution to insert a prohibition on racial discrimination. These were recently considered by the Commonwealth Expert Panel in the course of making its own recommendations for reform. 4.4.39E Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution: Report of the Expert Panel (2012) … [I]n … 1966, Liberal backbencher William (Billy) Wentworth introduced a Private Member’s Bill [proposing] … deletion of section 51(xxvi) and … insertion of a new power to make laws ‘for the advancement of the aboriginal natives of the Commonwealth of Australia’. Wentworth also proposed a new ‘section 117A’ to prevent the Commonwealth and States from making or maintaining any law ‘which subjects any person who has been born or naturalised within the Commonwealth of Australia to any discrimination or disability within the Commonwealth by reason of his racial origin’. The proposed ‘section 117A’ included a proviso to ensure that it would not operate ‘to preclude the making of laws for the special benefit of the aboriginal natives of the Commonwealth of Australia’. Neither proposal was put to the Australian people at the 1967 referendum … … [I]n 1988 the Constitutional Commission recommended the insertion of … a new ‘section 124G’…:

124G (1) Everyone has the right to freedom from discrimination on the ground of race, colour, ethnic or national origin, sex, marital status, or political, religious or ethical belief. (2) Sub-section (1) is not infringed by measures taken to overcome disadvantages arising from race, colour, ethnic or national origin, sex, marital status, or political, religious or ethical belief … … [Given] the … racially discriminatory attitudes that prevailed at the time when the Constitution was framed … the Panel strongly believes that a clear and unambiguous renunciation of racial discrimination is essential if our Constitution is to reflect the values of contemporary Australia … [and] is an integral part of the package of reforms necessary to give appropriate recognition to Aboriginal and Torres Strait Islander peoples … … [S]uch a provision should be structured as a prohibition of legislative or executive action on the part of the Commonwealth or under any law of the Commonwealth, and on the part of the States and Territories and under any of their laws, under which the real, supposed or imputed race, colour or ethnic or national origin of any person is a criterion for different treatment … … [T]he reach of Commonwealth, State and Territory antidiscrimination legislation extends beyond government actions to the private sector. The Panel’s recommendations do not extend so far … … The proposed racial non-discrimination provision does not proscribe discrimination on the ground of citizenship or nationality … The … provision proposed … includes an exception for ‘special measures’ in order to minimise the risk that a general nondiscrimination clause would invalidate laws for the

[page 414] benefit of Aboriginal and Torres Strait Islander peoples … The proposed ‘section 116A’ saves positive laws and measures designed to address socio-economic disadvantage on the basis of need … [and] … includes an exception … saving laws and executive actions designed to protect cultures, languages and heritage. The … provision would not impose any obligation on Parliament to adopt such laws and actions, but would ensure that they were not struck down as being discriminatory … The Panel recommends an amendment to the Constitution to provide for a new section … along the following lines: Section 116A Prohibition of racial discrimination (1) The Commonwealth, a State or a Territory shall not discriminate on the grounds of race, colour or ethnic or national origin. (2) Subsection (1) does not preclude the making of laws or measures for the purpose of overcoming disadvantage, ameliorating the effects of past discrimination, or protecting the cultures, languages or heritage of any group.

4.4.40 The constitutional provision proposed by the Expert Panel would proscribe ‘discrimination’ rather than guaranteeing equality before the law, as s 10 of the RDA does. While a prohibition on discrimination is easier for the courts to apply than a constitutional guarantee of equality, it is not clear exactly how the proposed s 116A would apply to state and territory legislation rather than executive action.

4.4.41 In its 2015 report, the Joint Select Committee on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples (Commonwealth Parliament) recommended, as part of a package of reforms to recognise Aboriginal and Torres Strait Islander peoples in the Constitution, that consideration be given to three different non-discrimination provisions as options ‘for referendum’: p xiii. Option 1 was the Expert Panel’s proposed s 116A, which would prohibit race-based discrimination against any group. The second and third options were narrower in scope. Option 2 proposed that s 51(xxvi) be replaced by a grant of power to the Commonwealth ‘to make laws with respect to Aboriginal and Torres Strait Islander peoples, but so as not to discriminate against them’. Option 3 proposed that s 51(xxvi) be replaced by the same positive grant of power ‘with respect to Aboriginal and Torres Strait Islander peoples’, followed by a separate provision stating that: ‘A law of the Commonwealth, a State or a Territory must not discriminate adversely against Aboriginal and Torres Strait Islander peoples’. See Joint Select Committee, 2015, pp xiii–xv (text of the options) and Ch 5 (‘A proposed prohibition of discrimination’). As Stubbs observes, it is significant that, in putting these options forward, the Joint Select Committee (which was composed of members from across party lines) agreed that the Constitution should contain a prohibition against racial discrimination in some form: Stubbs, 2015, at 150. 4.4.42 The likely practical effect of such reform proposals should be considered dispassionately. Since the end of the United States Civil War, that country’s Constitution has contained the following guarantee (added in 1868) (Amendment XIV, §1, cl 4): No State shall make or enforce any law which shall … deny to any

person within its jurisdiction the equal protection of the laws.

[page 415] However, for almost a century after the ‘equal protection clause’ was adopted, the Supreme Court upheld state laws permitting racial segregation and other devices designed to avoid racial equality. Moreover, the United States today remains a society sharply divided on racial lines, in which large numbers of AfricanAmericans in particular experience similar poverty, social and educational marginalisation and incarceration as Indigenous Australians.

DEFENCE POWER 4.5.1E

Commonwealth Constitution

51 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: … (vi) 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; …

4.5.2 Most Commonwealth legislative powers relate to a subject matter. A few legislative powers relate to a purpose. The defence power is such a purposive power: see Thomas v Mowbray (2007)

233 CLR 307 4.5.4C at 359 per Gummow and Crennan JJ; 384, 386–7 per Kirby J; 453 per Hayne J; 508 per Callinan J. In Stenhouse v Coleman (1944) 69 CLR 457, Dixon J maintained that the defence power could be defined only in terms of purpose, observing that the language of s 51(vi) treats ‘defence or war as the purpose to which the legislation must be addressed’: 69 CLR at 471. He noted that in this respect s 51(vi) differs from most other Commonwealth legislative powers which depend upon characterisation of subject matter: 69 CLR at 471. When considering the validity of any measure from the point of view of defence, the High Court is required to look at the purpose of the measure and to determine whether it could be considered to assist in the defence of the Commonwealth. The court’s function is not to decide whether any measure is appropriate for the purposes of the defence of the Commonwealth. However, the court must be satisfied that there is a real connection between the law and the defence of Australia: see, for example, Stenhouse v Coleman (1944) 69 CLR 457 at 470 per Dixon J. The extent of the defence power varies according to the degree and nature of the danger of external or internal aggression at a given period of time. (In Stenhouse v Coleman, Dixon J described s 51(vi) as ‘elastic’ in operation: 69 CLR at 472.) The High Court has traditionally distinguished between the scope of the defence power in peacetime and its scope during wartime, though some judges have questioned the continuing validity of this sharp distinction: see Thomas v Mowbray (2007) 233 CLR 307 at 458 per Hayne J; 503, 504–5 per Callinan J. The defence power has been held to be far broader in scope during wartime than during peacetime. The most significant modern peacetime cases relate to antiterrorism laws and the discipline of defence force members.

Anti-terrorism laws 4.5.3 In the following case, the court held that the defence power is not limited to external threats from governments but also extends to internal threats. [page 416]

4.5.4C

Thomas v Mowbray (2007) 233 CLR 307

[The plaintiff was subject to an interim control order under the Commonwealth Criminal Code. The court held (Kirby J dissenting) that the interim control order provisions were supported by the defence power. Gleeson CJ described the scope of those provisions in the following passage:] Gleeson CJ: The object of Div 104 [of the Code] is to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from a terrorist act (s 104.1). The definition of terrorist act (s 100.1) requires three elements for an action or threat of action to be a terrorist act. First, the action must fall within a certain description, and must not be of a kind excluded by another description. The inclusory aspect of the definition is that the action must … cause death, serious physical harm, or serious damage to property, endanger life, create a serious risk to public health or safety, or seriously interfere with or disrupt certain vital systems. The exclusory aspect of the definition excludes advocacy, protest, dissent or industrial action that is … not intended to cause death or serious injury, or endanger life or

public safety. The second necessary element is that the action is done, or the threat of action is made, with the intention of advancing a political, religious or ideological cause. The third necessary element is that the action is done, or the threat of action is made, with the intention of coercing, or influencing by intimidation … a government, or of intimidating the public or a section of the public. [On the defence power in s 51(vi), Gleeson CJ said:] [The defence power] is not limited to defence against aggression from a foreign nation; it is not limited to external threats; it is not confined to waging war in a conventional sense of combat between forces of nations; and it is not limited to protection of bodies politic as distinct from the public, or sections of the public. … The court’s power to make an interim control order is conditioned on two matters … First, the court must be satisfied on the balance of probabilities that making the order would substantially assist in preventing a terrorist act, or that the person has provided training to, or received training from, a listed terrorist organisation. Secondly, the court must be satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act. … On the question of power … [these words] repeat the legislative object: protecting the public from an apprehended terrorist act. That is not only the purpose of the legislation generally, it is the purpose to which the control order must be directed … This is in the specific context of prevention of a terrorist act, or dealing with a person who has trained with a terrorist organisation. The level of risk of the occurrence of a terrorist act, and the level of danger to the public from an apprehended terrorist act, will vary according to international or local circumstances. … the legislative criterion

for the sufficiency of the connection between the control order and the protection of the public from a terrorist act … means that the legislation is supported by the defence power supplemented, where necessary, by the external affairs power. [Gleeson CJ indicated that he also agreed with the opinion of Gummow and Crennan JJ on s 51(vi): 233 CLR at 324.] [page 417] Gummow and Crennan JJ: … [I]t has been said … that the [defence] power is purposive in nature and that a notion of proportionality is involved in relating ends to means. This is because par (vi) of s 51 is considered to be one of the few instances, referred to by Dawson J in Leask v The Commonwealth (1996) 187 CLR 579 at 600, where power is conferred by s 51 not ‘by reference to subject matter’ but by reference to ‘aims or objectives’. … In the Communist Party Case, Dixon J said that the ‘central purpose’ of the [defence] power is ‘the protection of the Commonwealth from external enemies’ (1951) 83 CLR 1 at 194 … Is the defence of the Commonwealth and the several States of which s 51(vi) of the Constitution speaks concerned exclusively with defence against external threats to those bodies politic, typically by the waging of war by nation states …? [Gummow and Crennan JJ answered this question ‘no’. In doing so, they noted that ‘there was a long history in English law before the adoption of the Constitution which concerned defence of the realm against threats posed internally as well as by invasion from abroad by force of arms’: 233 CLR at 361. They continued:] … the plaintiff … makes the following submissions respecting the defence power. The first, that s 51(vi) is concerned

only to meet the threat of aggression from a foreign nation, should not be accepted, for the reasons given above. Next, the plaintiff points to the words ‘the Commonwealth and the several States’ as indicative of that which is being defended. This is said to be those ‘collective’ bodies politic rather than the citizens or inhabitants of the Commonwealth or the States and their property. That submission should not be accepted. The notion of a ‘body politic’ cannot sensibly be treated apart from those who are bound together by that body politic. … One consequence of a restrictive view of the scope of the defence power, exemplified by statements that it is concerned with wars waged by external enemies, has been the assertion of a power, stemming from s 61 and the incidental power in s 51(xxxix), to legislate ‘for the protection of [the parliament] and the Constitution against domestic attack’. … … [M]uch attention has been given in various decisions, concerned particularly with the waging in World War I and World War II of ‘total war’ … to the fluid nature of the defence power. The plaintiff emphasises the concentration in such decisions upon the judicial assessment, as matters of constitutional fact, of facts said to be sufficient to connect the legislation in question with the head of power in s 51(vi). … But this concentration upon sufficiency of connection is not called for when dealing with the interim control order system. This turns upon the operation of the definition of ‘terrorist act’. What is proscribed by that definition falls within a central conception of the defence power … Protection from a ‘terrorist act’ as defined necessarily engages the defence power. The vice of the Communist Party Dissolution Act 1950 (Cth), that it was, as Dixon J put it, ‘not addressed to suppressing violence or disorder’ and did not ‘take the course of forbidding descriptions of conduct’ with ‘objective standards or tests of liability upon the subject’ [(1951) 83 CLR 1 at 192], does not appear in the interim control order regime.

The plaintiff’s submissions respecting the defence power should be rejected. Hayne J: No bright line can be identified between some kinds of terrorism or terrorist that are ‘internal’ and some that are ‘external’. … the present case concerns threats made by persons and groups outside Australia that are made for the stated purpose of effecting a change in Australia’s foreign policies. It is to that extent an ‘external’ threat. This case does not concern any wholly ‘internal’ threat and it is, therefore, neither necessary nor appropriate [page 418] to examine the issues that might arise were it said that the defence power may be engaged to legislate with respect to such a threat. … The plaintiff submitted … that defence from external enemies was more than the central purpose of the [defence] power, it was a defining and necessary characteristic of the purpose of laws made in exercise of the power. Further, so the plaintiff submitted, the only relevant ‘external enemies’ were those that are nation states, not what the plaintiff described as a ‘private group or organisation’. These contentions should not be accepted. Neither is a proposition that is established by, or supported by what is said in, the Communist Party Case [(1951) 83 CLR 1] or any other decision of this Court. … Neither the words of the provision [that is, s 51(vi)], nor the history of its application, supports propositions cast in the absolute terms advanced by the plaintiff … … recognising that the central purpose of the power is protection of the Commonwealth from external enemies does not

mean that those enemies are necessarily confined to nation states. Even if it was once true that only nation states had the means of pursuing political aims by the application of concerted force, that is not so today. … … the events of 11 September 2001 show that ‘terrorist’ tactics can be used by very small numbers of personnel but with large consequences. Power of a kind that was once the exclusive province of large military forces of nation states may now be exerted in pursuit of political aims by groups that do not constitute a nation state. Because that is so, it may be necessary to consider the continued utility of what Dixon J referred to in … the Communist Party Case as a ‘marked distinction … between the use of the power in war and in peace’. The line between war and peace may once have been clear and defined by the declared state of relations between nations. But as the reference in the Communist Party Case to ‘a period of ostensible peace’ reveals, that line is now frequently blurred. The increasing capacity of small groups to carry out threats of widespread harm to persons and property may further obscure the distinction between war and peace if those terms are to be defined primarily by reference to dealings between nation states. If there is that blurring of the distinction between war and peace, it must not be permitted to obscure the essential similarity between the actual or threatened application of concerted force by one nation state on another, in pursuit of the first state’s political objectives, and the actual or threatened application of such force by an organisation or group in pursuit of that organisation’s international political objectives. The former may be described as ‘war’, and the latter as ‘terrorism’, but each is the pursuit of international political aims by the actual or threatened application of concerted force. … The distinction drawn by the plaintiff between the defence of the Commonwealth and the several States as bodies politic, and the defence of citizens or inhabitants of the Commonwealth or the

States in their ‘individual capacities as such, or their property’, should … be rejected as unhelpful. … … [I]t should be accepted that the defence power is concerned centrally with defence of the Australian bodies politic. It is therefore concerned centrally with defence against the imposition of political objectives on those polities by external force. It matters not whether that force is sought to be applied by other nation states or by groups that do not constitute a state. … … [T]he impugned provisions are explicitly directed to the prevention of terrorist acts. That is their evident purpose … [In their operation in relation to the plaintiff] the impugned [page 419] provisions are laws with respect to the naval and military defence of the Commonwealth. They are laws with respect to naval and military defence because, in their particular operation in this case, they provide measures directed to preventing the application of force to persons or property in Australia that is sought to be applied for the purpose of changing the federal polity’s foreign policies. Callinan J: Threats to people and property against which the Commonwealth may, and must defend itself, can be internal as well as external. With respect, insufficient critical attention to these matters was given by the majority in the Communist Party Case. The references by Dixon J to ‘ostensible peace’ and protection against external enemies as the ‘central purpose’ of the defence power evince both a preoccupation with the events of the recent past, of a declared war, uniformed, readily distinguishable external enemies, generally culturally, ethnically, ideologically and religiously homogenous states, and an incomplete

appreciation, despite Hiroshima and Nagasaki, of the potential of weaponry for massive harm. In saying that, I do not question the result in the Communist Party Case or the particular principle … for which it stands … that it is for the courts, and not the Parliament to have the final say on whether legislation is within constitutional power or not. That does not mean that any of the separate judgments in the Communist Party Case should be uniquely immune to critical examination and analysis. Nor does it mean that subsequent events which might tend to falsify some of the factual assumptions upon which parts of the reasoning were based, should be ignored. … The facts established here, are, in my view facts in respect of which the Commonwealth may legislate under s 51(vi) of the Constitution. That conclusion is so right and obvious that reference to authority is really unnecessary. … The language of s 51(vi) of the Constitution is itself expansive. … The real question in every case will be, is the Commonwealth or its people in danger, or at risk of danger by the application of force, and as to which the Commonwealth military and naval forces, either alone or in conjunction with the State and other federal agencies, may better respond, than State police and agencies alone. If the answer to that is affirmative then the only further questions will be, are the enacted measures demonstrably excessive, or reasonably within the purview of the power, or, to use the language of s 104.4(1)(d) itself, ‘reasonably necessary’ or ‘reasonably appropriate and adapted’ to protection against terrorism. … I have commented on aspects of the judgment of Dixon J in the Communist Party Case which time, to say the least, as well as the facts proved here, make questionable: the drawing by his Honour of a distinction … … between times of peace and serious armed conflict, and internal and external threats. … To regard war as a declared war only, to assume that a nation’s foes would

all identify themselves, and rarely act covertly, that they would act logically, and that they would not be people drawn from the Australian community was even then however to be somewhat naïve. … … [C]ourts must scrutinise very carefully the uses to which the [defence] power is sought to be put. … The courts will simply have to do the best they can to ensure the proportionality that the Code itself admits must be applied in each and every case. The Commonwealth has however demonstrated that Div 104 of the Code, in its application to the plaintiff, is within the defence power. Heydon J: I agree with Gleeson CJ, and Gummow and Crennan JJ, that the defence power is not limited to defence against external threats to the Commonwealth and the States [page 420] from nation states, for the reasons they give. It is not necessary to consider whether the criticisms advanced by Callinan J of Australian Communist Party v Commonwealth [(1951) 83 CLR 1] are sound, although … there does not seem to be any significant difference between what Gleeson CJ, and Gummow and Crennan JJ have written about the defence power and what Callinan J has written about it. … … [T]here are constitutional facts favouring the conclusion that Australia faced a threat sufficient to support a characterisation of the impugned legislation as falling within the defence power.

Discipline of defence force members 4.5.5 A line of modern cases concerns the discipline of members of the defence force in peacetime. In the following cases, the court held that the defence power extends to the creation of a disciplinary code that stands outside Ch III of the Constitution. 4.5.6C

Re Tracey; Ex parte Ryan (1989) 166 CLR 518

[The court considered the validity of legislation that adopted the criminal law of the Australian Capital Territory as service law for all members of the defence forces inside and outside the territory. These service offences were tried by service tribunals. Defence personnel could not be tried in a civil court for a civil offence where they had been convicted or acquitted of a service offence that was similar to the civil offence: s 190(3), (5) of the challenged Act.] Mason CJ, Wilson and Dawson JJ: Although the Australian Constitution does not expressly provide for disciplining the defence forces, so much is necessarily comprehended by the first part of s 51(vi) for the reason that the naval and military defence of the Commonwealth demands the provision of a disciplined force or forces. Notwithstanding that it might be thought that the second clause of s 51(vi) is relevant to the question of military discipline by reason of the phrase ‘the control of the forces’ we doubt whether that is so. It seems to us that the content of that phrase relates to the work of law enforcement. It is not the ordinary function of the armed services to ‘execute and maintain the laws of the Commonwealth’. Of course, the powers bestowed by s 51 are subject to … Ch III. The presence of Ch III means that, unless, as with the defence power, a contrary intention may be discerned, jurisdiction of a judicial nature must be created

under Ch III … However, the defence power is different because the proper organization of a defence force requires a system of discipline which is administered judicially, not as part of the judicature erected under Ch III, but as part of the organization of the force itself. Thus the power to make laws with respect to the defence of the Commonwealth contains within it the power to enact a disciplinary code standing outside Ch III and to impose upon those administering that code the duty to act judicially. … [Section 190(3) and (5)] seeks to protect against double jeopardy … The method chosen … is to exempt persons from the operation of laws, for the most part State laws, which apply to those persons, by denying jurisdiction to the civil courts, for the most part State [page 421] courts, to try cases brought under those laws. … [These provisions] clearly exceed the power to make laws with respect to the defence of the Commonwealth. No doubt if the imposition of criminal liability upon defence members … in a particular instance or context were capable of interference with the defence of the Commonwealth, the Parliament would have power under s 51(vi) to provide for the specific situation by enacting a law which did not involve the ouster of jurisdiction from the courts of the States. Such a law would prevail under s 109 of the Constitution … But sub-ss (3) and (5) of s 190 extend across the whole range of criminal conduct and apply whenever a person prosecuted for an offence in a civil court has been tried by court-martial for substantially the same offence or where a court-martial has taken into account an offence that is substantially the same. In our opinion it is clearly beyond the defence power and the incidental

power of the Parliament to interfere in this manner with the exercise by State courts of their general criminal jurisdiction. Brennan and Toohey JJ: As the creation of a military jurisdiction to discipline army personnel has been regarded … to be the essential concomitant of the raising and keeping of a standing army, the power conferred by s 51(vi) to provide for a permanent defence force prima facie includes a power to create a military jurisdiction to discipline members of that defence force. The traditional jurisdiction to discipline military personnel has two aspects. The first is an authority to compel military personnel to conduct themselves in a manner which is conducive to efficiency and morale of the service; the second is an authority to punish military personnel who transgress the ordinary law of the land while acting or purporting to act as military personnel. These two aspects of the traditional jurisdiction are reflected in the two limbs of s 51(vi). If that subsection supports a law creating a military jurisdiction, the jurisdiction has two aspects: first, to compel members of the armed forces to conduct themselves in a manner which is conducive to the efficiency and morale of the forces charged with the defence of the Commonwealth … and secondly, to control persons who, being part of the armed forces and acting or purporting to act in that capacity, transgress the ordinary law of the land or fail to obey the lawful directions of the Executive Government as to the activities of the armed forces and the conduct of persons who are part of the armed forces. This is the disciplinary jurisdiction which, subject to the requirements of Ch III … s 51(vi) will support. … There are two sets of constitutional objectives to be reconciled. The first set of objectives, dictated by s 51(vi), consist of the defence of the Commonwealth … and the control of the armed forces. To achieve these objectives, it is appropriate to repose in service authorities a broad authority … to impose discipline on defence members and defence civilians. The second

set of objectives, dictated both by Ch III and s 106 of the Constitution … consist of recognition of the pre-ordinate jurisdiction of the civil courts and the protection of civil rights which those courts assure alike to civilians and to defence members and defence civilians who are charged with criminal offences. To achieve these objectives, civil jurisdiction should be exercised when it can conveniently and appropriately be invoked and the jurisdiction of service tribunals should not be invoked, except for the purpose of maintaining or enforcing service discipline. These two sets of constitutional imperatives point to the limits of the valid operation of the Discipline Act. It may not impair civil jurisdiction but it may empower service tribunals to maintain or enforce discipline. Therefore proceedings may be brought against a defence member or a defence civilian for a service offence if, but only if, those proceedings can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline. … [page 422] As the defence power authorizes the Parliament to establish the permanent armed forces of the Commonwealth and to employ them in different times and places and in a variety of circumstances, a grant of disciplinary powers to be exercised judicially by officers of the armed forces is — as it has historically been regarded — an essential concomitant. … But, when that jurisdiction falls to be exercised, the power which is exercised is not the judicial power of the Commonwealth; it is a power sui generis which is supported solely by s 51(vi) for the purpose of maintaining or enforcing service discipline. … A defence member is and must remain liable to the ordinary criminal law; he does not acquire immunity merely because he has been dealt with by a tribunal other than the

ordinary courts. An object of the defence power is the preservation of the civil government of the Commonwealth and the several States, a characteristic of which is the administration of the criminal law by the ordinary courts. To the extent that the civil courts are prohibited from exercising their jurisdiction, that object is defeated. Sections 190(3) and 190(5) cannot be supported as provisions incidental to a valid grant of jurisdiction to service tribunals. What is incidental to the exercise of a legislative power is dependent on the nature of the power and … the defence power must stop short of any interference with the exercise by the civil courts of their jurisdiction to administer the law of the land. It follows that sub-ss (3) and (5) are invalid.

4.5.7C

Re Nolan; Ex parte Young (1991) 172 CLR 460

Mason CJ and Dawson J: [In Re Tracey] [t]hree different opinions were expressed as to the extent to which the Commonwealth Parliament, in the exercise of the legislative power conferred by s 51(vi) of the Constitution, could enact a disciplinary code, binding upon members of the defence forces, standing outside Ch III of the Constitution. Mason CJ, Wilson and Dawson JJ held … that it is within the power of Parliament to provide that any conduct which constitutes a civil offence shall constitute a service offence if committed by a defence member and shall be triable by a service tribunal. On the other hand, Deane J held that, in so far as offences committed in Australia in time of peace are concerned, jurisdiction can be conferred validly on a service tribunal only to the extent that it relates to exclusively disciplinary offences, that is, offences which do not involve conduct of a type which is commonly an offence under the ordinary criminal law. Likewise, Gaudron J considered that jurisdiction can be validly conferred on a service tribunal only

to the extent that it relates to charges in respect of conduct outside Australia and to charges of service offences that are not substantially the same as civil court offences. Brennan and Toohey JJ took a rather wider view of the jurisdiction that can be conferred validly on a service tribunal than that expressed by Deane and Gaudron JJ. Brennan and Toohey JJ stated: ‘[P]roceedings may be brought against a defence member or a defence civilian for a service offence if, but only if, those proceedings can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline.’ … It is important to note that both Deane J and Gaudron J indicated that, had they not been of the opinion that the jurisdiction of a service tribunal could not extend to offences which involve conduct of a kind which is an offence under the ordinary law, they would have [page 423] considered that the jurisdiction of such a tribunal must be confined to dealing with the disciplinary aspect of conduct of defence members. … There was no majority for any one of the three opinions expressed in the judgments; indeed, there was a majority rejection, at least by way of preferred view, for each of the three opinions. … … we see no reason to resile from the view which we expressed in Re Tracey … it is open to Parliament to provide that any conduct which constitutes a civil offence shall constitute a service offence, if committed by a defence member. The proscription of that conduct is relevant to the maintenance of good order and discipline in the defence forces; so long as the rule prescribed is sufficiently connected with the regulation of the

defence forces and the good order and discipline of members, it will be valid. Brennan and Toohey JJ: The legislative power relating to discipline conferred by s 51(vi) must be exercised for the purpose for which it was conferred … Having regard to the history of military discipline and the terms of s 51(vi), the purpose for which the power to make a law relating to discipline of the Defence Force … is conferred is to maintain the operational efficiency of the Force and to ensure that the standing Force, as an organized entity, is a buttress of, rather than a threat to, internal security … As the power cannot be exercised to override the ordinary criminal law in its application to defence members and defence civilians, a law creating service offences and conferring jurisdiction on service tribunals to try must be subject to the ordinary criminal law. … Once it is appreciated that the legislative power conferred by s 51(vi) is limited in the relevant respect to the creation of laws which are supplementary to the ordinary criminal law, it can be seen that no law of the Commonwealth can validly create a service offence which is inconsistent with, as distinct from supplementary to, the ordinary criminal law. A law creating a service offence is denied an operation inconsistent with the operation of an ordinary criminal law of a State … because the support of s 51(vi) … for the creation of service offences vanishes when it is impracticable to obey simultaneously the law creating the service offence and the ordinary criminal law enforceable by the courts of this country. … … s 51(vi) does not extend to the making of a law to punish defence members and defence civilians for their conduct unless the proceedings taken in order to punish them can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline.

4.5.8C

Re Tyler; Ex parte Foley (1994) 181 CLR 18

Mason CJ and Dawson J: … as in Re Nolan, we see no reason to resile from the view which we expressed in Re Tracey. Brennan and Toohey JJ: The arguments as to the operation and constitutional validity of the Act advanced by the prosecutor were considered by the Court in Re Tracey; Ex parte Ryan and in Re Nolan; Ex parte Young. While differing views were expressed by members of the Court on each of those occasions, no clear majority view prevailed. … There is nothing [page 424] to be gained by rehearsing yet again the same arguments that were addressed to the Court in those cases; nothing said in that regard has persuaded us to a different view. … [It was submitted] that the conferral by the Act of jurisdiction on a general court martial was, in terms of s 51(vi) of the Constitution, neither a law for the ‘naval and military defence of the Commonwealth’ nor a law for ‘the control of the forces to execute and maintain the laws of the Commonwealth’. The submission contended that the second limb of par (vi) is not concerned with matters of service discipline and that the first limb will not support the conferral of jurisdiction on general courts martial because the Act is not reasonably proportionate to the end which legislation may legitimately pursue. … Counsel … drew heavily on the experience of comparable provisions in the Constitution of the United States with a view to showing that the true concern of the second limb of s 51(vi) was with legislative control of the occasions on which the Executive

Government might use a military force to maintain internal security. There is considerable historical support for that view though we do not see that ‘control of the forces’ is only within legislative power when the forces are engaged in maintaining internal security. There can be no doubt, in our view, that the Parliament has power to legislate for the discipline of the Defence Force ‘to maintain the operational efficiency of the Force and to ensure that the standing Force, as an organized entity, is a buttress of, rather than a threat to, internal security’. We do not accept the argument that the relevant aspects of the Act cannot be supported under the first limb of par (vi). The end to be pursued is, in the words of the Constitution, the ‘naval and military defence of the Commonwealth’. Essential to that defence is the discipline of the armed forces. Traditionally, the maintenance of that discipline has been through courts martial. The conferral of jurisdiction on general courts martial is appropriate and adapted to the end stated when prosecution before a court martial can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline. Deane J: The argument of the present case … has served to confirm the conclusions which I expressed in Re Tracey … about the limits of the judicial power which the Parliament can, consistently with Ch III of the Constitution, confer upon service tribunals to deal with offences by members of the armed forces. It has also served to reinforce the reasons which led me to conclude, in Re Nolan … that I should continue to reject what I see as an unjustifiable denial of the applicability of the Constitution’s fundamental and overriding guarantee of judicial independence and due process to laws of the Parliament providing for the trial and punishment of members of the armed forces for ordinary (in the sense of not exclusively disciplinary) offences committed within the jurisdiction of the ordinary courts in times of peace and general civil order. … Gaudron J: Neither of the earlier cases was determined by

reference to a principle or line of reasoning which commanded majority support. They are, thus, of limited authority. Moreover, where fundamental constitutional principle is involved, … the Constitution must prevail over judicial pronouncements on the subject. Even so, I have considered afresh whether Parliament can validly authorize service tribunals, which plainly are not courts of the kind contemplated by Ch III of the Constitution, to hear and determine charges under the Act in relation to acts or omissions which, although called ‘service offences’, are, in essence, the same or substantially the same as criminal offences under the general law. I remain firmly of the view that persons who are subject to military discipline cannot, on that account, be made ‘immune from the operation of the general law … or deprived of [its] protection’. In particular, they cannot, on that account, be deprived of the protection which flows from Ch III of the Constitution. [page 425] McHugh J: The divergent reasoning of the majority judges in Re Tracey and Re Nolan means that neither of those cases has a ratio decidendi. … Although I remain convinced that the reasoning of the majority Justices in Re Nolan and Re Tracey is erroneous, I do not regard that as a sufficient reason to refuse to give effect to the decisions in those cases. … In both Re Tracey and Re Nolan, the Court held that, consistently with Ch III of the Constitution, a person, not appointed in accordance with Ch III, had jurisdiction under the Act to hear and determine charges against a member of the defence forces.

4.5.9 In Re Aird; Ex parte Alpert (2004) 220 CLR 308, the court held that the defence power extended to the punishment of a rape allegedly committed by a defence force member deployed outside Australia while on recreational leave in a third country. Punishment of such an offence maintained service discipline and morale: 220 CLR at 313–14 per Gleeson CJ; 323–4 per McHugh J; 329–30 per Gummow J; 356 per Hayne J. In White v Director of Military Prosecutions (2007) 231 CLR 570, the court declined to overrule Re Tracey; Ex parte Ryan: 231 CLR at 586, 598, 648, 650. The court also rejected an argument that service tribunals could validly only exercise jurisdiction over purely disciplinary offences: 231 CLR at 587–8, 602, 650. In Lane v Morrison (2009) 239 CLR 230, the court held that the Australian Military Court had been invalidly established. The Military Court had been established outside the command structure of the armed forces and was therefore required to comply with Ch III of the Constitution: 239 CLR at 248, 256, 261.

Preparation for war 4.5.10 The range of matters that can be brought within the scope of the defence power expands and contracts according to the degree of apprehension of the danger of external or internal aggression. Legislation may be justified under the defence power at a time of imminent danger of war or disturbed international conditions which would not be justified under ordinary conditions of peace. However, in the following case the High Court held that during peacetime the Commonwealth Parliament could not arrogate to

itself conclusive power to determine the justification for legislation enacted in the interests of defence and internal security. 4.5.11CAustralian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 [The High Court held that the Communist Party Dissolution Act 1950 (Cth) was unsupported by the defence power. McTiernan J summarised the main provisions of the Act:] Section 4 singles out the Australian Communist Party by name. The section applies solely to the Party, declares it to be an unlawful association, breaks up the association of [page 426] persons who form it and provides for the forfeiture … of all its property to the Commonwealth … Sections 5 and 6 are directed against bodies, other than trade unions, which are supposedly allied … to the … Communist Party … These sections authorize the … Commonwealth to take action against any body in these selected categories if it is satisfied that ‘the continued existence of that body of persons would be prejudicial to the security and defence of the Commonwealth or to the execution or maintenance of the Constitution or of the laws of the Commonwealth’. This action has the same effect on the body against which it is taken and its members as s 4 has on the … Communist Party and its members. Sections 9 and 10 authorize the … Commonwealth to disqualify Communists from holding trade union office in certain industrial spheres and all Commonwealth positions. The Government is authorized to take this action against any communist to whom s 9 applies where it is satisfied that he ‘is

engaged or likely to be engaged in activities’, described as ‘prejudicial’ to the above-mentioned interests of the Commonwealth … The recitals in the preamble set forth many activities and operations which, in the opinion of the Parliament, are pursued by the Australian Communist Party … Dixon J: … the Act proceeds against the bodies and persons to be affected, not by forbidding a particular course of conduct or creating particular offences depending on facts so that the connection or want of connection with a subject matter of Federal legislative power may appear from the nature of the provision, but in the case of the Australian Communist Party itself by direct enactment and in the case of affiliated organizations and persons by empowering the Executive to act directly in a parallel manner … … The consequences ensue automatically, the dissolution of the bodies, the forfeiture of their property and the unlawfulness of conduct tending to keep them or their activities alive, the loss of office by the individuals, their disqualification and their incapacity to contract with the Commonwealth for services. … the present power is administrative and not legislative, it is not directed to the conduct of an existing war, and its exercise is not examinable and is not susceptible of testing by reference to the constitutional power above which it cannot validly rise. … when the country is … actually encountering the perils of war measures to safeguard the forms of government from domestic attack and to secure the maintenance and execution of at least some descriptions of law might be sustained under the defence power … … it is not possible to sustain the Act on the ground that sub-ss (2) of s 5 and s 9 are based in terms upon matters falling within the defence power …

The central purpose of the legislative power in respect of defence is the protection of the Commonwealth from external enemies and it necessarily receives its fullest application in time of war. It is a legislative power and therefore affords but the means of establishing all the legal machinery and making all the legal provisions considered necessary and appropriate for the purpose. The responsibility for the practical measures taken in order to protect the country must belong to the Executive. The prosecution of a war is of necessity an executive function and has always been so conceived … A conspicuous purpose of legislation in exercise of the defence power must be to invest the Executive, for the purpose of carrying on a war, with the necessary powers, legislative and administrative. … when the country is heavily engaged in an armed conflict with a powerful and dangerous enemy the defence power will sustain a law conferring upon a minister power to [page 427] order the detention of persons whom he believes to be disaffected or of hostile associations and whom he believes that it is necessary to detain with a view to preventing their acting in any manner prejudicial to the public safety and the defence of the Commonwealth … But what the defence power will enable the Parliament to do at any given time depends upon what the exigencies of the time may be considered to call for or warrant. … Hitherto a marked distinction has been observed between the use of the power in war and in peace … Correspondingly it is no doubt true that a mounting danger of hostilities before any actual outbreak of war will suffice to extend the actual operation of the defence power as circumstances may appear to demand … At the date of the royal assent Australian forces were involved in the hostilities in Korea, but the country was not of

course upon a war footing, and, though the hostilities were treated as involving the country in a contribution of force, the situation bore little relation to one in which the application of the defence power expands because the Executive Government has become responsible for the conduct of a war. I think that the matter must be considered substantially upon the same basis as if a state of peace ostensibly existed. … hitherto it has been supposed that only the supreme emergency of war itself would extend the operation of the power so far as to support a legislative provision which on a subject not by its own nature within the defence power affects the status, property and civil rights of persons nominatim [by name] or by other identification without any external test of liability upon which the connection of the provisions with power will depend … It would … be an error to draw a definite line between a period after the commencement of actual hostilities and the period before they commence. It is inappropriate to the altered character of war and the changes that appear to have taken place in the manner of commencing war. Imminence of war will enlarge the application of the fixed concept of defence. … Where legislation, subordinate or principal, purporting to exercise the defence power has stated the purpose for which it was enacted or adopted, this expression of purpose has received effect. In relation to a power largely directed to purpose its importance is evident. … What is in question is so much of the recitals as concern not the opinions and purposes of the legislature, but the opinions and purposes of the persons against whom the provisions are directed and their past actions. Again, the case is not one where a course of conduct is required or forbidden but only a knowledge of facts outside judicial notice would enable the Court to see how the pursuit of that course of conduct would promote or prejudice, as the case may be, an object within the defence power.

… nothing but an extreme and exceptional extension of the operation or application of the defence power will support provisions upon a matter of its own nature prima facie outside Federal power, containing nothing in themselves disclosing a connection with Federal power and depending upon a recital of facts and opinions concerning the actions, aims and propensities of bodies and persons to be affected in order to make it ancillary to defence. It may be conceded that such an extreme and exceptional extension may result from the necessities of war and, perhaps it may be right to add, of the imminence of war. But the reasons for this are to be found chiefly in the very nature of war and of the responsibility borne by the government charged with the prosecution of a war … A war of any magnitude now imposes upon the Government the necessity of organizing the resources of the nation in men and materials, of controlling the economy of the country, of [page 428] employing the full strength of the nation and co-ordinating its use, of raising, equipping and maintaining forces on a scale formerly unknown and of exercising the ultimate authority in all that the conduct of hostilities implies. … But they are necessities that cannot exist in the same form in a period of ostensible peace. Whatever dangers are experienced in such a period and however well-founded apprehensions of danger may prove, it is difficult to see how they could give rise to the same kind of necessities. The Federal nature of the Constitution is not lost during a perilous war. If it is obscured, the Federal form of government must come into full view when the war ends and is wound up. The factors which give such a wide scope to the

defence power in a desperate conflict are for the most part wanting. McTiernan J: The recitals are not judicial findings and do not bind the judicature on any question within its own exclusive province. The judicature, of course, treats the recitals with respect and regards the views which they express as possible but cannot concede that they are probative of any matter of fact which is material to the question whether the Parliament had or had not the power to pass this Act. The Constitution does not allow the judicature to concede the principle that the Parliament can conclusively ‘recite itself’ into power. … In a period of grave emergency the opinion of Parliament that any person or body of persons is a danger to the safety of the Commonwealth would be sufficient to bring his or their civil liberties under the control of the Commonwealth; but in time of peace or when there is no immediate or present danger of war, the position is otherwise because the Constitution has not specifically given the Parliament power to make laws for the general control of civil liberties and it cannot be regarded as incidental to the purpose of defence to impose such a control in peace time … Parliament … has not declared in the Communist Party Dissolution Act that it was passed for the prosecution of any war present or future, or that there is any immediate or present danger of war. At the time the Act came into force the Commonwealth was not engaged in any hostilities except in Korea. The state of affairs was peace not war. Indeed the constitutional position was that the defence power had declined from the zenith to which it had risen in the crisis of the last war practically to the level proper to it in time of peace. … [T]he Australian Communist Party manifests strong sympathy with the foreign and domestic policy of the government

of the Union of Socialist Soviet Republics. It follows that if war occurred in which that State was the enemy or there was imminent danger of such a war, the Commonwealth could take preventive measures against communists … just as it could against alien enemies resident in this country. But I cannot agree with the view that at the time this Act was passed there was a situation which provided a constitutional foundation for this Act. … [T]he Executive Government is itself the final judge of the … question … of how far it may go in operating these provisions. … it is … constitutionally wrong for Parliament to authorize the Executive to decide finally as to the extent of any legislative subject matter enumerated in s 51 of the Constitution and to bring the Act into operation in such cases as it decides to be within the subject matter. Williams J: The outstanding character of the Act is that … its main provisions ‘prohibits no act, enjoins no duty, creates no offence, imposes no sanction for disobedience to any command, prescribes no standard or rule of conduct’. It operates to dissolve the Australian Communist Party and to forfeit its property to the Commonwealth, and to make other bodies of [page 429] persons who were in the prescribed period or are likely to be tainted with communism, corporate or unincorporate, liable to be dissolved and their property forfeited to the Commonwealth, and to make persons who were in the prescribed period or are communists liable to be deprived of important contractual rights without creating any offence the commission of which will entail such consequences, and indeed without proof that they have committed any offence against any law of the Commonwealth, without a trial in any court, and without such bodies or persons having any right to prove that they have not done anything

prejudicial to the security and defence of the Commonwealth or to the execution or maintenance of the Constitution or of the laws of the Commonwealth … Accordingly the Act is in effect an assertion by Parliament that it can decide for itself or leave it to some authority other than a judicial organ of the Commonwealth to decide that facts exist which are sufficient in law to create a nexus between the particular legislation and such one or more of the constitutional legislative powers of the Commonwealth as are relied upon to support the legislation. … If legislation under [the defence] power is challenged, the Court must be satisfied that the fact or facts exist which bring the legislation within the scope of the power. As the power is one of indefinite extent and expands and contracts according to the dangers to the security of Australia that exist from time to time, the power is peculiarly one with respect to which it is the duty of the Court to be satisfied of such facts. The commencement of hostilities, especially if the conflagration is widespread and in close proximity to Australia, authorizes legislation which would not be justified in times of peace. … In times of peace Parliament can pass all legislation reasonably necessary to prepare for war, and it is clear, I think, that the extent of the power will increase in times of peace where the international situation is such that it can reasonably be apprehended that hostilities, especially hostilities on a large scale, are likely to break out in the near future … It is not the function of the Court to decide what measures are required from time to time … But it is the imperative duty of the Court to examine the character and effect of the law and decide whether it is a law with respect to the naval and military defence of the Commonwealth. During hostilities there are many facts which in the public interest cannot be disclosed, and it is necessary that the Parliament and the Executive charged with the defence of the

nation should be accorded the widest possible latitude of discretion … in peace time the legislation, to be reasonably capable of aiding defence, must be reasonably necessary for the purpose of preparing for war. … [T]he recitals cannot … be more than statement of the reasons why Parliament enacted the law. They indicate to the Court what Parliament believes to be the constitutional basis of the Act. … The defence power in peace time authorizes any legislation which is reasonably necessary to prepare for war, including … any legislation which would be authorized by an expansion of the power in view of the increasing probability of imminent war. Any conduct which is reasonably capable of delaying or of otherwise being prejudicial to the Commonwealth preparing for war would be conduct which could be prevented or prohibited or regulated under the defence power. Amongst such conduct there could be included … most, if not all, of the serious misdoings with which communist bodies … are charged in the recitals. But the legislation would have to define the nature of the conduct and the means adopted to combat it, so that the Court would be in a position to judge whether it was reasonably necessary to [page 430] legislate with respect to such conduct in the interests of defence and whether such means were reasonably appropriate for the purpose. The Communist Party Dissolution Act does none of these things. … The overt acts set out in the recitals alleged to be prejudicial to the security and defence of Australia are that the Australian Communist Party is part of a world communist

revolutionary movement which engages in espionage and sabotage and in activities or operations of a treasonable or subversive nature and promotes strikes and stoppages of work and so retards production in vital industries and by inference interferes with preparing Australia for war. But none of this conduct is prevented or prohibited or made an offence by the operative provisions of the Act. If the Act did this, the Court could consider the conduct prohibited and decide whether it was capable of being so prejudicial and, if it considered that it was, pronounce in favour of the constitutional validity of the Act … legislation to wind up bodies corporate or unincorporate and to dispose of their assets or to deprive individuals of their civil rights or liberties on the mere assertion of Parliament or the Executive that they are conducting themselves in a manner prejudicial to security and defence, is not authorized by the defence power or the incidental power in peace time. Legislation of this nature can only be valid in times of grave crisis during hostilities waged on a large scale, and it must, even then, be limited to such preventive steps as are reasonably necessary to protect the nation during the crisis. … [D]uring the emergency created by a world war the defence power is wide enough to authorize a law empowering Parliament or the Executive to place such a body like an individual in a state of preventive detention, but … the power is not wide enough to authorize a law empowering Parliament or the Executive on its mere ipse dixit [bare assertion] to liquidate an individual or body or forfeit his or its assets to the Crown. Fullagar J: The aims and activities asserted in [the] recitals include the overthrow of established government in Australia by means of force, violence, intimidation and fraudulent practices, espionage and sabotage, and deliberate dislocation, disruption and reduction and retardation of production in industries vital to the security and defence of Australia. That such activities could be the subject of valid Commonwealth laws could, one would think, not be doubted … But the great difficulty of the present

case lies in the fact that the Act in question does not set out to deal with those activities as such. It has an actual direct operation upon a particular association of persons specified by name, and a potential direct operation upon other associations and individuals who become subject to it by virtue of an expression of opinion by the Governor-General. … [T]he power given by s 51(vi) … is given by reference to the purpose or object of the law and not by reference to some concrete subject matter … [T]he power given by s 51(vi) has two aspects … In its first aspect, s 51(vi) authorizes the making of laws which have, as their direct and immediate object, the naval and military defence of the Commonwealth and of the several States. This power is clearly not confined to time of war … It is obvious that such matters as the enlistment (compulsory or voluntary) and training and equipment of men and women in navy, army and air force, the provision of ships and munitions, the manufacture of weapons and the erection of fortifications, fall within this primary aspect of the defence power. These things can be undertaken by the Commonwealth as well in peace as in war, because they are ex facie connected with ‘naval and military defence’. … [T]he defence power in its primary aspect [also] includes … a power to make laws [page 431] for the prevention or prohibition and punishment of activities obstructive of the preparation by such means as I have mentioned of the nation for war — and this whether war appears to be imminent or the international sky to be completely serene. … What I have called the secondary aspect of the defence power has so far only been invoked and expounded in connection with an actual state of war in which Australia has been involved. It has

hitherto … been treated in the cases as coming into existence upon the commencement or immediate apprehension of war and continuing during war and the period necessary for post-war readjustment. In a world of uncertain and rapidly changing international situations it may well be held to arise in some degree upon circumstances which fall short of an immediate apprehension of war. In its secondary aspect the power extends to an infinite variety of matters which could not be regarded in the normal conditions of national life as having any connection with defence. Examples now familiar are the prices of goods and the rationing of goods, rents and the eviction of tenants, the transfer of interests in land, and the conditions of employment in industry generally. … That under the defence power a law may, at least in time of war, be made to operate upon the opinion of a designated person, and that that opinion may supply the only link between the defence power and the legal effect of the opinion is well established. [Turning to the Communist Party Dissolution Act, Fullagar J continued:] It should be observed at this stage that nothing depends on the justice or injustice of the law in question. If the language of an Act of Parliament is clear, its merits and demerits are alike beside the point. It is the law, and that is all. Such a law as the Communist Party Dissolution Act could clearly be passed by the Parliament of the United Kingdom or of any of the Australian States. It is only because the legislative power of the Commonwealth Parliament is limited by an instrument emanating from a superior authority that it arises in the case of the Commonwealth Parliament. If the great case of Marbury v Madison (1803) 1 Cr 137 [2 Law Ed 118] had pronounced a different view, it might perhaps not arise even in the case of the Commonwealth Parliament; and there are those, even today, who

disapprove of the doctrine of Marbury v Madison, and who do not see why the courts, rather than the legislature itself, should have the function of finally deciding whether an Act of a legislature in a Federal system is or is not within power. But in our system the principle of Marbury v Madison is accepted as axiomatic, modified in varying degree in various cases (but never excluded) by the respect which the judicial organ must accord to opinions of the legislative and executive organs. … … it would be contrary to principle to allow even primafacie probative force to recitals of facts upon which the power to make the law in question depends. It is, as I have said, clearly impossible to allow them conclusive force, because to do so would be to say that Parliament could recite itself into a field which was closed to it. But to allow any probative force to such recitals would … be to say the same thing — and not less because the entry into the field might be only provisional … The question whether the Act can be supported as an exercise of the defence power in its secondary aspect must … depend entirely on judicial notice. The coming into existence of this secondary aspect has never been treated as depending on anything else. … It is only when the existence of the secondary aspect has been established by judicial notice of an emergency that evidence has ever been admitted to connect the enactment in question with power. [page 432] … [T]he defence power is … a power concerned with protection against external enemies. If, therefore, a situation is to be found which will justify the Act in question as an exercise of an extended defence power, it must be an international situation. … I am not prepared to hold that nothing short of war or an

immediate threat of war can bring into play a fully extended defence power. Each situation which arises must be examined as and when it arises. … But I have come to the conclusion that … one cannot judicially notice in this case a state of affairs which would justify holding … the Communist Party Dissolution Act valid as an exercise of an extended defence power. Kitto J: … while it is certain that the necessity or desirability of the measure, if it be within power, is a matter with which the courts have no concern, it is equally certain that the question whether the legal operation of the measure has such a capability of aiding defence as gives it that character which alone will sustain it as an exercise of the defence power is a matter which no judgment of the Parliament can conclusively decide. It is inherent in the system of government which the Constitution establishes that the Court must make its own decision on that point. … [I]n time of peace, when there is no special reason to apprehend a war, the class of laws which can be seen to possess a defence character is much more limited than it is when a danger of hostilities arises; it becomes wider still when war breaks out; it reaches its maximum amplitude when a war is raging which is of so serious a character as to call for the devotion to its prosecution of the entire resources and activities of the nation; it fluctuates according to ‘the nature and dimensions of the conflict … the actual and apprehended dangers, exigencies and course of the war, and … matters that are incident thereto’ …; it contracts again when hostilities cease, but even then remains sufficient to include laws to wind up after the war and to restore conditions of peace … The Court can take judicial notice of the fact that in October 1950 international tension had reached a point of real danger to Australia. The possibility of a war breaking out in the near future was by no means to be overlooked. In that situation

the defence power, at least, had a wider application than it has at times when no danger of war appears; but, even so, it was not possible to see, in the light only of that situation, a relation between any of the powers referred to and a law dissolving a specified association and confiscating its property.

4.5.12 The significance of the decision in Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 case extends well beyond the defence power in s 51(vi). In rejecting the Commonwealth’s argument that the Communist Party Dissolution Act 1950 (Cth) was a law with respect to defence, the majority justices affirmed that, under our constitutional arrangements, it is for the judicial branch to determine whether legislative or executive action conforms to the Constitution. As McTiernan J expressed the point: ‘The Constitution does not allow the judicature to concede the principle that the Parliament can conclusively “recite itself” into power’: 83 CLR at 205–6. Thus, parliament could not, by reciting its opinion that the activities of the Communist Party of Australia posed a threat to Australia’s defence interests, bring a law dissolving that organisation by name within the reach of s 51(vi). 4.5.13 That the ‘principle in the Communist Party case’ is a general principle of constitutional law is underscored by a passage from the judgment of Fullagar J in which he used the [page 433] Commonwealth’s power with respect to ‘lighthouses’ in s 51(vii) to

illustrate the operation of the principle. He said (83 CLR at 258): The validity of a law or of an administrative act done under a law cannot be made to depend on the opinion of the law-maker, or the person who is to do the act, that the law or the consequence of the act is within the constitutional power upon which the law in question itself depends for its validity. A power to make laws with respect to lighthouses does not authorize the making of a law with respect to anything which is, in the opinion of the law-maker, a lighthouse. A power to make a proclamation carrying legal consequences with respect to a lighthouse is one thing: a power to make a similar proclamation with respect to anything which in the opinion of the Governor-General is a lighthouse is another thing.

As Fullagar J indicated later in his judgment, this principle flows from the circumstance that under the Constitution, judicial review of the validity of legislation (‘the doctrine of Marbury v Madison’) ‘is accepted as axiomatic’: 83 CLR at 262. The deeper legal and social value thereby protected is the rule of law: 83 CLR at 193 per Dixon J. 4.5.14 Despite the fundamental importance of the principle in the Communist Party case, several justices in Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 accepted that, during an actual defence emergency, the scope of s 51(vi) may expand, in what Fullagar J termed its ‘secondary aspect’ (83 CLR at 254), to support certain laws in which ‘the opinion of a designated person’, such as a minister of state, ‘suppl[ies] the only link between the defence power and the legal effect of the opinion’: 83 CLR at 258 per Fullagar J. This is sometimes called the ‘Lloyd v Wallach exception’ (see Winterton, 2003, p 129), after a World War I case: Lloyd v Wallach (1915) 20 CLR 299. On the facts of the Communist Party case, however, the justices found that the

defence threat facing Australia at the time of assent to the Communist Party Dissolution Act (20 October 1950) was not sufficient to support the Act on this exceptional footing: 83 CLR at 195–9 per Dixon J; 206–8 per McTiernan J; 227–30 per Williams J; 267–8 per Fullagar J (and see also at 282–3 per Kitto J). See generally Winterton, 2003, pp 128–9, 131–2. 4.5.15 Statements in Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1 that s 51(vi) is concerned with external threats to Australia (see, for example, 83 CLR at 268 per Fullagar J) must now be read in light of the decision in Thomas v Mowbray (2007) 233 CLR 307 4.5.4C.

The power during wartime 4.5.16 Although the general test of validity under s 51(vi) remains the same in war as in peace, the courts are more ready to uphold defence legislation in time of war. In wartime it is easier to see a real connection between defence and laws which regulate ordinary civil activity. For example, the High Court held that during wartime the defence power authorised the Commonwealth to take over state taxation offices and personnel: South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373 5.3.4C at 436–8 per Rich J; 458–9 per McTiernan J; 468–71 per Williams J. Price controls were upheld as they combatted profiteering and inflation: Victorian Chamber of Manufactures v Commonwealth (Prices Regulations case) (1943) 67 [page 434]

CLR 335 at 339–40 per Latham CJ (with whom McTiernan J agreed); 342 per Rich J; 344 per Starke J; 345 per Williams J. Rent controls were accepted as within s 51(vi) as the control of housing was related to the conduct of the war: Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1 at 17 per Latham CJ (with whom Rich and McTiernan JJ agreed); 20–1 per Starke J (with whom Williams J substantially agreed). However, despite the breadth of the wartime defence power, in the following case the High Court held that while the subject of the challenged regulation (subversion) had a clear connection with defence, part of the regulation went far beyond the requirements of defence. 4.5.17C Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 110 [The National Security (Subversive Associations) Regulations 1940 were challenged as beyond the defence power. Regulation 3 provided: ‘Any body … the existence of which the Governor-General, … declares to be in his opinion, prejudicial to the defence of the Commonwealth or the efficient prosecution of the war, is hereby declared to be unlawful.’ Regulation 4 provided for the dissolution of declared bodies. Regulation 6A provided: ‘Any … premises … which was occupied by a [declared] body … may, if a Minister by order so directs, be occupied … so long as there is in the … premises … any property which … belonged to … the body …’. In his judgment, Latham CJ summarised the operation of other parts of the regulations (67 CLR at 143): Reg 7 prohibits the printing and the publication of matter advocating any unlawful doctrines. Reg 8 prohibits meetings for the purpose of advocating unlawful doctrines. Reg 9 prohibits

appeals for funds for the furtherance of unlawful doctrines. Reg 11 enables a Minister to prohibit the holding of meetings at which a Minister is satisfied it is likely that unlawful doctrines will be advocated. … [Reg 2 provides]: ‘“unlawful doctrines” includes any doctrines or principles which were advocated by a body which has been declared to be unlawful …’. An Order in Council declared that the Adelaide Company of Jehovah’s Witnesses was unlawful and the Commonwealth took possession of their premises.] Latham CJ: In pursuance of [the defence and executive powers] … the Commonwealth can defend the people, not only against external aggression, but also against internal attack, and in doing so can prevent aid being given to external enemies by internal agencies. No organized State can continue to exist without a law directed against treason. There are, however, subversive activities which fall short of treason … but which may be equally fatal to the safety of the people. These activities, whether by way of espionage, or of what is now called fifth column work, may assume various forms. Examples are to be found in obstruction to recruiting, certainly in war-time, and, in my opinion, also in time of peace. Such obstruction may be both punished and prevented. So also propaganda tending to induce members of the armed forces to refuse duty may not only be subjected to control, but may be suppressed. … [Speaking of reg 4, Latham CJ said:] [page 435] … [T]he power of the Commonwealth to protect the community against what are now called fifth-column activities,

that is, internal activities directed towards the destruction of the people of the Commonwealth, is not so weak as to be limited to legislation for the punishment of offences after they have been committed. Parliament may … under the defence power, seek to prevent such offences happening by preventing the creation of subversive associations or ordering their dissolution. … The Regulations depend upon the possibility that the existence of some associations may be prejudicial to the defence of the Commonwealth or the efficient prosecution of the war. If there are such associations it is … within the defence power … to take steps to suppress them and to terminate their existence. [Having found that reg 4 was supported by the defence power, Latham CJ turned to reg 6A, which he said ‘purports to authorize the occupation of certain real property on behalf of the Commonwealth for a particular period’: 67 CLR at 141. Latham CJ continued:] … I can see no objection to the validity of a regulation providing for the occupation by Commonwealth authorities of premises occupied by an unlawful body for the purpose of preventing the use of such premises by that body. But under the regulation the premises may be occupied so long as there is in the premises any property which a Minister is satisfied belonged to … the body, if that property was in the premises immediately prior to the body being declared to be unlawful. As long as a table or chair belonging to an unlawful body remained in a building, the occupation of the building would be lawful under the regulation. The regulation, therefore, does not depend for its operation upon any connection between the premises and the continued use or continued risk of use of the premises by the unlawful body … [T]he occupation authorized by the regulation has no relation to actual or probable unlawful user of the premises. Accordingly in my opinion reg 6A is not authorized by the defence power … [Latham CJ then considered regs 7–9 and 11:]

… [U]nder the defence power the Commonwealth Parliament may legislate to prevent propaganda of any kind prejudicial to the defence of the Commonwealth or the efficient prosecution of the war. … But the definition of ‘unlawful doctrines’ includes within that term any doctrine or principle which was advocated by a declared body. Thus, if a declared body advocated observance of the Ten Commandments, or annual elections to the Commonwealth Parliament, or improvements in the education system, all these matters would fall within the definition of unlawful doctrines. It is … clear that the defence power does not authorize the Commonwealth Parliament to prohibit the advocacy of such doctrines or principles simply because it happens that they have been advocated by a declared body. … [T]he regulations, so far as they depend upon this part of the definition of unlawful doctrines, should be held to be invalid. [McTiernan J agreed with Latham CJ: 67 CLR at 156–7.] Starke J: … [N]o regulation made by a subordinate authority … can be within power if arbitrary or capricious. In other words, if the regulation involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men, the court might well say: ‘Parliament never intended to give authority to make such rules.’ A regulation of that character would not be a law or a regulation ‘with respect to defence’ … … It would be more than an abuse or misuse of power: it would be beyond power. … [page 436] In themselves the Regulations are arbitrary, capricious and oppressive. Bodies corporate and unincorporate are put out of

existence and divested of their rights and their property on the mere declaration of the Executive Government. The operative clauses of the Regulations, such as the provision relating to bank credits, forfeitures and unlawful doctrines have little, if any, real connection with the defence of the Commonwealth or the efficient prosecution of the war. Accordingly, in my judgment, the Regulations are beyond the power conferred upon the GovernorGeneral in Council by the National Security Act 1939–1940, and, even if enacted by the Parliament itself, they would, I venture to think, transcend the powers conferred upon the Parliament by the Constitution. Williams J: A state of war … does not continue indefinitely. Because war promotes abnormal conditions, abnormal means are required to cope with them, and this justifies the Parliament of the Commonwealth under the defence power enacting many laws in times of war which would be beyond its scope in times of peace. … A state of war … justifies legislation by the Commonwealth Parliament, in the exercise of the defence power, which makes many inroads on personal freedom, and which places many restrictions on the use of property of an abnormal and temporary nature which would not be legitimate in times of peace. A law that called up the whole of the civil population between the ages of eighteen and sixty for continuous military service during the whole of these years in times of peace would be so fantastic that it could not be said to be a real exercise of the defence power. The substance and purpose of such a law would be to organize the Commonwealth as a military state and not to take the necessary steps to prepare for war; but it would be a valid exercise of the power to call up all or any citizens between these ages for continuous military service for the indefinite period of the war. … The definition [of unlawful doctrines] is … wide enough to include perfectly innocent principles and doctrines advocated by

a body which has been declared to be unlawful. As the religion of Jehovah’s Witnesses is a Christian religion, the declaration that the association is an unlawful body has the effect of making the advocacy of the principles and doctrines of the Christian religion unlawful and every church service held by believers in the birth of Christ an unlawful assembly. … [S]uch a law could not possibly be justified by the exigencies and course of the war. … … the Commonwealth is justified under the defence power in times of war in taking possession of and controlling during the war the property of organizations whose activities are prejudicial to the defence of the Commonwealth or the prosecution of the war, in confiscating any literature which is being used to promote subversive doctrines, and in preventing such bodies from holding meetings; but the vice of these regulations is that the consequences to a body, to those interested in the property of a body as shareholders and creditors, and to third persons which flow from the declarations are so drastic and permanent in their nature that they exceed anything which could conceivably be required in order to aid, even incidentally, in the defence of the Commonwealth. … [R]egs 3 to 8 are an invalid exercise of the defence power. [Rich J agreed with Williams J in relation to the defence power: 67 CLR at 150.]

4.5.18 The High Court has also considered the validity of various measures enacted during the post-war period. Under the defence power the Commonwealth may legislate for the orderly transition from hostilities to peace. Most recently, in Polyukhovich v Commonwealth

[page 437] (1991) 172 CLR 501 (see 4.3.10) Brennan J held that a law enacted in 1988 criminalising war crimes occurring in Europe during World War II was not a valid law with respect to defence. Given the distance in time from the events in question, the Act was unlikely to have a ‘deterrent effect’ against future murderous conduct: 172 CLR at 592. Brennan J also considered that laws enacted under the defence power during peacetime must pass a test of ‘reasonable proportionality’: 172 CLR at 592. The retroactive criminality and selective scope of the challenged Act meant that it lacked proportionality: 172 CLR at 593. Toohey J agreed with Brennan J on this aspect of the case: 172 CLR at 684. Gaudron J said that the defence power could not support the prosecution of conduct committed during a war that ended 45 years ago: 172 CLR at 697. The other judges did not need to consider this issue: 172 CLR at 531 per Mason CJ; 599 per Deane J.

Chapter references Articles and book chapters Bennett, ‘The 1967 Referendum’ (1985) 2 Australian Aboriginal Studies 30 Crommelin, ‘Comment on the External Affairs Power’ (1984) 14 Federal Law Review 208 Detmold, ‘Original Intentions and the Race Power’ (1997) 8 Public Law Review 244 French, ‘The Race Power: A Constitutional Chimera’ in H P Lee and George Winterton (eds), Australian Constitutional Landmarks, Cambridge University Press, Cambridge, 2003 French, ‘Native Title — A Constitutional Shift?’ in H P Lee and Peter Gerangelos (eds), Constitutional Advancement in a Frozen Continent: Essays in Honour of George Winterton, The Federation Press, Sydney, 2009 Hanks, ‘Aborigines and Government’ in Hanks and KeonCohen (eds), Aborigines and the Law, Allen & Unwin, Sydney, 1984 Lindell, ‘Judicial Review of International Affairs’ in B Opeskin and D Rothwell (eds), International Law and Australian Federalism, Melbourne University Press, Melbourne, 1997 Lindell, ‘The Races Power Problem: Other Observations’ (1998) 9 Public Law Review 272 Lino and Davis, ‘Speaking Ill of the Dead: A Comment on

s 25 of the Constitution’ (2012) 23 Public Law Review 231 Reilly, ‘Reading the Race Power: A Hermeneutic Analysis’ (1999) 23 Melbourne University Law Review 476 Sawer, ‘The Australian Constitution and the Australian Aborigine’ (1966) 2 Federal Law Review 17 Stubbs, ‘Refining the Model for Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples’ (2015) 26 Public Law Review 150 Twomey, ‘An Obituary for s 25 of the Constitution’ (2012) 23 Public Law Review 125 [page 438] Wheeler, ‘Commonwealth Power over Infrastructure: Constitutional Tools for National Economic Regulation’ (2007) 2 Public Policy 195 Williams, ‘Race, Citizenship and the Formation of the Australian Constitution: Andrew Inglis Clark and the “14th Amendment”’ (1996) 42 Australian Journal of Politics and History 10 Williams and Bradsen, ‘The Perils of Inclusion: The Constitution and the Race Power’ (1997) 19 Adelaide Law Review 95 Zines, ‘The High Court and the Constitution in 2006’ (2007) 30 University of New South Wales Law Journal 174 Winterton, ‘The Communist Party Case’ in H P Lee and G

Winterton (eds), Australian Constitutional Landmarks, Cambridge University Press, Cambridge, 2003 Books and texts Attwood and Markus, The 1967 Referendum, or When Aborigines Didn’t Get the Vote, Aboriginal Studies Press, Canberra, 1997 Bandler, Turning the Tide, Aboriginal Studies Press, Canberra, 1989 Joseph and Castan, Federal Constitutional Law: A Contemporary View, 4th ed, Lawbook Co, Sydney, 2014 Rees, Rice and Allen, Australian Anti-Discrimination Law, 2nd ed, The Federation Press, Sydney, 2014 Rothwell, Kaye, Akhtarkhavari and Davis, International Law: Cases and Materials with Australian Perspectives, 2nd ed, Cambridge University Press, Melbourne, 2014 Stellios, Zines’s The High Court and the Constitution, 6th ed, The Federation Press, Sydney, 2015 Reports Council for Aboriginal Reconciliation, Reconciliation: Australia’s Challenge — Final Report (2000),

Expert Panel on Constitutional Recognition of Indigenous Australians, Recognising Aboriginal and Torres Strait Islander Peoples in the Constitution: Report of the Expert Panel (2012) Joint Select Committee on Constitutional Recognition of Aboriginal and Torres Strait Islander Peoples, Final Report (2015)

Senate Legal and Constitutional References Committee, Trick or Treaty? Commonwealth Power to Make and Implement Treaties (1995)

[page 439]

Commonwealth Financial Powers

CHAPTER 5

TAXATION POWER 5.1.1 The power to impose taxation is of vital importance for any government, both as a means (obviously) to generate revenue and (perhaps less obviously) to affect behaviour. As Zines observed: ‘Throughout history, taxation has been used to influence human conduct as well as to raise revenue’: Stellios, 2015, p 46. The Commonwealth Constitution in s 51(ii) gives the Commonwealth Parliament power to impose taxation. However, the Commonwealth may not, when it legislates with respect to taxation, ‘discriminate between States or parts of States’ (s 51(ii)); nor may it give preference to particular states or parts of states in any revenue law: s 99 (see Chapter 6). A number of other provisions of the Constitution deal with aspects of taxation in our federal system. For example, s 114 prohibits the Commonwealth from taxing property belonging to a state; it also prohibits a state from taxing Commonwealth property without the Commonwealth’s consent. More importantly, in terms

of the impact on the tax-base available to the states, under s 90 of the Constitution the states are denied the power to levy common forms of taxes on goods known as customs and excise duties. 5.1.2 Except where the Constitution specifically excludes the states from an area of taxation (such as in s 90), the states retain concurrent taxing powers with the Commonwealth. Prior to World War II, for example, both the Commonwealth and the states imposed income taxes. The states only ceased to impose their own income tax during World War II under intense political and economic pressure from the Commonwealth to do so: see South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373 5.3.4C; Victoria v Commonwealth (Second Uniform Tax case) (1957) 99 CLR 575 5.3.9C. While there is no formal constitutional barrier to a state re-imposing its own tax on income, no state has chosen to do so. See generally Saunders, 2003. 5.1.3 It is a fundamental principle of public law, inherited by Australia from the United Kingdom, that taxation may only be imposed by parliament, as opposed to being exacted by executive decree. (For historical background to this principle, culminating in its inclusion in the Bill of Rights 1689 s 4, see 1.5.6–1.5.7E). As French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ recognised in Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation [page 440] (2011) 244 CLR 97 5.1.18C at 104: ‘[T]he executive power does

not extend to the levying of taxation’ which instead ‘requires the exercise of legislative power’. What then is the scope of the Commonwealth Parliament’s power over taxation? 5.1.4E

Commonwealth Constitution

51 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: … (ii) taxation; but so as not to discriminate between States or parts of States; …

The general definition of a tax 5.1.5 Many of the cases in which the definition of a tax has been explored are cases involving s 90 of the Constitution. The central issue in these cases was whether an exaction imposed by a state was a tax upon goods and thus an excise duty. As s 90 operates to render part of the taxation power in s 51(ii) exclusive to the Commonwealth, a first step in determining whether a state has levied an excise duty contrary to s 90 is to determine whether a tax has been imposed. What is regarded as the classic definition of a tax was given in one such case, Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263, where Latham CJ said (60 CLR at 276): … a tax … is a compulsory exaction of money by a public authority for

public purposes, enforceable by law, and is not a payment for services rendered …

As the decision in Air Caledonie International v Commonwealth (1988) 165 CLR 462 shows, several elements may be added to, and potentially subtracted from, this definition. For example, the exaction must not lie within the class of exactions not properly characterised as a tax (including fees for services rendered, charges for the acquisition of property, and fines and penalties). The court has also required that the exaction not be arbitrary. 5.1.6C Air Caledonie International v Commonwealth (1988) 165 CLR 462 [The Commonwealth introduced, by amendment to the Migration Act 1958 (Cth), a ‘fee for immigration clearance’ for persons arriving in Australia by air from overseas. The fee was to be collected and paid to the Commonwealth by the airlines. A number of airlines commenced proceedings in the High Court arguing that the ‘fee’ was invalid.] Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ: Section 7 of the Migration Amendment Act 1987 (Cth) purported, as from 1 January 1988, to impose a liability to pay what was described as a ‘fee for immigration clearance’ in respect of international airline passengers entering Australia. It did this by adding s 34A to the Migration Act 1958 (Cth). … s 34A was in the following terms: (1) Where a passenger … travels to Australia on an overseas flight, the passenger shall pay the prescribed fee for immigration clearance of that passenger by an officer at the airport at which the passenger intends to enter Australia.

[page 441] (2) The fee shall be collected by the international air operator operating the flight. (3) The international air operator shall pay to the Commonwealth the amount of the fee payable by a passenger, whether or not the operator has collected that amount from the passenger. (4) An amount payable to the Commonwealth by an international air operator under subsection (3) is a debt due to the Commonwealth and may be recovered in a court of competent jurisdiction. … (6) In this section: … ‘passenger’ means a person (whether an Australian citizen or not) who travels to Australia as a passenger on an aircraft operated by an international air operator. By reg 30A, which was inserted in the Migration Regulations on 21 December 1987, it was provided, for the purposes of s 34A(1), that the ‘prescribed fee’ was five dollars … There is a degree of obscurity about some aspects of the legislative scheme which was embodied in s 34A. … The overall purport of that legislative scheme was, however, clear enough. An obligation to pay a ‘fee for immigration clearance’ in whatever amount might be prescribed by regulation was imposed on airline passengers arriving from overseas … The fee was to be collected … by the relevant ‘international airline operator’ which was made liable to pay the amount of the fee to the Commonwealth regardless of whether the fee had been or could be actually collected from the passenger. The amount was recoverable from the operator as ‘a debt due to the Commonwealth’. Apart from describing the fee as ‘the prescribed fee for immigration clearance of that passenger by an officer at the airport at which

the passenger intends to enter Australia’ (s 34A(1)), the Parliament did not indicate the criteria by reference to which the Executive was to fix the amount of the fee. [The court referred to the plaintiffs’ argument that the ‘fee’ was in reality a tax that was invalid due to the first paragraph of s 55 of the Constitution. Their Honours continued:] In answer to that submission, the Commonwealth argued that the immigration clearance fee was not ‘taxation’ for the purposes of s 55; it was, so it was said, a ‘fee for services’. … [Thus] it is appropriate to turn initially to the question whether the exaction of the immigration clearance fee would, for relevant purposes, be taxation. … In Matthews v Chicory Marketing Board (Vict) (1938) 60 CLR 263 at p 276, Latham CJ adopted … what has subsequently been recognized in this Court as an acceptable general statement of positive and negative attributes which, if they all be present, will suffice to stamp an exaction of money with the character of a tax: ‘a compulsory exaction of money by a public authority for public purposes, enforceable by law, and … not a payment for services rendered’ … More recently this Court has drawn attention to other criteria, namely, that a tax is not by way of penalty and that it is not arbitrary (see MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at p 639; Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 at p 684). There are three comments which should be made in relation to the above general statement of Latham CJ. The first is that it should not be seen as providing an exhaustive definition of a tax. Thus, there is no reason in principle why a tax should not take a form other than the exaction of money or why the compulsory exaction of money under statutory powers could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as

public. The second is that … implicit in the reference by Latham CJ to ‘a payment for services rendered’ … [is] that the [page 442] services be ‘rendered to’ — or (we would add) at the direction or request of — ‘the person required’ to make the payment. The third is that the negative attribute — ‘not a payment for services rendered’ — should be seen as intended to be but an example of various special types of exaction which may not be taxes even though the positive attributes mentioned by Latham CJ are all present. Thus, a charge for the acquisition or use of property, a fee for a privilege and a fine or penalty imposed for criminal conduct or breach of statutory obligation are other examples of special types of exactions of money which are unlikely to be properly characterized as a tax notwithstanding that they exhibit those positive attributes. On the other hand, a compulsory and enforceable exaction of money by a public authority for public purposes will not necessarily be precluded from being properly seen as a tax merely because it is described as a ‘fee for services’. If the person required to pay the exaction is given no choice about whether or not he acquires the services and the amount of the exaction has no discernible relationship with the value of what is acquired, the circumstances may be such that the exaction is, at least to the extent that it exceeds that value, properly to be seen as a tax. [The court proceeded to summarise the effect of ss 53, 54 and 55 of the Constitution:] Section 53 of the Constitution imposes limitations upon the powers of the Senate in relation to proposed laws ‘appropriating revenue or moneys’ or ‘imposing taxation’: such proposed laws may not originate in or be amended by the Senate. The section does not define what constitutes, for its purposes, a

law ‘appropriating revenue or moneys’ or a law ‘imposing taxation’. It does, however, provide 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. … Section 54 of the Constitution provides: The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation. The first paragraph of s 55 provides: Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Sections 53, 54 and 55 of the Constitution must be read together. When the sections are so read, it is apparent that references in ss 53 and 55 to a law or laws ‘imposing taxation’ must be given a constant meaning. That being so, the provision in s 53 that ‘a proposed law shall not be taken … to impose taxation, by reason only of its containing provisions … for the demand or payment … of … fees for services under the … law’ must be treated as indirectly applicable to confine the content of the references to ‘[l]aws imposing taxation’ and the ‘imposition of taxation’ in the first paragraph of s 55. [Their Honours returned to the question of whether the ‘fee’ was a tax:]

[page 443] It is clear that the ‘fee’ purportedly exacted by s 34A possessed all of the positive attributes which have been accepted in this Court as prima facie sufficient to stamp an exaction of money with the character of a tax: it was compulsory; it was exacted by a public authority (the Commonwealth itself) for public purposes (consolidated revenue: see Constitution, s 81); it (or its ‘amount’) was enforceable by law. It is therefore necessary to consider whether there was something special about the fee (eg a ‘fee for services’) or the circumstances in which it was purportedly exacted (eg as a penalty for an offence) which, notwithstanding the presence of those positive attributes, might preclude its characterization as ‘taxation’. If the fee had been exacted only in those cases where the arriving passenger was not an Australian citizen, it would have been arguable that, regardless of whether it was a ‘fee for services’, it was not a tax. In that event … there might have been some force in an argument to the effect that it was to be seen as a charge imposed upon the passenger for the privilege of entering Australia or as a licence fee and that the requirement that the airline operator collect the fee … could not convert it into a tax. However, as has been seen, the fee was payable by, and in respect of, both citizens and non-citizens arriving on an international airline flight. … The right of the Australian citizen to enter the country is not qualified by any law imposing a need to obtain a licence or ‘clearance’ from the Executive. In the case of such a returning citizen, the impost could not be regarded as a charge for the privilege of entry. … Accordingly, the question whether the provisions of s 34A are properly to be characterized as a law ‘imposing taxation’ must be answered on the basis that they applied indifferently with respect to returning citizens and visiting non-citizens. That being so, s 34A was a law ‘imposing taxation’ if the fee which it purported to exact from, or with

respect to, returning citizens was, for relevant purposes, properly to be characterized as a tax. The only basis upon which it has been suggested that the fee which the section purported to impose for ‘the clearance of’ a returning citizen was not taxation was that it represented a fee ‘for services’. In one sense, all taxes exacted by a national government and paid into national revenue can be described as ‘fees for services’. They are the fees which the resident or visitor is required to pay as the quid pro quo for the totality of benefits and services which he receives from governmental sources. It is, however, clear that the phrase ‘fees for services’ in s 53 of the Constitution cannot be read in that general impersonal sense. Read in context, the reference to ‘fees for services’ in s 53 should, like the reference to ‘payment for services rendered’ in the above-quoted extract from the judgment of Latham CJ in Matthews v Chicory Marketing Board (1938) 60 CLR 263 at p 276, be read as referring to a fee or charge exacted for particular identified services provided or rendered individually to, or at the request or direction of, the particular person required to make the payment. At least in a case of the ordinary Australian citizen returning by air from overseas, the description of the purported impost … as a ‘fee for immigration clearance of that passenger’ did not suffice to make the impost a ‘fee for services’ in any relevant sense. As has been said, such a citizen had, under the law, the right to reenter the country, without need of any Executive fiat or ‘clearance’, for so long as he retained his citizenship. The subjection of such a citizen to administrative procedures at the point of entry … may be necessary, in the public interest, to enable the entry of non-citizens to be … controlled and to enable proper administrative records and procedures to be kept or followed in relation to the arrival and departure of citizens and non-citizens alike. A requirement that a returning citizen submit, in the public interest, to the inconvenience of such administrative procedures at the end of a journey cannot, however, properly be seen as the provision or rendering of ‘services’ to, or at the

request or direction of, the citizen concerned. Nor is it possible to find in s 34A … any identification of particular services provided or rendered to the individual passenger for which [page 444] the impost could relevantly be regarded as a fee or quid pro quo. As has been seen, the section neither fixed the amount of the fee nor indicated the considerations to which the Executive was required to pay regard in prescribing it. … Therefore, the fee which s 34A purported to exact was, at least in so far as it related to passengers who were Australian citizens, a tax and the provisions of the section were, for relevant purposes, a law ‘imposing taxation’. We turn to consider the effect on the validity of the amending Act of that conclusion. The first paragraph of s 55 of the Constitution contains two distinct limbs. The first limb consists of the mandatory injunction that laws imposing taxation deal only with the imposition of taxation. The second limb is the specification of the consequences of breach of the first limb, namely, that any provision in such laws dealing with any matter other than the imposition of taxation shall be of no effect. In a case where a law, as enacted, purports both to impose taxation and to deal with other matters, the application of the two limbs of the paragraph to confine validity to so much of the law as deals with the imposition of taxation will ordinarily be straightforward. The position is, however, more complicated in a case such as the present where the impugned law is a provision imposing taxation which an amending Act seeks to insert in an existing Act which deals only with matters other than the imposition of taxation and the validity of which is not in issue. An obvious purpose of the constitutional requirement that a law imposing taxation deal only with the imposition of taxation was to confine the impact of the limitations upon the Senate’s powers

with respect to proposed taxing laws to provisions actually dealing with the imposition of taxation, that is to say, to prevent ‘tacking’. That being so, there is something to be said for the view that, in a case where an amending Act inserts a taxing provision in an existing Act, all that s 55 requires is that the amending Act itself deal only with the imposition of taxation. On balance, however, it seems to us that the requirement of s 55 should be construed as extending to laws in the form in which they stand from time to time after enactment, that is to say, as extending to Acts of the Parliament on the statute book. That construction gives full effect to the ordinary meaning of the words of the section. It is also supported both by the contrast between the reference to ‘laws’ in s 55 and the references to ‘proposed laws’ and a ‘proposed law’ in ss 53 and 54 and by considerations relating to the nature of an amending Act which is ordinarily to be construed as part of the principal Act … and is commonly treated as ‘exhausted’ upon commencement … On that construction, s 55 requires that both an amending Act imposing taxation and the amended principal Act deal only with the imposition of taxation. If an amending Act purports to insert a provision imposing taxation in an existing valid Act which contains provisions dealing only with other matters, it seeks to bring about something which the Constitution directly and in terms forbids and which is not within the competence of the Parliament to achieve … In such a case, one cannot disregard the barrier of the constitutional injunction against a law dealing both with the imposition of taxation and other matters on the basis that, once the result which that injunction forbids has been achieved, the second limb will rectify the breach by invalidating all the other provisions of the principal Act. The injunction of the first limb constitutes a restriction on legislative power. Its effect in the present case is to invalidate the relevant provisions of the amending Act and one never reaches the situation where the second limb operates to strike down all of the provisions of the principal Act dealing with matters other than the imposition of taxation.

It follows that the effect of the conclusion that s 34A was a law imposing taxation is that s 7 of the Migration Amendment Act 1987 was ineffective to amend the Migration Act by adding s 34A to its provisions. … [I]t should be declared that s 34A was invalid.

[page 445] 5.1.7 The unanimous decision of the court in Air Caledonie International v Commonwealth has significance for at least three aspects of the Commonwealth’s legislative power with respect to ‘taxation’. First, the judgment endorsed Latham CJ’s definition in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276 ‘as an acceptable general statement of positive and negative attributes which, if they all be present, will suffice to stamp an exaction of money with the character of a tax’: 165 CLR at 466–7. Yet, at the same time, their Honours signalled that Latham CJ’s statement may not exhaustively describe a tax, and that, for example, a statutory exaction ‘by a non-public authority or for purposes which could not properly be described as public’ may, in certain circumstances, qualify as taxation: 165 CLR at 467. This idea was developed in Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 5.1.11C, albeit not without disagreement within the court. Second, in the course of rejecting the Commonwealth’s argument that the ‘fee for immigration clearance’ was a fee for services, the court made several statements about what distinguishes such a fee from a tax: notably, that there be a genuine service specifically provided to, ‘or at the request or direction of’,

the payer (here, returning citizens received no such service) and that there be a relationship between the amount paid and the nature of the service, so that one can be seen as the ‘quid pro quo’ of the other (again, a requirement that was absent as regards the payment made by returning citizens): 165 CLR at 470. Third, the outcome — that the fee was in fact a tax and that the form in which the tax had been enacted contravened s 55 of the Constitution resulting in invalidity — highlights the need for the Commonwealth to ensure that its taxation legislation is structured in a way that meets s 55’s requirements. As the High Court explained in Air Caledonie, the first part of s 55 safeguards against the House of Representatives ‘tacking’ extraneous material onto laws imposing taxation and, in this way, abusing the inability of the Senate, under s 53 of the Constitution, to amend bills that impose taxation: 165 CLR at 471. The general effect of s 55 is discussed in greater detail at 5.1.31E–5.1.37. The court’s specific finding in Air Caledonie that s 34A (a provision contained in an amending Act) was invalid for seeking to introduce a tax into the Migration Act 1958 (Cth) (an Act that, in isolation, complied with s 55) established a new category of operation for s 55: see also Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 5.1.11C. Given the rationale behind s 55, is the court’s decision in Air Caledonie a surprising one?

A compulsory exaction or charge 5.1.8 A critical element of a tax is compulsion. Usually, the requirement to pay is the result of a specific command in the relevant statute as in Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 468 5.1.6C. However, compulsion is not

sufficient of itself to mark a fee as a tax. Compulsory fees are common in statutory licensing schemes, for example, yet those fees are not necessarily classified as taxes. 5.1.9 An exaction may be regarded as compulsory even if the statutory scheme offers an alternative to payment — if the alternative to payment is a burden which the taxpayer would naturally seek to avoid. This realistic approach to the requirement of compulsion was taken by the court in Attorney-General (NSW) v Homebush Flour Mills Ltd (1937) 56 CLR 390. There, the Flour Acquisition Act 1931 (NSW) established a compulsory acquisition scheme under which the state expropriated flour from millers, who were then given compensation at a set price and an option to repurchase their flour from the state at a higher price. A miller was [page 446] taken to have exercised their option to re-purchase if they sold the flour to a third party. If a miller did not re-purchase, they were required to store the flour until it was sold by the state. The scheme operated in such a way that millers had no practical choice but to re-purchase if they wished to remain in business. Homebush Flour Mills challenged the validity of the scheme on the basis that it imposed an excise duty and thus infringed s 90 of the Constitution. The High Court accepted this argument, finding that the state Act imposed a tax on flour payable by the millers. In concluding there was a tax, Dixon J emphasised (56 CLR at 413) that it was the effect of the law which must be taken into account: When the desired contributions are obtained not by direct command but

by exposing the intended contributor, if he does not pay, to worse burdens or consequences which he will naturally seek to avoid, the payment becomes an exaction. The fact that no legal obligation to pay is imposed enforceable by direct legal remedies, civil or criminal, will not, in my opinion, prevent the exaction fulfilling the description of a tax; because in truth it is exacted by means of sanctions designed to that end, sanctions consisting in the detriments arising from the adoption by the taxpayer of the alternative left open by the legislation.

Latham CJ similarly observed that ‘the difference between the two prices is something which the miller is in practice compelled to pay to the Government and amounts to a tax’: 56 CLR at 400. See also at 399–400 per Latham CJ; 405 per Rich J; 408 per Starke J; 411– 13 per Dixon J; 417 per Evatt; 421 per McTiernan J.

Public authority 5.1.10 Part of Latham CJ’s definition of a tax in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276 was that the exaction was made by a public authority. As noted above, in Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 467 5.1.6C, the High Court proposed, in obiter dicta, that an exaction might still be a tax even if ‘by a non-public authority or for purposes which could not properly be described as public’. In Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480, the members of the High Court divided over this issue. 5.1.11C Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480

(most footnotes omitted) [The Copyright Amendment Act 1989 (Cth) added Pt VC to the Copyright Act 1968 (Cth). This was done to address the issue of people copying sound recordings, such as those on vinyl discs, onto blank tapes (primarily audio cassettes) in breach of copyright. The measures in Pt VC included the imposition of a levy, described as a ‘royalty’ payment, on sellers of blank tapes. A group of tape sellers commenced proceedings in the High Court arguing that the amendments were invalid.] Mason CJ, Brennan, Deane and Gaudron JJ: … in our view, the ‘royalty’ levied on the vendors of blank tapes by s 135ZZP(1) is a tax and this conclusion entails the consequence that, by reason of non-compliance with s 55 of the Constitution, Pt VC of the Act is invalid. … [page 447] The legislative scheme Part VC is a legislative scheme designed to deal with the problem presented by the widespread practice here and overseas of private and domestic taping of sound recordings. In the past, this practice has constituted an infringement of the copyright in the sound recordings. For all practical purposes, however, the owners of those copyrights were left without any effective remedy since they were unable to prove infringement and recover damages from the multitude of infringers who engaged in private taping of sound recordings. The principal elements of the legislative scheme are as follows: (1) A ‘royalty’ is payable for each blank tape first sold, let for hire or otherwise distributed in Australia (s

(2) (3)

(4)

(5)

135ZZN(1)), the royalty being payable by the vendor who first sells, lets for hire or otherwise distributes the tape in Australia (s 135ZZP(1)). The amount of the royalty is determined by the application of a formula prescribed by s 135ZZN(2). … A vendor is bound to pay to the collecting society within twenty-one days of the end of each quarter an amount equal to the sum of the amounts of royalty payable on the tapes first sold, let for hire or otherwise distributed by the vendor in that quarter (s 135ZZP(2)). The collecting society is a company limited by guarantee declared by the Attorney-General to be the collecting society. All the relevant copyright owners … must be entitled to become members. … Copyright in a published sound recording … is not infringed by making on private premises a copy of the sound recording if the copy is on a blank tape for the private and domestic use of the person who makes it (s 135ZZM(1)).

The effect of the scheme is that private and domestic recording, as just described, is not an infringement of copyright. Nonetheless, the amount levied on the vendors of blank tapes is described as a royalty and is paid to the collecting society, the net proceeds being distributed to the relevant copyright owners by the society. The amount of the royalty is calculated, at least in part, by reference to the extent to which blank tapes are used for the purpose of making copies of eligible sound recordings and eligible works for private and domestic use. But the ultimate payment received by the relevant copyright owners from the collecting society is not related to any right, permission or consent granted by those owners in relation to the reproduction or purpose of their copyright work. At the risk of stating the obvious, we should say that the amounts levied on the vendors of blank tapes are not paid, and are not directed to be paid, into the

Consolidated Revenue Fund. This fact is material to the validity of Pt VC. [Their Honours dismissed arguments that (1) the levy in Pt VC constituted a royalty; and (2) Pt VC acquired property within the meaning of s 51(xxxi) of the Constitution by limiting the scope of prior copyright protection. They continued:] Section 135ZZP(1) imposes taxation That brings us to the questions whether the levy is a tax and whether Pt VC or any part of it … constitute a law imposing taxation for the purposes of s 55 of the Constitution. The argument that the levy is not a tax rests on the broad propositions that it is not exacted by a public authority, nor is it exacted for public purposes. The two propositions are based on the influential statement by Latham CJ in Matthews v Chicory Marketing Board (Vict) that a [page 448] tax ‘is a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered’. Although the elements in this statement have been recognized as the positive and negative attributes of a tax, this Court has held that the statement is not an exhaustive definition of what is a tax and has attached important qualifications to the statement (Air Caledonie International v The Commonwealth (1988) 165 CLR 462 at p 467). One such qualification relates to the propositions on which the Commonwealth relies to support its contention that the levy is not a tax. In Air Caledonie International v The Commonwealth, the Court said:

[T]here is no reason in principle … why the compulsory exaction of money under statutory powers could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as public. … It would seem to be a remarkable consequence if a pecuniary levy imposed for public purposes by a non-public authority acting pursuant to a statutory authority falls outside the concept of a tax simply because the authority which imposes the levy is not a public authority, when the amount of the levy is to be expended on public purposes, more particularly, if those purposes are Commonwealth purposes. It is scarcely to be contemplated that the character of the impost as a tax depends upon whether the authority is a public authority, unless it be a case in which the character of the authority will be relevant and influential in deciding whether the purposes on which the moneys raised are to be expended are themselves public. Of course, it is a misnomer to describe an authority as non-public when one of its functions is to levy, demand or receive exactions to be expended on public purposes. To that extent, at least, the authority should be regarded as a public authority. But the better view is that it is not essential to the concept of a tax that the exaction should be by a public authority. The next question is whether it is necessary that the exaction should be for public purposes if the exaction is to be characterized as a tax. … In Australia, the fact that a levy is directed to be paid into the Consolidated Revenue Fund has been regarded as a conclusive indication that the levy is exacted for public purposes. But neither principle nor Australian authority provides any support for the converse proposition that an exaction is not a tax if it is not to be paid into the Consolidated Revenue Fund. The requirement imposed by s 81 of the Constitution that all revenue or moneys raised or received by the Executive Government form

one Consolidated Revenue Fund is not, and cannot constitute, a criterion for what is a tax. The purpose of s 81 … was to ensure that the revenues of the Crown, including taxes, were brought together in one Consolidated Revenue Fund under the control of Parliament. To hold that revenues or moneys that are not treated in accordance with the requirements of s 81 cannot be taxes to which s 81 applies is circuitous reasoning and deprives s 81 of any effective content. In the present case, it was not contended that, if an exaction does not form part of the Consolidated Revenue Fund, it cannot be said that it was raised for public purposes and therefore is not a tax. But it is necessary to deal with the argument. The essence of the argument is that the expression ‘public purposes’ is to be equated to ‘governmental purposes’. It is sought by the use of the adjective ‘governmental’ to convey the notion that the critical purposes are such that they can be effectuated only with the expenditure of moneys standing to the credit of the Consolidated Revenue Fund. If that proposition be correct, then an exaction not raised or received by the Executive Government, for example, an exaction raised [page 449] and received by an independent statutory authority pursuant to a power conferred by statute, could not constitute a tax. As Parliament has power to authorize a statutory authority to levy and receive a tax, that general proposition must be rejected. Furthermore, it is inconsistent with the passage earlier quoted from the judgment in Air Caledonie to the effect that an exaction for non-public purposes may be a tax. … The judgment is therefore at odds with the notion that a law which levies an exaction on one group in the community to be expended for the benefit or advantage of another group in the community is not a law imposing taxation.

The only possible reason, apart from those already rejected, for holding that the provision in question in this case is not a law imposing taxation is that an expropriation from one group for the benefit of another as an incident of legislative regulation of interests on a subject matter within power, with a view to bringing about what is conceived to be an equitable outcome, is not an exaction for public purposes and is therefore not a tax. In one sense it may be said that the purpose is private in that it concerns the interests of the two groups only. But, in truth, the legislative solution to the problem proceeds on the footing that it is imposed in the public interest. Indeed, the purpose of directing the payment of the levy to the collecting society for ultimate distribution of the net proceeds to the relevant copyright owners as a solution to a complex problem of public importance is of necessity a public purpose. … It is essential to the validity of a law or proposed law ‘imposing taxation’ for the purposes of ss 53–55 of the Constitution that the moneys raised by such a law shall form part of the Consolidated Revenue Fund whence they shall be appropriated by law ‘for the purposes of the Commonwealth’. … In that scheme of things, the Constitution plainly contemplates that revenues or moneys raised by a law which levies a tax shall form part of the Consolidated Revenue Fund, even if it be intended to distribute the moneys among a particular group in the community rather than in meeting the ordinary expenses of the Executive Government. Moneys raised by means of a tax levied by a law of the Parliament would not cease to be ‘revenues or moneys raised by the Executive Government’ because it is desired, and because the purported law directed, that they be paid directly to an agency for a particular group in the community which Parliament wished to benefit. Equally, such a law would not cease to be a law ‘imposing taxation’. In order to comply with the relevant provisions in Ch IV of the Constitution, however, it is necessary that the moneys raised by the imposition of the tax

form part of the Fund from which they must be appropriated by law. The purpose of s 81 would be circumvented readily if a law which imposed a tax on one group for the benefit of another group in the community was not a law ‘imposing taxation’ and, on that account, the moneys raised by the law were not ‘revenues or moneys raised or received by the Executive Government’. The moneys raised would then stand outside s 81. … They would also stand outside s 83. … In the result, we are of the opinion that the levy is a tax. It does not fall within any of the well-recognized descriptions of fees or charges which stand outside the concept of a tax. It is not a fee for a licence or privilege or for a service rendered; it is not a charge for the acquisition or use of property; and it is certainly not a fine or penalty. Moreover, it has the characteristics of an excise; it is imposed upon the vendors of blank tapes in respect of the sale of the tapes and it is a charge which the vendor will, in the ordinary course of business, pass on to the purchaser. The consequence of the conclusion that the levy is a tax is that Act No 32 of 1989 which inserts Pt VC … into the Act was a law imposing taxation and therefore contravened s 55 of [page 450] the Constitution. The operation of that section in relation to an amending Act which sought to introduce a law imposing taxation into an existing Act not dealing with the imposition of taxation was considered in Air Caledonie. The Court observed that, in such a case, the amending Act seeks to bring about something that the Constitution forbids. … [Accordingly, their Honours concluded that s 55 invalidated Pt VC on the same basis as in Air Caledonie International v Commonwealth (1988)

165 CLR 462, the taxing and non-taxing provisions of Pt VC being inseverable and falling as a whole.]

5.1.12 In their joint dissenting judgment in Australian Tape Manufacturers Association Ltd v Commonwealth, Dawson and Toohey JJ found that Pt VC was a law with respect to ‘copyrights’ in s 51(xviii) of the Constitution and did not impose a tax within s 55 or attract the operation of s 51(xxxi). In reaching their conclusion on s 55, they said that the passage in Air Caledonie International v Commonwealth (1988) 165 CLR 462 5.1.6C at 467 suggesting that a statutory exaction may be taxation even if the elements of public authority and public purpose are absent ‘may be too wide’: 176 CLR at 522. While they had both subscribed to this passage as members of the court in Air Caledonie, they now retreated from it (176 CLR at 522–3): Read in its widest sense that passage does suggest that any exaction enforceable by law may be a tax in the constitutional sense and that is … to regard as dispensable that feature of a tax which is, in truth, indispensable, namely, that the moneys raised be government revenue. Indeed, if all that is required for a tax is that there be an exaction enforceable by law, s 51(ii) assumes unforeseen proportions. Any compulsory exaction of money under statutory power would need no other constitutional warrant.

Their Honours emphasised (176 CLR at 522) that ‘[t]hose characteristics of a tax which require it to be levied by a public authority for public purposes are important in that they reflect the general conception of a tax as a means of raising revenue for government (even if the aim of the tax is also to encourage or discourage behaviour of a particular kind)’. It followed that the

blank tape levy was not, in their opinion, a tax as it was ‘not an exaction by a public authority for public purposes. The moneys exacted do not form part of the Consolidated Revenue Fund and understandably so because they do not form part of government revenue’: 176 CLR at 524. Rather, the moneys were collected as part of a regulatory scheme ‘designed to compensate copyright owners for the use of their copyright material’: 176 CLR at 524. McHugh J also denied that the blank tape levy was taxation. He stated (176 CLR at 530): Before a compulsory exaction of money under statutory authority can constitute a tax, it must, in my opinion, be raised for some public, that is, governmental, purpose. … [However] the levy … does not constitute a tax. It is not paid into Consolidated Revenue, and it is not imposed for the purposes of government or of any public or statutory authority.

5.1.13 In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 5.1.18C, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ cast doubt on aspects of the majority judgment in Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480. In particular, they suggested by way of obiter dicta that an exaction by a public authority may remain a necessary element of a tax (244 CLR at 110): [page 451] The majority in Tape Manufacturers (1993) 176 CLR 480 at 501 suggested that it is not essential to the concept of a tax that the exaction should be by a public authority. That suggestion would constitute a large and controversial step beyond what was said in Matthews. As the reasons

of the majority in Tape Manufacturers show, whether that step could or should be taken depends, at least in part, upon what meaning would be given to the expression ‘non-public’ authority if ‘one of its functions is to levy, demand or receive exactions to be expended on public purposes’ (1993) 176 CLR 480 at 501. It was not necessary to decide that question in Tape Manufacturers and the majority in that case did not do so.

5.1.14 An exaction by government upon itself, as opposed to other persons, cannot be a tax under s 51(ii). In Queanbeyan City Council v ACTEW Corporation Ltd (2011) 244 CLR 530, the court accepted the proposition that ‘the exaction of money by a polity for receipt into its fisc cannot be a tax if the exaction is imposed upon an entity which, properly characterised, is indistinct from the polity itself’: 244 CLR at 542 per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ. 5.1.15 A decision that is frequently contrasted with Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 is Luton v Lessels (2002) 210 CLR 333. 5.1.16C

Luton v Lessels (2002) 210 CLR 333 (some footnotes edited)

[The court considered whether the Child Support (Assessment) Act 1989 (Cth) and the Child Support (Registration and Collection) Act 1988 (Cth) imposed taxation within the meaning of s 55 of the Constitution. The Assessment Act provided for assessment of the quantum of child support payable by a parent to the child’s carer. Once assessed, the sums concerned became a debt owed by the parent to the carer. The parent and carer could maintain this payment arrangement. Alternatively, the

Registration and Collection Act enabled a carer to register the liability. Upon registration, the parent’s liability to the carer ceased and a liability on the part of the parent to pay equivalent sums to the Commonwealth was created. The carer, in turn, became entitled to receive child support payments directly from the Commonwealth: see generally 210 CLR at 340–1 per Gleeson CJ. As Gleeson CJ noted (210 CLR at 341): ‘Amounts collected are paid into, and disbursed to carers out of, the Consolidated Revenue Fund. The Commonwealth does not benefit financially.’ The High Court unanimously concluded that a parent’s liability to the Commonwealth under this arrangement did not constitute taxation.] Gleeson CJ: … while an objective of raising revenue for the government is not a universal determinant, the presence or absence of such an objective will often be significant in deciding whether an exaction … bears the character of taxation. That is the most usual form of public purpose involved … The impost in the Australian Tape Manufacturers Association Case involved raising revenue from one group for the purpose of its application for the benefit of another group. The majority held that revenue was raised for a public purpose of compensating the second group. The group who were to be compensated had no prior legal right against the group from whom the revenue was to be raised. That is a point of distinction from the Registration and Collection Act. The fact that the proceeds of the exaction [page 452] were not paid into, and out of, the Consolidated Revenue Fund was not regarded as decisive. I would also regard the converse as true. The Assessment Act creates a private or personal obligation, in the form of a debt payable by the liable parent to the eligible

carer. The debt is recoverable by the carer. The creation of a legal obligation, enforceable by private action, in a parent, to pay for the support of a child, is not taxation. It is a scheme for the creation and adjustment of private rights and liabilities. But the existence of the obligation is of significance in considering the aspect of the legislative scheme upon which the plaintiff principally relies, which is in the Registration and Collection Act. What is alleged to be taxation is in substance no more than a mechanism for the enforcement of a pre-existing private liability. … … What is involved is a collection mechanism to facilitate the recovery of child support payments that a parent becomes liable to make under the Assessment Act. It enables the discharge of a personal obligation created by the Assessment Act. A multiplicity of payments may be involved, the amounts of payments are likely to be modest, and many carers would lack the means or the will to undertake private recovery proceedings. The practical advantages of such a scheme are obvious, but they do not include any financial benefit to the Commonwealth. The payment of moneys collected by the Commonwealth into the Consolidated Revenue Fund, is necessitated by s 81 of the Constitution, which refers to ‘revenues or moneys’. The legislation does not have either the purpose or the effect of raising revenue for the Commonwealth. Its purpose is to create, and facilitate the enforcement of, private rights and liabilities. The Assessment Act creates a personal liability in a parent to the carer of a child; the Registration and Collection Act gives the carer the facility, in exchange for extinguishment of the liability to the carer, to have the Commonwealth recover the child support payments assessed and pay an equivalent amount to the carer. The legislation does not bear the character of taxation. [McHugh J agreed with Gleeson CJ: 210 CLR at 361. Gaudron and Hayne JJ, in their joint judgment, adopted a similar approach:]

Gaudron and Hayne JJ: It is clear that the Registration and Collection Act provides for the compulsory exaction of money which is to be paid to the Commonwealth. It is equally clear that it is inappropriate to speak of the exaction being in payment for any services rendered by the Commonwealth. Further, it may readily be assumed that the scheme for which the Registration and Collection Act provides is a scheme which is seen as being of public benefit … It by no means follows, however, that the Registration and Collection Act as a whole, or particular provisions of it, are properly described as a law imposing taxation. All of the features which Latham CJ identified in Matthews v Chicory Marketing Board (Vict) (1938) 60 CLR 263 at 276 as typical of a tax — compulsory exaction, by a public authority, for public purposes, enforceable by law, and not being payment for services rendered — are important. The presence or absence of none of them, however, is determinative of the character of the legislation said to impose a tax. It is necessary, in every case, to consider all the features of the legislation which is said to impose a tax. … … in Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480, the majority of the Court concluded that the better view is that it is not essential to the concept of a tax that the exaction be by a public authority because it was ‘scarcely to be contemplated’ [176 CLR at 501] that the character of an impost as a tax depends upon whether the authority is a public authority. Nonetheless, as the majority also noted [176 CLR at 501], the character of the authority concerned may bear upon whether the [page 453] purposes on which moneys raised are to be expended are themselves public. These matters were seen as significant in Tape Manufacturers because the impost then under consideration was

to be paid directly to a collecting society designated under the relevant legislation; it was not to be paid into the Consolidated Revenue Fund. Here … amounts due from payers … are debts due to the Commonwealth. When received, the amounts are paid into the Consolidated Revenue Fund. Amounts equal to what is received … are then credited to the Child Support Account from which amounts payable to those entitled are paid. What is the significance of the fact that the amounts exacted are paid into the Consolidated Revenue Fund? [Their Honours discussed s 81 (dealing with the Consolidated Revenue Fund) and related provisions of the Constitution, and continued:] … every tax that is raised must be paid into the Consolidated Revenue Fund. But the converse is not universally true. Not every sum that statute requires to be paid to the Commonwealth, and which is paid into the Consolidated Revenue Fund, is a tax. … What marks the present exactions apart from other exactions that have been held to be taxes is that in every case the sum exacted under the Registration and Collection Act is, when the maintenance liability is first registered, the amount which otherwise would be due and payable by the payer in satisfaction of an existing obligation owed by that payer to the carer of a child as maintenance for the child. There is, therefore, under the Registration and Collection Act, more than the mere earmarking of a compulsory exaction for a particular application. Imposing a financial burden on one group in society for the benefit of another group in society will often constitute a tax. Pointing to some identifiable relationship between the group of payers and the group of recipients or even to some relationship between a particular payer and a particular recipient will not usually require some different conclusion. Under the Registration and Collection Act, however, the obligation to

make a payment to the carer of the child is replaced by the obligation to pay the same amount to the Commonwealth. That obligation is coupled with the creation of a new right in the carer to have the Commonwealth pay the carer whatever the payer thereafter gives up … The combination of these features — the substitution of a new obligation to the Commonwealth equal to an existing obligation which is terminated, coupled with the substitution of new rights in the carer against the Commonwealth equal to the extent to which the payer performs his or her obligation to the Commonwealth — takes this compulsory exaction outside the description of ‘taxation’. [Kirby J found (210 CLR at 372–3) that the Acts did not impose taxation, stating that ‘the most telling feature of the Acts … is that neither of them … performs a revenue raising function’: 210 CLR at 373. Callinan J also found there was no taxation: 210 CLR at 384–5. Referring to the Tape Manufacturers case, he said:] Callinan J: There was no necessary correspondence between a copyright holder and the purchaser of a blank tape, who might not even use the tape to copy copyright material. By contrast, the amounts payable under this scheme are paid to the Commonwealth by a particular debtor in relation to a particular child or children, and an equivalent amount is paid to the particular person entitled to that amount of child support. It is this feature which makes Australian Tape Manufacturers distinguishable …

[page 454]

Public purposes

5.1.17 Another part of Latham CJ’s definition of a tax in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276 was that the exaction be made for public purposes. In Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 5.1.11C at 504–5, the majority took an expansive view of the concept of ‘public purpose’, seemingly equating it, in the circumstances of that case, with ‘public interest’. In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ discussed the public purposes requirement in a way that suggested they favoured the more conventional approach ‘that a tax be imposed for the purposes of government’: 244 CLR at 109. 5.1.18C

Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 (some footnotes omitted)

[The appellant argued that the Superannuation Guarantee Charge Act 1992 (Cth) and the Superannuation Guarantee (Administration) Act 1992 (Cth) were invalid because the ‘charge’ was ‘not a tax because it is not imposed for “public purposes”’: 244 CLR at 101. The court unanimously rejected this argument.] French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ: … the effect of the legislation under challenge is that if … an employer fails to provide to all employees a prescribed minimum level of superannuation then any shortfall represented by failure to meet that minimum level in full, becomes the [Superannuation Guarantee] Charge. This impost is levied on the employer by the Charge Act. The amount of the Charge is a debt due to the

Commonwealth and payable to the respondent, the Commissioner of Taxation … The Charge includes a component for interest and an administration cost. The result is to supply an incentive to employers to make contributions to superannuation for their employees without incurring a liability to the Commissioner for the Charge. [Their Honours noted that the charge was paid into the Consolidated Revenue Fund provided for in s 81 of the Constitution. They continued:] … Pt 8 (ss 63A–71) of the Administration Act is headed ‘Payments of amounts of shortfall components for the benefit of employees’. Part 8 applies to a charge payment in respect of the benefiting employees which is made by … an employer (s 63A(1)). Section 63B is headed ‘Overview of this Part’ and states that if a payment to which Pt 8 applies is made, the Commissioner is required to pay … an amount called ‘the shortfall component’ for the benefit of benefiting employees … The ‘shortfall component’, in general terms, is the lesser of the amounts paid by the employer as the Charge, and the amount of employee entitlement calculated at the time the payment was made … The Commissioner is obliged by Pt 8 to deal with this shortfall for the benefit of the employee by payments, directly to an employee aged sixty-five years or more … Otherwise, the Commissioner is to deal with the shortfall by payment to a retirement savings account, an account with a complying superannuation fund or an account with a complying approved deposit fund, which … is held in the name of the employee … Amounts which the Commissioner is required to pay under Pt 8 are payable out of the Consolidated Revenue Fund (established by s 81 of the Constitution). … [page 455]

The appellant’s case … the appellant challenges the validity of the provisions made in the Administration Act and the Charge Act dealing with the Charge itself. It submits, first, that these provisions confer a ‘private and direct benefit’ on the employees of those employers who pay the Charge and that this is effected by the compulsory transfer of money from the employers. The second submission is that by reason of the conferring of a private and direct benefit in this way, the Charge is not imposed for ‘public purposes’. The third submission is that an essential element for the characterisation of a ‘tax’ is that it be imposed for ‘public purposes’. It follows, the appellant submits … that neither the Charge Act nor the Administration Act is a law with respect to ‘taxation’ within the meaning of s 51(ii) of the Constitution, and that, there being no other head of supporting power to be found in s 51, the legislation establishing the Charge and providing for its administration is invalid. The first and second submissions should not be accepted in an unqualified form, and, that being so, the final submission fails. … Taxation … the discernment of a legislative objective to raise revenue is not necessarily a determinant that the exaction in question bears the character of taxation. For example, the objective of the imposition of a customs tariff at a high level may be to protect domestic industry by providing a disincentive to the importation of competing products. The point was made by Kitto J in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 12 with reference to the statement in United States v Sanchez (1950) 340 US 42 at 44: It is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even

definitely deters the activities taxed … The principle applies even though the revenue obtained is obviously negligible, … or the revenue purpose of the tax may be secondary … Nor does a tax statute necessarily fall because it touches on activities which Congress might not otherwise regulate. … Public purposes … the phrase ‘public purposes’ is not synonymous with ‘public interest’ (cf Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 504–505). Section 81 of the Constitution does not use the expression ‘public service of the Commonwealth’; the phrase ‘the purposes of the Commonwealth’ was preferred, so as to encompass the return of moneys to the States and thus to broaden, not narrow, the notions of ‘public service’ and ‘public purposes’. Against this background it is not surprising that in R v Barger (1908) 6 CLR 41 at 68, Griffith CJ said: ‘The primary meaning of “taxation” is raising money for the purposes of government by means of contributions from individual persons.’ (Emphasis added.) … The present appeal — conclusion … [As pointed out] earlier in these reasons: that the raising of revenue is secondary to the attainment of some other legislative object is no reason for treating an impost otherwise than as a tax … this is so even if the legislation is designed for the purpose of carrying out [page 456]

a policy affecting matters not directly within the legislative competence of the Parliament of the Commonwealth. The submission by the appellant that the Charge is invalid because the legislation confers upon employees a ‘private and direct benefit’ cannot be accepted. Nor does this ‘linkage’ indicate that the Charge is not imposed by the Parliament for ‘public purposes’. It is settled that the imposition of a tax for the benefit of the Consolidated Revenue Fund is made for public purposes. That is not to say that the receipt of funds into the Consolidated Revenue Fund conclusively establishes their character as the proceeds of a tax. But it does establish in the present case that the Charge is imposed for ‘public purposes’ and thus, if other necessary criteria are met, as they are in this case, the Charge is a valid tax. Moneys received into the Consolidated Revenue Fund are available to be appropriated for any purpose for which the Parliament may lawfully spend money; this is so, whatever the purpose for which those moneys were raised. In the First Uniform Tax Case, Latham CJ explained (South Australia v The Commonwealth (1942) 65 CLR 373 at 414): It is doubtful whether Commonwealth revenue can be earmarked except at the point of expenditure … by an appropriation Act … All taxation moneys must pass into the Consolidated Revenue Fund (s 81), where their identity is lost, and whence they can be taken only by an appropriation Act. An appropriation Act could provide that a sum measured by the receipts under a particular tax Act should be applied to a particular purpose, but this would mean only that the sum so fixed would be taken out of the general consolidated revenue. Thus there can be no earmarking in the ordinary sense of any Commonwealth revenue. The case presented by the appellant appears to depend upon the

proposition that payments of the Charge by an employer can be traced through the Consolidated Revenue Fund with the consequence that any payments made to employees under Pt 8 of the Administration Act are properly viewed as having come from the employer. That would involve earmarking of the very kind that the establishment of the Consolidated Revenue Fund … was designed to prevent. When the Charge is paid by a particular employer into the Consolidated Revenue Fund, its identity is lost. The funds raised by the Charge are thereafter available under s 83 of the Constitution for an appropriation to be spent on any purpose for which the Commonwealth may lawfully spend money.

Fees for services and related payments 5.1.19 Latham CJ’s definition of a tax in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276 as ‘a compulsory exaction of money by a public authority for public purposes, enforceable by law, and … not a payment for services rendered’ contemplates that there are certain types of exaction, such as fees for services, which are not taxation. In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 5.1.18C, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ stated (244 CLR at 111): The nature of a particular exaction or the end to which revenues raised might be put may be such as to take the exaction outside the constitutional conception of ‘taxation’. As s 53 of the Constitution itself recognises, a law does not impose taxation by reason only that it contains provisions for the imposition or the appropriation of fines or other pecuniary penalties, or for the demand or payment of fees for licenses, or fees for services.

[page 457] 5.1.20 The exclusion from the notion of a tax of charges for services rendered is demonstrated by Harper v Victoria (1966) 114 CLR 361, where the High Court held that Victorian legislation did not impose a tax when it required all eggs to be graded, tested and marked by a government agency and imposed a fee on the owners of the eggs ‘to defray the expenses incurred therefor’. McTiernan J said it was a fee ‘for services rendered’, the purpose of which was ‘to defray the costs of those services’: 114 CLR at 377. However, the line between a charge for services rendered and a tax can be a narrow one. In Parton v Milk Board (Vic) (1949) 80 CLR 229, the High Court held that Victorian legislation imposed a tax when it required dairy distributors to contribute money to a fund administered by a government agency. The agency was to apply the fund to the cost of promoting milk consumption, to compensating dairy distributors whose activities were restricted by the agency and to administrative expenses. In supporting his conclusion that the legislation imposed a tax, Dixon J said (80 CLR at 258): It is a compulsory exaction. It is an exaction for the purposes of expenditure out of a Treasury fund. The expenditure is by a government agency and the objects are governmental. It is not a charge for services. No doubt the administration of the Board is regarded as beneficial to what may loosely be described as the milk industry. But the Board performs no particular service for the dairyman or the owner of a milk depot for which his contribution may be considered as a fee or recompense.

5.1.21

A similar point was made by the High Court in Air

Caledonie International v Commonwealth (1988) 165 CLR 462 5.1.6C. In their unanimous judgment, Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ held that the ‘fee for immigration clearance’ imposed by s 34A of the Migration Act 1958 (Cth) on persons arriving in Australia by air from overseas was a tax. The court denied that the exaction was a ‘payment for services rendered’ because to fit into that category, it would need to be (165 CLR at 470): … a fee or charge exacted for particular identified services provided or rendered individually to, or at the request or direction of, the particular person required to make the payment.

They noted that Australian citizens had a ‘right to re-enter’ Australia without ‘clearance’ by the executive government: at 470. While it might be essential to subject citizens ‘to administrative procedures at the point of entry’ in order to record ‘the arrival and departure of citizens and non-citizens alike’ and for related purposes, this could not ‘properly be seen as the provision or rendering of “services” to, or at the request or direction of, the citizen concerned’: 165 CLR at 470. The justices also noted (at 470) that there was no correlation between the amount of the fee and any service: Nor is it possible to find in s 34A … any identification of particular services provided or rendered to the individual passenger for which the impost could relevantly be regarded as a fee or quid pro quo. … the section neither fixed the amount of the fee nor indicated the considerations to which the Executive was required to pay regard in prescribing it.

5.1.22

In Northern Suburbs General Cemetery Reserve Trust v

Commonwealth (1993) 176 CLR 555 (see 5.1.45), the High Court rejected an argument that a levy imposed on employers by the Training Guarantee Act 1990 (Cth) was not a tax but a fee for services. Under the Training Guarantee (Administration) Act 1990 (Cth), the moneys raised through the levy were paid into a fund, from which payments could be made to those states and territories [page 458] which entered into an agreement with the Commonwealth. Under the agreement, the states and territories were to apply the payments to providing employment training programs. Mason CJ, Deane, Toohey and Gaudron JJ said (176 CLR at 568) that the legislation fell ‘a long way short of requiring … that the money received be expended in relation to eligible training programs for those employers who have incurred a liability to pay the charge’. Thus ‘[t]he Administration Act does not by its terms establish any sufficient relationship between the liability to pay the charge and the provision of employment related training by the ultimate expenditure of the money collected to regard the liability to pay the charge as a fee for services or as something akin to a fee for services’: 176 CLR at 568. 5.1.23 A more complex example is provided by Airservices Australia v Canadian Airlines International Ltd (2000) 202 CLR 133. There, the court considered whether charges imposed by the Civil Aviation Authority (CAA) under the Civil Aviation Act 1988 (Cth) on a commercial airline, Compass Airlines, were taxes or fees for service.

The charges were for the provision by the CAA to Compass of essential facilities including air traffic control and emergency response services. These were necessarily monopoly services and the charges were set using an established mechanism for monopoly pricing, known as ‘Ramsey pricing’, based on the cost to the CAA of providing these services across the entire Australian air traffic network. While factors such as the number of flights made, and distance flown, by an individual operator, such as Compass, were reflected in the amount that operator paid, the charges were not quantified by the specific cost to the CAA of delivering the services concerned to each operator on an individual basis. Nonetheless, in the circumstances of the case, the charges were found to be ‘reasonably related’ to the cost to the CAA of providing these services and were not taxation. In arriving at this conclusion, Gleeson CJ and Kirby J said (202 CLR at 178–9): In this case: the charges were not imposed to raise revenue; the charges were undoubtedly charges for the provision of services and facilities; the charges were imposed to recover the cost of providing such services and facilities across the entire range of users; the charges for categories of services were reasonably related to the expenses incurred in relation to the matters to which the charges related; the services and facilities were, of their nature, part of an activity which must be highly integrated in order to be effective; there was a rational basis for such discrimination between users as existed. In those circumstances, there is no warrant for concluding that the charges amounted to taxation on the ground that they exceeded the value to particular users of particular services or the cost of providing particular services to particular users.

See generally 202 CLR at 176–9 per Gleeson CJ and Kirby J; 189– 92 per Gaudron J; 230–41 per McHugh J; 284–93 per Gummow J; 302–3 per Hayne J.

In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 5.1.18C at 111, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ described the fees paid by airline operators in Airservices Australia as ‘examples of financial burdens placed upon “users” to fund the maintenance of public assets and the provision of public services’. 5.1.24 A fee for a privilege was involved in Harper v Minister for Sea Fisheries (1989) 168 CLR 314, where the High Court held that a licence fee demanded by Tasmania for the right to harvest abalone for commercial purposes in local waters was not a tax. Brennan J (with whom Mason CJ, Deane and Gaudron JJ concurred) held that the fee charged for the privilege of [page 459] exploiting that ‘limited natural resource’ was ‘a charge for the acquisition of a right akin to property’: 168 CLR at 335. Although Dawson, Toohey and McHugh JJ also agreed with Brennan J, they cautioned that the conclusion in the present case did not mean that an exaction could never be a tax if ‘demanded for the purpose of conserving a public natural resource’; the exaction could still be taxation if, as stated in Air Caledonie International v Commonwealth (1988) 165 CLR 462 5.1.6C at 467, it had ‘no discernible relationship with the value of what is acquired’: 168 CLR at 336–7.

Fines and penalties 5.1.25

Taxes are to be distinguished from financial penalties. A

tax is a payment ‘demanded as a contribution to revenue irrespective of any legality or illegality in the circumstances upon which the liability depends’, while a penalty is a payment ‘claimed as solely a penalty for an unlawful act or omission’: R v Barger (1908) 6 CLR 41 5.1.39C at 99 per Isaacs J. As the court said in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 (see 5.1.28) at 639 and Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 (see 5.1.45) at 571, penalties are distinguished from taxing provisions because a penalty flows from ‘failure to discharge antecedent obligations on the part of the persons upon whom the exactions fall’. 5.1.26 The difference between a tax and a penalty is often clear. However, on occasions, difficulty may arise in distinguishing the two. For example, in Re Dymond (1959) 101 CLR 11 (see 5.1.33), it was held that s 46 of the Sales Tax Assessment Act (No 1) 1930 (Cth) imposed a penalty, not a tax. The section provided that any person who failed to furnish a proper sales tax return should ‘be liable to pay additional tax at [a specified rate] … or the sum of One pound, whichever is the greater’. Fullagar J (with the agreement of a majority of the court) explained (101 CLR at 22): The liability is imposed by the Act not as a consequence of a sale of goods but as a consequence of an attempt to evade payment of a tax on a sale of goods. The exaction is directly punitive, and only indirectly fiscal. It is imposed for the protection of the revenue, but as a sanction and not for the sake of revenue as such.

See also the discussion of Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 at 5.1.45.

Taxes must not be arbitrary 5.1.27 The court in Air Caledonie International v Commonwealth (1988) 165 CLR 462 5.1.6C at 467 recognised ‘that a tax … is not arbitrary’. In Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 (see 5.1.29) at 684, Gibbs CJ, Mason, Wilson, Deane and Dawson JJ explained the distinction between a tax and an arbitrary exaction: … liability can only be imposed by reference to ascertainable criteria with a sufficiently general application and … the tax cannot lawfully be imposed as a result of some administrative decision based upon individual preference unrelated to any test laid down by the legislation. To say that a tax may not be arbitrary in that sense does not, of course,

[page 460] preclude the pejorative description of a tax as arbitrary in the sense that the criteria which are laid down for its application give it a harsh or unreasonable incidence … To describe a tax as arbitrary in the latter sense is to do so in a manner which does not go to its validity.

The idea that a tax within the meaning of s 51(ii) is not arbitrary was expounded in two related cases in the 1980s: MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 (see 5.1.28) and Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678 (see 5.1.29). 5.1.28

In MacCormick v Federal Commissioner of Taxation (1984)

158 CLR 622, Brennan J acknowledged at 654–5 the plenary character of the power in s 51(ii): As the taxation power extends to ‘any form of tax which ingenuity may devise’, the Parliament may select such criteria as it chooses, subject to any express or implied limitations prescribed by the Constitution, irrespective of any connexion between them.

Brennan J was responding to an attack on the validity of the Taxation (Unpaid Company Tax — Vendors) Act 1982 (Cth) and the Taxation (Unpaid Company Tax — Promoters) Act 1982 (Cth), legislation designed to recoup taxation revenue lost through some of the more blatant tax avoidance schemes which flourished during the late 1970s, colloquially referred to as ‘asset-stripping’ and ‘bottom of the harbour’ schemes. Under these schemes, the shares in a company with an unpaid company tax liability were sold, through the promoters of the schemes, to purchasers of little (if any) substance, at a price which represented around 90 per cent of the gross value of the company’s assets. The assets were then stripped from the company by the new shareholders, the company’s records destroyed, the new shareholders evaporated, and the Commissioner of Taxation left with the empty and insolvent shell of the company. The legislation imposed a tax upon the vendors of shares in any company, and upon the promoters of the sale of such shares, where the company had an undischarged company tax liability and the sale was followed by stripping the company’s assets, which left the company incapable of discharging its tax liability. According to the Taxation (Unpaid Company Tax) Assessment Act 1982, the amount of the tax, referred to as recoupment tax, was calculated by reference to the unpaid company tax. Provisions in the Taxation (Unpaid Company Tax — Vendors) Act and the Taxation (Unpaid

Company Tax — Promoters) Act ensured that the recoupment tax would be collected only once, from either the vendor or the promoter; but payment of the recoupment tax by either the vendor or the promoter did not extinguish the company’s original liability for company tax. The legislation was attacked on the ground that s 51(ii) of the Constitution demanded a connection between the objects of taxation (that is, the person on whom liability to pay a tax was imposed) and the subject of taxation (that is, the criteria according to which the tax liability was created; namely, the event or thing which gave rise to the liability). This argument was also expressed as a constitutional objection to any legislation which required one person to discharge another person’s tax liability. It was said that an Act which required a person to pay a tax imposed upon another could not be a law with respect to taxation within s 51(ii). The need for a nexus between the objects and subject of taxation was doubted, although not explicitly rejected, by Gibbs CJ, Wilson, Deane and Dawson JJ: 158 CLR at 636. In any event, these justices said, there was a connection between the taxpayers and the subject of the recoupment tax, which was the transaction that resulted in the stripping of the company’s assets: 158 CLR at 636–7. [page 461] The argument against the legislation’s validity was subjected to extensive criticism by Brennan J as involving a confusion between s 51(ii) and s 55 of the Constitution. The latter section was ‘calculated to safeguard the powers of the Senate’; the concept of ‘subject of taxation’ did not affect the scope of the s 51(ii) power,

but only ‘the means by which that power is exercised’: 158 CLR at 653. However, the court did decide that s 23(1) of the Taxation (Unpaid Company Tax) Assessment Act was invalid because, in the language adopted by the plaintiffs in this case, it created ‘an incontestable tax’. This provision provided that a certificate signed by the Commissioner of Taxation, stating that company tax was due and payable and remained unpaid, was ‘conclusive evidence of the matters stated in the certificate’ for the purpose of the assessment of the recoupment tax imposed on vendors and promoters involved in the sale of the asset-stripped company. Murphy and Brennan JJ referred to the integrity of federal judicial power; that is, the general proposition that the conclusive determination of rights and liabilities is a judicial function which could not be committed to a non-judicial arm of the Commonwealth Government: 158 CLR at 645–6, 658–9. Gibbs CJ, Wilson, Deane and Dawson JJ adopted (158 CLR at 640) Dixon CJ’s proposition from Deputy Federal Commissioner of Taxation v Brown (1958) 100 CLR 32 at 40: [U]nder the Constitution liability for tax cannot be imposed upon the subject without leaving open to him some judicial process by which he may show that in truth he was not taxable or not taxable in the sum assessed, that is to say that an administrative assessment could not be made absolutely conclusive upon him if no recourse to the judicial power were allowed.

5.1.29 A further challenge to the Taxation (Unpaid Company Tax) Assessment Act 1982 (Cth) was made in Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678. The case focused on s 6(2) of the Act, which dealt with the situation where the vendor of shares in an ‘asset-stripped’

company was also a company. If the Commissioner of Taxation formed the opinion that the vendor company was unlikely to meet its obligations to pay recoupment tax as vendor under the Taxation (Unpaid Company Tax—Vendors) Act, a secondary tax liability fell on any person entitled to participate in the capital distribution of the vendor company. Section 6(2) was attacked on the ground that it provided for the imposition of an arbitrary tax because the persons on whom the secondary tax liability could be imposed need have no connection with the original company, whose assets had been stripped and whose unpaid company tax gave rise to the primary liability for recoupment tax. In their joint judgment, Gibbs CJ, Mason, Wilson, Deane and Dawson JJ noted that in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 (see 5.1.28), ‘the proposition that a law is not a law with respect to taxation unless there is a real connexion between the objects of the tax and its subject-matter was doubted’: 158 CLR at 685. Even so, the justices said there was here ‘a real connexion between the persons who might be made liable … under s 6(2) … and the subject-matter of the tax’; such persons formed ‘links in a chain’ commencing with the sale by a company of its shares in a company with an unpaid company tax liability: 158 CLR at 685. Their Honours acknowledged that the tax might ‘operate harshly’ in some cases, and that the ultimate taxpayer might be remotely connected to the transaction: 158 CLR at 686. Nevertheless, there would always be some connection. [page 462]

The justices also rejected an argument that the process by which the secondary tax liability could be imposed was arbitrary because it depended on the opinion of the Commissioner of Taxation (158 CLR at 687–8): The Commissioner is to be guided and controlled by the policy and purpose of the enactment and, whatever the width of his discretion, it is not unexaminable should he exceed the limits which may be discerned from its provisions … The legislation does not contemplate the formation of an opinion by the Commissioner in an arbitrary manner and any attack upon it on that ground cannot, in our view, succeed.

5.1.30 The references, in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 and Deputy Federal Commissioner of Taxation v Truhold Benefit Pty Ltd (1985) 158 CLR 678, to an ‘arbitrary exaction’ lying outside the s 51(ii) power, raise some difficult questions. It appears that legislation imposing a liability to pay money to public funds must have two characteristics to avoid being classed as an arbitrary exaction. First, it seems that a person’s taxation liability must ‘be imposed by reference to ascertainable criteria with a sufficiently general application’ (158 CLR at 684); that is, the liability cannot be imposed by ad hominem legislation directed at specified individuals. Second, the person upon whom the liability is imposed must have the opportunity to challenge the liability through some judicial process by showing that his or her circumstances do not attract the liability. This characteristic has some resonance with a doctrine which is expressed in the maxim: ‘the stream cannot rise higher than its source’. In Australian Communist Party v Commonwealth (1951) 83 CLR 1 (see 4.5.11C, 4.5.13), Fullagar J said that ‘[t]he validity of a law or of an administrative act done under a law cannot be made to depend on the opinion of the law-

maker, or the person who is to do the act, that the law or the consequence of the act is within the constitutional power upon which the law in question itself depends for its validity’: 83 CLR at 258. These two aspects of the concept of an arbitrary exaction overlap, as the following passage from the judgment of Gibbs CJ, Wilson, Deane and Dawson JJ in MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 640–1 illustrates: For an impost to satisfy the description of a tax it must be possible to differentiate it from an arbitrary exaction and this can only be done by reference to the criteria by which liability to pay the tax is imposed. Not only must it be possible to point to the criteria themselves, but it must be possible to show that the way in which they are applied does not involve the imposition of liability in an arbitrary or capricious manner. … the expression ‘incontestable tax’ … ‘refers to a tax provided for by a law which, while making the taxpayer’s liability depend upon specified criteria, purports to deny him all right to resist an assessment by proving in the courts that the criteria of liability were not satisfied in his case’. The purported tax is thereby converted to an impost which is made payable regardless of whether the circumstances of the case satisfy the criteria relied upon for characterisation of the impost as a tax and for characterisation of the law which imposes it as a law with respect to taxation. Such an incontestable impost is not a tax in the constitutional sense and a law imposing such an impost is not a law with respect to taxation within s 51(ii). It is in this sense that an incontestable tax is invalid.

In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 5.1.18C at 111, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ referred to this passage with approval. [page 463]

Non-compliance with form: s 55 5.1.31E

Commonwealth Constitution

53 Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But 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. The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government. The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people. The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications. Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws. 55 Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Laws imposing taxation, except laws imposing duties of customs

or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only.

5.1.32 Under s 53 of the Constitution, the Senate cannot amend bills imposing taxation. This constraint on the power of the Senate underlies the role of s 55 which is commonly described as intended to bar ‘tacking’: see Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 471 5.1.6C. Speaking of s 55, Barton ACJ in Buchanan v Commonwealth (1913) 16 CLR 315 at 328 explained this purpose in the following passage: The paragraph is clearly to protect the House representing the States from being faced with the alternative of rejecting a tax Bill necessary for the adjustment of the finances, or passing it with the addition of some matter of policy independent of taxation, to which they might be emphatically opposed.

As infringement of s 55 results in invalidity, it is vital that the form of Commonwealth taxation legislation adheres to its terms. 5.1.33 The need for care in the drafting of Commonwealth taxing laws in light of s 55 was emphasised in Re Dymond (1959) 101 CLR 11. There, the High Court was asked whether most of the provisions in the Sales Tax Assessment Act (No 2) 1930 (Cth) were invalid because the Act included a provision imposing taxation, while the bulk of the Act dealt with matters other than the imposition of taxation. [page 464]

Fullagar J, with whom Dixon CJ, Kitto and Windeyer JJ agreed, held that the Act was valid because the provision in question imposed a penalty, not a tax (see 5.1.26). However, Fullagar J went on to express his opinion (necessarily obiter) that, if the provision had imposed taxation, the bulk of the Act would have fallen foul of s 55 of the Constitution. The other parts of the Act dealt with the collection of tax, assessments, objections and appeals, and offences and penalties. Fullagar J endorsed some observations of Isaacs J in Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 187–92, to the effect that s 55 was intended to protect the position of the Senate: 101 CLR at 20. He then outlined what he saw as the drafting requirements of s 55 (101 CLR at 20–1): It may very well be that an Act imposing an income tax could, without offending against s 55, contain all or most of the provisions in fact contained in Pt III of the Income Tax and Social Services Contribution Assessment Act, which is headed ‘Liability to Taxation’. Such provisions do not impose taxation, but they deal with the imposition of taxation, because the specification of the persons who are to be liable to taxation and the definition of their liability is part of the denotation of the term ‘imposition of taxation’. But provisions for administration and machinery, the appointment and powers and duties of a commissioner of taxation, the making of returns and assessments, the determination of questions of law and fact relating to liability, the collection and recovery of tax, the punishment of offences, stand on a different footing. They ‘deal with’ matters which must be dealt with if the imposition of the tax is to be effective. But they cannot be said to deal with the imposition of taxation, because their subject matter is not comprehended within the meaning of the term ‘imposition of taxation’.

On the other hand, three justices of the court, McTiernan, Taylor and Menzies JJ, took a broader view of the class of provisions that

could be described as dealing ‘with the imposition of taxation’ and therefore included in a law imposing taxation. Taylor J pointed out that a number of justices had ‘consistently held that provisions for the assessment collection and recovery of tax are provisions which deal with the imposition of taxation’ (101 CLR at 24); and endorsed the proposition that a provision ‘fairly relevant or incidental to the imposition of a tax on one subject of taxation’ could be combined with a law imposing taxation: 101 CLR at 24. Menzies J (with whom McTiernan J agreed) noted that Isaacs J had been in the minority in Federal Commissioner of Taxation v Munro (1926) 38 CLR 153, where Starke J had held that it was ‘not unlawful to include in a taxing Act provisions incidental and auxiliary to the assessment and collection of the tax’ (38 CLR at 215); and that a similar view was part of the decision of the High Court in Moore v Commonwealth (1951) 82 CLR 547: see 101 CLR at 26–7. Menzies J noted that British parliamentary convention, on which ss 53, 54 and 55 of the Constitution were based, prevented the House of Lords from altering taxation bills so as to change a tax’s ‘duration, mode of assessment, levy, collection, appropriation, or management; or the persons who pay, receive, manage or control … [the tax]; or the limits within which’ the tax was leviable: 101 CLR at 27–8. 5.1.34 After Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630 (see 6.2.95) was decided, the Commonwealth enacted the Commonwealth Places (Mirror Taxes) Act 1998. The Mirror Taxes Act amended the Commonwealth Places (Application of Laws) Act 1970 (Cth) to ensure that state taxes could apply in Commonwealth public places within the meaning of s 52 of the Constitution. In 2001, the

Commissioner of State Revenue made a stamp duty assessment in respect of a development agreement for a [page 465] hotel at Tullamarine Airport in Melbourne. The land was vested in the Commonwealth and had been leased. Permanent Trustee was a party to the development agreement and objected to the stamp duty assessment. The issue of the validity of the Mirror Taxes Act was raised as part of this objection. In Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388, the appellant argued that the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) contravened the first paragraph of s 55 of the Constitution by including provisions dealing with assessment, objections, appeals and collection in a law imposing taxation; and the respondent argued that, if the Act was subject to s 55, those provisions dealt with the imposition of taxation, and the obiter views of the majority in Re Dymond should be rejected. A majority of the High Court, comprising Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ (McHugh and Kirby JJ not deciding) held that provisions dealing with assessment, objections, appeals and collection could be included in a law imposing taxation. Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ rejected submissions of the Commissioner and the Commonwealth Attorney-General (intervening) that s 55 did not apply to a Commonwealth public place within the meaning of s 52 of the Constitution: 220 CLR at 407. Applying the Cole v Whitfield (1988) 165 CLR 360 9.4.13C principle of constitutional

interpretation and commencing with an analysis of the purposes of s 55 envisioned by the participants in the Convention Debates, their Honours provided an exhaustive and detailed history of ‘tacking’ — attempts to include additional material in an Act to which one might object if it was raised separately — and concluded as indicated in the following extract. 5.1.35C

Permanent Trustee Australia Ltd v Commissioner of State Revenue (Vic) (2004) 220 CLR 388

Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ: … ‘Dealing with the imposition of taxation’ In the line of cases in this Court to which reference has been made, there were expressed differing opinions on the question of construction of the first limb of s 55. None was essential to the outcome in any of these decisions. Isaacs J alone was of opinion that there was no distinction between ‘imposing taxation’ and ‘dealing with the imposition of taxation’ in s 55 so that a law providing machinery for assessment, levying, collection and recovery of tax was not a law dealing with the imposition of taxation (Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 184–193). That involved reading s 55 as if it stated ‘laws imposing taxation shall only impose taxation’. On the issue of construction alone, the view of Isaacs J should not be accepted. … If the construction advanced by Isaacs J be rejected, the question then becomes one of the scope of the phrase ‘dealing with’ the imposition of taxation. As to this, it was accepted by Dixon CJ, Fullagar J, Kitto J and Windeyer J in Re Dymond (1959) 101 CLR 11 at 17, 20–21, 23, 29 that … [at 20–1]:

[an Act] would not be ‘dealing with’ anything other than the imposition of taxation if it prescribed the persons who were to pay the tax and the classes of income in respect of which they were to be taxed. It may very well be that an Act imposing an income tax could, without offending against s 55, contain all or most of the provisions in fact contained in Pt III of the Income Tax and Social Services Contribution [page 466] Assessment Act [1936 (Cth)], which is headed ‘Liability to Taxation’. Such provisions do not impose taxation, but they deal with the imposition of taxation, because the specification of the persons who are to be liable to taxation and the definition of their liability is part of the denotation of the term ‘imposition of taxation’. The other view goes further and accepts that provisions for the assessment, collection and recovery of tax are provisions which deal with the imposition of taxation. That proposition, with which the above majority disagreed, was accepted by McTiernan J, Taylor J and Menzies J in Re Dymond (1959) 101 CLR 11 at 17, 23–25, 26–28. This conclusion follows from a construction of the words ‘dealing with’ as allowing ‘the insertion of any provision which is fairly relevant or incidental to the imposition of a tax on one subject of taxation’ and the inclusion ‘in a taxing Act [of] provisions incidental and auxiliary to the assessment and collection of the tax’. The former formulation is that of Higgins J in Osborne (1911) 12 CLR 321 at 373 and the latter that of Starke J in Munro (1926) 38 CLR 153 at 215. Conclusions respecting the first limb of s 55 These formulations by Higgins J and Starke J should be accepted. They are consistent with the evident purpose of s 55, supported

by its history, of restraining abuse by the House of Representatives of its powers with respect to taxing measures by the tacking of other measures and so placing the Senate in the invidious position of which Deakin spoke in his argument in Stephens (1903) 29 VLR 229 at 235. ‘Tacking’ is quite a different matter to the insertion in a taxing statute of provisions for the assessment, collection and recovery of that tax. To accept these propositions means that a law containing added provisions of this nature is still a ‘law imposing taxation’ to which there attaches the stipulation in s 53 of the Constitution denying to the Senate a power of amendment but enabling a return of Bills with a request, by message, for omission or amendment of any items or provisions therein. However, the construction of the first limb of s 55 which should be accepted does not foreclose further observance of a practice or convention of splitting Bills between a taxing Act and an assessment Act. An assessment Act of the character of those in the numerous decisions of this Court discussed earlier in these reasons will not be a law imposing taxation with respect to which s 53 will restrict the powers of the Senate. The Mirror Taxes Act is an example of a legislative purpose of the House of Representatives which could only be achieved with difficulty by the splitting of Bills. In these and other cases where the House of Representatives decides upon a like course, the law which imposes taxation may deal with the assessment, collection and recovery of taxation without falling foul of the first limb of s 55. The provisions of the Mirror Taxes Act including the application of the Stamps Act in its modified form appear to answer the description of laws providing for the assessment, collection and recovery of taxation, and so to be valid. No detailed submission to the contrary effect was made. Were such a point to be taken, a further issue would arise. This would be whether the impugned provisions nevertheless answered the more general expressions used by Higgins J and Starke J as to the width of the term

‘dealing with’. These questions do not presently arise and may be put to one side. The result is there should be answered ‘No’ the question in par (a)(i) of question 2 of the case stated, namely whether the Mirror Taxes Act is invalid or ineffective to permit the assessment of duty under the assessment on the ground that, contrary to s 55 of the Constitution, it is a law imposing taxation and deals with a subject matter or subject matters other than the imposition of taxation. …

[page 467] 5.1.36 On the specific operation of s 55 where an amending measure which imposes taxation is added to a principal Act which deals with other matters, see Air Caledonie International v Commonwealth (1988) 165 CLR 462 5.1.6C. 5.1.37 The second paragraph of s 55 states that ‘[l]aws imposing taxation … shall deal with one subject of taxation only’. Laws imposing customs or excise duties are excepted from this requirement, ‘but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only’. This paragraph has been considered by the High Court in cases including Resch v Federal Commissioner of Taxation (1942) 66 CLR 198, State Chamber of Commerce and Industry v Commonwealth (Second Fringe Benefits Tax case) (1987) 163 CLR 329 and Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation (1992) 173 CLR 450.

Characterisation and s 51(ii) 5.1.38 The approach of the early High Court to the question of when a Commonwealth law can be said to have a sufficient connection with the subject of ‘taxation’ so as to be characterised as a law ‘with respect to’ that topic was outlined in R v Barger (1908) 6 CLR 41. 5.1.39C

R v Barger (1908) 6 CLR 41

[The Excise Tariff Act 1906 (Cth) imposed a tax on the manufacturers of agricultural machinery with an exemption for those manufacturers who paid their employees ‘fair and reasonable’ wages. The Commonwealth Government brought proceedings in the High Court against two manufacturers of agricultural machines. In each case, the Commonwealth sought to recover excise duties on machinery which, it alleged, had not been manufactured under any of the conditions of employment specified in the Act. The defendants claimed that the Act was invalid.] Griffith CJ, Barton and O’Connor JJ: It is not disputed that the effect of the Act now in question, if valid, is to enable the Commonwealth to exercise a large though indirect influence upon the conditions of labour employed in the manufacture of agricultural implements in the several States. The Attorney-General claimed that the Commonwealth should have this power, and very properly pointed out that in many cases the result of the exercise of the power of taxation is to bring about indirect consequences which are desired by the legislature, and which could not practically, or could not so easily, be brought about by other means. The policy of protective tariffs rests upon this basis. The effect of a protective tariff may be to raise or lower

prices, or to raise or lower rates of wages. In a Federal State it may not be within the competence of the taxing authority to interfere directly with prices or wages, but the circumstance that a tax affects those matters indirectly is irrelevant to the question of competence to impose the tax. In other words, the circumstance that an indirect effect may be produced by the exercise of admitted power is irrelevant to the question whether the legislature is competent to prescribe the same result by a direct law … Again, the motive which actuates the legislature, and the ultimate end desired to be attained, are equally irrelevant. A Statute is only a means to an end, and its validity depends [page 468] upon whether the legislature is or is not authorised to enact the particular provisions in question, entirely without regard to their ultimate indirect consequences … The scheme of the Australian Constitution … is to confer certain definite powers upon the Commonwealth, and to reserve to the States, whose powers before the establishment of the Commonwealth were plenary, all powers not expressly conferred upon the Commonwealth … The grant of the power of taxation is a separate and independent grant … In interpreting the grant it must be considered not only with reference to other separate and independent grants, such as the power to regulate external and interstate trade and commerce, but also with reference to the powers reserved to the States. It was not contested in argument that regulation of the conditions of labour is a matter relating to the internal affairs of the States, and is therefore reserved to the States and denied to

the Commonwealth, except so far as it can be brought within one of the 39 powers enumerated in s 51. We are thus led to the conclusion that the power of taxation, whatever it may include, was intended to be something entirely distinct from a power to directly regulate the domestic affairs of the States, which was denied to the Parliament … The Constitution must be considered as a whole, and so as to give effect, as far as possible, to all its provisions. If two provisions are in apparent conflict, a construction which will reconcile the conflict is to be preferred. If, then, it is found that to give a particular meaning to a word of indefinite, and possibly large, significance would be inconsistent with some definite and distinct prohibition to be found elsewhere, either in express words or by necessary implication, that meaning must be rejected. It follows that if the control of the internal affairs of the States is in any particular forbidden, either expressly or by necessary implication, the power of taxation cannot be exercised so as to operate as a direct interference. Prima facie, the selection of a particular class of goods for taxation by a method which makes the liability to taxation dependent upon conditions to be observed in the industry in which they are produced is as much an attempt to regulate those conditions as if the regulations were made by direct enactment. The distinction has already been pointed out between the indirect effect of the imposition of taxes upon the importation or production of particular goods which may, in effect, be prohibitive, and the direct regulation of the conditions of the production of goods. … It is clear that the power to pass such an Act must be vested either in the Parliament or in the State legislatures. If the tax is an excise duty within the meaning of s 90, the power of the Parliament is exclusive, and the State could not impose it. [Griffith CJ, Barton and O’Connor JJ said that a state legislature

could regulate conditions of labour by prescribing those conditions, subject to a penalty; imposing a licence fee; or following the model of the present Commonwealth legislation.] In any of the cases supposed the purpose of the Act, apparent on its face, whatever attempt might be made to disguise it in the title, would be, not to raise money for the purposes of government, but to regulate the conditions of labour. From this point of view an inquiry into the purpose of an Act is not an inquiry into the motives of the legislature, but into the substance of the legislation. And for the purpose of determining whether an attempted exercise of legislative power is warranted by the Constitution regard must be had to substance — to things, not to mere words … [page 469] In our opinion the exclusive power of the Parliament to impose duties of excise cannot be construed as depriving the States of the exclusive power to make such enactments as we have suggested above … Isaacs J: The unlimited nature of the taxing power … is incontestable. Its exercise upon all persons, things and circumstances in Australia is, in my opinion, unchallengeable by the courts, unless … a judicial tribunal finds it repugnant to some express limitation or restriction … [S]uch a conclusion, as my learned brethren preceding me have reached, necessarily gives determinative force to the purpose and effect of the Act, and the assumed object and motive of the legislature in passing it, and this is not permissible in such a case. The Act is by this process taken to be equivalent to an enactment containing no reference to a tax, and consisting merely

of regulative provisions; the words of the Commonwealth Parliament are rejected, and others it has not used are constructively substituted. No similar case can be found. It would be perfectly easy to destroy every Excise Act in a similar manner. All that is necessary is to apply the doctrine of equivalence. The Commonwealth imposes, say, a gun tax or a dog tax of £1 a year. That might be regarded as a penalty on keeping a gun or a dog; such a tax is very frequently said colloquially to be a penalty. A motor car tax might, in like manner, be held equivalent to a penalty on the possession of motor cars. The State might penalise the possession of opium by a £100 fine for every ounce. If the Commonwealth, for the purpose of suppressing the evil, imposes a tax of £100 an ounce could it be said it was only a penalty for regulation, and not a tax? But I do not see how such an Act could stand, if this Excise Tariff 1906 is bad. Let us get even closer to the present Act. Take the case of cigarettes. A differential excise tax of, say, six pence per pound is placed on cigarettes if made by machine. Is that a penalty on using machinery and unlawful? … What difference of principle is there between any of the cases suggested? In all of them the tax is on the goods, but for various reasons, motives, objects, or purposes which seem to the legislature appropriate to actuate it in the exercise of the granted power … It must not be forgotten that, always apart from express restrictions — there being no more limit on the power of Commonwealth taxation than on that of a State — persons may be taxed in any class, at any rate, for any reason. Manufacturers may be taxed at one rate, for one reason, at another for another, or exempted for a third. How can a court step in and say the employment of labour at low rates is not a reason which the legislature may select, and adjudge that such a reason converts the Act into one of penal regulation. We are therefore thrown back on the fundamental distinction between taxation and regulation.

The true test as to whether an Act is a taxing Act, and so within the Federal power, or an Act merely regulating the rates of wages in internal trade, and so within the exclusive power of the State, is this: Is the money demanded as a contribution to revenue irrespective of any legality or illegality in the circumstances upon which the liability depends, or is it claimed as solely a penalty for an unlawful act or omission, other than non-payment of or incidental to a tax? It is not sufficient to say the effect is the same. It may even be the very purpose of the Federal taxing authority to drive the taxed object out of existence; but as the power to tax includes the power ‘to embarrass or to destroy’, neither the purpose nor the effect is an objection to the exercise of the power. [Higgins J delivered a separate judgment to the same effect as Isaacs J.]

[page 470] 5.1.40 The majority judgment in R v Barger, holding that the Excise Tariff Act 1906 was not a law with respect to taxation, but a law with respect to conditions of labour, was influenced by the now discarded doctrine of state reserved powers: the rule that the specific legislative powers of the Commonwealth Parliament were to be interpreted so as to reserve for the states the maximum possible area of autonomous legislative power. 5.1.41 While the majority’s approach to characterisation in R v Barger supposedly focused on ‘the substance of the legislation’ (6 CLR at 75), Isaacs J argued that the majority approach, which he termed ‘the doctrine of equivalence’ (6 CLR at 97), could not be

applied in a consistent and principled fashion. Osborne v Commonwealth (1911) 12 CLR 321 might be seen to bear out Isaacs J’s view. There, a landowner challenged the validity of the Land Tax Act 1910 (Cth) which imposed a tax on the owners of land at rates which increased as the value of the land owned increased. It was argued that the purpose of the Act was not so much to raise revenue as to prevent the holding of a large quantity of land by a single person. The contention was rejected by the court (Griffith CJ, Barton, O’Connor, Isaacs and Higgins JJ). Barton J said (12 CLR at 344–5): Now, this legislation has nothing in its terms which dictates who shall hold land and who shall not, or how much land any person shall hold. Assuming that the taxation which it imposes is drastic, as it is alleged to be, still it is not the function of the Court to say that drastic taxation on landed interests will prevent residents from owning large areas, or prevent landholders from residing out of Australia, or prevent absentees from holding land within the Commonwealth. Nor is it our function to say what degree of inducement to abstain from doing these things amounts to a prevention of the doing of them. … Questions of the abuse of power are for the people and Parliament. We can only determine whether the power exists, and if so, whether Parliament has in fact and in substance acted within it. It is of the essence of the taxing power that when exercised to the full it may destroy the interest or the industry taxed. But even so, interference would involve the Court in the political function of deciding in what degree Parliament is justified in using a power on the exercise of which the Constitution itself places no limit.

Zines has suggested that the distinction between Barger’s case and Osborne ‘lay in the fact that in the former the object to be achieved — namely, the control of labour conditions rather than the collection of revenue — was regarded as being apparent on its face’: Zines, 1997, p 30.

5.1.42 The approach to characterisation of taxation laws adopted by the majority in R v Barger (1908) 6 CLR 41 has since been overtaken by a stream of more recent High Court decisions, including Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1. Similarly, the High Court’s reasoning in Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 (see 5.1.45) cannot be reconciled with Barger’s case. In Murphyores Inc Pty Ltd v Commonwealth (1976) 136 CLR 1 4.1.29C, Mason J described Barger’s case as ‘no longer … having authority’: 136 CLR at 23. 5.1.43C Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 [Under s 23(j) and (ja) of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth) the income of a superannuation fund had been exempt from income tax. In 1961, the Act was amended so that, according to s 121C of the Act, the income of a [page 471] superannuation fund would not be exempt under s 23(j) and (ja) unless the Commissioner of Taxation was satisfied that 30 per cent of the fund’s assets were invested in ‘public securities’, including a 20 per cent investment in ‘Commonwealth securities’. Both types of securities were defined in s 6 of the Act. Fairfax, Henderson and Palmer were the trustees of the Sydney Morning Herald Centenary Fund, a superannuation fund established for employees of John Fairfax and Sons Ltd. The Commissioner of Taxation assessed income tax on the income of the fund for the year

ended 30 June 1962, on the basis that the fund’s investments did not meet the standards in s 121C of the Act. The High Court considered whether the 1961 amendments made by s 11 of the Income Tax and Social Services Contribution Assessment Act 1961 were valid.] Kitto J: The contention of the appellant trustees is that no head of Federal legislative power will support the enactment of s 11. It is, they say, a law with respect to the investment of the moneys of superannuation funds, a subject which is not one upon which the Parliament has any power to make laws. The commissioner’s answer is that s 11 is a law with respect to taxation, whatever else it is, and is therefore to be upheld as an exercise of the power conferred on the Parliament by s 51(ii) of the Constitution. The argument for invalidity not unnaturally began with the proposition that the question to be decided is a question of substance and not of mere form, but the danger quickly became evident that the proposition may be misunderstood as inviting a speculative inquiry as to which of the topics touched by the legislation seems most likely to have been the main preoccupation of those who enacted it. Such an inquiry has nothing to do with the question of constitutional validity under s 51 of the Constitution. Under that section 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? … The need to distinguish between form and substance appears from what has just been said. The possibility has to be

recognised, as it was in the United States as long ago as McCulloch v Maryland (1819) 4 Wheat 316 at 423, that under the guise of exercising one or more of the powers of the Parliament legislation may in truth endeavour only to accomplish objects beyond those powers … Accordingly the task of characterising laws according to subject matter must be performed with care lest mere words mislead. The court … ‘is not to be bound by the name which Parliament has chosen to give the Act’ — one may add, or has chosen to give anything else — ‘but is to consider what the Act is in substance — what it does, what it commands or prescribes’ … The appellant’s argument in its final form accepted this as its real starting point and proceeded to say that s 11, though it is couched in terms of taxation and wears the badge of a tax law prominently upon it, really operates to expose trustees of superannuation funds to a liability which it miscalls a tax, a liability which in truth is a penalty or sanction for a failure to pursue a prescribed course of conduct by such trustees with respect to the investment of moneys. [After describing the effect of the new legislative measures, Kitto J continued:] … in the light of these features of the enactment, a court must be blind not to see that the ‘tax’ is imposed to stop trustees of superannuation funds from failing to invest sufficiently in Commonwealth and other public securities. [page 472] But is this enough to justify the conclusion that what purports to be a set of provisions for imposing a tax upon the investment income of superannuation funds is in reality not a law with respect to taxation at all, but only a law with respect to the investment of such funds? …

… the judgment of the majority in Barger’s case provides no satisfactory guide in the case before us, partly because the doctrine of the reserved powers of the States in the wide form in which it was held by their Honours, has long since been exploded …, but more fundamentally, because we ought to maintain the principle which may be stated in words taken from the judgment of Clark J in United States v Sanchez 340 US 42 at 44 (1950): ‘… a tax does not cease to be valid merely because it regulates discourages, or even definitely deters the activities taxed. … The principle applies even though the revenue obtained is obviously negligible … or the revenue purpose of the tax may be secondary … Nor does a tax statute necessarily fall because it touches on activities which Congress might not otherwise regulate’. The operation of s 11 is to replace a total exemption from all income tax with a conditional special liability to income tax on ‘investment income’. The legislative policy is obvious and may be freely acknowledged: it is to provide trustees of superannuation funds with strong inducement to invest sufficiently in Commonwealth and other public securities. The raising of revenue may be of secondary concern. But the enactment does not prescribe or forbid conduct. Its character is neither fully or fairly described by saying that it makes trustees of superannuation funds liable to pay for failing to do what the legislature wishes … the substance of the enactment is the obligation which it imposes, and the only obligation imposed is to pay income tax. In substance as in form, therefore, the section is a law with respect to taxation. [Taylor J delivered a judgment to the same effect as Kitto J. Menzies J delivered a concurring judgment.] Menzies J: Whether or not a law is one with respect to taxation cannot be determined by looking at its economic consequences, however apparent they must have been at the time of its enactment; nor is an inquiry into the motives of the

legislature permissible. There may be laws ostensibly imposing tax which, nevertheless, are not laws with respect to taxation. For example, a special prohibitive tax upon income derived from the sale of heroin or from the growing or treatment of poppies for the production of heroin may not be a law with respect to taxation but rather a law made for the suppression of the trade in that drug by imposing penalties described as taxes for participation in it. The reason for denying to such a law the character of a law with respect to taxation would not be either its economic consequences or the motive behind its enactment. It would simply be that its true character is not a law with respect to taxation. The problem in every case is, therefore, to ascertain from the terms of the law impugned its true nature and character. In this case, there is no reason — apart from the likely consequences upon the investing of the assets of superannuation funds and the motives imputed to the legislature — for denying to s 11, which relates to exemption from income tax, the character of a law with respect to taxation. Those consequences and imputed motives, for the reason which I have given, do not deprive the law of its character as such a law. [Barwick CJ wrote a brief concurrence with Menzies J. Windeyer J delivered a brief judgment in which he concurred with the other members of the court generally.]

[page 473] 5.1.44 Why, in the view of Menzies J in Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 at 17, might ‘a special prohibitive tax upon income derived from the sale of heroin’ not be a law with respect to taxation? Is it a question of the rate of a tax?

Ought the rate of a tax govern its validity under s 51(ii)? Can a prohibitive tax imposed on an activity, or the fruits of that activity, become a penalty notwithstanding that the activity is in no way made unlawful? In examining the legal operation of a statute imposing a prohibitive tax of the kind suggested by Menzies J, what discloses its true nature as not being a law with respect to taxation? In R v Barger (1908) 6 CLR 41 5.1.39C at 97, Isaacs J offered a similar hypothetical problem, a tax of £100 an ounce on the possession of opium; though he indicated that he thought such a tax would be within s 51(ii). Isaacs J’s view is more consistent with the High Court’s contemporary approach to characterisation. 5.1.45 In Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555, the High Court rejected a challenge to the validity of the Training Guarantee Act 1990 (Cth), which imposed a levy on those employers who did not expend a minimum proportion of their payroll on training their employees. One of the arguments raised against the validity of the Act was that its purpose was not to raise revenue but to control the training activities of employers through a penalty imposed on those employers who did not train their employees in the way required by the Act and the Training Guarantee (Administration) Act 1990 (Cth). In their joint judgment, Mason CJ, Deane, Toohey and Gaudron JJ (with whose reasons on this issue Brennan J agreed) conceded that the imposition of the levy on employers was ‘a secondary object’ of the legislation and, indeed, was not listed among the Act’s stated objects (176 CLR at 569): But the fact that the revenue-raising burden is merely secondary to the

attainment of some other object or objects is not a reason for treating the charge otherwise than as a tax … One might as well suggest that a protective customs duty is not a tax because its primary object is the protection of a particular local manufacturing industry from overseas competition. If a law, on its face, is one with respect to taxation, the law does not cease to have that character simply because Parliament seeks to achieve, by its enactment, a purpose not within Commonwealth legislative power.

Mason CJ, Deane, Toohey and Gaudron JJ continued (176 CLR at 571–2): [I]n the ultimate analysis, the considerations pointing to a tax rather than a penalty are decisive. Neither the Act nor the Administration Act mandates or proscribes conduct of any kind. The legislative provisions do not make it an offence to fail to spend the minimum training requirement; nor do they provide for the recovery of civil penalties for such a failure. Consequently, the charge is not a penalty because the liability to pay does not arise from any failure to discharge antecedent obligations on the part of the person on whom the exaction falls … The fact that the legislature has singled out those who do not spend the minimum training requirement as the class to bear the burden of the charge and to quantify the amount of the liability by reference to the shortfall does not deprive the charge of the character of a tax. … the conclusion that the Act and the Administration Act are laws with respect to taxation is unaffected by the omission of the purpose of raising revenue from the statement of legislative objects.

[page 474] Dawson J (with whose reasons on this issue McHugh J agreed) said (176 CLR at 589):

[T]o say that the legislation is not designed to raise money is somewhat elliptical. In so far as it operates to impose the charge, the clear intent of the legislation is to raise revenue and to do so for the purpose of expenditure under training guarantee agreements. The fact that the wider object of the legislation is to encourage employers to pay for training programs themselves and so avoid the charge does not alter the true nature or character of the impost. After all, any protective tariff ultimately aims to eliminate the activity which gives rise to its incidence, yet a protective tariff is clearly a tax. There is more than a hint of Barger’s Case (1908) 6 CLR 41 in this aspect of the plaintiff’s argument, but that case, if it survived Osborne v The Commonwealth (1911) 12 CLR 321, was laid to rest in Fairfax v Federal Commissioner of Taxation …

5.1.46 In Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97 5.1.18C, French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ affirmed and applied the above reasoning in Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 concerning characterisation and s 51(ii). Their Honours stated (244 CLR at 112–13): The Court in Northern Suburbs … emphasised a point made earlier in these reasons: that the raising of revenue is secondary to the attainment of some other legislative object is no reason for treating an impost otherwise than as a tax … this is so even if the legislation is designed for the purpose of carrying out a policy affecting matters not directly within the legislative competence of the … Commonwealth.

EXCISE DUTIES 5.2.1 The Commonwealth’s power in s 51(ii) is not exclusive and the states retain concurrent legislative power to levy and collect their own taxation revenue. However, this is subject to an

important exception: under s 90 of the Constitution, only the Commonwealth can impose certain types of taxes known as ‘duties of customs and of excise’. The High Court has given excise a broad meaning with the consequence that the tax-base constitutionally open to the states has been correspondingly curtailed. 5.2.2E

Commonwealth Constitution

90 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. On the imposition of uniform duties of customs all laws of the several States imposing duties of customs or of excise, or offering bounties on the production or export of goods, shall cease to have effect, but any grant of or agreement for any such bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before the thirtieth day of June, one thousand eight hundred and ninety-eight, and not otherwise.

5.2.3 The enduring difficulty posed by s 90 has been the problem of identifying the types of taxes which the states are excluded from imposing. The background to the framing of the [page 475] Constitution and the context in which s 90 appears suggest that this was intended to be a relatively narrow group of taxes; that is, the states were not to impose taxes which could undermine the

Commonwealth’s control over tariff policy. However, the current judicial orthodoxy is to the contrary: Ha v New South Wales (1997) 189 CLR 465 5.2.43C at 491–8 per Brennan CJ, McHugh, Gummow and Kirby JJ. Those who argue that s 90 was concerned only with tariff policy point to the historical evidence. One of the most substantial political issues throughout the Australian colonies in the years leading up to federation was the free trade/protection debate: see McMinn, 1979, pp 98–9, 113; Cole v Whitfield (1988) 165 CLR 360 9.4.13C at 385–92. There was strong support from both capital and labour, particularly in Victoria, for high import or customs duties on goods brought into Australia. These duties raised the prices at which imported goods could be sold in the Australian colonies and so allowed Australian-produced goods (for which production costs were relatively high) to compete with the imported goods. On the other hand, rural interests generally supported the concept of free trade — that is, of low or no import duties — partly because this kept down the prices of agricultural machinery and partly because rural interests were hoping for free access to overseas markets for their products: wheat, wool and other primary produce. The free trade movement was especially strong in New South Wales where it was, paradoxically, associated with urban, radical politics and where rural interests favoured protection: see Sawer, 1956, p 14. At the Constitutional Conventions of the 1890s, the decision was taken that the resolution of the argument over the tariff policy should be left to the new national government and parliament: see McMinn, 1979, p 106; La Nauze, 1972, pp 39, 41; Cole v Whitfield 165 CLR at 385–92. Section 88 of the Constitution embodies that decision:

88 Uniform duties of customs shall be imposed within two years after the establishment of the Commonwealth.

Indeed, during the first years of the Commonwealth, party politics were conducted as a struggle between free trade supporters and protectionists, with the Australian Labor Party forming the third political force and attempting to hold the balance between the other two: see, for example, Sawer, 1956, pp 15–19, 24, 34–7. 5.2.4 Given this background, the purpose of s 90 seemed clear to some commentators. The Commonwealth was given exclusive power over customs duties to ensure that it, and not the states, should determine the level of protective tariffs which might, from time to time, be imposed on imported goods. The Commonwealth was given exclusive control of excise duties and bounties on the production of goods to ensure that no state should frustrate or undermine the former’s tariff policy decisions. The argument that s 90 is concerned to ensure Commonwealth control of tariff policy is reinforced by the context in which it appears, namely, s 88, requiring uniform customs duties; the juxtaposition in s 90 of ‘bounties on the production or export of goods’ with ‘duties of customs and of excise’; and the spelling out in s 93 that ‘duties of customs’ are paid on goods imported into a state and ‘duties of excise’ are ‘paid on goods produced or manufactured in a State’. It is this context and the background to s 90 which, in combination, make a strong case for the argument that the taxes forbidden to the states by that section were taxes which, because of their application to imported or locally produced goods, would interfere with the Commonwealth’s tariff policies; that is, taxes which in their application discriminated between imported and locally produced goods. This view of the purpose of s 90 is spelt out

[page 476] in, for example, Parton v Milk Board (Vic) (1949) 80 CLR 229 (see 5.2.10) at 264–7 per McTiernan J; Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C at 555–6 per Fullagar J; Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 5.2.30C at 616, 638, 661–2 per Gibbs CJ, Murphy and Deane JJ. 5.2.5 However, the trend of judicial decisions on s 90, including the restatement in Ha v New South Wales (1997) 189 CLR 465 5.2.43C, has been towards a wider definition of ‘duties of excise’ and seeing that section as serving a wider purpose than guaranteeing the Commonwealth’s control of tariff policy. There are, in judgments delivered by the High Court, consistent references to s 90 giving the Commonwealth ‘real control of the taxation of commodities’: Parton v Milk Board (Vic) (1949) 80 CLR 229 at 260 per Dixon J. See also, for example, Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 at 17 per Barwick CJ; Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 at 631 per Mason J. To some commentators, such a broadranging objective is implausible if the intentions of the politicians who drafted the Commonwealth Constitution are taken into account and given weight. But, if the policy concern is to construct a rational or efficient distribution of fiscal power for contemporary economic and political needs (rather than those of the 1890s), it may be that this wider objective, and the consequentially wide definition of excise duties, can be justified. This approach was reflected in the most recent significant statement on s 90, the joint judgment of Brennan CJ, McHugh, Gummow and Kirby JJ in Ha v New South Wales: 189 CLR at 496.

5.2.6 The early reading of s 90 was spelt out in Quick and Garran, 1901, p 837 and in one of the first decisions of the High Court of Australia. In Peterswald v Bartley (1904) 1 CLR 497, the court held that a flat-rate licence fee imposed on brewers of beer as the price of state permission to brew beer was not an excise duty. That term, said Griffith CJ, Barton and O’Connor JJ (1 CLR at 509): … is intended to mean a duty analogous to a customs duty imposed upon goods either in relation to quantity or value when produced or manufactured, and not in the sense of a direct tax or personal tax.

The court pointed out that the tax (or licence fee) at issue was not calculated by quantity or value of the thing produced (1 CLR at 511) and repeated that excise duties were ‘limited to taxes imposed upon goods in process of manufacture’: 1 CLR at 512. 5.2.7 This relatively narrow view of s 90 was partly influenced by the early justices’ belief that the Constitution should be construed so as to preserve intact the states’ capacity to regulate their internal affairs (1 CLR at 507) — the ‘reserved powers’ or ‘implied prohibition’ doctrine: see 6.2.10–6.2.14. The narrow view that emerged from Peterswald v Bartley was expressed in several ways: that the excise duty must be a tax upon locally produced goods, that it must be imposed at the point of production, and that it must be a tax which is in proportion to quantity or value. Even though the ‘reserved powers’ doctrine was unequivocally rejected in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129 3.2.22C, the process of expanding the scope of s 90 and discarding the various strands of

the Peterswald v Bartley reading of excise duty was not completed until 1949 and the decision in Parton v Milk Board (Vic) (1949) 80 CLR 229. [page 477] 5.2.8 In Commonwealth v South Australia (Petrol case) (1926) 38 CLR 408, the High Court considered the validity of South Australian legislation which taxed the first sale in the state of both locally produced and imported petrol: Taxation (Motor Spirit Vendors) Act 1925 (SA) s 2(1). The majority of the court adhered to the analysis of excise duties given in Peterswald v Bartley (1904) 1 CLR 497. Isaacs J said (38 CLR at 426): Licences to sell liquor or other articles may well come within an excise duty law, if they are so connected with the production of the article sold or are otherwise so imposed as in effect to be a method of taxing the production of the article. But if in fact unconnected with production and imposed merely with respect to the sale of the goods as existing articles of trade and commerce, independently of the fact of their local production, a licence or tax on the sale appears to me to fall into a classification of governmental power outside the true content of the words ‘excise duties’ as used in the Constitution.

However, Isaacs J concluded that to tax the first sale of locally produced petrol was to impose an excise duty, because it was ‘essentially a burden and a tax on the production of the goods’, and the tax on the first sale of imported petrol was ‘substantially a tax on imports — in other words, a customs tax’: 38 CLR at 430. Higgins, Powers and Starke JJ also held that the legislation imposed both an excise duty and a customs duty, while Knox CJ

held that, in its application to the first sale of locally produced petrol, the legislation imposed an excise duty: 38 CLR at 419–20. Rich J adopted a wider view of excise duties (38 CLR at 437): In my opinion, the Constitution gives exclusive power to the Commonwealth over all indirect taxation imposed immediately upon or in respect of goods, and does so by compressing every variety thereof under the term ‘customs and excise’. If the expression ‘duties of excise’ be restricted to duties upon or in respect of goods locally produced the fiscal policy of the Commonwealth may be hampered. One authority should exercise the complementary powers of customs, excise and bounties without hindrance, limitation, conflict or danger of overlapping from the exercise of a concurrent power by another authority vested in the States.

5.2.9 In Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263, a majority of the High Court (Rich, Starke and Dixon JJ) held that a Victorian tax upon the producers of chicory of £1 for every half-acre planted with chicory was an excise duty, notwithstanding that the tax was not directly tied to the quantity or value of chicory produced. Dixon J, after an extensive review of the historical usage of the term ‘excise’, said that it described ‘a tax on or connected with commodities’: 60 CLR at 302. To confine it to taxes which had an arithmetical nexus with quantity or value (60 CLR at 304): … would expose the constitutional provision made by s 90 to evasion by easy subterfuges and the adoption of unreal distinctions. To be an excise the tax must be levied ‘upon goods’, but those apparently simple words permit of much flexibility in application. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. But if the substantial effect is to impose a levy in respect of the commodity the fact

that the basis of assessment is not strictly that of quantity or value will not prevent the tax falling within the description, duties of excise.

[page 478] 5.2.10 The erosion of the Peterswald v Bartley conception of ‘excise duties’ continued with Parton v Milk Board (Vic) (1949) 80 CLR 229. There, the High Court held that Victorian legislation imposing a tax on dairy distributors of one-eighth of a penny a gallon of milk sold or distributed in Melbourne was an excise duty. The majority (Rich, Dixon and Williams JJ) clearly saw s 90 as preventing the states from taxing any dealing in a commodity (other than consumption of that commodity). They apparently rejected the view that excise duties were confined to taxes on locally produced goods and unequivocally asserted that a state tax on distribution or sale of a commodity would be struck down by the section. Dixon J said (80 CLR at 260): In making the power of the Parliament of the Commonwealth to impose duties of customs and of excise exclusive it may be assumed that it was intended to give the Parliament a real control of the taxation of commodities and to ensure that the execution of whatever policy it adopted should not be hampered or defeated by State action. A tax upon a commodity at any point in the course of distribution before it reaches the consumer produces the same effect as a tax upon its manufacture or production. If the exclusive power of the Commonwealth with respect to excise did not go past manufacture and production it would with respect to many commodities have only a formal significance.

Rich and Williams JJ said (80 CLR at 252) that to be an excise duty, a tax:

… must be imposed so as to be a method of taxing the production or manufacture of goods, but the production or manufacture of an article will be taxed whenever a tax is imposed in respect of some dealing with the article by way of sale or distribution at any stage of its existence, provided that it is expected and intended that the taxpayer will not bear the ultimate incidence of the tax himself but will indemnify himself by passing it on to the purchaser or consumer.

(The exclusion, by all three justices, of taxes on consumption was prompted by a Privy Council decision of dubious relevance: Atlantic Smoke Shops Ltd v Conlon [1943] AC 550.) The extent to which the judgments of the majority in Parton’s case expanded the concept of ‘excise duties’ (and, consequently, contracted the taxing power of the states) was thrown into sharp focus by the two dissenting judgments: those of Latham CJ and McTiernan J. Latham CJ maintained that Peterswald v Bartley, which had limited excise duties to taxes ‘upon goods in process of manufacture’ (1 CLR at 512), should be followed. While a tax on the first sale by the manufacturer could be treated as a tax on manufacture or production (as in Commonwealth v South Australia (Petrol case) (1926) 38 CLR 408 (see 5.2.8)), a tax upon any later sale or dealing in the commodity was not a tax upon production and, therefore, not an excise duty: 80 CLR at 245–6. McTiernan J went back to a proposition of Isaacs J in the Petrol case, that taxes on the sale of ‘goods as existing articles of trade and commerce, independently of the fact of their local production’ were not excise duties: 38 CLR at 426. McTiernan J said that to limit s 90 in this way, so that it only withdrew from the states the power to tax local manufacture or production, would conform to the object of s 90 — that being ‘a uniform fiscal policy for the

Commonwealth’: 80 CLR at 265. Further, his Honour made it clear, through an example about customs and excise duties in the United Kingdom, that he meant a uniform tariff policy: see 80 CLR at 264–7. 5.2.11 McTiernan J was in a minority in Parton v Milk Board (Vic) (1949) 80 CLR 229, and his view of s 90’s purpose was eclipsed by Dixon J’s view that the section ‘was intended [page 479] to give the Parliament a real control of the taxation of commodities’ (80 CLR at 260) — a substantially broader objective. Sharp differences of judicial opinion over the objective of s 90 and over the inroads which the section makes on the states’ taxing power were to persist. The most recent example can be found in Ha v New South Wales (1997) 189 CLR 465 5.2.43C comparing the views expressed in the joint majority judgment of Brennan CJ, McHugh, Gummow and Kirby JJ with the dissenting joint opinion of Dawson, Toohey and Gaudron JJ. But, from Parton v Milk Board (Vic) onward, the view argued for by Dixon J was to dominate the court’s approach to s 90 issues. 5.2.12 The Dixonian view, that the purpose of s 90 is to place commodity taxes beyond the reach of the states’ legislative power, was, for a time, modified in two ways. First, some judges insisted, when deciding whether a state tax is a tax ‘upon goods’ and therefore an excise duty, that it is the form of the tax rather than its substance which is critical. This legalistic approach played a pivotal part in the majority’s decision in Dennis Hotels Pty Ltd v Victoria

(1960) 104 CLR 529 5.2.13C, a decision which drove a substantial wedge through any protection, broad or narrow, which s 90 might be thought to offer to the Commonwealth and its fiscal policies. In that case, a licence fee was said to be a fee for the privilege of carrying on a business (a business franchise fee) rather than a tax upon goods caught by s 90, because the amount of the fee was calculated upon sales of liquor in a period before the licence period. While the majority of the court has not always taken that legalistic approach (see, for example, Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 5.2.30C), the decision in Dennis Hotels Pty Ltd v Victoria narrowly survived and, until Ha v New South Wales (1997) 189 CLR 465 5.2.43C, formed the basis for very substantial state taxes on goods. For example, by following the Dennis Hotels formula, New South Wales expected to collect $852 million in 1995–96 from tobacco licence fees alone: see Ha v New South Wales 189 CLR at 502. The second way in which the court modified the impact which its view of s 90 would otherwise have on state taxing powers was by developing the proposition that s 90 does not prevent the states taxing the consumption of goods. This modification has not been exploited by the states to the extent that they exploited Dennis Hotels Pty Ltd v Victoria, largely because of the difficulty of devising cost-effective systems for collecting consumption taxes: see Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 5.2.24C. It is extremely unlikely that the states would introduce a consumption tax now, in light of the fact that the Commonwealth has introduced a goods and services tax (GST). 5.2.13C

Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529

[The Licensing Act 1958 (Vic) prohibited the selling of liquor except by a person licensed under the Act. Vignerons, brewers, spirit merchants, grocers, hotelkeepers and clubs were obliged to hold licences on which they paid annual licence fees. According to s 19(1)(a) of the Act, the fee for a victualler’s licence (that is, the licence required for the sale of liquor in a hotel) was 6 per cent of the amount paid or payable for all liquor purchased by the licensee during a 12-month period ending on 1 June preceding the date of the application for the licence. According to s 19(1)(b) of the Act, the fee for a temporary licence was £1 for each day the licence was in force, plus 6 per cent of the amount paid or payable for all liquor purchased by the licensee for sale under the licence. Other provisions of the Act fixed [page 480] licence fees for vignerons, brewers, spirit merchants, grocers, wine bars and clubs. In every case, except that of vignerons, the fee was equivalent to 6 per cent of turnover during the preceding year. Dennis Hotels Pty Ltd was the licensee of a hotel in Victoria and had held a number of temporary licences. It began an action in the High Court of Australia against the State of Victoria, seeking to recover (as money had and received) £12,703 paid by the company to Victoria for renewal of its victualler’s licence for the period 1 January to 31 December 1958, and £68 paid for temporary licences during the period 21 January to 5 July 1958. The company claimed that this money had been demanded from it under invalid provisions of the Licensing Act and had been paid by the company involuntarily. The State of Victoria demurred to the statement of claim, asserting that the Licensing Act was valid. The demurrer came on for hearing before the Full Court.] Dixon CJ: A careful consideration of the Victorian licensing law, which is now embodied in the Licensing Act 1958 (No 6293), has made it clear to me that a connected series of provisions ensures that, subject to exceptions that are of no

importance either because they are theoretical and not real or because they are too trivial to matter, all liquor sold in Victoria must bear a tax of six per cent of its wholesale price or value before it reaches the consumer. … It is, I believe, an undeniable proposition that, subject to the unimportant exceptions I have mentioned, because of the provisions of the Licensing Act no liquor can be bought by retail in Victoria unless in respect of it someone has paid, has become liable to pay or will be placed in a situation which will from the necessity of the case involve him in paying to the Victorian Treasury an amount equal to six per cent of the wholesale selling price of the liquor. That proposition means to me that the provisions impose an excise duty within the meaning of s 90. It is a tax. It is a tax ‘upon’ the goods. It is the kind of tax which tends to be recovered by the person paying it in the price he charges for the goods which bear the imposition. Only in two respects does the case appear to me to involve any question as to the connotation of the word ‘excise’ in s 90 — a connotation that has been discussed in past cases very fully in this Court. The first of the two matters to which I refer is the fact that the proposition as I have framed it embraces liquors independently of their place of origin. The tax is an inland tax and not an import tax, but as I have described it, it falls without distinction upon liquors whether they originated in Victoria, in Australia but outside Victoria or outside Australia altogether. The tax is undoubtedly an inland tax but it does not distinguish between the goods upon which it falls in respect of their origin: it is indifferent to the possibility of their being domestically produced or imported. Certain licences such as an Australian wine licence and to some extent perhaps a brewer’s licence, are restricted to Australian production but we need not enter upon that distinction between licences; it is a side issue. For so far as I am concerned I think an inland tax upon goods of a class manufactured in Australia and abroad, imposed without regard to their place of origin, is an excise. It may be that

it is an excise because it includes goods of home manufacture and as to imported goods is not … But it would be ridiculous to say that a State inland tax upon goods of a description manufactured here as well as imported here was not met by s 90, excluding as that section does both duties of customs and duties of excise, because the duty was not confined to goods imported and so was not a duty of customs and was not confined to goods manufactured at home and so was not a duty of excise … The second matter which perhaps arises as to the connotation of ‘excise’ is closely connected with the first. It is whether the tax in order to be an excise must be imposed on the production of the goods or may be imposed upon the goods in the hands [page 481] of any of the various persons through whom they pass in the course of distribution. Upon this I have expressed my view in Matthews’ case (1938) 60 CLR at 291–303 and in Parton’s case (1949) 80 CLR at 260, 261, where there is a qualification with respect to consumption. [Dixon CJ noted that the Licensing Act imposed the licence fee on the renewal of a licence; that it made no provision for payment of the fee where a licence was not renewed; but that this omission was of no practical significance. His Honour then discussed the detailed provisions of the Licensing Act and the different situations in which licence fees were to be paid by people dealing in alcoholic liquor, and continued:] It will be seen that under the system which operates as a result of the provisions that have been examined the tax of six per cent on wholesale prices covers the whole supply of liquor to the consumers in Victoria. The disappearance of this or that old licence, or the grant of this or that new licence has no effect on

the liability to tax of the total amount of liquor obtained by the consumers. … Section 90 is … concerned wholly with the demarcation of authority between Commonwealth and State to tax commodities. Duties of excise and of customs are denied to the States simply because of their effect on commodities. Whether a tax is a duty of excise must be considered by reference to its relation to the commodity as an article of commerce. The six per cent upon the wholesale selling price of liquor appears to me simply to be a tax upon liquor, a tax imposed on liquor on its way to the consumer by whatever channel it may proceed: it is in other words an addition to the excises the Commonwealth Parliament has chosen to impose on liquor. It is a tax which goes into the licensing fund kept in the Treasury under Pt XV. From that certain annual subventions are payable to municipalities and to the Police Superannuation Fund and the costs are paid for administering the Act: see s 290. But the balance forming the great bulk of the fund goes to the Consolidated Revenue of Victoria. The tax is in my opinion an excise on liquor. Fullagar J: When it has been decided that the particular exaction in question is a tax, the question is then sometimes asked whether it is a ‘direct’ tax or an ‘indirect’ tax. As to this, I would say that, with the greatest respect, I think it a pity that this distinction was ever raised or mentioned in relation to s 90. I do not think it is capable of throwing any light on s 90. Attention to it may be thought to have been invited by the concluding words of the ‘definition’ of Griffith CJ in Peterswald v Bartley (1904) 1 CLR at 509. His Honour’s words were ‘and not in the sense of a direct tax or personal tax’. [Fullagar J noted that the distinction between direct and indirect taxes was no longer favoured by economists, and that, in any event, the distinction referred to in Peterswald v Bartley was based upon the

Canadian Supreme Court’s reliance upon the writings of John Stuart Mill. His Honour continued:] There can be no such justification for ‘the use of Mill’s analysis’, or for the use of Canadian precedents, when we come to interpret our own s 90, which was adopted in a quite different setting and employs much more specific terminology. When we have found that an exaction which is in question is a tax, and when we have put aside the Canadian Constitution and the decisions on it as irrelevant, we come to the critical questions. These may be stated as being three in number — (1) Must it be a tax ‘upon goods’? — (2) Must it be imposed upon the production or manufacture of goods? — (3) Must it be imposed by reference to quantity or value of the goods? The questions so stated raise [page 482] for consideration, though not in the same order, the three elements regarded by the Court in Peterswald v Bartley (1904) 1 CLR 497 as essential … It has often been observed that the meaning of the term ‘duty of excise’ is not so well established, and the crucial question in the present case, as I see it, is: What is the relation of taxpayer to goods which characterises a ‘duty of excise’ as that term is used in the Constitution and particularly in s 90? The answer to this question given by the Court in Peterswald v Bartley (1904) 1 CLR 497 was that the necessary relation is to be found in the manufacture or production of goods — that what characterises a duty of excise is that the taxpayer is taxed by reason of, and by reference to, his production or manufacture of goods. The relation is treated as implicit in the term itself. As to the scope of the terms ‘manufacture’ and ‘production’ see Parton

v Milk Board (Vic) (1949) 80 CLR 229 per Latham CJ at 245, 246. After full consideration, and necessarily with the greatest respect for the contrary view, I am of opinion that the answer given in Peterswald v Bartley (1904) 1 CLR 497 was right and should be applied in the present case … I would myself respectfully agree with the observations of McTiernan J in Parton v Milk Board (Vic) (1949) 80 CLR 229. His Honour said: ‘Duties of customs on imported goods have a relationship to the price paid by the user or consumer of the goods similar to that which duties of excise imposed upon goods produced or manufactured in the country have to the price paid by the user or consumer of those goods. There is an important relationship between duties of customs and duties of excise levied upon production or manufacture. … It may be inferred from the event mentioned in s 90 and the inclusion of customs, excise and bounties in the section that the duties of excise to which it refers have this relationship to duties of customs and that the object of the section is a uniform fiscal policy for the Commonwealth’ (1949) 80 CLR at 264, 265. [Fullagar J said that he was ‘not satisfied that it is an essential element of a duty of excise that it should be measured by quantity or value of goods’: 104 CLR at 556. He concluded that the licence fees were not excise duties because they did ‘not fall upon any producer or manufacturer’; they did ‘not in any way affect production or manufacture’; and the tax was calculated on all purchases of liquor ‘whether produced or manufactured in Victoria or imported from abroad or from another State’: 104 CLR at 558.] Kitto J: By a line of decisions beginning with Peterswald v Bartley (1904) 1 CLR 497, it is established that although in the United Kingdom the word ‘excise’ has come to be used as a convenient label for a mass of heterogeneous taxes collected by the excise administration, in the Australian Constitution the expression has a more precise meaning. The

Court had occasion to consider this line of decisions in the recent case of Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117, in which, after saying that the essential distinguishing feature of a duty of excise (in the relevant sense) is that it is a tax imposed ‘upon’, or ‘in respect of’ or ‘in relation to goods’, a reference was given to a passage in the judgment of Dixon J (as he then was) in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263. His Honour there stated more fully what such expressions as the foregoing attempt to convey. He said that to be an excise, ‘The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce’ (1938) 60 CLR at 304. The reference to consumption must be considered as omitted now, in view of what his Honour said later in Parton v Milk Board (Vic) (1949) 80 CLR at 261; but with [page 483] that qualification the correctness of the proposition seems to me to be demonstrated by his Honour’s examination of the subject … The contrast which these citations bring out is not simply between a tax which is and a tax which is not imposed by reference to commodities, or even by reference to a specified mass of commodities. What is insisted upon may, I think, be expressed by saying that a tax is not a duty of excise unless the criterion of liability is the taking of a step in a process of bringing goods into existence or to a consumable state, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. Indeed, the fact which in general justifies the description of an excise duty as an indirect tax, in the sense of John Stuart Mill’s dichotomy, is that when, in the ordinary case, excise duty becomes payable, it amounts to a statutory addition to the cost of a particular act or

operation in the process of producing or distributing goods, so that in the costing of the goods in relation to which the act or operation is done, for the purpose of arriving at a selling price to be charged to the next recipient in the chain that leads to the ultimate consumer, the duty paid in respect of those goods may enter — and therefore, according to the natural course of business affairs, will enter — as a charge relating to those goods specifically … To say so much is to exclude a tax which has no closer connexion with production or distribution than that it is exacted for the privilege of engaging in the process at all. The cases decided in this Court have been marked by much diversity of opinion on some points, but I think it may be taken as settled that a tax is not a duty of excise unless the criterion of liability is such as I have mentioned. [Kitto J then reviewed the provisions of the Licensing Act and the various licence fees imposed by s 19, examined the factors by which the victualler’s licence fee was calculated, and continued:] No part of such a fee becomes payable at the time of a purchase of liquor for the victualler’s premises, and no purchase of liquor for the premises necessarily results in any liability under the section on the part of the person making the purchase … [T]he fee is concerned with the taking out or renewing of the licence, and therefore with the person who takes it out or renews it rather than with the person who made the purchases … In other words, the fees are taxes imposed not ‘in respect of commercial dealings’ [1934] AC at 59, but in respect of the acquisition of a right to engage in commercial dealings. They are imposed, not on goods, but on licences. Accordingly I would hold that the victuallers’ licence fees are not duties of excise …

I turn to the temporary victualler’s licence fee — or rather, since the fixed fee of £1 is obviously not a duty of excise, to the ‘further fee’ of six per cent on the gross amount of liquor purchased for sale or disposal under the licence. The reasons above given in reference to the victualler’s licence fee appear to me to apply in substance here also. Had the purchasing of the liquor been made the criterion of the liability, the right conclusion might no doubt have been that this fee was different in character from each of the others. But para (b) does not tax the purchasing of liquor. It measures the fee by reference to purchases some or all of which may already have been made when the licence is granted. What attracts the liability is the acceptance of the licence. The tax is not on the liquor; it is on the licence — on the obtaining of authority to sell and dispose of liquor generally at the relevant function. In my opinion it is not a duty of excise. [Menzies J reviewed the High Court’s decisions on s 90, and continued:] [page 484] … This survey of the Australian cases shows that the position has now been reached that although an excise duty is a tax on the production or manufacture of goods, a tax upon the sale or purchase of goods manufactured in Australia at any point before sale for consumption is to be regarded as a tax on production or manufacture; and furthermore, that a tax may be an excise notwithstanding that quantity or value of goods is not the basis of the duty. This position I feel bound to accept notwithstanding the reservations I would otherwise have about the glosses upon the main proposition … Coming back now to the victualler’s licence fee, I am disposed to regard it as an indirect tax in that not only are

consumers likely to pay more for liquor than would be the case if licence fees were not charged, but, further, notwithstanding s 19(3), licensed victuallers probably endeavour to pass on to consumers the full amount of what they pay as licence fees; it is not, however, a sales or a purchase tax because, as I have already stated, a dealing with the goods does not expose the licensed victualler to liability for tax; the tax is upon the person seeking a licence to sell liquor upon particular premises in the future, not upon the liquor already purchased for sale at those premises although it is calculated upon such purchases; it is a tax upon persons, like that considered in Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117, namely, a tax upon a licensed victualler as the price for his franchise to carry on a business, the most important element of which is to sell liquor from the licensed premises independently of whether the liquor is produced in Australia or abroad, or partly in Australia and partly abroad. It is not in truth a tax on the production or manufacture of liquor, and none of the decided cases require that it should be treated as such a tax. For these reasons, I have come to the conclusion that the licensed victualler’s fee is not a duty of excise. In reaching this conclusion, I am fortified by the views expressed in Parton v Milk Board (Vic) (1949) 80 CLR 229, by Latham CJ (at 248) and Dixon J (at 263) … I find greater difficulty about the character of the fee for a temporary licence. It seems to me that once a temporary licence is granted, every purchase of liquor for sale under that licence, whether it be of local or overseas production, does attract tax at the rate of six per cent of the purchase price. In these circumstances I feel constrained by Parton v Milk Board (Vic) (1949) 80 CLR 229 to treat such fees to the extent that they are upon purchases of liquor produced in Australia, as duties of excise. As s 19(1)(b) is not susceptible to the application of what is now s 3 of the Acts Interpretation Act 1958 (Vic), I think the provision therein for a percentage fee is wholly invalid. I would allow the demurrer to so much of the statement of

claim as relates to licensed victuallers’ fees, and overrule it so far as it relates to temporary licence fees.

5.2.14 McTiernan and Windeyer JJ delivered separate judgments to substantially the same effect as that of Dixon CJ, although McTiernan J (104 CLR at 550) found it unnecessary to decide whether a tax on goods imported into Australia could be an excise duty. Taylor J gave judgment for substantially the same reasons as Kitto J. In the result, Victoria’s demurrer was allowed in part; that is, the plaintiff’s claim that the Licensing Act was invalid was held to show no cause of action except in relation to s 19(1)(b), the temporary licence. 5.2.15 The decision in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 provides a good illustration of the diffusion of judicial approach to s 90 problems, typical of many High Court decisions on the section; a diffusion which has, to some extent, been resolved by Ha v New South Wales (1997) 189 CLR 465 5.2.43C. [page 485] In Dennis Hotels, there was, first, a fundamental disagreement over the meaning of ‘excise duties’. Dixon CJ, Kitto and Menzies JJ adopted the broad view put forward by Dixon J in Parton v Milk Board (Vic) (1949) 80 CLR 229 (see 5.2.10), while Fullagar J adopted the narrow view endorsed by the court in Peterswald v Bartley (1904) 1 CLR 497 (see 5.2.6) and by McTiernan J in

Parton’s case. Even among those justices who appeared to agree on a broad definition of excise duties, there were differences of emphasis which could, in some cases, prove significant. For a discussion of the asymmetry between the categories of definition, purpose and interpretive method in s 90, see Cass, 1997, pp 19–30. 5.2.16 For all the diffusion of approach and lack of certainty among the judges in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529, the decision confirmed the erosion of the conception of excise duties from Peterswald v Bartley (1904) 1 CLR 497. After Dennis Hotels, a tax on a commodity would be treated as an excise duty if it was imposed on some dealing in the commodity from production to final sale before consumption. Excise duties were not to be limited to taxes at the point of production nor to taxes imposed on locally produced goods. This broad view formed the foundation for all subsequent judicial discussion of s 90. The contrary view, that excise duties were taxes that applied only to locally produced goods, was to be revived by Murphy J (for example, in Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 (see 5.2.22) at 84–5) and favoured by certain justices in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 (see 5.2.35) at 472–3 per Dawson J; 479 per Toohey and Gaudron JJ; Capital Duplicators Pty Ltd v Australian Capital Territory (No 2) (1993) 178 CLR 561 5.2.40C at 615 per Dawson J; 627, 629–31 per Toohey and Gaudron JJ; Ha v New South Wales (1997) 189 CLR 465 at 513–15 per Dawson, Toohey and Gaudron JJ. 5.2.17

The most striking contrast in Dennis Hotels Pty Ltd v

Victoria (1960) 104 CLR 529 is between the formal, legalistic approach of Kitto, Taylor and Menzies JJ and the more pragmatic approach of Dixon CJ, McTiernan and Windeyer JJ in the application of the broad definition of ‘excise duties’ to the legislation under challenge. This tension, between an emphasis on the technical, legal form of legislation and a willingness to look at the legislation’s practical effect, was a recurring feature of High Court decisions on s 90 in the decades that followed: see, for example, Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1 (see 5.2.21); Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 5.2.24C; Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 5.2.30C. 5.2.18 In Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529, there was an even division of opinion on the question whether the court should consider the practical effect of the tax (did it amount, in practice, to a burden on liquor on its way to the consumer?), or should it look only at the criterion of liability of the tax: was the circumstance which created the liability to pay the tax a dealing in the commodity? (Fullagar J found it unnecessary to consider this question.) It is, therefore, difficult to accept that Dennis Hotels established anything apart from the validity of s 19(1)(a) and the invalidity of s 19(1)(b) of the Licensing Act 1958 (Vic) (if we put on one side the strong support which the case established for a broad definition of ‘excise duties’): see Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 438, 481 (see 5.2.35). Yet, in later decisions, some justices of the High Court were to treat Dennis Hotels as establishing that a tax, imposed as a licence fee for the privilege of conducting a business and

[page 486] calculated on the basis of goods purchased in an earlier period, could not be an excise duty: see, for example, Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 at 226, 236 per Gibbs and Stephen JJ; MG Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245 (see 5.2.27) at 259, 263 per Gibbs and Stephen JJ; Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368 (see 5.2.33) at 380, 399, 420 per Gibbs CJ, Wilson and Dawson JJ. In Ha v New South Wales (1997) 189 CLR 465, the majority (Brennan CJ, McHugh, Gummow and Kirby JJ) said that states which acted upon this theory had clearly ‘misunderstood’ the Dennis Hotels position: 189 CLR at 502. Thus, until Ha v New South Wales, a series of judicial decisions accepted the device in Dennis Hotels as a loophole through which the states could pass their commodity taxes (regardless, it seemed, of any effect which such disguised commodity taxes had in frustrating the purpose of s 90): see Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177; HC Sleigh Ltd v South Australia (1977) 136 CLR 475: see 5.2.28. In Ha v New South Wales, a majority of the High Court effectively closed this loophole by confining Dennis Hotels to its facts. We return to the decision in Ha after we examine the decisions of the court in the period following Dennis Hotels. 5.2.19 Within three years of Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C, the High Court resolved the sharp differences of opinion by endorsing the broad conception of excise duties and (as a counterbalance) applying that conception in a

technical fashion. In Bolton v Madsen (1963) 110 CLR 264, the court (Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ) said, in a unanimous judgment, that ‘duties of excise’ were ‘taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers’: 110 CLR at 271. However, the justices went on to say that the question whether a tax was related to goods in that way was to be answered by asking whether the criterion of liability of the tax was a step in the production or distribution of the goods. It was not enough that the tax added to the cost of production or distribution: 110 CLR at 271. 5.2.20 The unanimity of approach demonstrated in Bolton v Madsen (1963) 110 CLR 264 disappeared in Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353 when the new Chief Justice, Barwick CJ, stressed that the question whether a tax fell upon a step in the production or distribution of goods was a question of substance, not form: 111 CLR at 365–6. The debate was carried forward in Western Australia v Hamersley Iron Pty Ltd (No 1) (1969) 120 CLR 42, which showed that the ‘practical effect’ approach, for which Barwick CJ argued in Anderson’s Pty Ltd v Victoria, could still attract significant support in the High Court, despite the unanimous proposition in Bolton v Madsen (1963) 110 CLR 264. In Western Australia v Hamersley Iron Pty Ltd (No 1), the Stamp Act 1921 (WA) obliged a person who received money outside the state, as payment for goods and services supplied in the state, to issue a written receipt acknowledging the payment: s 101A. The Act then obliged any person who issued a receipt to pay a stamp duty on the receipt, calculated at 0.1 per cent of the amount of money received: s 16. Three members of the court held that the legislation did not impose an excise duty. For example, Kitto J

(with whom McTiernan J agreed) said it was essential ‘to identify the criterion of liability under s 101A’; this criterion was, he said, nothing to do with goods, the supply of goods or ‘doing anything to goods’. The criterion of liability was ‘the event of someone’s receiving payment for the goods outside the State, and not … the manufacture or production or distribution of the goods’: 120 CLR at 63. [page 487] On the other hand, three justices held that the legislation did impose an excise duty and, as they included the Chief Justice, their opinion prevailed: Judiciary Act 1903 (Cth) s 23(2)(b). For example, Barwick CJ emphasised that a person receiving money for goods supplied was obliged to issue a formal receipt, upon which tax was payable. The statute, he said, imposed a tax upon the receiving of money and not upon the issuing of a written receipt. It was a tax ‘upon’ goods if the money received was a payment for goods sold (120 CLR at 55–6): [T]o say that a tax upon the act by which a purchaser discharges his obligations to a vendor under a contract for the sale of goods is not a tax upon the sale itself is, in my view, to play with words. … although the duty imposed by the Act in respect of the receipt of money will have a much wider incidence than an excise duty, it is plain enough that it will assume the character of a duty of excise where the tax is payable, in effect, upon the sale price received upon the first sale and any subsequent sales in the course of the distribution of goods produced in Western Australia or elsewhere in the Commonwealth.

5.2.21

Western Australia v Hamersley Iron Pty Ltd (No 1) (1969)

120 CLR 42 raised obliquely yet another problem in the application of the agreed definition of ‘excise duties’, namely, where a tax is levied on a range of transactions, only some of which involve a dealing in goods, is the tax nevertheless a tax upon goods and therefore an excise? This issue was considered in more detail in Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1. The Stamp Act 1921 (WA) required a person who was paid any money to provide a receipt and pay stamp duty on the receipt at the rate of 1 cent for every $10 received. The question arose as to whether that obligation amounted to the imposition of a tax on goods where the payment of money was part of a transaction involving the distribution of goods. The majority of the High Court (Barwick CJ, Menzies, Windeyer and Owen JJ) rejected the argument adopted by the minority (McTiernan, Kitto and Walsh JJ) that the tax on receipts of money could not be an excise duty because it fell generally on a wide range of transactions, whether or not those transactions involved goods. Barwick CJ said (121 CLR at 15): The plaintiffs, as I follow them, really say that unless a tax by an Act is in all the circumstances to which the Act is intended to apply a duty of excise, it cannot be a duty of excise in any of those circumstances. Quite apart from authority, that proposition, in my opinion, is evidently fallacious.

5.2.22 The question whether a general state tax on a wide range of transactions fell within s 90 if the tax applied to a transaction in goods was raised again in Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 and, as in Western Australia v Chamberlain Industries Pty Ltd (1970) 121 CLR 1, it sharply divided the High Court. The court was asked to declare invalid s 7 of the Stock Act 1915 (Qld). The section authorised ‘the Minister’ to levy an annual

tax, ‘at rates to be fixed by him’, on each head of stock (horses, cattle, sheep and swine) owned by a person who had at least eleven head of stock. Taxes totalling $4315 had been imposed on the plaintiff for the 3 years 1972–74. The plaintiff owned sheep, kept for their wool and sale for meat, cattle for breeding and sale for meat, pigs for breeding and sale for meat, and horses for working the plaintiff’s properties. The court held, by a statutory majority under s 23(2)(b) of the Judiciary Act 1903 (Cth), that the section invalidly imposed an excise duty to the extent that it imposed a tax on stock kept for production. Mason J said that to tax livestock ‘used for their product’ was ‘a tax on production itself … and it has a natural, though not a necessary, relation to the quantity or value [page 488] of what is produced’: 137 CLR at 78. He dismissed the objection that the tax could not be an excise duty because it fell on the owners of all livestock regardless of the purpose for which the stock were kept (137 CLR at 78): The fact that the statutory definition of ‘stock’ in s 5A includes some animals, for example horses and foals, which are not usually used or kept for production, is of no relevance. If the tax otherwise has the character of an excise in its application to stock used for production, it does not lose this character merely because in its application to other animals it may not constitute an excise.

Stephen J, with whom Barwick CJ agreed, pointed out what was implicit in all the judgments in this case: that the tax on the horses could not be an excise duty because they were not kept or used for

their produce. To tax them was to tax, not the production of a commodity, but its consumption. A tax on consumption or ownership of goods after their production and distribution was not an excise duty: 137 CLR at 69–70. However, the fact that the tax was not in every instance a duty of excise did not lead to the conclusion that it was not in any instance a duty of excise: 137 CLR at 71. Gibbs J dissented, maintaining that a tax on the ownership of stock, irrespective of the purpose for which it was owned, was not an excise. The criterion of liability under the Act was not any step in the production or distribution of a commodity, nor was its practical effect to impose a tax at some point in its production or distribution: 137 CLR at 67. Jacobs J said that it was necessary to look at the Act’s criterion of liability. A tax imposed on the owner of goods, not because of the ‘course of the goods between their production or manufacture and their ultimate consumption’, would not be an excise duty merely because the owner’s ‘goods may be on that course … Particularly is this so when the tax is imposed indifferently upon goods which are and goods which are not, or are not in the course of, becoming commodities’: 137 CLR at 82–3. Murphy J also dissented in Logan Downs Pty Ltd v Queensland, but for radically different reasons. His Honour argued that the definition of excise duties should be returned to that of a tax on local manufacture or production (137 CLR at 84), and referred to the judgments of McTiernan J in Parton v Milk Board (Vic) (1949) 80 CLR 229 (see 5.2.10) at 263 and Fullagar J in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C at 552. 5.2.23

It was implicit in the judgments in Logan Downs Pty Ltd

v Queensland (1977) 137 CLR 59, as Stephen J pointed out (137 CLR at 69–70), that the tax, as it fell on the plaintiff’s horses, could not be an excise duty because those animals, unlike the cattle, sheep and pigs, were not being used as units of production. The taxpayer’s relationship to the horses was that of consumer rather than producer. The assumption was that a tax on the consumption of a commodity lay outside the definition of an ‘excise duty’. That assumption had been tested directly only once: in 1974, in Dickenson’s Arcade Pty Ltd v Tasmania. 5.2.24C

Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177

[Part II of the Tobacco Act 1972 (Tas) was headed ‘Tax on the consumption of tobacco’. Section 3 imposed a tax on the consumption of tobacco, calculated at 7.5 per cent of the retail value of the tobacco. ‘Consumption’ was defined by s 2(2) as ‘the smoking or chewing [page 489] of tobacco by any person’. Section 6(1) authorised the Governor to make regulations providing for any convenient method for the collection of the tax. The Governor made the Tobacco Regulations 1972. These regulations required every person who sold tobacco by retail to arrange with the Commissioner of Taxes for the retailer to collect the consumption tax: reg 4. Payment of the tax was to be made to the retailer at the time of purchase (reg 2(1)) or to the Commissioner after consumption: reg 2(2). Part III of the Tobacco Act 1972 (Tas) was headed ‘Licensing of retailers of tobacco’. Section 9 prohibited any person from carrying on a retail tobacco business without a licence. According to s 11, the licence

fee was a varying percentage (around 2.5 per cent) of the value of the tobacco handled by a retailer during ‘the relevant assessment period’. That period was ‘the period of twelve months ending six months before the commencement of the annual period in respect of which the licence is granted’: s 11(3)(b). (This exploited the device employed in Dennis Hotels which sought to break up the nexus between the imposition of the tax and the sale of the goods). Dickenson’s Arcade Pty Ltd carried on the business of a tobacco retailer in Tasmania. The company brought an action against Tasmania in the High Court, claiming a declaration that the Act and regulations were invalid. The defendant demurred to the statement of claim and the demurrer was heard by the Full Court of the High Court.] Barwick CJ: A duty of excise for the purposes of the Australian Constitution, to use the formulation substantially as approved in Bolton v Madsen (1963) 110 CLR 264 at 273, in its essence, is a tax upon ‘the taking of a step in a process of bringing goods into existence or to a consumable state or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer’, including the step which puts the goods into consumption. There was no logical reason, in my opinion, for ending at the point of entry into consumption the area which might yield a duty of excise. [Barwick CJ said that the ‘question whether a statute imposes a duty of excise is a matter of substance in which its intended operation as well as its form is of importance’: 130 CLR at 186. He referred, as he had in Western Australia v Chamberlain Industries (1970) 121 CLR 1 at 14, to a statement of Isaacs J in Commonwealth v South Australia (Petrol case) (1926) 38 CLR 408, and continued:] Unless those views are applied, and the substance of the operation of the statute, rather than merely its form, is treated as definitive of the relevant nature of the tax it imposes or exacts, a premium will be placed on verbal sleight of hand and, in the end, the Constitution mocked.

The question in this case, in my opinion, is whether the intended operation of the Act is confined to the imposition of a tax on consumption of tobacco or whether that operation extends to impose a tax on its entry into consumption. Before going further in the matter, it is necessary, in my opinion, to clarify the concept of a tax on consumption, as consumption is made a point of reference in defining the area within which a duty of excise may be found to be operating. … [T]he act of a vendor in making delivery of goods sold or of the purchaser in receiving the goods and reducing them into his possession are not in my opinion acts of consumption in the relevant sense. In relation to goods generally, consumption for present purposes involves, in my opinion, the act of the person in possession of the goods in using them or in destroying them by use, irrespective of the manner or means by which that possession was obtained … [page 490] [Barwick CJ said that, on the authority of Dennis Hotels Pty Ltd v Victoria, the licensing provisions in Pt III of the Act were valid, although he said: ‘I cannot confess to any great satisfaction in taking that course’: 130 CLR at 189. His Honour then turned to the tax imposed by s 3, the consumption tax:] Each act of smoking is said to attract an amount of tax equal to seven and one half per cent of the value of the amount of tobacco smoked at that time less, of course, the value of any ‘dregs’, ie unsmoked residues or butts, if the smoker within due time makes an appropriate application for a refund, see s 3(5). Nothing is said expressly in the Act about the consumption of tobacco given to the smoker though s 4(1) exempts from tax tobacco brought into the State by a traveller for disposal by gift

provided it is consumed within 28 days of its being brought into the State. The donee of tobacco, for example, a cigarette, may but does not necessarily identify its brand and, perhaps, in many situations, does not care. Whether or not the donor, or for that matter his donor, has paid an appropriate amount of tax in respect of the cigarette can scarcely be known. All this may equally be true of the friend or acquaintance who is given a ‘fill’ of his pipe. Thus, a person who has been given tobacco may not have the means of knowing the value for the purposes of the Act of what he smokes. Bearing in mind the habits of mankind in offering cigarettes and tobacco not merely to friends but to the merest acquaintance on social occasions, the idea that the agreeable recipient of the convivial cigarette or pipe fill should come under an obligation to make a return or give a notification of having smoked the gift and within seven days of that event — no doubt rarely remembered at the end of an evening of stimulating social intercourse — to pay a tax of seven and a half per cent of the value of that cigarette or pipe fill upon pain of a criminal prosecution, is so ludicrous that it is to my mind inconceivable that a legislature should so intend … I cannot believe, however, that any such operation of the Act is intended. My incredulity of such a fanciful operation being intended by a legislature leads me to conclude in the absence of clear and unambiguous words that it was not intended to tax the consumption of tobacco in all circumstances, including the case of tobacco given to the smoker or chewer. That means, in my opinion, that it was intended only to tax the consumption of tobacco by or at the instance of a purchaser of tobacco purchased by or for him … Thus, it is to my mind clear to demonstration that the intention of the Act is that what amounts of tax will be collected under the Act will be obtained by the addition by the retailer of tobacco to the purchase price of the tobacco sold of an amount which will be at least the amount of tax payable on consumption

of the whole amount of tobacco purchased. In the unlikely event that the purchaser of the tobacco desires and chooses to pay later, the chances of recovery of the tax would appear to be nil … The intended operation of the Act is that the tax is payable only by the purchaser of the tobacco and it is intended to be collected at the point of purchase. Such a tax is not, in my opinion, a tax upon consumption in the sense of the decisions of this Court. It is not a tax, as I construe the Act, unconnected with the purchase of tobacco; indeed, it is essentially connected with such purchase. In my opinion, it constitutes a tax upon a step in the movement of the tobacco into consumption. In the relevant sense it is a tax upon the tobacco. It is a duty of excise. Gibbs J: Since Parton v Milk Board (Vic) (1949) 80 CLR 229 no member of the Court has dissented from, and almost every member who has had occasion to discuss the matter has expressly affirmed, the proposition that a tax imposed on consumption is not a duty of excise … [page 491] To say that the control by the Commonwealth Parliament of the taxation of goods will not be complete, or that its fiscal policy may be hampered, if the States can impose a tax at the point of consumption, is in my opinion not decisive against this view. The question cannot be answered by having regard to the position of the Commonwealth alone. The Constitution is a federal constitution, and s 90 is intended to effect a distribution of the power to impose taxation between the Commonwealth and the States. Of course, the section confers no power on the Commonwealth, which derives its power to impose taxation from s 51(ii), but it denies power to the States. The extent of the denial must be found in the words of the section themselves rather in

economic, social or political theory. Section 90 does not refer to taxes on goods but to duties of customs and of excise. Upon its proper construction s 90 stops short of denying power to the States to impose taxes on consumption. [Gibbs J said that, in order to decide ‘whether a tax is a duty of excise the Court must identify the criterion of liability under the statute which imposes the tax’: 130 CLR at 223. He then examined the tax imposed by Pt II of the Act:] The label given to it — ‘Tax on the consumption of tobacco’ — is not of importance. However, in my opinion Pt II on its proper construction does impose a tax which is correctly described by that label, that is, a tax on consumption. It is true that the retailer can only lawfully carry on business if he makes arrangements to collect the tax and that for practical reasons a purchaser is likely to pay the tax to the retailer or his agent at the time when he buys his tobacco. However, the purchaser is not bound to make payment until he has in fact consumed the tobacco and the retailer is not liable for any tax which he does not collect. It is, in my opinion, impossible to say that Pt II, when properly construed, imposes a tax on the last retail sale of tobacco. It is immaterial, if in fact it is true, that the tax has substantially the same practical effect as a tax imposed on the last retail sale. The criterion of liability is consumption. The tax is not an excise.

5.2.25 Gibbs J then considered the licence fee imposed by Pt III of the Act and held that, on the authority of Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C, it was not an excise duty. Menzies and Stephen JJ delivered separate judgments to the same effect as Gibbs J. McTiernan J held that both Pts II and III of the Act imposed

excise duties. He said that a tax on consumption of goods was an excise within s 90 of the Constitution (130 CLR at 204–5) and that ‘the method of calculation of the licence fee … does not prevent it from being a duty of excise’: 130 CLR at 206. Mason J held that the regulations, providing for the collection of the consumption tax at the point of retail sale, exacted the tax imposed by the Act before the tobacco reached the consumer. Although the Act, viewed alone, imposed a tax on the consumption of goods which was not an excise, once the regulations were considered, the tax operated as a sales tax paid by the purchaser (who was not necessarily the consumer) and it was therefore an excise: 130 CLR at 241–3. Accordingly, the regulations were invalid. Mason J held that the validity of the licence fee was determined by Dennis Hotels, but that case was not authority for any broad proposition: 130 CLR at 240, 243–4. Accordingly, the court held, by a statutory majority under s 23(2) (b) of the Judiciary Act 1903 (Cth), that the consumption tax amounted to an excise duty and, by a majority of 5:1, that the licence fee was not an excise duty. [page 492] 5.2.26 The court’s decision on the consumption tax in Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 demonstrates the confusion that has often characterised this area of constitutional law. Two justices (Barwick CJ and McTiernan J) held Pt II of the Act and the regulations invalid, but for different reasons; one judge (Mason J) held Pt II of the Act valid but the regulations invalid for reasons similar to those adopted by Barwick

CJ; and three judges (Menzies, Gibbs and Stephen JJ) concluded that the Act and regulations were valid. The result, because of the Chief Justice’s ‘casting vote’ under s 23(2)(b) of the Judiciary Act 1903, was that only the regulations, providing for a method of collecting the consumption tax, were held to be invalid. 5.2.27 In MG Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245, the plaintiff sought a declaration that s 35G of the Fisheries Act 1905 (WA) was invalid. The section imposed a licence fee on fish processors in Western Australia. Although the Act was drafted in a confusing manner, four of the five justices in the case treated s 35G(2) as requiring a processor to pay an annual licence fee which was calculated as a percentage of the value of the fish acquired for processing during a 12-month period which ended 6 months before the commencement of the licence: an obvious attempt to copy s 19(1)(a) of the Licensing Act 1958 (Vic), which the High Court had upheld in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529. However, the court held, by a majority of three justices to two, that s 35G imposed an excise duty. McTiernan J referred to judicial statements to the effect that the substantial effect of state taxing laws should be considered in order to ensure that s 90 was not flouted. He described the licence fee as an excise duty but did not mention Dennis Hotels: 130 CLR at 250–2. Mason J repeated what he had said in Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 at 240, that Dennis Hotels ‘should not be regarded as authoritative in relation to the prescription of fees for licences to manufacture or produce goods’. To do that ‘would … give the constitutional prohibition contained in s 90 a formal operation, having little substantial importance’ and would frustrate the purpose of s 90 (Commonwealth control of goods

taxation): 130 CLR at 265. Here, the licence fee was a tax which directly affected the price of fish processed in the state, with flow on effects for consumption and thus on demand for production of those goods: 130 CLR at 266. It was, therefore, an excise duty. The third member of the majority, Menzies J, read the Fisheries Act as demanding that the licence fee be paid on the basis of the current year’s processing activities (rather than the activities of a preceding period). He said that, therefore, the Act did not fall within the authority of Dennis Hotels — although he could have said that it was covered by the decision in that case that the temporary licence fee, imposed by s 19(1)(b), was an excise duty. He described the licence fee as a ‘tax … upon the processing of fish’, not merely ‘the price of a licence to carry on a business’, and therefore an excise duty: 130 CLR at 254. The two dissenting justices, Gibbs and Stephen JJ, regarded Dennis Hotels as relevant and authoritative. 5.2.28 However, the court declined, when next presented with the opportunity, to overrule Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529. In HC Sleigh Ltd v South Australia (1977) 136 CLR 475, the plaintiff sought a declaration that the Business Franchise (Petroleum) Act 1974 (SA) imposed an invalid excise duty. The Act provided that no person should sell petroleum products without a licence. The licence fee, payable annually, was calculated on the basis of the licensee’s turnover of petroleum products during a period of 12 months preceding [page 493]

the commencement of the licence. The court held, by a majority of 5:1, that the licence fee was not an excise duty. Mason J, with whose reasons Barwick CJ agreed, said that Dennis Hotels was decisive of the issues before the court. The submission that MG Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245 had overruled Dennis Hotels was ‘plainly misconceived … The fact is that the three members of the majority in Kailis’ case each had different reasons for subscribing to the conclusion that the licence fee was an excise’: 136 CLR at 500. Mason J said that the court’s decision in Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 made it impossible to overrule Dennis Hotels, and adverted to an additional policy concern, the fiscal imbalance between the Commonwealth and the states (136 CLR at 501–2): Since Dennis Hotels (1960) 104 CLR 529 it has been accepted that liquor licensing fees calculated by reference to past sales are not an excise and the States have continued to rely on liquor licensing fees as an important source of revenue. Likewise, since Dickenson’s Arcade (1974) 130 CLR 177 States have relied on tobacco licensing fees, similarly calculated, as an additional source of government revenue. It would, I think, lead to great uncertainty in government and commerce if the Court were now to hold that Dennis Hotels or Dickenson’s Arcade was wrongly decided. Such a course would disturb legislative and financial arrangements made on the faith of the existing decisions of this Court. A departure from these decisions can be justified only in the event that the Court is convinced that they are wrong. Yet the inherent difficulty of determining what is an excise in the constitutional sense, a difficulty reflected in the shifts of opinion that have taken place in the judicial exposition of s 90, makes it extremely hard to say that a particular decision is wrong, notwithstanding that the reasoning on which it is based may not appear to be persuasive. So far as the present problem is concerned, nothing has occurred since Dickenson’s Arcade

(1974) 130 CLR 177, which was decided only two years ago, to suggest that it was wrongly decided. Nor, indeed, did the plaintiff’s counsel so suggest, apart from submitting that it had been overruled by Kailis’ case (1974) 130 CLR 245, a submission which, as I have said, was misconceived. There is, therefore, no basis for our refusing to follow Dickenson’s Arcade if it transpires that the present case cannot be distinguished.

Gibbs and Stephen JJ said that the validity of the Business Franchises (Petroleum) Act was established by Dennis Hotels and Dickenson’s Arcade: 136 CLR at 491–4 per Gibbs J; 496–7 per Stephen J. Murphy J, consistent with his judgment in Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 (see 5.2.22), said that ‘[a] nondiscriminatory tax on sales or distribution or consumption is neither a duty of customs nor of excise’; he did ‘not regard the test in Dennis Hotels … and Dickenson’s Arcade … as satisfactory for determining whether s 90 of the Constitution applies’: 136 CLR at 527. Jacobs J dissented, observing that the licensing system, sanctioned by Dennis Hotels, could be exploited to allow the states to overcome s 90. That exploitation ‘must be curbed now before the Court is faced either with the virtual supersession of s 90 or a need at some later time to cry halt’: 136 CLR at 526. He described Dennis Hotels as authority for the proposition that a licence fee for the sale of alcohol was not an excise duty where the fee was calculated as a percentage of purchases over a preceding period: 136 CLR at 518. He described Dickenson’s Arcade Pty Ltd v Tasmania as holding that a fee for a licence to sell tobacco (or ‘a product containing a drug’) was not an excise duty where the fee was calculated as a percentage of tobacco (or ‘product’) sold over a

preceding period: 136 CLR at 520, 522. Those decisions should be confined to their specific facts. [page 494] 5.2.29 The retirement of Sir Garfield Barwick in 1981 offered the prospect of a shift in the balance of opinion on the court towards a view more tolerant of (less contorted) state commodity taxes. That balance was tested in Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599, which also gave four members of the court the opportunity to debate a fundamental question: what is the purpose of s 90?

5.2.30C

Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599

[The Pipelines Act 1967 (Vic) provided that no person should construct or operate a pipeline unless that person held a licence issued by ‘the Minister’: s 25(1). A licensee was prohibited from operating a pipeline unless the current annual pipeline operation fee had been paid: s 35(1). Until 1981, this fee was fixed at $35 per kilometre of pipeline. By the Pipelines Fees Act 1981 (Vic), new subsections were added to s 35: 35 … (2) The pipeline operation fee shall be in the financial year 1981– 1982: (a) in the case of a trunk pipeline, the amount of $10,000,000; (b) in the case of any other pipeline, an amount equal to $40 for every complete kilometre of pipeline operated under the licence. Section 35(3) provided for annual adjustment of the fees by reference to the consumer price index. Section 35(8) defined ‘trunk pipeline’ to mean the pipelines to which specific licences had been issued. These were two pipelines, owned and operated by the plaintiffs, and a pipeline owned and operated by the Gas and Fuel Corporation of Victoria. The plaintiffs had, since 1968, been recovering oil and gas from wells in Bass Strait off the Victorian coast. The oil and gas were carried to Longford, on the east coast of Victoria, where they were separated into crude oil, liquefied petroleum gas and natural gas. The first two products were then transported, through the two pipelines owned and operated by the plaintiffs, to a processing plant on Westernport, 184 km away on the south coast of Victoria. After further processing at that plant, the end products (propane, butane, ethane and crude oil) were either shipped or transported by road to the plaintiffs’ customers. (The

third product, natural gas, was sold and delivered by the plaintiffs to the Gas and Fuel Corporation at Longford. The corporation then transported the natural gas to Melbourne through the third pipeline.) The plaintiffs began an action against Victoria in the High Court of Australia, in which they sought a declaration that the subsections added in 1981 to s 35 of the Pipelines Act 1967 were invalid, and an order that Victoria repay to the plaintiffs $19,992,920 licence fees paid by them under protest. The defendant demurred and the demurrer came on for hearing before the Full Court of the High Court. Gibbs CJ emphasised the implications of the Dixonian view that s 90 was intended ‘to give the Parliament a real control of the taxation of commodities’: 151 CLR at 616. He then considered the fiscal position of the states:] … s 90 seriously restricts the taxing power of the States; it narrows, artificially, the field of taxation open to them. The inability of the States to impose duties of excise has created greater difficulties for the States since the uniform tax arrangements have virtually [page 495] prevented them from imposing income taxes. One view of experts in the field of public finance is that the wide extension made by this Court to the definition of ‘excise’ is ‘one of the greatest impediments preventing the achievement of a rational and lasting division of financial powers in the Australian federal system’: Matthews and Jay: Federal Finance, 1972, p 318. One result must surely tend to be that the States will impose some forms of taxation which, although constitutionally permissible, are less economically desirable than taxes now categorised as duties of excise. The conclusion that the grant to the Commonwealth of the

exclusive power to impose duties of excise gravely hampers the States in the conduct of their financial affairs without conferring any corresponding benefit on the Commonwealth does not mean that the prohibition which s 90 contains must be disregarded. It does however suggest that there is no good reason for giving a wide and loose construction to its provisions. It supports the view that there is no justification for deciding the question whether a tax is a duty of excise by considering whether the real or practical effect of the legislation is the same as that which would be produced by a duty of excise … The question whether a State law infringes s 90 can be answered only by determining whether it imposes that sort of tax. One must first define ‘excise’, and then ask whether the tax imposed by the State statute comes within that definition. It is irrelevant that the State statute brings about the same practical result as a duty of excise, for s 90 does not forbid the States to achieve any particular economic result; it forbids them to enact a particular form of taxation … If one were to have regard to practicalities, the decisions of this Court would not inspire one with any firm conviction that the invalidation of State taxes on the ground that they are duties of excise has always either contributed to the effectuation of the policies of the Commonwealth Parliament or has had any other beneficial result of a practical kind. It is difficult to see what practical benefit (except to the taxpayer) ensued from the invalidation of a charge made by a marketing board to meet the expenses of its administration (Parton v Milk Board (Vic)), or a stamp duty on receipts of payments on sales (Western Australia v Chamberlain Industries Pty Ltd) or a levy on stock imposed to provide a fund to be used in providing husbandry services (Logan Downs Pty Ltd v Queensland). [Gibbs CJ referred to a series of cases in which licence fees had been held not to be excise duties, and then said:] In the present case, as I have already said, the pipeline

operation fee imposed by s 35(2) in respect of the crude oil pipeline and the gas liquids pipeline is a tax paid for the right to use those pipelines for the conveyance of the liquid hydrocarbons from Longford to Long Island Point … The conveyance of the liquid hydrocarbons to Long Island Point is an integral step in the production of the products sold by the plaintiffs. It does not appear that the same is true of the conveyance of the natural gas to Melbourne … There is nothing in the Pipelines Act to suggest that any distinction is intended to be drawn between the fees payable in respect of the three trunk pipelines or that liability to the tax in any way depends on whether the things conveyed by the pipeline are to be subject to further processing. If for some reason production ceased at Long Island Point, and the plaintiffs sold the hydrocarbons on their arrival there, that would not affect the plaintiffs’ liability for the fee. However, in the case of all three trunk pipelines, if the tax directly affects the goods conveyed it is imposed at a point in their production or distribution before they reach the hands of consumers. The question then is whether the tax directly affects the goods, or in other words whether the plaintiffs are taxed by reason of the fact that they transport the hydrocarbons and by reference to the transportation. [page 496] … Clearly the payment of the fee is a condition of the right to use the pipeline. The amount of the fee does not depend on the extent to which the pipeline is used … However, for the purposes of the Pipelines Act, it is immaterial whether the pipelines carry any particular quantity of, or indeed any, hydrocarbons … If it appeared that in a particular year the plaintiffs would carry a greater (or lesser) amount of liquid hydrocarbons than in the previous licence period, that would be quite irrelevant to the amount of fee payable. The conclusion appears to me inescapable that the fee is not

imposed because the hydrocarbons are carried; it is imposed as a condition of the right to carry them. … The very size of the impost, the fact that it is exacted in respect of pipelines carrying the products of the Bass Strait oil wells and the comparison with the pipeline operation fee charged in respect of other pipelines naturally give rise to the suspicion that the fees charged for the licences for the trunk pipelines are designed to avoid the limitation which s 90 imposes on the taxing power of the States. However, a tax is not an excise simply because it is large and discriminatory and aimed at companies which carry on a business thought to be lucrative enough to enable them to pay it. None of these circumstances show that there is any relationship between the fee and any step taken by the plaintiffs in respect of the goods. And for the reasons I have given a tax is not an excise because its practical effect appears to be similar to that of an excise. The pipeline operation fee is in my opinion not a tax upon or directly affecting goods; it is what it purports to be, a fee for a licence to use the pipeline. It is not a duty of excise. Mason J: [T]he court has rejected the narrow view of excise — that it is confined to taxes upon production and manufacture. Instead it has adopted the broader view that it extends to taxes upon commodities to the point of receipt by the consumer. However, the apparent breadth of this approach is somewhat illusory because the Court has from time to time insisted that there must be a strict relationship between the tax and the goods in order to constitute a tax upon goods. The continuing problem has been to define or describe that relationship accurately and instructively, especially with a view to distinguishing those taxes imposed at the point of sale or distribution which are an excise from those which are not. … The Bolton v Madsen formula has not emerged unscathed from the more recent decisions on s 90. It no longer commands the acceptance of the Court as a whole, or even of a majority, as a

conclusive guide as to what is an excise. In Anderson’s (1964) 111 CLR at 365 Barwick CJ expressed the broad view of an excise, that a tax is a duty of excise if it is upon or in respect of goods at any point including the point of manufacture or production, as they pass to consumption, saying: ‘… in arriving at the conclusion that the tax is a tax upon the relevant step, consideration of many factors is necessary, factors which may not be present in every case and which may have different weight or emphasis in different cases. The “indirectness” of the tax, its immediate entry into the cost of the goods, the proximity of the transaction it taxes to the manufacture or production or movement of the goods into consumption, the form and content of the legislation imposing the tax — all these are included in the relevant considerations’. In Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 at 241, I agreed with his Honour’s comments. … The Bolton v Madsen formula has one advantage. Its application will lead to certainty and predictability in the determination of what is an excise. Unfortunately the formula has a number of countervailing disadvantages. The criterion of liability which it expresses is very much a matter of form, not of substance. This would not matter if the constitutional conception of an excise was itself a matter of form. But there are powerful reasons for thinking that the [page 497] grant of exclusive power to the Commonwealth to impose excise duties was not intended to be a mere matter of form. Applied literally, as the decision in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 convincingly demonstrates, the criterion of liability leads to the result that a licence fee charged on a step in production or distribution, calculated by reference to

the quantity or value of goods produced or sold in the period for which the licence is held, is an excise, but not if the fee is calculated by reference to the quantity or value of the goods produced or sold in the previous licensing period. The distinction between the two licence fees just mentioned is a mere matter of form. It leaves the State free to levy licence fees and other duties in respect of the production, manufacture, sale or distribution of goods in any form except that which is caught by the Bolton v Madsen strict criterion of liability … … That s 90 confers on the Commonwealth Parliament an exclusive power to grant bounties on the production or export of goods reinforces the proposition that the grant of an exclusive power to impose duties of customs and excise was intended to give the Parliament a real control over the taxation of commodities. It could not have been intended that the States should have the power to burden home production by imposing taxes upon goods, when the Commonwealth was given exclusive power to stimulate production by granting bounties. That the object of the power was to secure a real control over the taxation of commodities provides strong support for a broad view of what is an excise, one which embraces all taxes upon or in respect of a step in the production, manufacture, sale or distribution of goods, for any such tax places a burden on production. A tax on goods sold, like a tax on goods produced, is a burden on production, though less immediate and direct in its impact. It is a burden on production because it enters into the price of the goods — the person who is liable to pay it naturally seeks to recoup it from the next purchaser. As the tax increases the price of the goods to the ultimate consumer, and thereby diminishes or tends to diminish demand for the goods, it is a burden on production. To justify the conclusion that the tax is upon or in respect of the goods it is enough that the tax is such that it enters into the cost of the goods and is therefore reflected in the prices at which

the goods are subsequently sold. It is not necessary that there should be an arithmetical relationship between the tax and the quantity or value of the goods produced or sold (Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 304), still less that such a relationship should exist in a specific period during which the tax is imposed. This is because there are many cases where an examination of the relevant circumstances will disclose that a tax is a duty of excise notwithstanding that it is not expressed to be in relation to the quantity or value of the goods. As Dixon J said in Matthews (at 304): But if the substantial effect is to impose a levy in respect of the commodity the fact that the basis of assessment is not strictly that of quantity or value will not prevent the tax falling within the description, duties of excise. The contrary approach, that suggested by the defendant, is to ascertain the character of the tax ‘solely by considering whether the taxing legislation picks out goods to be the subject of the imposition’: Chamberlain (1970) 121 CLR at 20. This approach ignores the fact that, in determining whether a tax is a duty of excise, the enquiry is a constitutional question. To strictly confine the inquiry to the terms of the statute levying the impost is to ‘expose the constitutional provision made by s 90 to evasion by easy subterfuges and the adoption of unreal distinctions’ (see Matthews (1938) 60 CLR at 304 per Dixon J …). [page 498] … The philosophy which underlies the [Bolton v Madsen strict criterion of liability] … is that in applying constitutional prohibitions or guarantees the Court should not look beyond the direct legal operation of the impugned law according to its terms. It is a philosophy with which I profoundly disagree. It is necessary

to examine the practical operation of a law as well as its terms in order to ascertain whether it imposes an excise … Otherwise the constitutional prohibition is reduced to a formula which lends itself to evasion … The criteria enunciated by Barwick CJ in Anderson’s (1964) 111 CLR at 365 are a more reliable guide to what constitutes an excise … Here the significant features of the pipeline operation fee are: (1) that it is levied only upon a trunk pipeline, ie, the gas and fuel Corporation pipeline, the Gas Liquids pipeline and the crude oil pipeline, through which flow the entirety of the hydrocarbons recovered from the Bass Strait fields; (2) that it is a fee payable for permission to operate a pipeline for which the plaintiffs otherwise hold a permit to own and use; (3) that the fee is a special fee which is extraordinarily large in amount, having no relationship at all to the amount of the fees payable for other pipeline operation licences — the fee payable for a trunk pipeline is $10,000,000 whereas the fee payable for any other pipeline is $40 per kilometre; and (4) that the fee is payable before an essential step in the production of refined spirit can take place — the transportation of the hydrocarbons from Longford to Long Island Point where the refinery is situated. The coexistence of these features indicates that the pipeline operation fee payable by the plaintiffs is not a mere fee for the privilege of carrying on an activity; it is a tax imposed on a step in the production of refined petroleum products which is so large that it will inevitably increase the price of the products in the course of distribution to the consumer. The fee is not an exaction imposed in respect of the plaintiffs’ business generally; it is an exaction of such magnitude imposed in respect of a step in production in such circumstances that it is explicable only on the footing that it is imposed in virtue of the quantity and value of the hydrocarbons produced from the Bass Strait fields. To levy a tax on the operation of the pipelines is a convenient means of

taxing what they convey for they are the only practicable method of conveying the hydrocarbons to the next processing point.

5.2.31 Murphy J said that s 90 ‘should be read narrowly, to avoid adverse consequences to the States’: 151 CLR at 638. He said that s 90 ‘prohibits State taxation which discriminates between goods produced in the State and those produced outside the State, and prohibits State bounties on production (or export)’: 151 CLR at 638. On this basis, he found that the fee payable by the plaintiffs was an excise: 151 CLR at 639–40. Wilson J held that the licence fee was not an excise duty, for substantially the same reasons as Gibbs CJ. Brennan J described the movement of crude oil and liquefied petroleum gas through the plaintiffs’ pipelines as ‘an integral part of the process of converting the petroleum brought ashore from the Bass Strait field into the products sold from the Long Island Point Plant’: 151 CLR at 655. Even adopting the approach of Kitto J in Anderson’s Pty Ltd v Victoria (1964) 111 CLR 353 at 374, the licence fee was an excise duty because its criterion of liability was the operation of the pipelines: ‘a step in the production, manufacture and distribution of the products sold by the plaintiffs’: 151 CLR at 659. ‘However,’ he said, ‘for the reasons expressed by Mason J, I prefer the broader approach’ — that is, the approach spelt out by Barwick CJ in Anderson’s case (111 CLR at 365–6): 151 CLR at 659. That approach led, Brennan J said, to the same conclusion: the taxes imposed on the plaintiffs’ operation of their pipelines were excise duties. [page 499]

Deane J concluded, for substantially the same reasons as Mason J, that the licence fee imposed by s 35(2) was an excise duty. 5.2.32 The decision in Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 illustrates the tension which is involved in the competing definitions of ‘excise duties’, and in the different approaches to applying that definition. The broad view of excise duty, adopted by four of the six justices, threatens the tax-raising capacity of the states; the narrow view adopted by Murphy J (and left open by Deane J: 151 CLR at 665) avoids, as Murphy J recognised, ‘adverse consequences to the States’: 151 CLR at 638. On the other hand, approaching the validity of legislation by concentrating on its criterion of liability limits (as both Gibbs CJ and Wilson J recognised (151 CLR at 618, 650)) the reduction of the states’ taxation powers. To assess the validity of state legislation by considering its practical effect, however, further diminishes the range of taxes which the states may impose, if only because that approach cuts through state attempts to avoid, through the adoption of indirect means, the prohibition in s 90. The point is that, while the adoption of a broad definition of excise duties places the states’ taxing powers at risk, the real threat to those powers materialises only when that definition is applied to legislation in a way which takes account of the legislation’s practical effect. The insistence that the question whether legislation imposed a tax upon goods should be judged by looking at the legislation’s criterion of liability could therefore be justified as an attempt to preserve the taxing powers of the states, to minimise the devastation which s 90 would otherwise work. 5.2.33 In Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368, a majority of the High Court reiterated the point, made

by Mason J in MG Kailis (1962) Pty Ltd v Western Australia (1974) 130 CLR 245 (see 5.2.27), that the licence fee device should not be extended beyond the range of transactions covered by the decisions in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C, Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 5.2.24C and HC Sleigh Ltd v South Australia (1977) 130 CLR 475 (see 5.2.28). Mason, Murphy, Brennan and Deane JJ held (with Gibbs CJ, Wilson and Dawson JJ dissenting) that the Meat Industry Act 1978 (NSW) invalidly imposed an excise duty. Section 10 of the Act prohibited any person operating premises for slaughtering animals without a licence for those premises. Section 11C provided that the annual fee for such a licence was calculated by reference to the number of animals slaughtered on the premises during the 12month period which ended on 30 June preceding the licence period. Mason and Deane JJ, in their joint judgment, described an excise duty as ‘a tax upon internally produced or manufactured goods’, whose ‘constitutional conception … is a matter of substance and not of form’: 155 CLR at 383. They said that Dennis Hotels could not be decisive of the case then before them. That decision had (155 CLR at 385): … been allowed to stand as an authoritative decision on its own facts, [but] it would fly in the face of both principle and authority to accept it as establishing a general proposition that can be applied to a tax made payable, in the form of a licence fee, by a manufacturer or producer of goods.

Murphy J adhered to his view that s 90 prohibited state taxes which discriminated against goods produced or manufactured outside the

state (customs duties) or inside the state (excise duties): 155 CLR at 387. The present tax discriminated against production of goods in New South Wales and was therefore an excise. [page 500] Brennan J noted, as had Mason and Deane JJ, that Fullagar J had been a crucial member of the majority in Dennis Hotels upholding the franchise fee. Yet his approach in that case had been radically different from that of other members of the majority and he would have treated a similar licence fee tax on a producer as an excise duty: 155 CLR at 409–10. Brennan J said (155 CLR at 410): Although the authority of Dennis Hotels and Dickenson’s Arcade is to be maintained in respect of legislation imposing fees for licences to sell goods calculated by reference to purchases or sales in preceding periods, those cases do not require the conclusion that a tax payable by a producer of goods and calculated by reference to steps in the production of goods taken in a preceding period is not a duty of excise.

The minority justices regarded the validity of the licensing system as settled by Dennis Hotels, Dickenson’s Arcade, HC Sleigh and Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 (see 5.2.34). Gibbs CJ, for example, said there was ‘no logical ground’ on which a licence fee based on past sales and purchases could be distinguished from a licence fee based on past production or manufacture: 155 CLR at 379. Dawson J observed that there was ‘no ultimate truth which lies at the end of any search for the meaning of the phrase “duty of excise” ‘and that it was, therefore, ‘all the more important’ to follow and not undermine ‘doctrine which has been accepted in this Court

upon the subject’: 155 CLR at 411. Moreover, the states had shaped their taxation policies ‘to conform to the principles laid down by authority’, and those policies would be disrupted ‘by any significant departure from those principles’: 155 CLR at 411. 5.2.34 The High Court’s concern with maintaining some tax base for the states was expressed in Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311. The court unanimously rejected a taxpayer’s challenge to the Business Franchise (Tobacco) Act 1974 (Vic), which imposed a tax on tobacco retailers and wholesalers in the form of a licence fee modelled precisely on the fee upheld in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529. The court pointed out that taxes of this type had been upheld in Dennis Hotels, Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 and HC Sleigh Ltd v South Australia (1977) 130 CLR 475. Because the states had ‘organised their financial affairs in reliance on’ those decisions, it would not be appropriate to reconsider their correctness: 154 CLR at 316. 5.2.35 The coherence of the franchise fee cases was again called into question in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399. Section 6 of the Business Franchise (Tobacco) Act 1974 (Vic) provided that a person could not carry on tobacco wholesaling or retailing unless the person was a holder of a licence under the Act. The fee to be paid for a licence was $50 plus 25 per cent of the value of tobacco sold by the applicant in ‘the relevant period’. ‘The relevant period’ was the last preceding month but one before the month in respect of which a licence was granted. In a series of divergent and often conflicting opinions, a majority of the High Court (Mason CJ, Deane,

Dawson, Toohey and Gaudron JJ; Brennan and McHugh JJ dissenting) upheld the validity of the Act. Mason CJ and Deane J reiterated the broad purpose of s 90, saying that ss 51(ii), (iii), 88, 90, and 92 ensured ‘equality of opportunity both for interstate trade and commerce and for local manufacture and goods and ordain[ed] that the Commonwealth be an economic union, not an association of States each with its own domestic economy’: 167 CLR at 426. They said that the ‘point of dissension’ in recent cases, including Western Australia v Chamberlain Industries [page 501] Pty Ltd (1970) 121 CLR 1 (see 5.2.21), Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 (see 5.2.22) and Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 5.2.30C, was not about whether ‘a tax upon the taking of a step in the distribution of goods’ was an excise, but about whether, in identifying an excise, the court should look ‘to its practical or substantial operation’ as well as ‘the legal operation of the statute’: 167 CLR at 432–3. Mason CJ and Deane J said that ‘the characterisation of a law by reference exclusively to its strict legal operation, without regard to its practical or substantial operation, is bound to yield … highly artificial results’: 167 CLR at 433. Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 was ‘authority only for the proposition that the presence or absence of the formula is a relevant [rather than ‘critical’] consideration’ in assessing whether a licence fee is or is not an excise: 167 CLR at 437. Although it might have been ‘[a]ttractive’ to confine the franchise cases to their facts, especially

in view of the fact that they disagreed with those decisions, the ‘preferable approach’ was to view alcohol and tobacco as belonging to a special category of cases. Liquor licensing had ‘a unique history’; tobacco invited ‘regulatory control’; and in neither case was the tax ‘likely to be passed on as a significant component of the cost of different and dissimilar manufactured goods’: 167 CLR at 440. Mason CJ and Deane J held that the tobacco licence fees were valid. Toohey and Gaudron JJ revived the narrow definition of excise and narrow purpose of s 90. They said that s 90 was designed to ‘secure to the Commonwealth the power to effectuate economic policy with respect to Australian imports and exports’: 167 CLR at 479. Although it may be a ‘power over commodities’, it was ‘a power with a purpose’. They continued (167 CLR at 479): All that is necessary to secure that purpose and to perfect the power is to deny to each State the power to levy duties of customs on goods entering that State from overseas, the power to levy duties of excise on goods produced or manufactured in that State and the power to grant bounties on goods produced or manufactured in that State.

Toohey and Gaudron JJ approached the case on the basis that the prohibition in s 90 referred to goods produced or manufactured in Australia: 167 CLR at 480. If the section was designed to give the Commonwealth control over commodity taxation, it was ‘difficult to see any basis for distinction’ between taxes on sale and distribution and taxes on consumption: 167 CLR at 480. They said that the franchise cases could be viewed either as an ‘anomalous exception’ to the broad view, or as a ‘denial of [its] correctness’, and said there was ‘much to be said’ for the former: 167 CLR at 481. Their Honours concluded that the tobacco licence fees were not excise duties because they affected goods ‘in their character as

articles of commerce rather than in their character as goods manufactured in Australia’: 167 CLR at 485. Dawson J also held that the tobacco licence fees were not excise duties, but on the basis that the earlier cases (Dennis Hotels, Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 and HC Sleigh Ltd v South Australia (1977) 130 CLR 475) were authority for a wide legal proposition, namely, that a licence fee imposed on the vendor of goods would not be an excise duty where it was calculated by reference to past sales or purchases: 167 CLR at 472. He made the following observations on the course of decisions on s 90 (167 CLR at 473–4): Perhaps the basic error was to depart from the limited conception of an excise duty which the Court laid down in Peterswald v Bartley. To have regard, as the Court did there, to the constitutional purpose which the context of s 90 reveals and to the restricted objectives to which s 90 gives expression would make it possible to speak sensibly of duties of excise as a

[page 502] matter of substance. But as the authorities stand at the moment it is not possible to do so and the application of the test laid down in Bolton v Madsen represents the only available method of imposing some practical limit upon the reach of the section.

Brennan and McHugh JJ dissented. In separate judgments, they adopted narrow readings of Dennis Hotels. Its authority should be confined, they said, to ‘legislation operating in indistinguishable terms’: 167 CLR at 460 per Brennan J. They saw a series of distinctions between the present licence fee and the fee upheld in

Dennis Hotels: these included the relative brevity of the licence period (1 month), the proximity of the past period (the second-last month) and the relatively high rate of the tax: 167 CLR at 463–4 per Brennan J; 500–1 per McHugh J. Brennan J also said that this licence fee was distinguishable from Dennis Hotels because it was not ‘regulatory’ (167 CLR at 461) and that it was ‘a matter of indifference’ who paid it in the chain of steps from production to final distribution: 167 CLR at 461. The ‘once-only’ nature of the tax meant that it was a tax on any step in a product’s distribution rather than a fee for the privilege of engaging in a business: 167 CLR at 462. 5.2.36 The reasons for judgment in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 appear to have been driven by two contending pressures: a resistance to reopening the decisions in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C and Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 5.2.24C; and the need to reconcile those two cases with the general trend of decisions on s 90. The result was an untidy collection of qualifications and compromises — a result which suggests that the preferable course would have been to discard the two earlier decisions. (Brennan J remarked, perhaps regretfully, that the court’s commitment made during argument ‘to resolve the instant case in the light of existing authority … has proved to be more difficult than it then appeared’: 167 CLR at 443.) Of the seven justices, only Dawson J accepted that the earlier cases were authority for the wide proposition that a licence fee imposed on the vendor of goods would not be an excise duty where it was calculated by reference to past sales or purchases. Mason CJ and Deane J limited the proposition from those two decisions to

licensing regimes for the sale of alcohol and tobacco. Brennan and McHugh JJ did not accept the limitation proposed by Mason CJ and Deane J, but confined the authority of Dennis Hotels to ‘legislation operating in indistinguishable terms’: 167 CLR at 460 per Brennan J. Toohey and Gaudron JJ saw Dennis Hotels as standing for a proposition which owed more to the judgment of Fullagar J than to the judgments of the other six justices in that case. 5.2.37 The judgment of Toohey and Gaudron JJ in Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 was an attack on the foundation on which Dennis Hotels and every later decision was constructed, namely, the expanded definition of excise duties articulated by Rich and Williams JJ and by Dixon J in Parton v Milk Board (Vic) (1949) 80 CLR 229 (see 5.2.10). Toohey and Gaudron JJ supported the narrow definition of excise duties, endorsed by the High Court in Peterswald v Bartley (1904) 1 CLR 497 (see 5.2.6), by McTiernan J in Parton v Milk Board (Vic), and by Fullagar J in Dennis Hotels: excise duties were taxes imposed on goods because of their local (Australian) production. An even narrower form of this definition had been advanced by Murphy J in Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 5.2.30C. Murphy J had described excise duties as ‘limited to taxes on production within the State’: 151 CLR at 638. [page 503] In Philip Morris, Toohey and Gaudron JJ acknowledged that

there was much to be said for Murphy J’s view of excise duties, but claimed that ‘the overwhelming weight of authority favours the identification of the relevant goods caught up in [s 90’s] … prohibition as goods produced or manufactured in Australia’: 167 CLR at 480. The claim that this definition is supported by ‘the overwhelming weight of authority’ may be optimistic. Acceptance of the definition would require rejection of almost all decisions since Parton v Milk Board (Vic) (1949) 80 CLR 229. But there were, in Philip Morris, signs that other members of the court could join with Toohey and Gaudron JJ in returning to the limited conception of an excise duty laid down in Peterswald v Bartley. Dawson J suggested that the High Court’s departure from Peterswald v Bartley may have been ‘the basic error’: 167 CLR at 473. Brennan J speculated (167 CLR at 443) whether a review of the s 90 cases of the type seen in the context of s 92 of the Constitution in Cole v Whitfield (1988) 165 CLR 360 9.4.13C might be called for. 5.2.38 The High Court reviewed the purpose of s 90 and its conferral of exclusive power over customs and excise duties in Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248. A majority of the court (Brennan, Deane, Toohey and Gaudron JJ; Mason CJ, Dawson and McHugh JJ dissenting) held that the exclusive power of the Commonwealth to levy duties of excise prevented a territory legislature, as well as a state parliament, from imposing excise duties. In their joint judgment, Brennan, Deane and Toohey JJ identified the purpose of ss 88, 90, 92 and 99 of the Constitution as being to establish a free trade area throughout Australia: 177 CLR at 274–6. They said that ‘[t]he collection and control of duties of customs and excise and the control of the payment of bounties’ was

‘central to the fulfilment of’ that purpose: 177 CLR at 276. Accordingly, at federation, s 86 transferred the powers of collection and payment to the Commonwealth, and s 69 transferred the relevant colonial departments to the Commonwealth: 177 CLR at 276. They continued (177 CLR at 276) (emphasis in original): It would frustrate the manifest purpose of s 86 if, after uniform duties of customs were imposed, part of the functions of collecting and controlling duties of excise or controlling the payment of bounties were to pass from the Executive Government of the Commonwealth to the Executive of a territory government whose legislature might be empowered to impose its own duties of excise or to grant its own bounties on the production or export of goods.

Later, Brennan, Deane and Toohey JJ said (177 CLR at 278–9): If s 90 is to play its part in achieving the ‘essential objective’ of abolishing internal customs barriers and in guaranteeing equality as regards the customs and excise duties which the people of the Commonwealth are to bear, it must be construed as restricting to the Parliament the sole legislative power to impose duties of customs and excise and to grant bounties on the production or export of goods … If s 122 authorised the creation of a legislature for an internal territory with the powers referred to in s 90, it would be a Trojan horse available to destroy a central objective of the federal compact …

5.2.39 The applicability of s 90 to the territories confirmed, the court then turned its attention to the ‘sea of uncertain principle’ of s 90: Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 at 445 per Brennan J. It became clear that a new consensus was emerging, grounded in Dixon J’s conception of excise in Parton v Milk Board (Vic) (1949) 80 CLR 229.

[page 504]

5.2.40C

Capital Duplicators Pty Ltd v Australian Capital Territory (No 2) (1993) 178 CLR 561 (some footnotes omitted)

[The Business Franchise (‘X’ Videos) Act 1990 (ACT) established a licensing scheme in the Australian Capital Territory for the sale of ‘X’ rated videos. Wholesale and retail sellers of ‘X’ rated videos were required to obtain a licence, which was renewable on a monthly basis. The fee system had three components: a ‘basic fee’ payable at the establishment of the licence; an ‘advance fee’ payable at the time of the first grant of the licence; and a ‘franchise fee’ payable with each subsequent licence renewal. The advance fee and the franchise fee were both calculated according to the value of sales during a particular month, although the relevant monthly period for the purposes of calculation differed. The advance fee was calculated by reference to the month for which the licence was granted or renewed. The franchise fee was determined according to the month which was 2 months prior to the month for which the renewal was sought. The licensing system aimed to avoid imposing the fee twice in relation to the same videos. Hence the wholesalers’ licence fees were calculated according to the wholesale value of the videos supplied during the relevant month. The retail fees were calculated according to the value of videos the retailer offered for sale in the relevant month, and which it manufactured or were supplied to it, otherwise than in accordance with the wholesale licence. The fee was calculated at a rate of 40 per cent of the wholesale value of the videos. In order to obtain a licence, the licensee was required to be a fit and proper person, determined according to various factors, including: bankruptcy or liquidation; past convictions; and past contraventions of this Act and of

the Publications Control Act 1989 (Cth) and the Taxation (Administration) Act 1987 (Cth). A vendor of ‘X’ rated videos challenged the legislation on the basis that the fee structure it imposed amounted to a duty of excise, power over which was exclusive to the Commonwealth. Having decided in Capital Duplicators Pty Ltd v Australian Capital Territory (No 1) (1992) 177 CLR 248 that s 90 applied to the territories, the court proceeded to consider the substantive issues. Questions were referred to the court pursuant to s 18 of the Judiciary Act 1903 (Cth), the first of which was whether the licence fees imposed by the Act were invalid as duties of excise under s 90.] Mason CJ, Brennan, Deane and McHugh JJ: The variety of views which have been expounded about the meaning of ‘duties of excise’ since Peterswald and the shifts in judicial opinion with respect to s 90 reflect the fact that the critical words of the section had no clearly established meaning when the Constitution was brought into existence … [S]ince Parton, there has been little support for the view that an excise is confined to a tax on, or by reference to, the local production or manufacture of goods. In Dennis Hotels, Fullagar J was alone in expressing that opinion [(1960) 104 CLR at 555–6]. Murphy J again was alone in stating a similar view in Logan Downs Pty Ltd v Queensland [(1977) 137 CLR at 84–5]. And, more recently, Toohey and Gaudron JJ expressed the same opinion in Philip Morris [(1989) 167 CLR at 478–80]. But that is the only support for the narrow view of ‘duties of excise’ that has been expressed in all the cases since Parton. Ranged against these expressions favouring a return to a narrow definition of excise is the very substantial weight of judicial opinion since Parton … [page 505]

The submissions advanced by the defendants and South Australia deny the proposition that ‘duties of customs and of excise’ in s 90 exhaust the categories of taxes on goods. Those submissions accept that a tax which, in form or even in substance, imposes a duty on the importation of goods or on the local production or manufacture of goods would be within the scope of s 90. But a tax which does not fall within either of those categories but which imposes a duty indifferently on all goods (whether imported or locally produced or manufactured) is said to be outside the scope of s 90. These propositions were rejected expressly and, in our respectful opinion, rightly by Dixon CJ and Windeyer J in Dennis Hotels [(1960) 104 CLR at 540, 600–1]. Moreover, they are inconsistent with the purpose which Dixon J attributed to s 90 in Parton and which has been attributed to s 90 by subsequent judgments in this Court. Adhering to that view of the purpose of s 90, the term ‘duties of customs and of excise’ in s 90 must be construed as exhausting the categories of taxes on goods. That leaves the question whether a tax on goods should be classified as a duty of customs to the extent to which it applies to imported goods and a duty of excise to the extent to which it applies to goods of local production or manufacture. Some support can be found for this distinction. However, once it is accepted that duties of excise are not limited to duties on production or manufacture, we think that it should be accepted that the preferable view is to regard the distinction between duties of customs and duties of excise as dependent on the step which attracts the tax: importation or exportation in the case of customs duties; production, manufacture, sale or distribution — inland taxes — in the case of excise duties. It is unnecessary in this case to consider taxes on the consumption of goods. The very limited support manifested since Parton and, more particularly, since Bolton v Madsen, for a return to the narrow concept of excise is a telling argument against reconsideration of the broader interpretation which has prevailed since Parton. What

is more, the case for reconsideration invites a return to a narrow concept of excise similar to the Peterswald definition which, for reasons already discussed, was discarded over forty years ago. In that time, federal financial arrangements have been designed and implemented on the basis of the interpretation given by this Court to s 90. To desert that interpretation now would have widespread practical ramifications and generate extraordinary confusion. That argument against reconsideration would not prevail if it were clear that the interpretation for which the Territory and South Australia contend is correct. However, that is certainly not the case. Indeed, as we have indicated, we consider that that interpretation is fundamentally mistaken and involves a denial of what has, since Dixon J’s judgment in Parton, been generally and (in our view) correctly accepted as the essential nature of a duty of excise for the purposes of our Constitution. In that regard, it must be stressed that, putting to one side the judgments of Murphy J and Toohey and Gaudron JJ to which we have referred, recent disagreement within the Court about duties of excise has not been about whether the nature of a duty of excise was correctly identified by Dixon J in Parton. It has been about whether, in determining whether a particular statutory impost is a duty of excise for the purposes of s 90, one should have regard to ‘the substance of the operation of the statute, rather than merely its form’ [Dickenson’s Arcade (1974) 130 CLR at 186]. Reconsideration of Dennis Hotels and Dickenson’s Arcade Rejection of the case for a return to a narrow concept of excise entails a rejection of the argument that Dennis Hotels and Dickenson’s Arcade should be reconsidered in order to define more narrowly the nature of a duty of excise and thereby cut back the operation of s 90 of the Constitution. It should be apparent from what has been said above that

[page 506] we see more theoretical force in an argument that Dennis Hotels and Dickenson’s Arcade should be reopened for the purpose of enabling reconsideration of the question whether, as a matter of the substance of the operation of the relevant statutory provisions rather than of mere form, the challenged licence fees in those cases should be characterised as duties of excise. However, it was not argued on behalf of any party or intervener in the present case that, even if the Court was not prepared to adopt a narrower view of the nature of a duty of excise, Dennis Hotels and Dickenson’s Arcade should nonetheless be reopened and overruled. Nor, on balance, do we think that they should be. For one thing, there are some grounds for treating tobacco and alcohol products as constituting a special category of goods for the purpose of considering whether what purports to be a licensing fee under a regulatory regime should be characterised as a duty of excise. For another, there are very strong practical reasons why the rule of stare decisis should be observed in relation to those decisions. Not only was the authority of Dennis Hotels acknowledged in Bolton v Madsen, but also that decision was itself followed in the unanimous decision in Anderson’s Pty Ltd v Victoria. Later, in Dickenson’s Arcade, the Court refused to depart from Dennis Hotels and, subsequently, in H C Sleigh, the Court followed and applied the two earlier decisions. Since then, the Court has twice refused to reconsider the correctness of Dennis Hotels and Dickenson’s Arcade. In Philip Morris, the most recent instance in which there was a refusal to reconsider the two decisions, the court refused to do so by a majority of six Justices to one. After refusing to reconsider the correctness of the earlier decisions, the Court heard other arguments as to the effect of those decisions. In disposing of those arguments, the members of the Court gave different reasons for supporting the two earlier decisions …

The diversity in the reasons given for not disturbing the earlier decisions is not an adequate ground for now disregarding the significance of the Court’s repeated refusal to depart from Dennis Hotels and Dickenson’s Arcade. It is true that those reasons do not support H C Sleigh with the same cogency as they support Dennis Hotels and Dickenson’s Arcade. All that means, however, is that, if a fee imposed in purported conformity with H C Sleigh were of sufficient magnitude to deny a regulatory character to the law which imposes it, the validity of the fee would require close consideration. In refusing to reconsider the franchise decisions relating to liquor and tobacco, the Court has recognized the fact that the States (and the Territories) have relied upon the decisions in imposing licence fees upon vendors of liquor and tobacco in order to finance the operations of government. Financial arrangements of great importance to the governments of the States have been made for a long time on the faith of these decisions [Evda Nominees; Philip Morris (1989) 167 CLR at 438, 443, 489–90] … For the reasons stated, the case for a reconsideration of those decisions has not been made out. [Mason CJ, Brennan, Deane and McHugh JJ outlined the licensing regime established by the legislation, and continued:] Validity of the Act The foregoing summary of the provisions of the Act reveals that the legislation cannot be described merely as a regulatory scheme in which the licensing fees are simply an element in an overall regime of controlling the distribution of ‘X’ videos to the public. The principal elements of the legislation are directed to the raising of revenue rather than to the creation of a regulatory scheme designed to protect the public. [page 507]

There is no restriction whatsoever in the Act on the class of videos which can be sold; any video, no matter how violent or pornographic, may be sold. Nor is there any restriction on the class of purchasers; the Act does not preclude the sale of any video to children. Likewise, there is no restriction on advertising or display. And the conditions to be satisfied by an applicant for a licence under s 5 relate more obviously to the capacity of the applicant to pay the fees than to the protection of the public in connection with the distribution of violent and pornographic videos. Accordingly, the Act falls outside the category of regulatory schemes affecting liquor and tobacco which Mason CJ and Deane J held in Philip Morris could support the exaction of a licence fee on the footing that it is not an excise. Furthermore, the size of the fee (40 per cent) is larger than the fee exacted in the other franchise cases and clearly exceeds the cost of implementing the scheme. No endeavour was made to justify the size of the fee on that score. Indeed, the true nature of the exaction is to be discerned from s 21 which refers to the fee being ‘payable in relation to the supply or offer for retail sale’ of the videos. Hence, the purpose of exacting the licensing fees is not simply regulatory but has a very substantial revenue purpose. In the view of Brennan J in Philip Morris, the fact that the legislative scheme is not regulatory and the substantial size of the fee are factors which are relevant in the characterization of the licence fee as an excise. In addition, the advance fee, being calculated by reference to sales made under the licence, plainly is an exaction made on a step in the process of distribution under the licence. And, though the franchise fee is calculated by reference to sales made in a past period, that period is no more than two months earlier than the licence period, each being for one month only. The proximity of the prior period to the period of the licence is a factor pointing in the direction of an excise because the transactions in the past period may well provide a reliable forecast of the transactions which will occur during the

currency of the licence [Philip Morris (1989) 167 CLR at 458]. Thus, the exaction is imposed not merely on the taxpayer’s past dealings with the goods but in circumstances in which the magnitude of the past dealings with the goods is a likely indicator of the measure of the taxpayer’s dealings with the goods during the term of the licence. With the exception of the non-regulatory character of the licensing scheme, the same factors would, on the view of McHugh J in Philip Morris [(1989) 167 CLR at 493], lead to the view that the exactions in the present case are excise duties. In the result, in the light of the reasoning of the members of the court in Philip Morris, the conclusion is inevitable that certain licence fees imposed by the Act are an excise.

5.2.41 Dawson J dissented. Toohey and Gaudron JJ delivered a joint judgment in which they endorsed the narrow view of excise duties, namely, that they were taxes that discriminated between commodities locally produced and other commodities. That view of excise duties served the purpose of s 90. They expressly endorsed (178 CLR at 629) the approach of Murphy J in Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59 at 84 (see 5.2.22): In general, taxes imposed without regard to the place of production or manufacture are neither duties of customs nor duties of excise. The essence of each duty is the tendency to discriminate between goods locally produced and other goods.

Toohey and Gaudron JJ said that their approach to s 90 was (178 CLR at 631): … consistent with the approach taken in Cole v Whitfield, namely, to identify the purpose of the section which, in the case of s 92, is to strike down laws which impose discrimination of

[page 508] a protectionist nature. Likewise, s 90 strikes down such laws in relation to Australian exports and imports, that is, State taxation measures which discriminate against goods manufactured or produced in Australia.

They said that the licence fees at issue were taxes on goods; but, because they were ‘imposed whether the videos sold or hired are manufactured locally or … imported’, there was no discrimination and the tax was not an excise: 178 CLR at 631–2. 5.2.42 In Capital Duplicators Pty Ltd v Australian Capital Territory (No 2) (1993) 178 CLR 561, Mason CJ, Brennan, Deane and McHugh JJ referred to the need to maintain the Parton doctrine because ‘federal financial arrangements have been designed and implemented on the basis of’ it; to do otherwise would ‘generate extraordinary confusion’: 178 CLR at 590–1. How tenable is this as a justification, in view of the fact that it is the states and territories themselves which would benefit from a reinterpretation of Parton v Milk Board (Vic) (1949) 80 CLR 229 (see 5.2.10), which reversed that decision and reverted to the position in Peterswald v Bartley (1904) 1 CLR 497 (see 5.2.6)? Lindell has pointed out that any expansion of state and territory revenues could only cause confusion to the states in a positive sense: Lindell, 1997, p 36. The resolution on the meaning of duties of excise in s 90 was finally reached in Ha v New South Wales. 5.2.43C

Ha v New South Wales (1997) 189 CLR 465 (some footnotes omitted)

[Sections 28–30 of the Business Franchise Licences (Tobacco) Act 1987 (NSW) prohibited the sale of tobacco, by wholesale or retail, without a licence. Licences were issued on application under s 35 of the Act. Section 41(1)(a) and (c) provided a formula, similar to that considered in Dennis Hotels Pty Ltd v Victoria, for calculating the amount payable for a retail or wholesale licence. The fee consisted of $10 plus a specified percentage of the value of tobacco sold in the ‘relevant period’, which was defined to mean ‘the month commencing 2 months before the commencement of the month in which the licence expires’. The specified percentage payable as part of the licence fee was increased from 30 per cent in 1989 to 100 per cent in 1995. Section 47 of the Act required sellers of tobacco without a licence to pay an amount equal to the fee that would have been payable for the licence if the person had held one, and a penalty equal to twice that amount. Section 46 provided for reassessment of fees which had been assessed incorrectly. The plaintiffs in the first proceeding did not hold a retail licence under the Act at the time that they conducted a duty-free store in Sydney selling tobacco. A delegate of the Chief Commissioner for Business Franchise Licences (Tobacco) issued a notice of assessment to the plaintiffs under s 47 of the Act. The plaintiffs in the second proceeding held a wholesale licence. The Chief Commissioner’s delegate issued a notice of assessment under s 46 of the Act reassessing the fees. The plaintiffs refused to pay the fees and commenced proceedings in the High Court claiming that ss 46 and 47 of the Act were invalid because they imposed a duty of excise and were thus exclusive to the Commonwealth under the Constitution. A case was stated reserving this question for the opinion of the Full Court. [page 509] The Attorneys-General of the other states and the Northern

Territory and the Australian Capital Territory joined with New South Wales to argue for a reconsideration of the broad view of excise, and, in the alternative, to argue that these imposts were merely fees for a licence to carry on the business of selling tobacco.] Brennan CJ, McHugh, Gummow and Kirby JJ: The principle that an inland tax on a step in production, manufacture, sale or distribution of goods is a duty of excise has been long established. As a criterion of a duty of excise, it was expressed by Kitto J in Dennis Hotels [(1960) 104 CLR 529 at 559] and adopted by a unanimous Court in Bolton v Madsen [(1963) 110 CLR 264 at 273]. It can be traced back to the judgments in Parton [(1949) 80 CLR 229 at 252–3, 260, 261] and, before that, to the judgment of Dixon J in Matthews v Chicory Marketing Board (Vict) [(1938) 60 CLR 263 at 291–304]. As Brennan J said in Philip Morris Ltd v Commissioner of Business Franchises (Vict) [(1989) 167 CLR 399 at 445]: If there be any rock in the sea of uncertain principle, it is that a tax on a step in the production or distribution of goods to the point of receipt by the consumer is a duty of excise. The proposition that was not clearly established before Philip Morris was that the character of a tax required a consideration of the substantive operation as well as the text of the statute imposing the tax. To support the overturning of such a long and consistent line of authority, the defendant’s submissions needed to show a clear departure from the text of the Constitution. They submitted that Parton had departed without warrant from what they identified as the narrow view of ‘duties of excise’ expressed by Griffith CJ, speaking for the Court in Peterswald v Bartley [(1904) 1 CLR 497 at 509]. The defendants sought to show that departure by reference to the words of s 90 which identify ‘production or export of goods’ as the only subjects of bounties, to s 55 which draws a

sharp distinction between laws imposing duties of customs and laws imposing duties of excise, and to s 93 which specifically applies duties of customs to ‘goods imported into a State’ and duties of excise to ‘goods produced or manufactured in a State’. To assess the validity of these arguments, it is necessary to see the provisions of ss 90 and 93 in the context of Ch IV of the Constitution and to understand the operation which Ch IV was designed to have at the time of Federation. Chapter IV deals with ‘Finance and Trade’. While taxes can and do affect trade, their immediate effect is to raise revenue. While the intended effect of s 90 on trade has often been invoked to illuminate the meaning of the term ‘duties of excise’ in s 90, it should not be forgotten that one of the chief purposes of Ch IV was to provide for the financial transition of the Colonies into the States of the Commonwealth and for the revenues required by the Commonwealth. Prior to Federation, colonial revenues were derived chiefly from duties of customs and (except in Western Australia and the Northern Territory of South Australia) duties of excise. On the imposition of uniform duties of customs by the Commonwealth at 4.00 pm on 8 October 1901, the power to impose such duties passed exclusively to the Commonwealth except in the case of Western Australia which, by s 95 of the Constitution, was permitted to levy customs duty on a reducing scale over a period of five years ‘on goods passing into that State and not originally imported from beyond the limits of the Commonwealth’. [Brennan CJ, McHugh, Gummow and Kirby JJ referred (189 CLR at 491) to the ‘transitional scheme of finance’ contained in ss 88, 86, 87 and 93 of the Constitution, as explained by Mills in Taxation in Australia, 1925, pp 200–1. At 492, they quoted [page 510]

Mills as saying: ‘In the economic sphere, the paramount object of Federation was inter-State free trade with a uniform Tariff in the importation of goods from overseas, and so the preparation of a Tariff became the most urgent task of the new Commonwealth Government.’ The justices continued:] Although duties of excise were in practice levied on goods of local production or manufacture in the Australian Colonies, the review of the history of the word ‘excise’ by Dixon J in Matthews v Chicory Marketing Board (Vict) [(1938) 60 CLR 263 at 299] ‘does not disclose any very solid ground for saying that, according to any established English meaning, an essential part of its connotation is, or at any time was, that the duty called by that name should be confined to goods of domestic manufacture or production’. His Honour noted that in Tasmania in 1829 duties of excise were levied indifferently on spirits of Tasmanian origin and on spirits imported from New South Wales. Blackstone identified an excise duty as ‘an inland imposition, paid sometimes upon the consumption of the commodity, or frequently upon the retail sale, which is the last stage before the consumption.’ … There is no common use of the term ‘excise’ in the Convention Debates which might illuminate its meaning, save that it does not include the fees for a licence to carry on a business which, in England, were sometimes called excise licences. What is apparent, with respect to the financial position of the Colonies, is that it was understood at the time that in becoming States what had been their principal sources of revenue would be withdrawn … It is clear that an objective of the movement to Federation was ‘inter-colonial free trade on the basis of a uniform tariff’ as this Court pointed out in Cole v Whitfield [(1988) 165 CLR 360 at 386]. That objective could not have been achieved if the States had retained the power to place a tax on goods within their borders. If goods that attracted a State tax were imported into the State from outside the Commonwealth, Commonwealth tariff policy would have been compromised by the imposition of a State

tax. The second paragraph of s 92 and the third paragraph of s 95 (by limiting the period of its operation) show that such a tax was alien to the scheme of Ch IV. If a State tax were imposed on goods brought into the State having been produced or manufactured elsewhere in the Commonwealth, the tax would affect the freedom of trade in those goods [Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411] and might be a duty of customs on the entry of the goods into the taxing State. If a State tax were imposed on goods of local production or manufacture within the State, it would be a duty of excise on any view of the term. As State power to tax goods whatever their place of production or manufacture was given up to the Commonwealth, Dixon J was surely right to say in Parton [(1949) 80 CLR 229 at 260]: In making the power of the Parliament of the Commonwealth to impose duties of customs and of excise exclusive it may be assumed that it was intended to give the Parliament a real control of the taxation of commodities and to ensure that the execution of whatever policy it adopted should not be hampered or defeated by State action. The defendants’ submission is that the exclusivity of the Commonwealth power to impose duties of excise has a more modest purpose and is designed merely to protect the integrity of the tariff policy of the Commonwealth. The history of s 90 denies that hypothesis although that was the original purpose in mind during the 1891 Convention. The level of protection given to local production or manufacture depended at the time of Federation — and, indeed, before and since that time — on the disparity between duties of customs on imported goods [page 511] and duties of excise on goods of local production or manufacture.

When the matter was debated at the 1891 Convention, the resolution tied duties of excise to goods of the same kind as those subject to duties of customs. The resolution agreed to at that Convention read as follows: That in order to establish and secure an enduring foundation for the structure of a federal government, the principles embodied in the resolutions following be agreed to: (3) That the trade and intercourse between the federated colonies, whether by means of land carriage or coastal navigation, shall be absolutely free. (4) That the power and authority to impose customs duties and duties of excise upon goods the subject of customs duties and to offer bounties shall be exclusively lodged in the federal government and parliament, subject to such disposal of the revenues thence derived as shall be agreed upon. So long as the objective of the Convention was limited to prescribing the powers needed to create a disparity between the tax on imported goods and the tax on goods of local production or manufacture, the insertion of the words ‘upon goods the subject of customs duties’ was appropriate. But at the Adelaide Convention in 1897, Sir George Turner moved an amendment to omit the qualifying phrase in order to enlarge the power of the Commonwealth Parliament. Although Mr McMillan had advocated the retention of the phrase in 1891, in 1897 he accepted that ‘it would be as well not to do anything that would restrict the power of the Federal Parliament’. The amendment was agreed so that, both by intention and by expression, the exclusive power to impose duties of excise was conferred on the Parliament as a freestanding power. It was capable of exercise in conjunction with the exclusive power to impose customs duties in order to further either protectionism or external free trade but the exercise of the power was not to be confined to the fulfilment of either purpose.

The history of s 90 denies any necessary linkage between the exclusivity of the power to impose duties of excise and Commonwealth tariff policy. The dichotomy between laws imposing duties of customs and laws imposing duties of excise in s 55 of the Constitution is satisfied by the dichotomy between laws imposing a tax on the importation of goods and laws imposing an inland tax on some dealing with goods … So far as it goes, it can be accepted that a purpose of s 90 is to give the Commonwealth fiscal control over imports, domestic production and exports. But free trade within the Commonwealth would not have been ensured by exclusive federal fiscal control of imports, domestic production and exports. As earlier noted, the imposition of State taxes upon other inland dealings with goods as integers of commerce, even if those taxes were not protectionist, would have created impediments to free trade throughout the Commonwealth. Why should s 90 be construed so as to subvert an objective which Federation was designed to achieve [Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at 276, 279]? It is immaterial that the States retain taxing and other powers the exercise of which might affect the overall costs of production, sale or distribution of goods and ultimately be shared by consumers [Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117 at 129]; what is material is that the States yielded up and the Commonwealth acquired to the exclusion of the States the powers to impose taxes upon goods which, if applied differentially from State to State, would necessarily impair the free trade in those goods throughout the Commonwealth [Capital Duplicators (No 2) (1993) 178 CLR 561 at 585]. Section 51(ii) ensured that such taxes when imposed by the Parliament would be imposed uniformly throughout the Commonwealth. [page 512]

The defendants’ submissions now seek to reclaim the taxing powers ceded to the Commonwealth by a simple device in legislative drafting. So long as a State taxing statute taxes the sale or distribution of imported goods and goods of local production or manufacture indifferently and equally, the statute, it is said, cannot be characterised as a law imposing duties of excise. This submission proceeds on the footing that a criterion of liability must be local production or manufacture and that a statute which imposes a tax indifferently on goods irrespective of their origin does not impose a duty of excise. If this submission were accepted, the State power of taxation would extend in effect to the taxation of any commodity provided the taxing statute is not expressed to tax solely goods of local production or manufacture. The importation of an insignificant quantity of the commodity would permit State taxation of the commodity provided it applied indifferently to the imported quantity and the quantity that is locally produced. In the present case, for example, even if the substantive effect of the tax were found to burden Australian production or manufacture of tobacco, the importation of a small percentage of the tobacco sold in Australia would permit the imposition of the tax under a State law. If accepted, the submission would frustrate whatever purpose might be attributed to s 90. That approach to the characterisation of laws impugned for contravention of s 90 was rejected as far back as Peterswald v Bartley [(1904) 1 CLR 497 at 511] itself … When a constitutional limitation or restriction on power is relied on to invalidate a law, the effect of the law in and upon the facts and circumstances to which it relates — its practical operation — must be examined as well as its terms in order to ensure that the limitation or restriction is not circumvented by mere drafting devices. In recent cases, this Court has insisted on an examination of the practical operation (or substance) of a law impugned for contravention of a constitutional limitation or restriction on power. On that approach, even if the narrower view of ‘duties of excise’ were accepted, the question whether the

imposts on the sellers of tobacco under the Act burden Australian-produced tobacco products would have to be answered. However, for reasons stated above, the question is whether the imposts are an inland tax on a step in the distribution of tobacco products. If it were not for the factors to which reference will be made in considering what have been known as the franchise cases, the defendants’ submissions could and would have been dismissed by reference simply to the line of authority following Parton and culminating in the Capital Duplicators Case (No 2). No further analysis of the arguments supporting those submissions would have been called for. The repetition on this occasion does nothing to enhance their cogency, despite the care and vigour with which they were presented. Evda Nominees Pty Ltd v Victoria [(1984) 154 CLR 311] and the Capital Duplicators Case (No 2) [(1993) 178 CLR 561 at 590–593] show that mere repetition of arguments does not require the Court to reopen settled authority to reconsider the arguments, at least where ‘the States have organized their financial affairs in reliance on them’ [Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 at 316]. In the present case, however, the States, fully appreciating that the attack on the doctrine based on Parton, if successful, would destroy the reasoning in the franchise cases and conscious of the factors on which the plaintiffs rely to limit the protection which the franchise cases give to the States’ tax base, chose to invite the Court to re-examine the Parton doctrine which has been accepted for nearly half a century. Perhaps the States and Territories were conscious of the risk that the taxes in question in this case might be held to fall outside the protection offered by the franchise cases. However that might be, as the present case requires a declaration of the limits of the protection offered by the franchise cases so as to accord with the Parton doctrine, it seems right to accede to the defendants’ application to reopen the Parton line of cases. But the correctness of the

[page 513] doctrine they establish must now be affirmed. Therefore we reaffirm that duties of excise are taxes on the production, manufacture, sale or distribution of goods, whether of foreign or domestic origin. Duties of excise are inland taxes in contradistinction from duties of customs which are taxes on the importation of goods. Both are taxes on goods, that is to say, they are taxes on some step taken in dealing with goods. In this case, as in Capital Duplicators Case (No 2) [(1993) 178 CLR 561 at 590], it is unnecessary to consider whether a tax on the consumption of goods would be classified as a duty of excise. In the light of this doctrine, the second major proposition in the defendants’ submissions falls for consideration. 2 Are the licence fees or the amounts payable under ss 46 and 47 of the Act merely fees for a licence to carry on a business? This is substantially the same question as that which arose in Coastace Pty Ltd v New South Wales [(1989) 167 CLR 503] in which imposts under the legislation as it stood between 28 January and 27 July 1987 were held to be valid. Since 1987, as we have seen, the variable component of licence fees calculated under s 41 of the Act have been increased by increasing the specified rate from 30 per cent of the value of tobacco sold in a relevant period to 100 per cent. The imposts in Coastace were held to be valid by a majority whose opinions were markedly dissimilar. In particular, Mason CJ and Deane J upheld the imposts for reasons which their Honours had stated more extensively in their judgment in Philip Morris. In that case, their Honours expressed the view that liquor and tobacco were commodities that invite regulatory control and, that being so, they were prepared to accept the correctness of Dennis Hotels and Dickenson’s Arcade on a special basis … In Philip Morris, Brennan J in dissent declined to accept that

approach… We are respectfully unable to accept the basis on which Mason CJ and Deane J accepted Dennis Hotels and Dickenson’s Arcade. Were it not for that basis, Mason CJ and Deane J would have joined Brennan and McHugh JJ in holding the imposts in Philip Morris and Coastace to be duties of excise and, on that account, invalid. The concordance in their Honours’ views was manifested in their joint judgment in the Capital Duplicators Case (No 2). It is therefore unnecessary to canvass again the question whether the decisions in the franchise cases can be reconciled with the doctrine based on Parton. That exercise was undertaken by Brennan J in Philip Morris [(1989) 167 CLR 399 at 451–64] and we agree with the analysis and conclusions in his Honour’s judgment. In Philip Morris, McHugh J was also in dissent. His Honour rejected the authority of the earlier franchise cases as support for any proposition save the validity of the imposts upheld in those cases [(1989) 167 CLR 399 at 496, 497–8, 499]. We do not apprehend that, in the result, there is any dissimilarity in the approach taken by the two Justices in dissent. Both Brennan J [(1989) 167 CLR 339 at 463] and McHugh J [(1989) 167 CLR 399 at 501] pointed to the proximity of the relevant period to the licence period, the shortness of the licence period, the size of the tax imposed ad valorem and the fact that it is to be borne only once in the course of distribution as indicia that were inconsistent with the tax being merely a licence fee having — to use the test stated by Kitto J in Dennis Hotels [(1960) 104 CLR 529 at 560] — ‘no closer connection with production or distribution than that it is exacted for the privilege of engaging in the process at all’. Brennan J added a reference [(1989) 167 CLR 399 at 463] to ‘the revenue raising and non-regulatory purpose of the scheme’. Those factors are present and relevant to the character of the licence fees and the amounts payable under the Act in this case. Moreover, an amount equal to 75 or 100 per cent

[page 514] of the value of tobacco sold during a relevant period is levied by the Act. That amount could not conceivably be regarded as a mere fee for a licence required as an element in a scheme for regulatory control of businesses selling tobacco. The Act contains minimal provisions controlling businesses selling tobacco, chiefly those contained in s 36(2) which authorises the refusal of a licence to a person who has been convicted of an offence under s 59 of the Public Health Act 1991 (NSW) or, pursuant to s 36(2AA), if the Chief Commissioner is satisfied that ‘the issue of a licence would be contrary to the public interest’. Subject to these provisions, renewal of a licence requires merely the due payment of the fees exacted. The licence fee is manifestly a revenue-raising tax imposed on the sale of tobacco during the relevant period. The licensing system is but ‘an adjunct to a revenue statute’ [Dennis Hotels (1960) 104 CLR 529 at 576 per Taylor J]. [Brennan CJ, McHugh, Gummow and Kirby JJ referred to the revenues raised under the Act between 1986 and 1996, concluding with $852 million in 1996: 189 CLR at 502.] The revenue to be derived from inland taxes on goods was ceded by the States to the Commonwealth under the Constitution. Although the early franchise cases admitted that ad valorem imposts of small amounts might properly be classified merely as licence fees having ‘no closer connection’ with duties of excise, the States and latterly the Territories have sought to re-establish the pre-Federation tax bases of the Colonies by once more placing taxes on goods under a formula known as the Dennis Hotels formula. If the theory on which the States and Territories acted was that a ‘fee for a licence to carry on the business … quantified by reference to the value of the quantity of [the commodity] sold

during a period preceding that in respect of which the licence is granted’ [HC Sleigh (1977) 136 CLR 475 at 491 per Gibbs J] (the Dennis Hotels formula) denied any impost the character of a duty of excise, the theory was misunderstood. Such a proposition fails to take account of the important qualification which Kitto J himself expressed in Dennis Hotels, [(1960) 104 CLR 529 at 563] namely, that the exaction is ‘not in respect of any particular act done in the course of the business’. The proposition that a tax imposed in accordance with the Dennis Hotels formula was necessarily cloaked with immunity from an attack under s 90 was rejected in Philip Morris by six members of the Court. It cannot be prayed in aid to support the imposts challenged in this case. The maintenance of constitutional principle evokes a declaration that the Dennis Hotels formula cannot support what is, on any realistic view of form and of ‘substantial result’ [Attorney-General (NSW) v Homebush Flour Mills Ltd (1937) 56 CLR 390 at 412], a revenue-raising inland tax on goods. The States and Territories have far overreached their entitlement to exact what might properly be characterised as fees for licences to carry on businesses. The imposts which the Act purports to levy are manifestly duties of excise on the tobacco sold during the relevant periods. The challenged provisions of the Act are beyond power. We are conscious that this judgment has the most serious implications for the revenues of the States and Territories. But, in the light of the significantly increasing tax rates imposed by State and Territory laws under the insubstantial cloak of the Dennis Hotels formula, the Court is faced with stark alternatives: either to uphold the validity of a State tax on the sale of goods provided it is imposed in the form of licence fees or to hold invalid any such tax which, in operation and effect, is not merely a fee for the privilege of selling the goods. Section 90 of the Constitution, by prescribing the exclusivity of the Commonwealth’s power to impose duties of excise, resolves the question. So long as a State

tax, albeit calculated on the value or quantity of goods sold, was properly to be characterised as a mere licence fee [page 515] this Court upheld the legislative power of the States to impose it [Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311]. But once a State tax imposed on the seller of goods and calculated on the value or quantity of goods sold cannot be characterised as a mere licence fee, the application of s 90 must result in a declaration of its invalidity. [Brennan CJ, McHugh, Gummow and Kirby JJ said that it was contrary to the judicial process for the court to engage in prospective overruling: 189 CLR at 503–4.] In any event, the decision of this Court is not to overrule Dennis Hotels or Dickenson’s Arcade. They may stand as authorities for the validity of the imposts therein considered. Properly understood, the test of ‘no closer connection’ as stated by Kitto J in Dennis Hotels and explained by Brennan J in Philip Morris [(1989) 167 CLR 399 at 445–446] is maintained. It is not necessary now to reconsider H C Sleigh, though the reservation expressed as to that case in the Capital Duplicators Case (No 2) [(1993) 178 CLR 561 at 593] will not have passed unnoticed. However, the consequence of rejecting the view that alcohol and tobacco are commodities that are in a special category for s 90 purposes means that Philip Morris and Coastace were wrongly decided. [Brennan CJ, McHugh, Gummow and Kirby JJ said that ss 36(1), 41(1), 41(3), 43, 45 and 47(1) of the Business Franchise Licences (Tobacco) Act 1987 (NSW) were invalid because they imposed duties of excise within s 90 of the Constitution. Dawson, Toohey and

Gaudron JJ dissented on the basis of a narrower conception of an excise.] Dawson, Toohey and Gaudron JJ: A State tax which fell selectively upon imported goods would, of course, be a customs duty and be prohibited by s 90. A State tax which fell selectively upon goods manufactured or produced in that State would be an excise duty and be prohibited by s 90. A State tax which discriminated against interstate goods in a protectionist way would offend s 92 and be invalid. But those three instances do not exhaust the categories of taxes upon goods and do not support, as a legal conclusion, the proposition that the Commonwealth was intended to have an exclusive power to tax commodities. That is a suggestion which appears to be made in this case, but clearly a State tax — a tax upon sale, for example — which does not fall selectively upon imported goods or locally produced or manufactured goods and does not discriminate against interstate goods, offends against none of the prohibitions imposed by the Constitution. In particular, such a tax would not affect freedom of interstate trade because all goods would compete in the State on the same footing: there would be no discrimination of a protectionist kind … Whether a tax which falls upon locally produced goods discriminates against those goods in favour of imported goods is a question of substance, not form. It is the answer to that question which, upon the correct view of duties of excise, determines whether the tax is an excise duty. The clearest case is, of course, where a customs duty exists so as to afford a measure of protection to the home product and a selective tax upon a product of that kind extinguishes or substantially diminishes the protection. But there would be discrimination with a selective tax even where there was no relevant customs duty. The tariff policy in that case must be that imported goods of the relevant kind compete with locally produced goods upon an equal footing in the home market and a tax imposed selectively upon the local

production of those goods would burden them in relation to imported goods and so impair the policy. Moreover, it is not of significance that a non-selective tax falls upon locally produced goods or substantially upon locally produced goods because there are no imported goods [page 516] or substantially no imported goods of the relevant kind. In that situation there would be no impairment of the tariff policy. The tax would remain a non-selective tax and the mere absence of imported goods would not render it discriminatory in relation to the home product. … In these cases the defendants invite the Court to re-examine the decision in Parton with a view to establishing that the validity of the fees imposed in the franchise cases is to be supported upon the basis that an excise duty is a tax which falls selectively upon the local production or manufacture of goods. In our view that contention is correct and we would accede to the reopening of Parton … [I]n our opinion, Parton cannot be allowed to stand. No question arises whether the overruling of that decision should be merely prospective, but in view of the submission made by the defendants that any overruling of the franchise cases should be prospective only, we should express our agreement with Brennan CJ, McHugh, Gummow and Kirby JJ that this Court has no power to adopt such a course … [Dawson, Toohey and Gaudron JJ held that, because the licence fees, ‘regarded as taxes upon goods, fall indiscriminately upon tobacco products regardless of whether they are locally manufactured or produced or are imported’ (189 CLR at 517), and did not interfere with the Commonwealth’s tariff policy, they were not duties of excise.]

5.2.44 In Ha, the majority took up the invitation offered by the states to reassess the correctness of the Parton doctrine and firmly rejected the argument that s 90 was confined only to prohibiting to the states the power to impose taxes upon production and manufacture. They reaffirmed the broad view that ‘duties of excise are taxes on the production, manufacture, sale or distribution of goods, whether of foreign or domestic origin. Duties of excise are inland taxes in contradistinction from duties of customs which are taxes on the importation of goods. Both are taxes on goods, that is to say, they are taxes on some step taken in dealing with goods’: 189 CLR at 499. 5.2.45 As well as affirming the broad view of what constitutes an excise duty, the majority in Ha severely limited the scope of the franchise cases, and effectively put an end to the states’ and territories’ reliance on those devices for revenue collection. The majority overruled Philip Morris Ltd v Commissioner of Business Franchises (Vic) (1989) 167 CLR 399 (see 5.2.35) (189 CLR at 504) and, following the dissent of Brennan and McHugh JJ in Philip Morris, said that Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 5.2.13C and Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 5.2.24C ‘stand as authorities for the validity of the imposts therein considered’: 189 CLR at 504. They were not authority for the proposition put forward by Mason CJ and Deane J in Philip Morris that alcohol and tobacco constituted a special category of goods: 189 CLR at 500–1. Instead, the majority adopted the view of Brennan J in Philip Morris when he explained the test of ‘no closer connection’ stated by Kitto J in Dennis Hotels: 189 CLR at 504. The decisions in Dennis Hotels and Dickenson’s Arcade could be reconciled with Parton only on the basis of the

factors identified by Brennan J in Philip Morris as relevant to the question whether a tax was imposed in respect of a step in the production or distribution of goods (and hence an excise) or had no closer connection with production or distribution than that it was exacted for the privilege of engaging in either process. [page 517] 5.2.46 The majority in Ha v New South Wales (1997) 189 CLR 465 said that s 90 had a revenue-preserving function for the Commonwealth. Brennan CJ, McHugh, Gummow and Kirby JJ said that at federation the ‘principal sources of revenue would be withdrawn’ from the states (189 CLR at 494) and ‘one of the chief purposes of Ch IV was to provide … for the revenues required by the Commonwealth’: 189 CLR at 491. The minority disagreed. Dawson, Toohey and Gaudron JJ said the purpose of s 90 ‘was not to secure to the Commonwealth a revenue base: that is the function of s 51(ii)’: 189 CLR at 517. 5.2.47 The day after the decision was handed down in Ha v New South Wales (1997) 189 CLR 465, the Commonwealth announced that, ‘[i]n response to a unanimous request from the States and Territories’, it had ‘agreed to introduce measures to protect State and Territory revenue’: Treasurer, Press Release, 6 August 1997. The measures consisted of a complex set of temporary ‘safety net’ arrangements which provided for an increase in the rate of Commonwealth customs and excise duty on tobacco and petrol, and in the rate of wholesale sales tax on alcohol. The revenue collected by the Commonwealth was to be returned to the states (less administrative costs) as revenue replacement payments.

Because s 51(ii) of the Constitution requires that any Commonwealth tax must be uniform and cannot discriminate between states, the states and territories agreed to refund any excess revenues (above their respective losses of business franchise fee revenue) to manufacturers, wholesalers and retailers. In addition, the package provided for a 100 per cent windfall gains tax to protect the states from claims for refunds of past business franchise fee payments. 5.2.48 The Commonwealth started a goods and services tax (GST) on 1 July 2000 as a tax of 10 per cent on the sale or supply of most goods and services in Australia. GST revenue is channelled to the states. Section 1.3 of the implementing legislation, A New Tax System (Goods and Services Tax) Act 1999 (Cth), is headed ‘Commonwealth-State financial relations’ and reads: The Parliament acknowledges that the Commonwealth: (a) will introduce legislation to provide that the revenue from the GST will be granted to the States, the Australian Capital Territory and the Northern Territory; and (b) will maintain the rate and base of the GST in accordance with the Agreement on Principles for the Reform of Commonwealth-State Financial Relations endorsed at the Special Premiers’ Conference in Canberra on 13 November 1998.

Under the agreement referred to in s 1.3(b), the Commonwealth abolished (from 1 July 2000) wholesale sales tax and taxes collected on behalf of the states after the constitutional validity of state franchise fees was substantially rejected in Ha v New South Wales (1997) 189 CLR 465. At the same time, the state and territory governments abolished certain taxes widely regarded as inefficient in nature, such as bed taxes (state taxes applying to hotel

accommodation) and financial institutions duties: see Commonwealth of Australia, GST Distribution Review: Second Interim Report (2012), pp 4–5. 5.2.49 GST revenue was intended to replace general revenue grants paid by the Commonwealth to the states and territories. GST revenue amounts are divided ‘among the states in accordance with the principle of horizontal fiscal equalisation and having regard to the recommendations of the Commonwealth Grants Commission’: Commonwealth of [page 518] Australia, Budget 2015–16, Federal Financial Relations, Budget Paper No 3, 2015–16 (2015), p 78. However, the GST has not necessarily ensured adequate revenue for the states. Fenna, 2008, at 516 has observed that: The section 90 prohibition has contributed not just to an underresourcing of the States, but to an underdevelopment of consumption taxes in Australia in general. With the commencement of the federal Goods and Services Tax (‘GST’) on 1 July 2000, these deficiencies were partially addressed. The net revenue of the GST is hypothecated by statute to the States and Territories … This has represented a not inconsiderable improvement for the States in practical revenue terms, but could be said to have simultaneously made them even more dependent on the Commonwealth.

Fenna has also argued that ‘[c]ritics also note that although the GST was legislated following a formal “deal” with the States … it

is Commonwealth legislation, amendable at any time by the federal Parliament’: at 516. 5.2.50 The vertical fiscal imbalance (VFI) between the Commonwealth and the states is evident from Table 5.1 below, drawn from Commonwealth of Australia, Reform of the Federation White Paper: COAG and Federal Financial Relations, Issues Paper No 5, February 2015, p 62.

Table 5.1: Total state and territory revenue by source (illustrating VFI), 2013–14 NSW

VIC

QLD

WA

SA

TAS

ACT

NT

Total

36.8

32.3

25.3

31.7

27.0

19.5

29.8

11.0

30.9

Sales of goods and services

8.6

12.8

10.8

7.4

14.4

8.0

11.5

6.0

10.3

Royalties

2.0

0.1

5.1

21.6

1.9

0.7

0.0

3.0

4.6

Other revenue(a)

7.7

8.9

15.7

9.7

7.1

14.3

16.8

7.8

10.2

55.1

54.1

56.9

70.4

50.5

42.6

58.2

27.8

56.0

24.0

22.0

23.3

8.9

30.5

37.1

23.7

55.0

22.9

0.1

0.0

0.0

4.2

0.0

0.0

0.9

0.1

0.6

Specific purpose payments

20.8

23.8

19.8

16.5

19.0

20.3

17.2

17.1

20.5

Total (VFI)

44.9

45.9

43.1

29.6

49.5

57.4

41.8

72.2

44.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Proportions (per cent) Own-source revenue Taxation revenue

Total Commonwealth grants GST Other general revenue assistance(b)

Total proportions

Other State revenue includes dividend income, income from public trading (a) enterprises, fines and assets acquired below fair value.

[page 519] (b) Other general revenue assistance includes Snowy Hydro Ltd tax compensation to NSW and Victoria; royalty payments from the North West Shelf oil and gas project and Ranger Project to WA and NT respectively; and municipal services assistance to the ACT. Note: Totals may not sum exactly due to rounding. Source: Commonwealth Final Budget Outcome 2013–14, State 2014–15 budgets. Source: Licensed from the Commonwealth of Australia under a Creative Commons Attribution 3.0 Australia Licence

5.2.51 After Ha was decided, Williams (1999, at 627–8) predicted that ‘the demise of the franchise system as a means to raise capital for the States and Territories … will inevitably place further pressure on these governments to increase their dependence on what is already a key revenue stream: gambling taxes’. The Productivity Commission’s 2010 Report on Gambling estimated ‘that there are between 80,000 and 160,000 Australian adults suffering severe problems from their gambling’ (p 47) and that the social and personal costs are estimated conservatively to be at least $4.7 billion annually (p 48): Commonwealth of Australia, Productivity Commission, Gambling, Report No 50 (2010), Canberra. An analysis of gambling tax revenue in each of the states and territories is provided in Table 5.2 below, drawn from Australasian Gaming Council, A Guide to Australasia’s Gambling Industries: Facts,

Figures and Statistics, Ch 5, ‘Gambling Taxation in Australia: (Version 2.0) 2014/2015’, p 3.

Table 5.2: Overview of gambling taxation revenue in Australia by state/territory (2013–14) Location Australian Capital Territory New South Wales Northern Territory Queensland South Australia Tasmania Victoria Western Australia

Gambling tax ($m) 54.89 1,868.55 58.04 1,045.52 381.14 82.13 1,512.00 438.08

Gambling tax per adult ($) 183.47 322.88 322.27 292.45 288.66 205.87 334.44 222.97

Source: Government Statistician, Queensland Treasury and Trade (2015) Australian Gambling Statistics 1988–89 to 2013–14 (31st edition). Total gambling revenue is incomplete due to some unavailable revenue figures that are used to derive this number. Refer to Australian Gambling Statistics Explanatory Notes for further information.

COMMONWEALTH GRANTS 5.3.1 The picture that emerges from the preceding material is of Commonwealth dominance of revenue-raising in Australia. The Commonwealth’s taxation power in s 51(ii) of the Constitution is

interpreted broadly, and the prohibitions against discrimination or preference [page 520] in ss 51(ii) and 99 have not proven significant constraints on Commonwealth power in practice. Moreover, the states are excluded, through a broad interpretation of s 90, reaffirmed in Ha v New South Wales (1997) 189 CLR 465 5.2.43C, from imposing a wide variety of commodity taxes. But the picture, constructed as it is out of constitutional decisions, is unfinished. To complete it, we need to examine the effect produced by the Commonwealth’s use of its grants power, s 96 of the Constitution. That effect has been threefold: first, the Commonwealth used its grants power (and other sources of Commonwealth power) to takeover, in 1942, from the states their income tax revenues; second, despite suggestions from time to time that the states might resume taxation of incomes, the Commonwealth’s takeover has persisted; and, third, the Commonwealth now uses the grants power to support, on a massive scale, state finances. Commonwealth transfer payments constitute approximately 45 per cent of the revenue of the states and territories: Commonwealth of Australia, Reform of the Federation White Paper — COAG and Federal Financial Relations, Issues Paper 5, February 2015, p 3. The Commonwealth’s capacity to attach conditions to such grants also allows it to shape policy outcomes in areas otherwise lying outside its legislative and executive power.

5.3.2E

Commonwealth Constitution

96 During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

The Uniform Tax cases 5.3.3 The validity of the legislation enacted to exert Commonwealth control over income taxation in Australia was considered by the High Court in the two Uniform Tax cases in 1942 and 1957 respectively. The legislation was largely upheld. 5.3.4C

South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373

[From the establishment of the Commonwealth in 1901, each of the six Australian states levied income taxes. The Commonwealth first levied an income tax in 1915 and, from that year until 1942, most incomes in Australia were subject to at least two forms of income tax: Commonwealth and state. In the financial year 1940–41, the six states raised £35.5 million and the Commonwealth raised £43.3 million from income taxes. In June 1941 and in May 1942, the Commonwealth Government requested the states to vacate the field of income tax for the duration of the current war, and to accept compensation by way of financial assistance from the Commonwealth. On each occasion, all six states

refused. Accordingly, on 7 June 1942 the Commonwealth Parliament enacted four Acts: The Income Tax Act 1942 (Cth) imposed a tax upon incomes at rates rising to 18s in the pound upon annual incomes in excess of £4000. (It was conceded that the [page 521] revenue which would be raised from this Act would be approximately equal to the total of the revenues raised over the previous year through Commonwealth and state income taxes.) Section 31 of the Income Tax Assessment Act 1942 (Cth) inserted a new s 221, in the Income Tax Assessment Act 1936 (Cth). This new section forbade a taxpayer from paying state income tax for any year until that taxpayer had paid the Commonwealth income tax owing for the year. The States Grants (Income Tax Reimbursement) Act 1942 (Cth) authorised the annual payment, by way of financial assistance to each state, of a grant, upon condition that ‘the Treasurer is satisfied that [the] State has not imposed a tax upon incomes’ for that year. Each grant was to be equal to the average income tax revenues of that state in two preceding financial years, 1939–40 and 1940–41. The Income Tax (War-time Arrangements) Act 1942 (Cth) empowered the Commonwealth Treasurer to serve notices on the Treasurer of each state, requiring the transfer to the Commonwealth of all staff, office accommodation, furniture, equipment and records used by the states for the assessment and collection of income taxes. Four states, South Australia, Victoria, Queensland and Western Australia, brought actions in the High Court of Australia against the

Commonwealth, for a declaration that the Acts were invalid and for an injunction to restrain the Commonwealth from putting the Acts into operation. The plaintiffs’ applications for interlocutory injunctions were heard by the Full Court and, by consent, treated as the trial of the actions.] Latham CJ: [T]he controversy before the Court is a legal controversy, not a political controversy. It is not for this or any court to prescribe policy or to seek to give effect to any views or opinions upon policy. We have nothing to do with the wisdom or expediency of legislation. Such questions are for Parliaments and the people. It has been argued that the Acts now in question discriminate, in breach of s 51(ii) of the Constitution, between States. The Court must consider and deal with such a legal contention. But the Court is not authorised to consider whether the Acts are fair and just as between States — whether some States are being forced, by a political combination against them, to pay an undue share of Commonwealth expenditure or to provide money which other States ought fairly to provide. These are arguments to be used in Parliament and before the people. They raise questions of policy which it is not for the Court to determine or even to consider. … [Latham CJ said (65 CLR at 409–10) that the Commonwealth Treasurer’s second reading speeches on the bills for the four Acts and the report of a committee on uniform taxation could not be admitted as evidence of the intentions of the Commonwealth Parliament. Only the words of the statutes could express that intention.] The Acts as a Scheme — In the first place it is contended by the plaintiffs that the Acts together constitute a ‘scheme’ directed towards an unlawful object, namely, the exclusion of State Parliaments from the sphere of legislation upon income tax. Reference is made to Attorney-General for Alberta v AttorneyGeneral for Canada [1939] AC 117, and to Deputy Commissioner of Taxation v Moran [1940] AC 838 at 849; 63 CLR 338 at 341.

The contention that an Act which does not refer to or incorporate any other Act, and which when considered by itself is not invalid, may be held to be invalid by reason of the enactment of other Acts, whether valid or invalid, meets many difficulties. Parliament, when it passes [page 522] an Act, either has power to pass that Act or has not power to pass that Act. In the former case it is plain that the enactment of other valid legislation cannot affect the validity of the first-mentioned Act if that Act is left unchanged. The enactment of other legislation which is shown to be invalid equally cannot have any effect upon the first-mentioned valid Act, because the other legislative action is completely nugatory and the valid Act simply remains valid. [Latham CJ said it was not necessary to examine those questions in the present case because ‘[t]he intention to get rid of State income tax and of State income tax departments’ was clear in the case of the Tax Act, the Grants Act and the War-time Arrangements Act: 65 CLR at 411. He said: ‘The legislation which is attacked is not colourable — it admits its character upon its face’: 65 CLR at 412.] The Tax Act — The Income Tax Act is in its terms an ordinary tax Act, except that it imposes a very high rate of tax. It may be assumed, in favour of the plaintiffs, that the rates of tax which are imposed make it politically impossible for the States to impose further income tax. But it is not possible for the Court to impose limitations upon the Parliament as to the rate of tax which it proposes to impose upon the people. There is no legal principle according to which a tax of 10s in the pound should be held to be valid, but a tax of 11s or 15s or 18s or 20s should be held to be invalid. Indeed, it was not disputed by the plaintiffs that, if the

Tax Act had been passed without the Grants Act, it would have been unchallengeable, whatever the result might have been in making it impossible for a State to impose or collect income tax. … The Tax Act is a law with respect to taxation. It simply exacts from citizens a contribution to the public revenue. It contains no provisions relating to any other matter. The argument which was successful in Barger’s case (1908) 6 CLR 41 (that what professed to be a Tax Act was shown by its own terms not really to be such an Act) is not available here. The Act is merely and simply an Act imposing taxation upon incomes. The Commonwealth power to legislate is subject to certain limitations. There must be no discrimination between States or parts of States (Constitution, s 51(ii)), the requirements of s 55 must be satisfied: See also ss 92, 99, 114 and 117. It is clear that the Tax Act does not infringe any of these provisions. It is argued that the Commonwealth cannot use its taxing power so as to prevent the States exercising their taxing power. It may be conceded that the Commonwealth Parliament has no power to prohibit a State exercising its taxing power. But there is no such prohibition in this Tax Act. As already stated, there is no sure foothold for an argument that the Commonwealth Parliament cannot impose so high a tax in relation to a particular subject matter that there is no room for any additional State impost. This argument was not put by the plaintiffs. … The Grants Act — It is now necessary to deal with the farreaching and fundamental general objection which is made to the Tax Act considered in association with the other Acts, but which is particularly directed against the Grants Act. This objection is based upon the following principle which, it is argued, applies to all Commonwealth legislative powers, namely — the Commonwealth cannot direct its legislative powers towards destroying or weakening the constitutional functions or capacities of a State. (A corresponding rule should, it is said, be applied in

favour of the Commonwealth as against the States.) In another form the principle is said to be that the Commonwealth cannot use its legislative powers to destroy either ‘the essential governmental functions’ or ‘the normal activities’ of a State. [page 523] [Latham CJ said (65 CLR at 416) that ‘the following preliminary comments’ could be made on the condition expressed in the Grants Act:] (a) The Act does not purport to repeal State income-tax legislation. The Commonwealth Parliament cannot do this. … (b) The Grants Act does not require, in order that a State should qualify for a grant, that the State — or rather the State Parliament — should abdicate, or purport to abdicate, its power to impose taxes upon incomes. A State Parliament could not bind itself or its successors not to legislate upon a particular subject matter, not even, I should think, by referring a matter to the Commonwealth Parliament under s 51(xxxvii) of the Constitution … (c) The Act does not purport to deprive the State Parliament of the power to impose an income tax. The Commonwealth Parliament cannot deprive any State of that power: see Constitution, ss 106, 107. … (d) The Grants Act offers an inducement to the State Parliaments not to exercise a power the continued existence of which is recognised — the power to impose income tax. The States may or may not yield to this inducement, but there is no legal compulsion

to yield. The Commonwealth may properly induce a State to exercise its powers (eg, the power to make roads: see Victoria v Commonwealth (1926) 38 CLR 399) by offering a money grant. So also the Commonwealth may properly induce a State by the same means to abstain from exercising its powers. … But the position is radically different, it is urged, if the socalled inducement practically amounts to coercion. … This identification of a very attractive inducement with legal compulsion is not convincing. Action may be brought about by temptation — by offering a reward — or by compulsion. But temptation is not compulsion. … The Grants Act does not compel the States to abandon their legislative power to impose a tax upon incomes. States which do not abstain from imposing income tax cannot be said to be acting unlawfully. There is no command that they shall not impose such a tax. State Functions and Capacities — It is clear, however, that the Grants Act is intended to bring about the result that the State shall not impose such a tax. The Act therefore must meet the challenge of the plaintiffs that the Commonwealth cannot direct its legislative powers against the constitutional functions or capacities — against the essential functions or the normal activities — of a State. This statement reminds one who has followed the development of Australian constitutional law of ‘the rule in D’Emden v Pedder (1904) 1 CLR 91’ … It is argued for the plaintiffs that the authorities as they now stand leave it open to the Court to hold that, while there is no general principle of exemption of State instrumentalities from the exercise of Federal power, the Federal nature of the Constitution, involving as it does the continued existence of the States, does involve the principle that the Commonwealth cannot use its legislative powers to destroy or weaken the constitutional

functions or capacities or to control the normal activities of the States. It will be convenient to quote certain passages from cases upon which the plaintiffs rely which will show the plaintiffs’ contention in its full strength. … [page 524] In this case the plaintiffs do not rely on any express provision in the Commonwealth Constitution for the purpose of showing that the Tax Act and the Grants Act, as well as the other Acts considered together with them, are invalid. They rely upon the alleged implied prohibition as to non-interference by the Commonwealth with State constitutional functions, capacities or activities. … The Engineers’ case (1920) 28 CLR 129 did not deny the existence of implied powers or prohibitions (see the report at 155). Should then the particular implication for which the plaintiffs contend be made upon some ground other than the express terms of ss 106 and 107 of the Constitution? In the first place it may be admitted that revenue is essential to the existence of any organised State, and that there cannot be either reliable or sufficient revenue without power of taxation. The power of taxation may fairly be said to be an essential function of a State. But this admission states a universal opinion. There is no universal or even general opinion as to what are the essential functions, capacities, powers, or activities of a State. Some would limit them to the administration of justice and police and necessary associated activities. There are those who object to State action in relation to health, education, and the development of natural resources. On the other hand, many would regard the provision of social services as an essential function of government. … It is not for a court to impose upon any

parliament any political doctrine as to what are and what are not functions of government, or to attempt the impossible task of distinguishing, within functions of government, between essential and non-essential or between normal or abnormal. There is no sure basis for such a distinction. Only the firm establishment of some political doctrine as an obligatory dogma could bring about certainty in such a sphere, and Australia has not come to that. Thus the principle for which the plaintiffs contend must be applied, if at all, in protection of all that a State chooses to do, and it must mean that Commonwealth legislation cannot be directed to weaken or destroy any State function or activity whatsoever. But it cannot be denied that Commonwealth legislation may be valid though it does in fact weaken or destroy, and even is intended to weaken or destroy, some State activity. Section 109 shows that this must be so in many cases. Commonwealth laws have in fact put an end to the existence of State Courts of Bankruptcy and State Patent, Trade Mark and Copyright Departments. The Commonwealth laws are not invalid on that account. They have produced the results stated just because they are valid. It is true that the Commonwealth Parliament has no power to make laws with respect to the capacity and functions of a State Parliament. It has already been stated that the Commonwealth Parliament could not pass a law to prohibit a State Parliament from legislating in general or from legislating upon some particular subject matter. But this limit upon the power of the Commonwealth Parliament does not arise from any prohibition or limitation to be implied from the Constitution. It is simply the result of the absence of power in the Commonwealth Parliament to pass laws with respect to the functions or powers of State Parliaments. The Commonwealth Parliament cannot legislate with respect to any subject whatever unless a power to do so is conferred on it by the Constitution. No power such as that mentioned is given by the Constitution to the Parliament.

But the Acts in question are not laws with respect to State functions. They do not command or prohibit any action by the State or by the State Parliament. Indirect Effects of Laws — A law may produce an effect in relation to a subject matter without being a law with respect to that subject matter. Questions of motive and object are irrelevant to the question of the true nature of a law. The nature (or ‘substance’ if that word [page 525] is preferred) of a law is to be determined by what it does, not by the effect in relation to other matters of what the law does. A prohibition of import or a very high duty in a customs tariff may bring about the closing of business enterprises in a State. But the tariff is not a law with respect to those enterprises. Similarly a State law may prohibit the carrying on of occupations with the result that they are necessarily abandoned, with perhaps great consequential loss to the Commonwealth in customs duties or income-tax receipts. But the State law does not for this reason become a law with respect to customs duties or income tax. The true nature of a law is to be ascertained by examining its terms and, speaking generally, ascertaining what it does in relation to duties, rights or powers which it creates, abolishes or regulates. The question may be put in these terms: ‘What does the law do in the way of changing or creating or destroying duties or rights or powers?’ The consequential effects are irrelevant for this purpose. Even though an indirect consequence of an Act, which consequence could not be directly achieved by the legislature, is contemplated and desired by Parliament, that fact is not relevant to the validity of the Act: R v Barger (1908) 6 CLR 41 at 66, 67; Osborne v Commonwealth (1911) 12 CLR 321 at 335; AttorneyGeneral for Queensland v Attorney-General for the Commonwealth (1915) 20 CLR 148 at 173, 174; Sonzinsky v United States 300

US 506 (1937) [81 Law Ed 772], and see note in the Lawyers’ Edition (1937) 81 Law Ed 776 et seq. … Thus, although the Commonwealth Parliament cannot validly pass laws limiting the functions of State Parliaments — and vice versa — the Tax Act and the Grants Act are not invalid on that ground. They do not give any command or impose any prohibition with respect to the exercise of any State power, legislative or other. The Tax Act simply imposes Commonwealth taxation, and is authorised by s 51(ii) of the Constitution. The Grants Act authorises payments to States which choose to abstain from imposing income tax, and is valid by reason of s 96 of the Constitution, unless it is bad as involving some prohibited discrimination or preference. It is now necessary to deal specifically with that objection. … The Tax Act now under consideration does not so discriminate. It imposes the same tax at the same rates upon all persons in all States throughout Australia. It does not make any discrimination whatever between States — it does not even refer to any State. The Act is also a law of revenue, and therefore must not give preference to any State (s 99). The Act does not give preference to any State. The Grants Act is an Act dealing with expenditure — an appropriation Act. It does draw distinctions between States. There is no constitutional reason why it should not do so. There never has been and there cannot be uniformity in payments made by the Commonwealth in or to States or persons in States. Discrimination in expenditure between States is found in every Commonwealth budget and in many appropriation Acts. It has never been argued either that such differentiation should be avoided or that it could be avoided. Conclusion as to Tax Act and Grants Act — Thus the objections to the Tax Act and the Grants Act fail, whether those Acts are considered separately or as part of a scheme to bring about the abandonment by the States of the raising of revenue by taxation of incomes.

It is perhaps not out of place to point out that the scheme which the Commonwealth has applied to income tax of imposing rates so high as practically to exclude State taxation could be applied to other taxes so as to make the States almost completely dependent, financially and therefore generally, upon the Commonwealth. If the Commonwealth Parliament, in a Grants Act, simply provided for the payment of moneys to States, without attaching any conditions whatever, none of the legislation could be challenged by any of the arguments submitted to the Court in these cases. The amount of the grants could be determined in [page 526] fact by the satisfaction of the Commonwealth with the policies, legislative or other, of the respective States, no reference being made to such matters in any Commonwealth statute. Thus, if the Commonwealth Parliament were prepared to pass such legislation, all State powers would be controlled by the Commonwealth — a result which would mean the end of the political independence of the States. Such a result cannot be prevented by any legal decision. The determination of the propriety of any such policy must rest with the Commonwealth Parliament and ultimately with the people. The remedy for alleged abuse of power or for the use of power to promote what are thought to be improper objects is to be found in the political arena and not in the Courts.

5.3.5 Latham CJ went on to conclude that the Income Tax (War-time Arrangements) Act was invalid, rejecting an argument that it was supported by the defence power: 65 CLR at 431–3. He held that s 221 of the Income Tax Assessment Act 1936 (giving priority to the Commonwealth over the states in the payment of

income tax) was a valid law with respect to taxation: 65 CLR at 433–5. Rich J, McTiernan J and Williams J, in separate judgments, held that each of the four pieces of legislation was valid. Starke J dissented as to the validity of the State Grants (Income Tax Reimbursement) Act and the Income Tax (War-time Arrangements) Act. In considering the validity of the Grants Act, Starke J said (65 CLR at 442): ‘The limited grant of powers to the Commonwealth cannot be exercised for ends inconsistent with the separate existence and self-government of the States, nor for ends inconsistent with its limited grants’. He continued (65 CLR at 443): In my opinion, the object of the Act is not merely to grant financial assistance to the States, but there is linked up in it an object and an end that is inconsistent with the limited grant of power given by s 96 to the Commonwealth, namely, making the Commonwealth the sole effective taxing authority in respect of incomes and compensating the States for the resulting loss in income tax. The argument that the States Grants Act leaves a free choice to the States, offers them an inducement but deprives them of and interferes with no constitutional power, is specious but unreal. … The real object of the condition is that already stated, and it is in my judgment neither contemplated by nor sanctioned by the Constitution, and in particular by s 96 thereof. As I have said, all State legislation and functions might ultimately be so controlled and supervised. The possibility of the abuse of a power is not, however, an argument against the existence of a power. But if the extent of the power claimed by the Commonwealth leads to ‘results which it is impossible to believe … the statute contemplated … there is … good reason for believing that the construction which leads to such results cannot be the true construction of the statute’ (The Queen v Clarence (1888) 22 QBD 23 at p 65).

5.3.6

The four Acts challenged in South Australia v

Commonwealth (First Uniform Tax case) (1942) 65 CLR 373 received the royal assent on 7 June 1942. As Dixon CJ pointed out in Victoria v Commonwealth (Second Uniform Tax case) (1957) 99 CLR 575 5.3.9C at 599, the battle of Midway Island had ended the day before. That battle can now be seen as marking the limit of Japanese military advances in the Pacific region and as the turning point in that theatre of World War II. This strategic analysis was by no means obvious on 7 June 1942, nor on 23 July 1942, when the court’s decision in the First Uniform Tax case was handed down. The acute crisis which, it was thought, Australia faced and the need to marshal the country’s resources in order to meet that crisis could hardly be ignored by the justices who decided the case. Indeed, that necessity was cited by the Commonwealth Parliament in both [page 527] the Assessment Act (as justifying the Commonwealth’s priority) and the Arrangements Act (as the basis for transfer of state income tax personnel and other resources to the Commonwealth). 5.3.7 The decision in South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373 can be regarded as the high-water mark of the doctrine from the Engineers’ case (1920) 28 CLR 129 3.2.22C. Not only did it affirm, as the earlier decision had, the effective superiority of the Commonwealth within the federal system, but the majority justices insisted that the problems before the court should be approached as strictly legal questions. If s 96 said ‘on such terms and conditions as the Parliament thinks

fit’, then that was what it meant and its plain meaning was not to be modified by the invocation of any unstated (or implied) propositions. It was not the court’s concern that this reading of s 96 could be exploited by the Commonwealth Parliament so as to reduce the states to total economic (and policy) subservience. That was a political question to be resolved politically. 5.3.8 In January 1946, the Commonwealth informed the states that it proposed to continue uniform income tax indefinitely. A premiers’ conference agreed on total tax reimbursement grants for the next two financial years, and on a formula for increasing the grants in subsequent years. In 1950 and 1951, premiers’ conferences discussed the resumption of state income tax. In July 1952, the Commonwealth informed the states that it was willing to discuss with them the question of the resumption of state income tax. Commonwealth and state treasury officials prepared a series of technical reports, but no agreement was reached between the Commonwealth and the states. Eventually, the states of Victoria and New South Wales began proceedings in the High Court to challenge the validity of the continuing uniform tax scheme (see further Saunders, 2003, pp 69–70). The decision in Victoria v Commonwealth (Second Uniform Tax case) (1957) 99 CLR 575 did not, however, end uniform taxation. 5.3.9C Victoria v Commonwealth (Second Uniform Tax case) (1957) 99 CLR 575 [The States Grants (Tax Reimbursement) Act 1946 (Cth) authorised the annual payment of money to a state as financial assistance, on condition that the Commonwealth Treasurer was satisfied that the state

had not, in that year, imposed a tax on incomes: s 5. The Act provided that £40 million should be available for distribution in 1947 and 1948, thereafter to be adjusted in line with population changes and any increase in average wages: s 6. This sum was to be divided between states in proportion to their ‘adjusted’ populations. Section 12 provided that payments under the Act should be made out of the Consolidated Revenue Fund which was appropriated accordingly. The Income Tax Assessment Act 1936 (Cth) provided: 221 (1) For the better securing to the Commonwealth of the revenue required for the purposes of the Commonwealth – (a) a taxpayer shall not pay any tax imposed by or under any State Act on the income of any year of income in respect of which tax is imposed by or under any Act with which this Act is incorporated until he has paid that last mentioned tax or has received from the Commissioner a certificate notifying him that the tax is no longer payable. The states of Victoria and New South Wales began actions in the High Court of Australia against the Commonwealth, in which they sought declarations that the State Grants [page 528] (Tax Reimbursement) Act 1946 and s 221(1)(a) of the Income Tax Assessment Act 1936 were invalid. The Commonwealth demurred to the plaintiffs’ statements of claim and the demurrers were heard by the Full Court of the High Court.] Dixon CJ: … There has been what amounts to a course of decisions upon s 96 all amplifying the power and tending to a denial of any restriction upon the purpose of the appropriation or the character of the condition. The first case decided under s 96 was Victoria v Commonwealth (1926) 38 CLR 399. The

enactment there in question, the Federal Aid Roads Act 1926 (No 46), did not express its reliance on s 96 either in terms or by reference to the grant of financial assistance. It authorised the execution by or on behalf of the Commonwealth of an agreement in a scheduled form with each of the States. It established a trust account in the books of the Treasury to be known as the Federal Aid Roads Trust Account and appropriated for payment into the fund such amount as was necessary for each agreement so executed. The scheduled form of agreement set out in detail a plan or scheme for the construction of roads at the combined expense of State and Commonwealth. The roads, called Federal Aid Roads, fell into three classes, (1) main roads opening up and developing new country; (2) trunk roads between important towns; and (3) arterial roads carrying concentrated traffic from developmental main trunk and other roads. Very specific provisions were made by which what the State did in pursuance of the plan was made subject to the control or approval of the Commonwealth. The amounts contributed by a State were to be about three-fourths of those contributed by the Commonwealth. The contributions of the Commonwealth were to extend over ten years. It was provided that payments would be made to the State out of the moneys for the time being in the trust account in such amounts and at such times and subject to such conditions as the Commonwealth Minister might determine. The form of agreement should perhaps be studied in detail to appreciate how much is implied by the decision of the Court, but for present purposes the foregoing outline may be enough. The validity of the legislation was upheld by this Court as authorised by s 96. This means that the power conferred by that provision is well exercised although (1) the State is bound to apply the money specifically to an object that has been defined, (2) the object is outside the powers of the Commonwealth, (3) the payments are left to the discretion of the Commonwealth Minister, (4) the money is provided as the Commonwealth’s contribution to an object for which the State is also to contribute to funds. Roadmaking no doubt may have been conceived as a function of the

State so that to provide money for its performance must amount to financial assistance to the State. But only in this way was there ‘assistance’. In Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Ltd (1939) 61 CLR 735, one of the matters decided was the validity of s 6 of the Wheat Industry Assistance Act 1938 (No 53). It is unnecessary to describe the legislative plan or scheme of which that section formed a part or to discuss the constitutional question from which I have isolated the question whether s 6 was valid. The provision was upheld (Evatt J dissenting) on the ground that it amounted to an exercise of the power contained in s 96. Section 5 of the Wheat Industry Assistance Act established a fund fed from Consolidated Revenue to be called the Wheat Industry Stabilization Fund. Subsection (1) of s 6 provided that subject to the Act the moneys standing to the credit of the fund should be applied in accordance with the Act in making payments to the States as financial assistance; sub-s (6) provided that after certain deductions the amount paid in to the fund in any year should be applied in making payments to the States in effect in proportion to the quantities of wheat produced. Subsection (7) then made the following provision — ‘Any amount granted and paid to a State in pursuance of the last preceding subsection shall be paid to that State upon [page 529] condition that is distributed to the wheat growers in that State in proportion to the quantity of wheat sold or delivered for sale by each wheat grower during the year in respect of which the payment is made to the State’. Now it might have been thought that these provisions were outside s 96 because they gave no assistance to the State as a body politic but used it only as a conduit or an agency by which the moneys would be distributed

among the wheat growers of the State. In that light the provision could not presumably have been upheld as an exercise of the power conferred by s 51(iii) to make laws with respect to bounties on the production or export of goods but so as not to discriminate between States or parts of States. The reason why apparently it could not be justified under that power was because the basis of the distribution of the moneys was not the production but the sale of wheat. In fact, however, the provision was considered to amount to financial assistance to the State notwithstanding that the State was bound to distribute the money it received to the wheat grower. The decision, which was affirmed in the Privy Council [1940] AC 838; (1940) 63 CLR 338, without express reference to this use of s 96, must mean that s 96 is satisfied if the money is placed in the hands of the State notwithstanding that in the exercise of the power to impose terms and conditions the State is required to pay over the money to a class of persons in or connected with the State in order to fulfil some purpose pursued by the Commonwealth and one outside its power to effect directly. I should myself find it difficult to accept this doctrine in full and carry it into logical effect, but the decision shows that the Court placed no limitation upon the terms or conditions it was competent to the Commonwealth to impose under s 96 and regarded the conception of assistance to a State as going beyond and outside subventions to or the actual supplementing of the financial resources of the Treasury of a State. From the reasons given in the Privy Council it clearly appears that their Lordships considered that it is no objection to a purported grant of financial assistance under s 96 that it discriminates as between States or that it is for the purpose of a distribution to a class of the people of a State; but what was said did not necessarily include such an imperative requirement as s 6(7) imposes: for that provision was not mentioned: [1940] AC at 857–9; (1940) 63 CLR at 349–50. In South Australia v Commonwealth (1942) 65 CLR 373 the

dissent of Starke J was on the ground that the Income Tax Reimbursement Act of 1942 included the object of ‘making the Commonwealth the sole effective taxing authority in respect of incomes and compensating the States for the resulting loss in income tax’ (at 443). ‘No doubt’, said his Honour, ‘means can be found to give the States financial assistance without crippling them in the exercise of their powers of self-government if the Commonwealth taxation creates economic difficulties for them. But I cannot agree that the provisions of s 96 enable the Commonwealth to condition that assistance upon the States abdicating their powers of taxation or, which in substance is the same thing, not imposing taxes upon income’ (at 443, 444). Unless this view involves a departure from what was decided in the two cases with which I have dealt, Starke J said nothing in derogation of the interpretation of s 96 which those decisions involve. The judgments of the members of the Court forming the majority place positive reliance upon the decisions as affording definite support to the conclusion that the Income Tax Reimbursement Act was a valid exercise of the power conferred by s 96. Those judgments pronounce specifically against the view that that Act was invalid as attempting an interference with the exercise by the States of their constitutional functions. … In the present attack upon the validity of the Tax Reimbursement Act 1946–1948 the two States that are plaintiffs naturally rest heavily upon the argument that the Act is a [page 530] law for the restriction or control of the States in the exercise of their taxing powers, that on its face the purpose appears of compelling the States to abstain from imposing taxes upon income. If s 96 came before us for the first time for interpretation, the contention might be supported on the ground

that the true scope and purpose of the power which s 96 confers upon the Parliament of granting money and imposing terms and conditions did not admit of any attempt to influence the direction of the exercise by the State of its legislative or executive powers. It may well be that s 96 was conceived by the framers as (1) a transitional power, (2) confined to supplementing the resources of the Treasury of a State by particular subventions when some special or particular need or occasion arose, and (3) imposing terms or conditions relevant to the situation which called for special relief of assistance from the Commonwealth. It seems a not improbable supposition that the framers had some such conception of the purpose of the power. But the course of judicial decision has put any such limited interpretation of s 96 out of consideration. In any case it must be borne in mind that the power conferred by s 96 is confined to granting money and moreover to granting money to governments. It is not a power to make laws with respect to a general subject matter, which for reasons such as I gave in Melbourne Corporation v Commonwealth (1947) 74 CLR 31, may be taken to fall short of authorising a special attempt to control the exercise of the constitutional powers of the States where there is a connexion with some part of the subject matter of the federal power. The very matter with which the power conferred by s 96 is concerned relates to State finance. Further there is nothing which would enable the making of a coercive law. By coercive law is meant one that demands obedience. As is illustrated by Melbourne Corporation v Commonwealth (1947) 74 CLR 31, the duty may be imposed, not on the State or its servants, but on others and yet its intended operation may interfere unconstitutionally with the governmental functions of the State in such a way as to take the law outside federal power. But nothing of this sort could be done by a law which in other respects might amount to an exercise of the power conferred by s 96. For the essence of an exercise of that power must be a grant of money or its equivalent and beyond that the legislature can go no further than attaching conditions to the

grant. Once it is certain that a law which is either valid under s 96 or not at all does contain a grant of financial assistance to the States, the further inquiry into its validity could not go beyond the admissibility of the terms and conditions that the law may have sought to impose. The grant of money may supply the inducement to comply with the term or condition. But beyond that no law passed under s 96 can go. Once the interpretation is accepted in full which the decisions in Victoria v Commonwealth (1926) 38 CLR 399, and in Moran’s case (1939) 61 CLR 735; [1940] AC 838; (1940) 63 CLR 338 combine to place upon the section it becomes difficult indeed to find safe ground for saying that the condition of the grant of financial assistance may not be that a particular form of tax shall not be imposed by the State. The interpretation flowing from these two decisions is not consistent with the view that there must be a need for relief or a reason for giving assistance which is not itself created by the Commonwealth legislation connected with the grant. It is inconsistent with the view that the terms or conditions cannot require the exercise of governmental powers of the State and require the State to conform with the desires of the Commonwealth in the exercise of such powers. It seems a short step from this to saying that the condition may stipulate for the exercise or non-exercise of the State’s general legislative power in some particular or specific respect. Once this step is taken it becomes easier to ask than to answer the question — ‘Why then does this not apply to the legislative power of imposing this or that form of taxation?’. [page 531] In short the result of my consideration of the two prior decisions upon s 96 has been to convince me that the decision of the majority of the Court with respect to the Tax Reimbursement Act in South Australia v Commonwealth (1942)

65 CLR 373 was but an extension of the interpretation already placed upon s 96 of the Constitution. The three decisions certainly harmonise and they combine to give to s 96 a consistent and coherent interpretation and they each involve the entire exclusion of the limited operation which might have been assigned to the power as an alternative. Before the meaning of s 96 and the scope of the power it gives had been the subject of judicial decision no one seems to have been prepared to speak with any confidence as to its place in the constitutional plan and its intended operation. It may be said perhaps that while others asked where the limits of what could be done in virtue of the power the section conferred were to be drawn, the Court has said that none are drawn; that any enactment is valid if it can be brought within the literal meaning of the words of the section and as to the words ‘financial assistance’ even that is unnecessary. For it may be said that a very extended meaning has been given to the words ‘grant financial assistance to any State’ and that they have received an application beyond that suggested by a literal interpretation. But even if the meaning of s 96 had seemed more certain, it would, in my opinion, be impossible to disregard the cumulative authority of the three cases I have discussed and conclude that ss 5 and 11 of the Tax Reimbursement Act are invalid. I therefore think that the validity of that Act must be upheld. [Dixon CJ went on to hold that s 221(1)(a) of the Income Tax Assessment Act was not a valid law of the Commonwealth on the basis that it fell outside the incidental area of s 51(ii): 99 CLR at 612–21.]

5.3.10 The other members of the court agreed that the State Grants (Tax Reimbursement) Act was valid. However, a majority held that s 221(1)(a) of the Income Tax Assessment Act was

invalid (Dixon CJ, McTiernan, Kitto and Taylor JJ; Williams, Webb and Fullagar JJ dissenting on this aspect of the case). 5.3.11 Owen Dixon had been absent from the High Court when the First Uniform Tax case was argued and decided. He was then Australian Minister in Washington. Some commentators have suggested that he might have persuaded the court to condemn the Grants Act of 1942 had he participated in that case: see, for example, Sawer, 1967, p 134. His decision in the Second Uniform Tax case that the Grants Act of 1946 was supported by s 96 did appear to be based more on precedent than on principle. Consider, for example, his observations on the approach to s 96 which the court could have adopted ‘[i]f s 96 came before us for the first time for interpretation’: 99 CLR at 609. 5.3.12 However, it is by no means clear that a successful challenge to the Grants Act of 1946 would have put an end to the concentration in Commonwealth hands of the imposition and collection of income tax. ‘No satisfactory legal reason could be advanced’, said Dixon CJ, to support the ‘prophecy’ that the uniform tax system would collapse without the Grants Act: 99 CLR at 597. In fact, Commonwealth monopoly of the field of income taxation has been demonstrated not to depend on the attachment of any express condition to s 96 grants. The condition that the states not impose their own income tax was removed from the relevant [page 532] legislation in 1959: Saunders, 2003, p 76. As Saunders observes at

p 76: ‘It remained as an understanding between governments, however’. 5.3.13 Since the start of the GST in 2000, following enactment of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), the revenue raised by the GST has been transferred by the Commonwealth to the states and territories in the form of general revenue (untied) grants. This arrangement replaced the former scheme of income tax transfers by the Commonwealth to the states: Fenna, 2008, at 516 (and see generally Saunders, 2000).

Specific purpose grants 5.3.14 Of the total grant moneys channelled by the Commonwealth to the states and territories, approximately 50 per cent is paid as GST grants. The remaining 50 per cent primarily takes the form of specific purpose (tied) grants: Commonwealth of Australia, Reform of the Federation White Paper — COAG and Federal Financial Relations, Issues Paper 5, February 2015, p 27. Fenna, 2008, at 520–1 observes (footnote omitted): Tied grants have become, since they were ratcheted up by the Whitlam Government in the early 1970s, a dominant feature of Australian federalism. … They are used in a large number of policy fields and collectively they impose a wide range of conditions. … Probably most emblematic of the lengths to which tied grants could go in recent times was the Howard Government’s school flagpole policy of 2004, which provided education funding to the States conditional upon each school having a ‘functioning flagpole and flying the Australian flag’. … What [this example] … draws attention to … is the capacity the spending power gives Commonwealth governments for imposition of their particular values or policy priorities at the time.

Specific purpose grants under s 96 have been widely used by the Commonwealth in areas such as health, education, infrastructure and housing: see, for example, Commonwealth of Australia, Budget 2015–16, Federal Financial Relations, Budget Paper No 3 2015–16 (2015), Pt 2: Payments for Specific Purposes. 5.3.15 One of the early uses of specific purpose grants by the Commonwealth was for infrastructure funding in the form of road construction: see Saunders, 1978, at 384–9. In Victoria v Commonwealth (Federal Roads case) (1926) 38 CLR 399 it was argued that the Commonwealth Parliament could not use s 96 to grant money to the states on condition that the money be used to construct ‘Federal aid roads’ nominated by the Commonwealth. (A detailed description of the scheme involved in this case is contained in Dixon CJ’s judgment in Victoria v Commonwealth (Second Uniform Tax case) (1957) 99 CLR 575 5.3.9C). Counsel for the State of Victoria, Robert Menzies (a nice irony, in view of his later resort to s 96 as the means of implementing Commonwealth education programs) argued (38 CLR at 405): Under that section [s 96] the Parliament cannot attach as conditions to its grant any conditions which amount in substance to the exercise of any legislative power which is not within s 51 of the Constitution.

The High Court rejected this argument in one of its shortest judgments. The Act authorising the grants was valid because it was ‘plainly warranted by the provisions of s 96 of the Constitution, [page 533]

and not affected by those of s 99 or any other provisions of the Constitution, so that exposition is unnecessary’: 38 CLR at 406. 5.3.16 Over half a century later, Attorney-General (Vic); Ex rel Black v Commonwealth (1981) 146 CLR 559 involved specific purpose grants for Commonwealth funding of non-government schools. The relators sought declarations that several Commonwealth Grants Acts were invalid. The Acts provided for the payment of financial assistance to each state on condition that the state ‘without undue delay’ (see, for example, 146 CLR at 640) pay out the money to non-government schools nominated by the Commonwealth at rates of payment nominated by the Commonwealth. The relators’ first argument, that the Grants Acts infringed s 116 of the Constitution, was rejected: see 9.7.13C. Their second argument was that the Grants Acts did not comply with s 96 of the Constitution because those Acts gave no financial assistance to the states but used them merely as agencies for the distribution of Commonwealth moneys. All the members of the court who considered this argument (Barwick CJ, Gibbs, Stephen, Mason, Aickin and Wilson JJ) rejected it. The relators had not asked the court to overrule any earlier decisions, and each of the justices saw those decisions (Victoria v Commonwealth (Federal Roads case) (1926) 38 CLR 399; Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR 735 (see 5.3.17); (1940) 63 CLR 338 (see 5.3.18); and the First and Second Uniform Tax cases (1942) 65 CLR 373 5.3.4C; (1957) 99 CLR 575 5.3.9C) as decisive. The judgment of Wilson J was typical of the court’s reaction to the relators’ argument. He noted that the Grants Act gave the

states no discretion in administering the grants in question (there was, he said, only ‘the barest acknowledgment of the formalities required by s 96’: 146 CLR at 659). This lack of discretion was ‘all the more remarkable in the context of a constitution which’ gave the Commonwealth Parliament no power over education: 146 CLR at 659. However, these features of the scheme in the Grants Act raised only questions of policy, not of law (146 CLR at 659– 60): In the present state of the authorities, the legislation satisfies the requirements of s 96 for a valid law. It is a non-coercive law which in terms grants money to each of the States ‘by way of financial assistance to the State’. The freedom of each State to decide whether to accept or reject the grant, however restricted it may be in a political sense, is legally fundamental to the validity of the scheme, and its existence as a matter of law cannot be denied. The conditions attaching to the grant are those to be determined by the Commonwealth, but this has always been so. It is not necessary that the grant should benefit the State Treasury directly, or that the purpose of the grant should be within the express legislative power of the Commonwealth, or that the State should be the instigator or even a party to the initiation of the scheme. In addition to the significance of the State’s decision to accept the grant, the necessity for it then to enter into an agreement with the eventual recipient of a grant is also significant. The State enters into that agreement, not as an agent for the Commonwealth, but as a principal. In any event, the plaintiffs have no answer, in my opinion, to the defendants’ contention that the legislation does extend financial assistance to the States. It satisfies the most stringent tests that can be applied to that criterion. The States have assumed a governmental responsibility for all primary and secondary education within their bounds. If there were no other contributors, the total financial responsibility would fall on the State, as until recently it always has done in the case of government schools. In such a situation, the initiative and

sacrifice assumed by those responsible for the existence of a nongovernment

[page 534] school system affords relief directly to the State Treasury, without relieving the State of the general responsibility of oversight that it has assumed. The participation of the Commonwealth is a further source of help. In my opinion, there can be no doubt that Commonwealth grants to non-government schools within a State must have the effect of easing the claim that such schools would otherwise make upon State financial resources. It must not be forgotten that these schools are already receiving substantial financial assistance from State governments, and the level of this assistance must be affected by the existence of the Commonwealth scheme.

Limitations on s 96 5.3.17 The question whether s 96 might be used to circumvent specific prohibitions in the Constitution, rather than merely to overcome an absence of specific power, was raised in Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR 735. The Commonwealth had passed several tax Acts imposing a tax on flour in the hands of the millers. The Wheat Industry Assistance Act 1938 (Cth) provided for payment to the states, in proportion to their wheat production, of moneys equivalent to the proceeds of the tax. The grants were made on condition that each recipient state distribute the money among local wheat-growers. Section 14 made special provision for Tasmania, which had a flour-milling industry but practically no

wheat-growers. A specific sum was to be granted to Tasmania without any specified conditions. However, it was understood between the Commonwealth and the states that Tasmania would pass the money on to local flour-millers. The Tasmanian Parliament enacted the Flour Tax Relief Act 1938 to implement that understanding. A New South Wales flour-miller, WR Moran Pty Ltd, challenged the validity of the Commonwealth taxing legislation on the ground that, in combination with the grants legislation, it discriminated between states contrary to the proviso to s 51(ii). The High Court rejected the challenge. Latham CJ said that the taxation legislation did not discriminate between the states; the Constitution did not prevent a Grants Act from discriminating between the states; and the several pieces of legislation should be considered individually, not as parts of a ‘scheme’. He made these comments about s 96 (61 CLR at 763–4): Section 96 is a means provided by the Constitution which enables the Commonwealth Parliament, when it thinks proper, to adjust inequalities between States which may arise from the application of uniform nondiscriminating Federal laws to States which vary in development and wealth. … A uniform law may confer benefits upon some States, but it may so operate as to amount to what is called ‘a Federal disability’ in other States. Section 96 provides means for adjusting such inequalities in accordance with the judgment of Parliament. That section is not limited by any prohibition of discrimination. There is no general prohibition in the Constitution of some vague thing called ‘discrimination’. There are the specific prohibitions or restrictions to which I have referred. The word ‘discrimination’ is sometimes so used as to imply an element of injustice. But discrimination may be just or unjust. A wise differentiation based upon relevant circumstances is a necessary element in national policy. The remedy for any abuse of the power conferred by s 96 is political and not legal in character.

Evatt J dissented, treating the Assistance Act as part of a scheme to discriminate between states in taxation. He said that s 96 could not be used for the ‘purpose of nullifying constitutional guarantees contained elsewhere in the Constitution’: 61 CLR at 802. [page 535] 5.3.18 WR Moran Pty Ltd appealed to the Privy Council, which dismissed the appeal: WR Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR 338. In the course of its opinion, the Privy Council made a number of propositions: In assessing the validity of the pieces of legislation involved in the case, it was appropriate ‘to treat them together and to see how they interact … [I]t is necessary to examine the scheme, and to have regard to its ultimate effect or its function as shown in the various Acts’: 63 CLR at 341. In assessing whether a taxation Act discriminated contrary to s 51(ii), it was necessary to consider the terms of any appropriation Act which might authorise refunds of tax to some taxpayers: 63 CLR at 345–6. Section 96 was not expressed to be ‘subject to this Constitution’ and must be regarded as superior to s 51, which was so expressed: 63 CLR at 346–7. Section 96 did not prohibit discrimination; and a use of that power to prevent ‘unfairness or injustice to the State of Tasmania or indirectly to some or all of its population’ was ‘unobjectionable’: 63 CLR at 349.

However, s 96 could not be used by the Commonwealth Parliament ‘with a complete disregard of the prohibition contained in s 51(ii), or so as altogether to nullify that constitutional safeguard’: 63 CLR at 349. Their Lordships continued (63 CLR at 350): Cases may be imagined in which a purported exercise of the power to grant financial assistance under s 96 would be merely colourable. Under the guise or pretence of assisting a State with money, the real substance and purpose of the Act might simply be to effect discrimination in regard to taxation. Such an Act might well be ultra vires the Commonwealth Parliament. Their Lordships are using the language of caution because such a case may never arise, and also because it is their usual practice in a case dealing with constitutional matters to decide no more than their duty requires. They will add only that, in the view they take of the matter some of the legislative expedients — objected to as ultra vires by Mr Justice Evatt in his forcible dissenting judgment — may well be colourable, and such Acts are not receiving the approval of their Lordships. In the present case there seems to be no valid ground for suggesting that the sums payable to the Government of Tasmania pursuant to s 14 of the Wheat Industry Assistance Act 1938 (No 53) are not in the nature of genuine financial assistance to the State, paid for the purpose of equalising the burden on the inhabitants of Tasmania of taxation which was being imposed on all the millers throughout the Commonwealth for an end which might reasonably be considered to be both just and expedient.

5.3.19 The Privy Council’s approach to the issues raises several problems. First, the proposition that the separate pieces of legislation should be treated as a ‘scheme’ and their validity judged by their interaction cannot be reconciled with the High Court’s decisions and statements of principle in the First and Second

Uniform Tax cases (1942) 65 CLR 373 5.3.4C; (1957) 99 CLR 575 5.3.9C. Second, the Privy Council apparently had in mind that a Grants Act could be revealed as a colourable device for effecting discrimination in taxation by studying the motives which prompted the passage of the Act. Yet legislative motive has been regularly and consistently dismissed as irrelevant for constitutional purposes: see, for example, R v Barger (1908) 6 CLR 41 5.1.39C; South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373; [page 536] Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1 5.1.43C; Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555 (see 5.1.45). That the investigation would be into motive is evidenced by the Privy Council’s own attitude to the scheme in Moran’s case, namely, it was legitimate because the Assistance Act was designed to correct an injustice caused by the operation of the non-discriminatory taxation laws (that is, the Privy Council approved Parliament’s motive in enacting a Grants Act which equalised the ‘unfair’ distribution between the states of the burden of the taxation laws). An additional difficulty with this approach is that it demands that a court examine the fairness of the distribution of the tax burden and that the court determine whether the Grants Act goes no further than correcting any unfairness brought about by the taxation legislation. However, the Commonwealth Constitution contains no criteria for measuring the fairness of the distribution of tax burdens, other than that they must not discriminate between

states (s 51(ii)), and no criteria for measuring the fairness of the corrective measure contained in a Grants Act. What criteria of fairness did the Privy Council use? Was its analysis (of the ‘fairness’ of the taxation burden and the Grants Act) convincing? 5.3.20 On the other hand, the view adopted by the majority of the High Court, that s 96 was not subject to the constraints imposed by ss 51(ii) and 99 — rather, that the limits on its exploitation were political rather than legal — does open up the real prospect of Commonwealth evasion of express restrictions on its legislative powers, at least when it can secure the cooperation of a state. Sawer’s description of the legislation in Moran’s case is apt: ‘a Commonwealth-State conspiracy … to evade constitutional restrictions’: Sawer, 1967, p 77. 5.3.21 More recently, the High Court has held that s 96 grants may be subject to some of the specific restrictions on Commonwealth legislative power. In Attorney-General (Vic); Ex rel Black v Commonwealth (1981) 146 CLR 559 (see 5.3.16), the court considered a challenge to several Grants Acts, authorising payments to the states on condition that the states pass on those payments to nominated non-government schools. One of the relators’ arguments was that the payment, through the states, of money to church-controlled schools was equivalent to ‘establishing any religion’ and that each of the Grants Acts was, therefore, a ‘law for establishing any religion’, which the Commonwealth was forbidden to make: Constitution s 116. A majority of the court (Barwick CJ, Gibbs, Stephen, Mason, Aickin and Wilson JJ, Murphy J dissenting) held that the provision of government funds to church-owned schools could not be

described as ‘establishing any religion’: see 9.7.13C. However, all members of the court, other than Stephen J (who said nothing on this point), indicated that laws made under s 96 were subject to the restrictions imposed by s 116. Gibbs J expressed this view at some length (146 CLR at 592–3): It is plain, as Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd shows, that a condition may be imposed under s 96 for the purpose of persuading a State to do something which the Commonwealth itself could not do: Pye v Renshaw (1951) 84 CLR 58 provides another example. The cases show that the Parliament has wide power to fix the terms and conditions of a grant made under s 96. In Victoria v Commonwealth (the Roads case) (1926) 38 CLR at 406, it was said that the Federal Aid Roads Act 1926 was ‘plainly warranted by the provisions of s 96 of the Constitution, and not affected by those of s 99 or any other provision of the Constitution’, and the statement that grants made under s 96 are not affected by any other provision of the Constitution was repeated in Deputy

[page 537] Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR at 763, 771. On the other hand, in Adelaide Company of Jehovah’s Witnesses Inc v Commonwealth (1943) 67 CLR 116 at 123, Latham CJ said that s 116 ‘prevails over and limits all provisions’ [of the Constitution] ‘which give power to make laws’, and McTiernan J at 156 said that the section ‘imposes a restriction on all the legislative powers of Parliament’. I consider that the ordinary rules of statutory construction should be applied, and that ss 96 and 116 should be read together, the result being that the Commonwealth has power to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit, provided that a law passed for that purpose does not contravene s 116. It is one thing to say that the Parliament, by a

condition imposed under s 96, could achieve a result which it lacks power to bring about by direct legislation, but quite another to say that the Parliament can frame a condition for the purpose of evading an express prohibition contained in the Constitution. As the Judicial Committee pointed out in WR Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR at 346–7; [1940] AC at 855, the powers given by s 51 of the Constitution are expressly made ‘subject to this Constitution’ which includes s 96. On the other hand, s 116 is not expressed to be subject to the Constitution. Of course the same is true of s 99, but that section speaks of ‘any law or regulation of trade, commerce or revenue’ and a law under s 96 cannot properly be regarded as such a law: see Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR at 775. However, whether or not the provisions of s 51 can be ‘completely disregarded’ in deciding upon the validity of a law made under s 96 (as to which see WR Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) (1940) 63 CLR at 349–50), I consider that the Parliament, acting under s 96, cannot pass a law which conflicts with s 116. To take an unlikely example, an Act which granted money to a State on condition that the State would prohibit entirely the exercise of a particular religion would, in my opinion, be a law for prohibiting the free exercise of that religion, and would be invalid.

The other judgments contained only brief assertions that s 96 laws were subject to s 116, although Mason and Wilson JJ agreed that a grant to a state as part of a scheme to establish a church as a national church would be struck down by s 116: 146 CLR at 618, 651; see also 146 CLR at 576 per Barwick CJ; 635 per Aickin J; 621 per Murphy J. 5.3.22 In ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140, the High Court confirmed that the powers conferred in ss 96 and 51(xxxvi) are subject to the guarantee in s 51(xxxi) of the Constitution concerning ‘the acquisition of property on just terms’.

The plaintiffs were agricultural companies that held licences under the Water Act 1912 (NSW) to extract groundwater. Following the repeal of the Act, the licences were superseded by new licences under the Water Management Act 2000 (NSW). The new licences significantly reduced the plaintiffs’ water entitlements. Under a funding agreement between the Commonwealth (represented by the National Water Commission) and the New South Wales Government, the Commonwealth undertook to provide financial assistance to the state to contribute towards ‘structural adjustment payments’ for licensees affected by the water allocation changes. New South Wales, in turn, had undertaken to make the changes concerned. It was conceded (240 CLR at 160) that the adjustment payments designated by New South Wales for the plaintiffs did not satisfy the s 51(xxxi) ‘just terms’ standard. In light of this deficiency, the plaintiffs claimed that the National Water Commission Act 2004 (Cth) ‘is invalid in so far as it authorised the CEO to enter into the Funding Agreement on behalf [page 538] of the Commonwealth and to administer the financial assistance pursuant to the Funding Agreement’: 240 CLR at 163. A majority of the court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; Heydon J dissenting) rejected the plaintiffs’ claim on the basis that the changes to the licences did not result in an acquisition of property within the operation of s 51(xxxi). In arriving at this conclusion, French CJ, Gummow and Crennan JJ addressed the relationship between ss 96 and 51(xxxi). This involved considering the effect of two previous decisions of the

court that could be seen to be at odds with each other: P J Magennis Pty Ltd v Commonwealth (1949) 80 CLR 382 and Pye v Renshaw (1951) 84 CLR 58. The former case suggested that s 96 was subject to s 51(xxxi) though the latter case cast doubt on this. 5.3.23C ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 (most footnotes omitted) French CJ, Gummow and Crennan JJ: … in P J Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382 at 403 Latham CJ rejected the proposition that a federal statute giving financial assistance to States was for that reason not a law with respect to the acquisition of property. The Court did not accept the submission for the defendants that a law could not be with respect to the acquisition of property unless it (a) directly acquired property by force of its own terms, (b) created a previously non-existing power in some person to acquire property, or (c) came into operation upon the acquisition of property. Latham CJ said (1949) 80 CLR 382 at 402: All such laws doubtless would be laws with respect to the acquisition of property. But there is nothing in the words of s 51(xxxi) of the Constitution which supplies any warrant for limiting the application of this provision to laws which fall within the classes mentioned. Magennis To the extent that his submissions were contrary to Magennis, the Commonwealth Solicitor-General contended that that case should be re-considered and overruled. The better view, he submitted, is that indicated subsequently in Pye v Renshaw (1951) 84 CLR 58 at 83. There, in rejecting the plaintiff’s argument, the Court noted

the absence of any allegation that the moneys to fund the impugned acquisitions had not been duly appropriated or that their payment for any reason would be unlawful. The proposition of law, rejected by the Court, was that ‘an appropriation by the Commonwealth Parliament for the purposes mentioned is unconstitutional’. The Court said that proposition could not be supported. It explained why: The argument really comes to this. The Commonwealth cannot itself acquire land except upon just terms. A State can resume land on any terms, just or unjust, authorised by its Parliament. But the Commonwealth is not authorised by s 96 or any other provision of the Constitution to provide money for a State in order that the State may resume land otherwise than on just terms. This is the very argument which was rejected in Victoria v The Commonwealth (1926) 38 CLR 399: see also South Australia v The Commonwealth (1942) 65 CLR 373 at 417, where Latham CJ [page 539] said: ‘The Commonwealth may properly induce a State to exercise its powers … by offering a money grant’. (Emphasis added) However, the two earlier authorities referred to in the last sentence do not require rejection of the particular argument respecting s 96 which was in issue in Pye v Renshaw. … … It is significant that from the legislation under consideration in Pye v Renshaw any arrangement or agreement with the Commonwealth had been, as Professor Saunders has said, ‘decoupled’ (Saunders, ‘Intergovernmental Agreements and the Executive Power’, Public Law Review, vol 16 (2005) 294 at p 301) in 1950 upon the repeal of the War Service Land

Settlement Agreement Act 1945 (NSW). The argument rejected in Pye v Renshaw was that the exercise of the power to grant financial assistance under s 96 would be vitiated if shown to be for the purpose of inducing the State to exercise its powers of acquisition on less than just terms. The concept of improper purpose as a vitiating characteristic was rightly rejected. Section 96 says nothing about purpose. It authorises the making of grants on ‘such terms and conditions as the Parliament thinks fit’. The constraints imposed by constitutional prohibitions or guarantees will be directed to the range of permissible terms and conditions rather than their underlying purpose. … … Leave to re-open Magennis should be refused because, in particular, the reasoning upon which it was based is sound, all the more so in the light of developments in interpretation of the Constitution since Magennis was decided. Several developments since the decision in Magennis tend to support the view taken by the majority of the relationship between ss 51(xxxi) and 96. First, it is now settled that the provisions … in s 81 of the Constitution for establishment of the Consolidated Revenue Fund and in s 83 for Parliamentary appropriation, do not confer a substantive spending power and that the power to expend appropriated moneys must be found elsewhere in the Constitution or the laws of the Commonwealth. Secondly, it is settled since Trade Practices Commission v Tooth & Co Ltd [(1979) 142 CLR 397] that s 51(xxxi) is not confined to the acquisition of property by the Commonwealth or its instrumentalities. … Thirdly, in Tooth Barwick CJ described s 51(xxxi) as ‘a very great constitutional safeguard’ and shortly thereafter, in the joint reasons of six Justices in Clunies-Ross v The Commonwealth, it was said that s 51(xxxi) ‘has assumed the status of a constitutional guarantee of just terms … and is to be given the liberal construction appropriate to such a constitutional provision’.

Fourthly, that construction involves looking beyond matters of legal form and to the practical effect of the law in question. … … Finally, passages in the reasons of several members of the Court in Attorney-General (Vic); Ex rel Black v The Commonwealth, respecting the relationship between s 96 and the guarantee or prohibition provided by s 116 with respect to matters of religion, suggest that ss 96 and 51(xxxi) also should be read together. Wilson J said that Magennis remained a persuasive analogy respecting ss 96 and 116. Gibbs J said he considered: ‘that ss 96 and 116 should be read together, the result being that the Commonwealth has power to grant financial assistance to any State on such terms and conditions as the Parliament thinks fit, provided that a law passed for that purpose does not contravene s 116.’ Conclusions respecting ss 96 and 51(xxxi) The result is that the legislative power of the Commonwealth conferred by ss 96 and 51(xxxvi) does not extend to the grant of financial assistance to a State on terms and conditions [page 540] requiring the State to acquire property on other than just terms. The plaintiffs’ case, to that extent, should be accepted. … [Heydon J agreed with French CJ, Gummow and Crennan JJ as regards the relationship between s 96 and s 51(xxxi): 240 CLR at 206. Hayne, Kiefel and Bell JJ did not decide the point: 240 CLR at 199.]

COMMONWEALTH POWER TO SPEND

5.4.1 While the states have shown some resentment at the use by the Commonwealth of specific purpose grants, they expressed even greater alarm when the federal Whitlam Labor Government proposed to abandon those grants as an instrument of Commonwealth policy and replace them with direct expenditure. Crommelin and Evans, 1977, described this innovation in the following terms (p 41): Given the financial dominance of the Commonwealth in the Australian federal system, it was obvious that the establishment of an unlimited power to appropriate and disburse federal funds would signify a vital shift in the balance of power, relieving the Commonwealth of the necessity to involve the States in non–regulatory programmes.

5.4.2 Why should the Commonwealth want to bypass the states, given the broad scope of s 96 grants and the economic pressures on the states to accept specific purpose grants? There are political and administrative reasons behind such a move. The Commonwealth Government may be anxious to claim for itself, rather than share with state governments, the political credit for a particular spending program, and may believe that state government machinery is inefficient or obstructive — that is, either not geared to the running of an innovative program or that it will resist the introduction and impede the operation of such a program. This type of consideration was expressed by former Prime Minister Whitlam in 1976 (Whitlam, 1977, p 308): For a number of reasons the making of grants through State governments unnecessarily complicates the machinery of government. In the case of the Australian Assistance Plan and the Australian Legal Aid Office, for example, several States had shown either their unwillingness or their inability to provide urgently needed services. In both cases my Government made direct grants of funds under s 81.

5.4.3 Naturally, the state governments were not happy about this attempt to cut them out of spending programs. The then Victorian Solicitor-General, Daryl Dawson (later Justice Dawson) put this resentment in relatively moderate terms in 1976 (Dawson, 1977, p 73): Allied with this tendency of the Labor Government to treat limitations upon its power somewhat off-handedly was a tendency in some areas not to want to do anything unless it could be seen to be being done from Canberra. I am thinking here particularly of the use of the spending power. Much of what the Commonwealth attempted to do during Labor’s years of office could without question have been achieved by means of grants to the States under s 96 of the Constitution. The provision of welfare services such as legal aid, unemployment benefits or the scheme envisaged in the Australian Assistance Plan was constitutionally feasible by means of grants, conditional grants, under s 96 of the

[page 541] Constitution. I make this point simply because a great deal of the exploration which took place in these areas tended to be unnecessary and counter-productive. May I take as my example the Regional Employment Development (RED) Scheme. This was a scheme by which the Commonwealth Government sought to provide unemployment relief by providing funds to local bodies, including local government bodies, to enable them to hire labour for approved works. The scheme was, so the State of Victoria contended, beyond the legislative competence of the Commonwealth and, that being so, it was outside the spending power. But the point I wish to make here is that in 1972 a similar scheme had operated simply and efficiently by channelling Commonwealth funds through the State Treasury for disbursement to State departments and instrumentalities and local

government bodies. In 1974, this would not do and a cumbersome, inefficient and expensive machinery was set up (or so it seemed to the State) merely to assert Commonwealth powers.

5.4.4 Whatever the merits of these respective arguments, the Commonwealth has historically asserted that it has a general power of expenditure that is not constrained by the federal division of responsibilities: see, for example, the view of Sir Robert Garran in Saunders, 1978, pp 396–7. Its direct spending programs in recent times have been substantial, and have included funding for such purposes as housing support (Kerr, 2009, at 316), pre-school, school and university education, support for regional Australia, and sports and arts assistance: see Chordia, Lynch and Williams, 2015, at 326–8. What, then, is the nature and scope of the Commonwealth’s direct spending power? May it undertake expenditure on any program, even in areas which lie outside its capacity to regulate or control through legislation passed under s 51 of the Constitution? For many years, attempts to answer these questions focused on ss 81 and 83 of the Constitution.

5.4.5E

Commonwealth Constitution

81 Consolidated Revenue Fund All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution. 83 Money to be appropriated by law No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law. But until the expiration of one month after the first meeting of the Parliament the Governor-General in Council may draw from the Treasury and expend such moneys as may be necessary for the maintenance of any department transferred to the Commonwealth and for the holding of the first elections for the Parliament.

5.4.6 The operation of ss 81 and 83 must be understood in the context of ss 53, 54 and 56 of the Constitution which address the relationship between the Senate and House of Representatives as regards appropriation legislation. [page 542]

5.4.7E

Commonwealth Constitution

53 Powers of the Houses in respect of legislation Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But 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. The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government. The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people. The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications. Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws. 54 Appropriation Bills The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation. 56 Recommendation of money votes A vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed unless the purpose of the appropriation has in the same session been recommended by

message of the Governor-General to the House in which the proposal originated.

5.4.8 Together, ss 53, 54, 56, 81 and 83 of the Constitution ‘reserves to the Parliament, and especially the House of Representatives, the power associated with control of funding through appropriation’: Combet v Commonwealth (2005) 224 CLR 494 5.4.22C at 522 per Gleeson CJ. Under s 81, all money received by the Commonwealth executive forms a single Consolidated Revenue Fund. Section 83 then provides that money cannot be taken from that fund ‘except under appropriation made by law’, that is, by legislative authority: see Brown v West (1990) 169 CLR 195 at 205 per Mason CJ, Brennan, Deane, Dawson and Toohey JJ. It follows that an appropriation of funds by parliament or directly under the Constitution (see, for example, s 3) is a prerequisite to spending by the executive — the executive cannot unilaterally extract money from the Consolidated Revenue Fund. In this way, ss 81 and 83 function ‘as parliamentary controls of the exercise of executive power to expend public monies’: Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 5.4.24C at 36 per French CJ. 5.4.9 Appropriations are routinely expressed in very broad statutory language. However, they cannot be wholly open-ended. A joint judgment of five justices recognised [page 543]

in Brown v West (1990) 169 CLR 195 at 208 (Mason CJ, Brennan, Deane, Dawson and Toohey JJ) that: An appropriation, whether annual or standing, must designate the purpose or purposes for which the moneys appropriated might be expended. The principle was stated by Latham CJ in Attorney-General (Vict) v The Commonwealth (1945) 71 CLR at p 253: ‘… there cannot be appropriations in blank, appropriations for no designated purpose, merely authorizing expenditure with no reference to purpose.’

5.4.10 Prior to the decision in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 5.4.24C, debate over the extent of the Commonwealth’s power to spend centred on s 81 of the Constitution. It was widely assumed that a valid appropriation under s 81 gave the Commonwealth positive authority to spend the funds concerned. The scope of the Commonwealth’s spending power was thus seen to turn on the meaning of ‘for the purposes of the Commonwealth’ in s 81. When was an appropriation ‘for the purposes of the Commonwealth’? A variety of divergent views were expressed: that the Commonwealth Parliament can appropriate funds for projects for which it has legislated, or can legislate, under s 51 of the Constitution; that, in addition, the Commonwealth Parliament can appropriate funds for a wider range of projects which can be described as ‘of national concern’; that the Commonwealth Parliament can appropriate funds for any project which it chooses. These divergent views were complicated by a parallel dispute

over whether the Commonwealth Government can establish administrative machinery to supervise the expenditure of money appropriated under s 81. See generally Victoria v Commonwealth (Australian Assistance Plan case) (1975) 134 CLR 338 5.4.17C. 5.4.11 As early as 1912, the Commonwealth Government adopted an optimistic view of its power under s 81. The Maternity Allowance Act 1912 (Cth) instituted a payment of £5 to each mother (apart from some racist exceptions) giving birth to an infant in Australia. Strong doubts were expressed in the parliament about the power of the Commonwealth to legislate in this way, but the government claimed that s 81 gave the parliament a general spending power. However, even the protagonists of this generous view of s 81 conceded that the section would not support the administrative system needed to implement the program. Despite the doubts, the Act was passed and the program implemented; and the validity of the legislation was not challenged in the courts: see Sackville, 1973, at 249–50; Saunders, 1978, p 381. 5.4.12 In 1928, a royal commission appointed to examine a proposal for Commonwealth child endowment concluded there were serious doubts over whether the Commonwealth Parliament could use s 81 to support such payments. The commission therefore recommended against the introduction of a child endowment program. It would, the commission said, ‘be calamitous’ to introduce the scheme, ‘unless the validity of the necessary legislation was beyond dispute’: Saunders, 1978, p 397. This pessimistic view appears to have dampened direct Commonwealth spending initiatives for many years: see Saunders, 1978, p 397. Perhaps the Commonwealth’s refusal to initiate direct spending programs owed much to the economic depression of the

1930s and to the strong fascination of pre-Keynesian economic theory. Certainly, the realisation that spending channelled through state governments under s 96 would survive constitutional challenge [page 544] (Victoria v Commonwealth (Federal Roads case) (1926) 38 CLR 399 (see 5.3.15)) was a good reason for using that process rather than direct expenditure. 5.4.13 However, the advent of the federal Curtin Labor Government in 1941 led to new legislation based on the broad reading of s 81: Child Endowment Act 1941 (Cth); Widows’ Pensions Act 1942 (Cth); Unemployment and Sickness Benefits Act 1944 (Cth); Pharmaceutical Benefits Act 1944 (Cth). All of these Acts introduced direct Commonwealth spending programs, with their necessary administrative machinery, in areas clearly outside the Commonwealth’s direct legislative powers as then defined in s 51 of the Constitution. See generally Sawer, 1963, pp 132, 162. 5.4.14 The last of these programs was challenged by the Medical Society of Victoria, with the fiat of the Victorian Attorney-General, in Attorney-General (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits case) (1945) 71 CLR 237. The court held by a majority (Latham CJ, Rich, Starke, Dixon and Williams JJ; McTiernan J dissenting) that the Pharmaceutical Benefits Act was invalid but the justices’ reasons differed.

Three members of the court (Latham CJ, Rich and Dixon JJ) held that the Act was invalid because of those aspects of the Act which went beyond appropriation or authorising expenditure. The Act imposed a series of controls on medical practitioners and pharmacists; thus, it purported to regulate conduct, these justices said, in areas outside the Commonwealth’s legislative power: 71 CLR at 256–63 per Latham CJ; 267–70 per Dixon J (Rich J concurring). However, each of these justices made some observations on the extent of the Commonwealth’s power to appropriate moneys. Latham CJ said that s 81 of the Constitution was the constitutional basis for appropriation legislation and that the parliament could appropriate money for any purpose which it nominated (71 CLR at 254): [T]he Commonwealth Parliament has a general, and not a limited, power of appropriation of public moneys. It is general in the sense that it is for the Parliament to determine whether or not a particular purpose shall be adopted as a purpose of the Commonwealth.

Latham CJ expressly rejected the argument that the Commonwealth’s appropriation power should be confined to those purposes for which it might otherwise legislate or to the governmental purposes of the Commonwealth: 71 CLR at 253, 256. Dixon J (Rich J concurring) took a narrower view. Without strictly deciding the point (71 CLR at 269), he regarded the Commonwealth’s power of appropriation as based on the parliament’s specific legislative powers rather than on s 81. However, he indicated that these legislative powers could support a relatively broad range of appropriation (71 CLR at 269, 271–2):

Even upon the footing that the power of expenditure is limited to matters to which the Federal legislative power may be addressed, it necessarily includes whatever is incidental to the existence of the Commonwealth as a state and to the exercise of the functions of a national government. These are things which, whether in reference to the external or internal concerns of government, should be interpreted widely and applied according to no narrow conceptions of the functions of the central government of a country in the world of today … In deciding what appropriation laws may validly be enacted it would be necessary to remember what position a national government occupies and, as I have already said, to take no narrow view, but the basal consideration would be found in the distribution of powers and functions between the Commonwealth and the States.

[page 545] Starke and Williams JJ held the Pharmaceutical Benefits Act invalid because it appropriated money for a purpose falling outside Commonwealth authority. Of s 81, Starke J said (71 CLR at 266): The purposes of the Commonwealth are those of an organised political body, with legislative, executive and judicial functions, whatever is incidental thereto, and the status of the Commonwealth as a Federal Government. And where else but from the Constitution and other Acts conferring authority upon the Commonwealth can its purposes or functions be discovered? Those purposes include matters in respect of which it can make laws by virtue of the Constitution or any other Act, and they also include the exercise of executive and judicial functions vested in the Commonwealth by the Constitution or by any other Act. Among other purposes of the Commonwealth must also be included, I think, matter arising from the existence of the Commonwealth and its status as a Federal Government. Thus, I should think that moneys

appropriated for payment etc of members of Parliament, exploration and so forth, would be within the authority of the Commonwealth. But the Pharmaceutical Benefits Act 1944 is beyond any purpose of the Commonwealth. No legislative, executive or judicial function or purpose of the Commonwealth can be found which supports it, and it cannot be justified because of the existence of the Commonwealth or its status as a Federal Government.

Williams J likewise said that the phrase ‘purposes of the Commonwealth’ in s 81 limited the purposes for which the Commonwealth Parliament could appropriate money. Discussing the phrase, he said (71 CLR at 282): The object of the Constitution was to superimpose on the existing body politics consisting of the States a wider overriding body politic for certain specific purposes. It was for these particular purposes and these alone that the body politics consisting of the States agreed to create the body politic known as the Commonwealth of Australia. These purposes must all be found within the four corners of the Constitution.

McTiernan J dissented, holding that the Act was no more than an appropriation Act, which was within the power conferred by s 81 of the Constitution: 71 CLR at 274–5. He said that the Constitution should be seen as ‘an instrument of government’ adaptable ‘to new needs and conditions’. Thus, ‘[t]he purposes of the Commonwealth are not fixed or immutable. They expand and change with the growth and development of the nation’: 71 CLR at 274. It was for the parliament, not the courts, to select the purposes for which money could be appropriated: 71 CLR at 273– 4. 5.4.15 Following Attorney-General (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits case) (1945) 71 CLR 237,

the Commonwealth Government received legal advice that the Maternity Allowance Act 1912, Child Endowment Act 1941, Widows’ Pensions Act 1942 and Unemployment and Sickness Benefits Act 1944 were invalid: see Sackville, 1973, at 256. The government then revived an earlier proposal to alter the Commonwealth Constitution by giving the parliament power to legislate with respect to a series of specific income security and welfare issues. In 1946, a referendum approved the insertion of pl (xxiiiA) in s 51 of the Constitution. The Commonwealth Parliament now had clear power to make laws with respect to: (xxiiiA) [T]he provision of maternity allowances, widows’ pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription), benefits to students and family allowances.

[page 546] 5.4.16 While that Constitution alteration enhanced Commonwealth power to engage in direct social welfare spending, Attorney–General (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits case) had a dampening effect on direct Commonwealth expenditure in other areas for some time: Saunders, 1978, p 401. However, as noted at 5.4.1–5.4.3, in the 1970s the federal Whitlam Labor Government established a number of direct expenditure schemes, producing strong objections from the states and the following litigation. 5.4.17C

Victoria v Commonwealth (Australian Assistance Plan case)

(1975) 134 CLR 338 [The Appropriation Act (No 1) 1974–75 (Cth) appropriated substantial sums of money for expenditure by the Commonwealth Government. This appropriation was effected by the following provision. 3 The Treasurer may issue out of the Consolidated Revenue Fund and apply for the services specified in Schedule 2, in respect of the year ending on 30th June 1975, the sum of $2,863,510,000. Schedule 2 to the Act allocated an overall amount of $141,637,000 to the Department of Social Security and this sum was divided, according to the schedule, between a range of programs. Among the specific expenditure projects was the following (found in Div 530 of the schedule): 4 Australian Assistance Plan 01 Grants to Regional Councils for Social Development

$5,620,000

02 Development and evaluation expenses

350,000

Total

$5,970,000

These payments were not authorised by any other legislation, nor was the Australian Assistance Plan established or regulated by legislation. However, it was conceded by the parties to this action that the plan involved the expenditure, through Regional Councils for Social Development, of the appropriated money on investigating the need for community welfare services and fostering the development of services. These regional councils were to be established throughout Australia in areas or regions with substantial commonality of interest, and were intended to be independent, non-political, local organisations. The community welfare services included within the scope of the plan extended beyond the matters on which s 51 of the Constitution authorised the Commonwealth Parliament to legislate. They included,

according to a discussion paper issued by the Social Welfare Commission, a statutory body set up by the Social Welfare Commission Act 1973 (Cth) (134 CLR at 350): 4.1 Child development services including: Family day care programs. Counselling services for ‘at risk’ families. Day care services not included in the Child Care Act 1972, including before- and after-school programs, and school holiday programs (which do not attract other Federal grants). [page 547] Parental education programs. Fostering programs on a permanent or temporary basis. 4.2 Services to assist families including: Professional counselling services (i) Social casework or group work; family casework services including marriage guidance; (ii) Budget advisory services; (iii) Home management advice; (iv) Legal advice. Domiciliary services (i) Home help, housekeeper, home management available to population generally; (ii) Meals-on-wheels (Commonwealth assistance available under Delivered Meals Subsidy Act); (iii) Allied services such as friendly visiting, home maintenance, laundry, shopping and other ancillary services designed to assist people to remain independent of institutional care.

Victoria and the state Attorney-General began an action in the High Court against the Commonwealth and the Minister for Social Security, seeking a declaration that the appropriation of $5.9 million was invalid, and an injunction to restrain the Commonwealth and the Minister for Social Security from spending the money concerned on the Australian Assistance Plan. The defendants lodged a defence claiming that the Appropriation Act and the Australian Assistance Plan were valid and denying the standing of the State of Victoria and its Attorney-General to bring the action. The plaintiffs demurred to the statement of defence and the demurrer was heard before the Full Court of the High Court. The states of New South Wales and Western Australia were given leave to intervene. Barwick CJ said that, before federation, the colonies’ principal revenues came from customs and excise duties, which were taken over by the Commonwealth.] Barwick CJ: It is apparent from the history of the proposals for federation that the plan of federation involved, and essentially involved, the sharing or distribution of the revenues of the Commonwealth. … Just as legislative power was distributed, with specific topics assigned to the Commonwealth and the residue falling to the States, so, it seems to me, the surplus of the Commonwealth revenues, the residue, after the servicing of the exercise of Commonwealth powers, was to come to the States, though in a manner left to be determined by the Parliament. This distribution of the revenue was effected, in my opinion, by the stipulation that the Consolidated Revenue Fund could only be appropriated and disbursed by constitutional or statutory authority, and that the Commonwealth could only expend the fund for Commonwealth purposes. Thus if the revenues in fact exceeded Commonwealth purpose requirements, there would be surplus revenue intended to be available for the States. The fact, if that be the right conclusion, that the payment of the surplus revenue was left in the control of the Parliament does not detract, in my opinion,

from the basic concept of limiting the power of the Commonwealth, itself a legislative power, to appropriate and spend the Consolidated Revenue Fund as part of the distribution of legislative power by which the federation was effected. The failure to agree upon a permanent formula for distributing the revenue does not deny the essentially federal nature of the financial provisions of the Constitution. In my opinion, the words of s 81 do involve a restraint of the Commonwealth’s power of appropriation and expenditure of the Consolidated Revenue Fund and ss 81 and 83 were part of what I may call the distribution of the available governmental revenue of the federation as between Commonwealth and States. … [page 548] … It is perhaps worth remarking at this point that the doctrine of the court established in the Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 has supported the exercise to the full of Commonwealth legislative power. But however large and generous the interpretation of those powers, the Constitution requires that the power of the States with respect to the residue, not embraced in Commonwealth power as thus construed, should not be trespassed upon by the Commonwealth without the concurrence of the State. Participation by the Commonwealth in policy-making or of administration in connexion with matters of State concern, matters within the residue left to the States by ss 106 and 107, must, in my opinion, be confined to the use by the Commonwealth of s 96 which, as I have said, involves the consent of a State. The Commonwealth, in my opinion, activity under s 96 apart, cannot enter that residual area left by the Constitution to the States, either by legislative or executive act. [Barwick CJ said that the assumption, made in s 94 of the

Constitution, that the states would share in the Commonwealth’s surplus revenue, provided ‘a clear reason in the formation of the Australian Constitution to impose limits on the [spending] capacity of the Commonwealth’: 134 CLR at 359. He rejected (at 359–60), as irrelevant to Australia, rulings of the United States Supreme Court on Congress’ spending power. He continued:] In my opinion, the words ‘for the purpose of the Commonwealth’ [sic] were intended to and do limit the legislative power of the Commonwealth to appropriate and authorise the expenditure of the Consolidated Revenue Fund. They must be construed and applied in the light of the circumstances and constitutional provisions to which I have referred. It follows inevitably, in my opinion, that they cannot be writ out of the Constitution by deciding that any purpose which the Parliament considers to be a Commonwealth purpose is an authorised purpose. That is but an example of ‘words meaning what I says they mean’, a notion more likely to be found in fantasy than in constitutional law. … … What then are purposes of the Commonwealth within s 81? The Commonwealth is a polity of limited powers, its legislative power principally found in the topics granted by ss 51 and 52: its executive power is described as extending to the execution and maintenance of the Constitution and of the laws of the Commonwealth. No doubt some powers, legislative and executive, may come from the very formation of the Commonwealth as a polity and its emergence as an international state. Thus it may be granted that in considering what are Commonwealth purposes, attention will not be confined to ss 51 and 52. The extent of powers which are inherent in the fact of nationhood and of international personality has not been fully explored. Some of them may readily be recognised: and in furtherance of such powers money may properly be spent. One such power, for example, is the power to explore, whether it be of foreign lands or seas or in areas of scientific knowledge or

technology. Again, there is power to create departments of State, for the servicing of which, as distinct from the activities in which the departments seek to engage, money may be withdrawn from the Consolidated Revenue Fund. But, to anticipate a submission with which I must later deal, to say that a matter or situation is of national interest or concern does not, in my opinion, attract any power to the Commonwealth. Indeed, any student of the Constitution must be acutely aware of the many topics which are now of considerable concern to Australia as a whole which have not been assigned to the Commonwealth. Perhaps the most notable instance is in relation to the national economy itself. There is but one economy of the country, not six: it could not be denied that the economy of the nation is of national concern. But no specific power over the [page 549] economy is given to the Commonwealth. Such control as it exercises on that behalf must be effected by indirection through taxation, including customs and excise, banking, including the activities of the Reserve Bank and the budget, whether it be in surplus or in deficit. The national nature of the subject matter, the national economy, cannot bring it as a subject matter within Commonwealth power. However, to whatever source it be referred, any act or activity of the Commonwealth must fall within the confines of some power, legislative or executive, derived from or through the Constitution. In this connexion, I have not included any reference to the judicial power because, in my view, such a reference would be irrelevant to the matter in hand. In the long run, whether the attempt is made to refer the appropriation and expenditure to legislative or to executive power, it will be the capacity of the Parliament to make a law to govern the activities for which the money is to be spent, which will determine whether or not the

appropriation is valid. With exceptions that are not relevant to this matter and which need not be stated, the executive may only do that which has been or could be the subject of valid legislation. Consequently, to describe a Commonwealth purpose as a purpose for or in relation to which the Parliament may make a valid law, is both sufficient and accurate. In my opinion, the expression in s 51(xxxi) of the Constitution ‘for any purpose in respect of which the Parliament has power to make laws;’ is a reasonable synonym for the expression ‘the purposes of the Commonwealth’ in s 81. … Is the Australian Assistance Plan … a purpose of the Commonwealth? Is it something the Commonwealth may lawfully implement? I have no doubt it is not. There is no granted power which either alone, or in combination with other powers, could support a scheme for the rearrangement of the Australian community into regions for deriving financial support directly from the Commonwealth or for integration of social welfare schemes or welfare planning as such. Nor is there power to grant money to or through the Regional Councils. An Act of the Parliament which sought to authorise the carrying out of the Plan, including its financial provisions, would, in my opinion, be beyond the power of the Parliament. … It was then suggested that, because social welfare itself and, in particular, the coordination of the efforts of a large number of diverse agencies was a national problem, there was power in the national Parliament to deal with it, by appropriation of funds as well as by particular legislation. But, as I have already pointed out, to describe a problem as national, does not attract power. Though some power of a special and limited kind may be attracted to the Commonwealth by the very setting up and existence of the Commonwealth as a polity, no power to deal with matters because they may conveniently and best be dealt with on a national basis is similarly derived. However desirable the exercise by the Commonwealth of power in affairs truly national in

nature, the federal distribution of power for which the Constitution provides must be maintained. In my opinion, no power resides in the Commonwealth to implement and carry out a social welfare plan such as the Australian Assistance Plan. It follows, in my opinion, that that Plan is not a purpose of the Commonwealth within the meaning of the language of s 81. Accordingly, in my opinion, there is no power in the Parliament to appropriate and authorise the expenditure of money for that Plan and its purposes. Item 4 in Div 530 of the Second Schedule to the Act is, in my opinion, void and in respect of the Plan and its purposes, the Act is ineffective to authorise the withdrawal from the Treasury of any money for the support and implementation of the Plan. [Barwick CJ also said the states had an interest in the Commonwealth’s surplus revenue sufficient to give them standing in this suit: 134 CLR at 365. In taking this view, he appeared [page 550] to accept that ss 81 and 83 of the Constitution give the Commonwealth a substantive power to spend (134 CLR at 365):] As I have pointed out, the [Appropriation] Act, in traditional form, both authorizes the expenditure of part of the Consolidated Revenue Fund and, to enable that expenditure, appropriates so much of the Fund as is necessary to do so. It cannot be said that the Act does nothing, merely earmarking part of the Consolidated Revenue Fund which remains as it was before appropriation. The real operation of the Act is to provide an authority for expenditure so as to satisfy the terms of s 83 … [Stephen J said that the present proceedings were concerned with a ‘special type of Act of Parliament’ (134 CLR at 386):]

Stephen J: … When an item in an Appropriation Act is attacked as ultra vires it is not in any real sense the Commonwealth Parliament’s legislative power that is attacked but rather the taking of the first step in the expenditure of moneys on a particular purpose. … It is, then, with this special type of Act of Parliament that the present proceedings are concerned. It is an Act which, while a necessary precondition to lawful disbursement of money by the Treasury, is not in any way directed to the citizens of the Commonwealth; it does not speak in the language of regulation, it neither confers rights or privileges nor imposes duties or obligations. It only permits of moneys held in the Treasury being paid out, upon the Governor-General’s warrant, to departments of the Government. Its importance is essentially confined to the polity in question, here the federal polity; the control which, by its means, is exercised by the legislature over proposed government expenditure is of significance within the framework of that polity but has no direct effect upon the powers or interests of the other component parts of the federation, the States. How then can the present plaintiffs, the State of Victoria and its Attorney-General, have any standing to complain of this legislative authorisation of proposed federal expenditure? The answer is, in my view, that they cannot. The State itself has no concern with the mode of expenditure of federal revenue unless it be associated with some claim to surplus revenue of the Commonwealth under s 94 of the Constitution, but the present proceedings are no more appropriate to raise any such claim than were those in Attorney-General (Vict); Ex rel Dale v The Commonwealth (‘the Pharmaceutical Benefits Case’) (1945) 71 CLR 237; I would adopt what Latham CJ there said (at 247). The plaintiffs did not seek to support standing by reference to surplus revenue, no doubt both because of the Commonwealth’s use of trust funds, sanctioned in New South Wales v Commonwealth (1908) 7 CLR 179 and exemplified, in refined form, in s 7 of the

present Appropriation Act and because, in any event, the very large deficit budgeted for effectively eliminates it from consideration. … … I conclude that where the federal legislation which is impugned is no more than an Appropriation Act, whose provisions not only do not extend to and operate within any State and do not affect, still less interfere with, public rights but have no ordinary law-making function at all, not purporting to govern the conduct of the citizens of any State or of the Commonwealth and having no injurious effect upon their trading activities or other rights, the Attorney-General of a State has no standing to sue. … what is complained of is not truly an instance of law making but rather an example of the exercise of fiscal control over the executive by the legislature. [Mason J said that there had been some dispute over the source of Commonwealth authority to appropriate moneys, and continued:] [page 551] Mason J: … The weight of opinion in the Pharmaceutical Benefits case (1945) 71 CLR 237 was that s 81 defined the scope and extent of the power, a view confirmed by the observation of the court in Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 454 … In ascertaining the meaning of ‘for the purposes of the Commonwealth’, which is the critical expression in s 81, it is necessary to keep in mind the function and purpose of an Appropriation Act. Section 83 in providing that ‘No money should [sic] be drawn from the Treasury of the Commonwealth except under appropriation made by law’, gives expression to the established principle of English constitutional law enunciated by Viscount Haldane in Auckland Harbour Board v R [1924] AC 318

at 326: ‘no money can be taken out of the consolidated Fund into which the revenues of the State have been paid, excepting under a distinct authorisation from Parliament itself’. An Appropriation Act has a twofold purpose. It has a negative as well as a positive effect. Not only does it authorise the Crown to withdraw moneys from the Treasury, it ‘restrict(s) the expenditure to the particular purpose’, as Isaacs and Rich JJ observed in Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 224. Their Honours, after noting that an Appropriation Act is ‘financial, not regulative’, continued at 224–5: ‘It … neither betters nor worsens transactions in which the Executive engages within its constitutional domain, except so far as the declared willingness of Parliament that public moneys should be applied and that specified funds should be appropriated for such a purpose is a necessary legal condition of the transaction.’ An Appropriation Act therefore is something of a rara avis in the world of statutes; its effect is limited in the senses already explained; apart from this effect it does not create rights, nor does it impose duties. … [Mason J said that a limited reading of ‘for the purposes of the Commonwealth’ in s 81 would be consistent with the Commonwealth’s limited legislative power, and would increase the states’ chances of receiving surplus revenue.] … However, the support which these considerations give to the plaintiffs’ case are, I think, outweighed by other factors which point to an opposite conclusion. The annual appropriations are a central feature of the financial arrangements made for the government of the country. It is not lightly to be supposed that the framers of the Constitution intended to circumscribe the process of parliamentary appropriation by the constraints of constitutional power and thereby to expose the items in an Appropriation Act to judicial scrutiny and declarations of invalidity. Consequences more

detrimental and prejudicial to the process of Parliament would be difficult to conceive. Any item in the Act would be subject to a declaration of invalidity after the Act is passed, even after the moneys in question are withdrawn from Consolidated Revenue and perhaps even after the moneys are expended, for an appropriation, if it be unlawful and subject to a declaration of invalidity, does not cease to have that character because acts have taken place on the faith of it. The adverse consequences of a narrow view of s 81 do not stop at this point. It has been the practice, born of practical necessity, in this country and in the United Kingdom, to give but a short description of the particular items dealt with in an Appropriation Act. No other course is feasible because in many respects the items of expenditure have not been thought through and elaborated in detail. How is the short description of an item contained in the schedule to the Act to serve as the fulcrum of constitutionality? If it fails to throw sufficient illumination on the area of doubt, is the court to have regard to supplementary material, as it has been invited to do in this case, and if so, to what material will it have recourse? These [page 552] questions, which to my mind admit of no satisfactory solution, illustrate the problems inherent in the narrow construction offered by the plaintiffs and the hazards attending the processes of Parliament if that construction is accepted. Another consequence of the plaintiffs’ view of s 81 is that it would deprive the Commonwealth of the power to make grants for purposes thought to be deserving of financial support by government, yet standing outside the area of Commonwealth power, and not involving any exercise of the Commonwealth’s executive power. Over the years there have been many instances of appropriations made by the Parliament to persons and bodies

and for purposes which appear to have little, if any, connexion with the functions and powers of the Commonwealth under the Constitution. On the plaintiffs’ argument these appropriations are invalid. The consequence would be that public money has been illegally withdrawn from the Treasury and paid away. And for the future the Commonwealth, subject to the authority which s 122 provides, could make such grants only through the agency of the States under s 96. Although some have discovered in s 96 of the Constitution a power to make grants to the States which would not otherwise exist, the section should in my view be seen as a provision which puts beyond question the power of Parliament to attach conditions to grants made to the States, as to which doubts would certainly have existed had explicit provision not been made. But it could scarcely be doubted that in the absence of s 96 the Parliament would have enjoyed the power to make unconditional grants to the States. So much at least would be implied from the relationship subsisting between the Commonwealth and the States as constituent elements in the federation and the possession by the Commonwealth of its taxation and other financial powers. The presence of s 96 is therefore not a reason for confining s 81 as the plaintiffs would suggest. … … It follows, then, that I would give to the words ‘for the purposes of the Commonwealth’ in s 81 the meaning ascribed to them by Latham CJ in the Pharmaceutical Benefits case (1945) 71 CLR at 256, that is, for such purposes as Parliament may determine. But this is not to say that the Commonwealth has an unlimited executive power or that a statutory appropriation provides lawful authority for the engagement by the Commonwealth in particular activities. An appropriation, as I have explained, has a limited effect. It may provide the necessary parliamentary sanction for the withdrawal of money from Consolidated Revenue and the payment or subscription of money to a particular recipient or for a

particular purpose but it does not supply legal authority for the Commonwealth’s engagement in the activities in connexion with which the moneys are to be spent. Whether the Commonwealth can engage in any specific activities depends upon the extent of the Commonwealth’s legislative, executive and judicial powers. [Mason J went on to conclude that the executive power of the Commonwealth Government did not extend to implementing the Australian Assistance Plan. The government could undertake those executive activities which were consistent with the ‘responsibilities allocated to the Commonwealth by the Constitution’: 134 CLR at 396. These included not only the matters listed in s 51 (as within the Commonwealth’s legislative power) but also ‘enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation’, such as scientific and public health research: 134 CLR at 397. However, the executive power of the Commonwealth was not without limits and it did not extend to the activities included in the Australian Assistance Plan. ‘The carrying into execution of that Plan’, he said, ‘should be restrained by injunction’: 134 CLR at 401. (This aspect of Mason J’s judgment is extracted at 7.5.57C). He also held [page 553] that the states had sufficient standing to challenge the Commonwealth’s expenditure: this was based on their interest in maintaining the ‘division of powers and … consequential allocation of responsibilities between the Commonwealth and the States’: 134 CLR at 401.] Jacobs J: … In my opinion the appropriation by the Commonwealth Parliament of moneys of the Commonwealth to the purposes stated in the Appropriation Act cannot by itself be the subject of legal challenge. The appropriation is a matter internal to the Government of the Commonwealth. It may not

make valid anything which cannot be validated. That depends on the breadth of the Commonwealth power of appropriation and expenditure expressed in s 81 and on the meaning of the words therein ‘for the purposes of the Commonwealth’. However, even when those words are given a limited meaning it does not follow that the Appropriation Act or any part thereof can be declared invalid. The appropriation is no more than an earmarking of the money, which remains the property of the Commonwealth. All it does is to disclose that the Parliament assents to the expenditure of the moneys appropriated for the purposes stated in the appropriation. The Crown may then within the law governing appropriation of its money expend those moneys. It is given ‘the authority and the opportunity’ so to do: Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 222. … [After pointing to other difficulties in framing relief against alleged ultra vires Commonwealth expenditure (134 CLR at 411–12), Jacobs J continued:] … For these reasons alone the plaintiffs have made out no case for relief even on the assumption that some part of the proposed expenditure may be beyond Commonwealth power. That assumption, however, does not appear to me to be correct. Moneys may be appropriated and therefore expended pursuant to that appropriation ‘for the purposes of the Commonwealth’. It appears to me that the view of the majority of the court in Attorney-General (Vict) v Commonwealth [Pharmaceutical Benefits Case] (1945) 71 CLR 237 was that the power of appropriation was limited by the nature and purposes of the Government of the Commonwealth but that, on the other hand, the purposes of the Commonwealth may not only fall within a subject matter of general or particular power prescribed in the Constitution but may also be other purposes which now adhere fully to Australia as a nation externally and internally sovereign: cf per Starke J at 266. The growth of national identity results in a corresponding growth in the area of activities which have an

Australian rather than a local flavour. Thus, the complexity and values of a modern national society result in a need for coordination and integration of ways and means of planning for that complexity and reflecting those values. Inquiries on a national scale are necessary and likewise planning on a national scale must be carried out. Moreover, the complexity of society, with its various interrelated needs, requires co-ordination of services designed to meet those needs. Research and exploration likewise have a national, rather than a local, flavour. In two ways the Australian Assistance Plan is in substance within the powers of the Commonwealth. First, it is an expenditure of money in the exercise by the Commonwealth of its executive power to formulate and co-ordinate plans and purposes which require national rather than local planning and of its legislative power to appropriate its funds accordingly. Secondly, in so far as the proposed expenditure does not fall directly within a specific power of the Commonwealth it is an expenditure of money which is incidental to the execution by the Commonwealth of its wide powers respecting social welfare. A considerable part of the proposed expenditure falls or may fall directly within Commonwealth power either in respect of specific subject matter or in respect of particular classes of persons but in so far as some expenditure may be outside Commonwealth powers in respect of specific subject matters or in respect of [page 554] particular classes of persons it seems to me that the expenditure falls within the incidental power in s 51(xxxix). The purposes of the Commonwealth certainly include all the purposes comprehended within the subject matters of s 51 in respect of which the Commonwealth may legislate, including the subject matter comprised in s 51(xxxix). The purposes of the Commonwealth include purposes comprehended within the

Commonwealth power in respect of matters incidental to the execution of the legislative power to appropriate and the executive power to expend moneys for the purposes of the Commonwealth. Moneys may therefore be appropriated and expended for that purpose as well as for purposes wholly comprehended within the other subject matters of Commonwealth power. … [Earlier, Jacobs J had said (134 CLR at 404–5) the prerogative powers of the Crown extended to the expenditure of money appropriated by parliament. As those prerogatives were part of the executive power of the Commonwealth, the Commonwealth Government could legitimately spend the moneys appropriated for the Australian Assistance Plan.]

5.4.18 McTiernan and Murphy JJ held, in separate judgments, that the Commonwealth Parliament could appropriate money for those purposes determined by parliament (134 CLR at 367–9, 417) and that the act of spending appropriated moneys on the Australian Assistance Plan was within the executive power of the Commonwealth: 134 CLR at 370, 419. They did not decide whether the plaintiffs had standing to challenge an appropriation, although Murphy J was ‘inclined to agree with what has been said by Stephen J’: 134 CLR at 424. Gibbs J held, for reasons substantially the same as those of Barwick CJ, that the appropriation was outside the purposes of the Commonwealth, and that the expenditure by the Commonwealth Government was outside its executive power: 134 CLR at 373–9. In the result, the plaintiffs’ demurrer was overruled and the action dismissed. 5.4.19 Overall, the decision in the Australian Assistance Plan case went some way towards reversing the narrowing effect of AttorneyGeneral (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits

case) (1945) 71 CLR 237 (see 5.4.14), at least to the extent that the plaintiffs were unsuccessful in their challenge to the Australian Assistance Plan. The case did not resolve the scope of the Commonwealth’s power to appropriate and spend money, however. 5.4.20 In Davis v Commonwealth (1988) 166 CLR 79 7.5.59C, the High Court rejected a challenge to the validity of s 10 of the Australian Bicentennial Authority Act 1980 (Cth), which appropriated $17.95 million for the purposes of the authority. Those purposes included the commemoration of the bicentenary in 1988 of the first European settlement in Australia. The court concluded that this commemoration was within the executive power of the Commonwealth (see 7.5.59C); and Mason CJ, Deane and Gaudron JJ observed that ‘[a]n appropriation for a valid exercise of the executive power of the Commonwealth is necessarily an appropriation for a purpose of the Commonwealth within the meaning of s 81 of the Constitution’, even on the narrow view of that section: 166 CLR at 95. The three justices noted (at 95–6) that in the Australian Assistance Plan case: … McTiernan, Mason and Murphy JJ concluded that s 81 enabled the Parliament to appropriate for such purposes as it may determine. Jacobs J considered that the validity of an appropriation is not justiciable and is therefore not susceptible to legal challenge. The case therefore stands as an authority for the proposition that the validity of an appropriation act

[page 555] is not ordinarily susceptible to effective legal challenge. It is unnecessary to consider whether there are extraordinary circumstances in which an appropriation of money by the Parliament may be susceptible to such

challenge. It suffices to say that, if there be such cases, the present is not one of them.

5.4.21 The conditions governing the Commonwealth’s power to appropriate money were considered in Combet v Commonwealth (2005) 224 CLR 494. In 2005, the Howard Government stated that it planned to introduce a national industrial relations system relying substantially on the Commonwealth’s power over corporations, s 51(xx): see the discussion of New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1 at 4.2.29C. The Australian Council of Trade Unions (the ACTU) commenced a campaign opposing the reforms. The government started an advertising campaign (that ultimately cost $55 million) extolling the virtues of the reforms. The advertisements were funded by money drawn from the Commonwealth Treasury. Greg Combet, the secretary of the ACTU, commenced proceedings arguing that the Commonwealth’s advertising expenditure was not authorised by the Appropriation Act (No 1) 2005–2006 (Cth). A majority of the court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) upheld the validity of the expenditure. McHugh and Kirby JJ dissented. While the question before the court was one of statutory construction, Gummow, Hayne, Callinan and Heydon JJ delivered a joint judgment which explored ss 81 and 83 and related constitutional provisions. 5.4.22C

Combet v Commonwealth (2005) 224 CLR 494 (some footnotes omitted)

Gummow, Hayne, Callinan and Heydon JJ: …

… Chapter 4 of the Constitution Reference was made at the beginning of these reasons to ss 81 and 83 of the Constitution and to the propositions that appropriations are for the purposes of the Commonwealth and that they are made by law. Two other provisions of Ch 4 of the Constitution are relevant to a proper understanding of the system of appropriation for which the Constitution provides. They are ss 94 and 97. First, s 94 empowered the Parliament (after five years from the imposition of uniform duties of customs) to provide ‘on such basis as it deems fair, for the monthly payment to the several States of all surplus revenue of the Commonwealth’. The possibility may now appear to be remote that the federal Parliament would provide for the distribution of surplus revenue. Nonetheless, s 94 emphasises the importance, to other integers of the federation, of the prohibition in s 83 against drawing from the Treasury except under appropriation made by law. Section 97, on the other hand, is important because it emphasises that ss 81 and 83 are directed to regulating the relationship, in matters of finance, between the Executive and the Parliament. Section 97 provides for the review and audit of receipts and expenditures on account of the Commonwealth. Until the Parliament otherwise provided, colonial laws with respect to the receipt of revenue and expenditure of money on account of the government and the review and audit of receipt and expenditure were to apply to the receipt of revenue and expenditure of money on account of the Commonwealth. And s 51(xxxvi) gave to the federal Parliament power to make laws with respect to a matter ‘in respect of which this Constitution makes provision until the Parliament otherwise provides’. In fact, one of the earliest statutes [page 556]

enacted by the federal Parliament was the Audit Act 1901 (Cth). But what the audit process required by s 97 reveals is that the constitutional provisions about finance were constructed on the basis that the Executive’s expenditure of money was to be reviewed by an office holder who, under the colonial arrangements mentioned in s 97, had been obliged to report to Parliament the results of that review. Part 5 of Ch 1 of the Constitution The provisions of Ch 4 to which reference has been made must also be understood in the light of those provisions of Pt 5 of Ch 1 (in particular ss 53, 54 and 56) which regulate the relations between the two Houses of the federal Parliament in respect of money Bills. Each of those three sections deals with proposed laws appropriating revenue or moneys. They are directed, therefore, to steps taken within the Houses of Parliament before the law is made. Four aspects of ss 53, 54 and 56 are of importance for present purposes. First, there are those aspects of s 53 which forbid the Senate amending proposed laws appropriating revenue or moneys ‘for the ordinary annual services of the Government’, but permit the Senate to return such a law to the House of Representatives requesting omission or amendment of any item or provision. Secondly, s 53 provides that ‘[p]roposed laws appropriating revenue or moneys … shall not originate in the Senate’. Thirdly, s 54 provides that a proposed law which appropriates revenue or moneys for the ordinary annual services of the Government ‘shall deal only with such appropriation’. Finally, there is the provision in s 56 that ‘unless the purpose of the appropriation has in the same session been recommended by message of the GovernorGeneral to the House in which the proposal originated’ a vote, resolution, or proposed law for the appropriation of revenue or moneys shall not be passed. What thus is revealed is not only that appropriations ‘for the

ordinary annual services of the Government’ are treated as a distinct class of appropriation (in respect of which the Senate has no power of amendment) but also that it is the Executive Government which begins the process of appropriation. This the Executive Government does by specifying the purpose of the appropriation by message to the House of Representatives. In the present case, the message recommended that an appropriation be made ‘for the purposes of a Bill for an Act to appropriate money out of the Consolidated Revenue Fund for the ordinary annual services of the Government, and for related purposes’ and identified that Bill as the Appropriation Bill (No 1) 2005–2006. As noted earlier, what became s 15 of the Act appropriated the Consolidated Revenue Fund ‘as necessary for the purposes of this Act’. The purposes of the appropriation were ‘the purposes of [the] Act’. [After reviewing constitutional and statutory provisions for the review and audit of the receipt of revenue and Commonwealth spending (see s 97), the plurality said:] The plaintiffs emphasised what they contended to be an established parliamentary understanding of what is an appropriation ‘for the ordinary annual services of the Government’ (Constitution, ss 53, 54). They contended that the expression is one which does not encompass appropriations for new policies. Because the Appropriation Act (No 1) 2005–2006 was an Act to appropriate money for the ordinary annual services of the Government it followed, so the plaintiffs submitted, that the Act should not, or at least should not readily, be construed as making an appropriation to advertise a ‘reform package’, let alone one in respect of which draft implementing legislation had not been prepared. [The plurality then reviewed the ‘long history of debate between the two Houses of the federal Parliament about what is meant by “the

ordinary annual services of the Government”’ (224 CLR at 572), and noted that:] [page 557] From time to time, particularly in the early 1950s and early 1960s, questions arose, both between the two Houses and within the Senate, about what proposed laws should be understood as falling within the prohibition against Senate amendment, contained in s 53 of the Constitution, or about how the Government should frame its appropriation Bills. In 1965, the two Houses reached an accommodation which has come to be known as the ‘Compact of 1965’. Its terms were reflected in a statement (Australia, House of Representatives; Parliamentary Debates (Hansard); 13 May 1965, p 1485) made to the House of Representatives by the then Treasurer, Mr Holt, on the second reading of the Supply Bill (No 1) 1965–1966. In particular, it was agreed that one appropriation Bill would be presented for the ordinary annual services of the Government and that a separate Bill would be presented containing appropriations for expenditure on: (a) the construction of public works and buildings; (b) the acquisition of sites and buildings; (c) items of plant and equipment which are clearly definable as capital expenditure; (d) grants to the States under s 96 of the Constitution; and (e) new policies not authorised by special legislation. This second Bill would be regarded as not for the ordinary annual services of the Government and thus subject to amendment in the Senate. It was further agreed, however, that subsequent appropriations for the last category of items, ‘new policies not

authorised by special legislation’, would be included in an appropriation Bill not subject to amendment by the Senate. Writing in the 1972 edition of Australian Senate Practice, Odgers said (p 331) of the inclusion of this last category of expenditure (new policies not authorised by special legislation) in a Bill amenable to amendment by the Senate, that: One of the virtues of this practice is that Parliament is thereby protected from the possibility of appropriations for any new policies not being readily identifiable in an omnibus Appropriation Bill. Members of both Houses can approach a consideration of the annual appropriations sure in the knowledge that only appropriations for services already approved are included in one Appropriation Bill, while those for any new policies not previously authorised attract the search-light of attention in a separate Bill. … the Senate resolved, on 17 February 1977, to reaffirm that appropriations for (among other things) ‘new policies not previously authorised by special legislation’ were not appropriations for the ordinary annual services of the Government (Australia, Senate, Journals of the Senate, 1976–1977, No 82, 17 February 1977, p 572). [The plurality then explained how departmental ‘running costs’ became authorised in subsequent budgets, and the President of the Senate concurred in these arrangements (224 CLR at 574–5). The plurality then observed:] The significance to be attached to parliamentary practice The Constitution makes the references it does to proposed laws appropriating revenue or moneys for the ordinary annual services of the Government for the purpose of regulating relations between the two Houses of the federal Parliament. It is unnecessary to decide whether a dispute about the application of those aspects

of ss 53 and 54 could give rise to a matter to be decided by this Court. Nor is it necessary to decide what limits there may be to the use that might be made in construing an appropriation Act of exchanges between the Houses, Ministers and presiding officers of the kind that have been described above. … [page 558] … the Appropriation Act (No 1) 2005–2006 required that money issued out of the Consolidated Revenue Fund for a departmental item be applied only for the departmental expenditure of the entity. Making an appropriation for a departmental item that may be applied only for an entity’s departmental expenditure (not otherwise specified or identified) does not represent any radical departure from previous federal parliamentary practice. As the Portfolio Budget Statements for the Department said in its ‘User Guide’, under present budget and accounting arrangements, ‘departmental items’ are: Assets, liabilities, revenues and expenses in relation to an agency or authority that are controlled by the agency. Departmental expenses include employee and supplier expenses and other administrative costs, which are incurred by the agency in providing its goods and services (emphasis added). By contrast, ‘administered items’ are: Revenues, expenses, assets and liabilities that are managed by an agency or authority on behalf of the Government according to set government directions. Administered expenses include subsidies, grants and personal benefit

payments and administered revenues include taxes, fees, fines and excises (emphasis added). As counsel for the defendants rightly submitted, it is important to recognise that the immediate predecessor to the present system of appropriations was the making of a single lump sum appropriation for ‘running costs’ of a department. And there is a very long history of the federal Parliament making appropriations that are not more closely identified than as being for the purpose of departmental expenditure. Indeed, the very first Act passed by the federal Parliament (an Act to grant and apply out of the Consolidated Revenue Fund a specified sum to the service of the period ending on 30 June 1901) contained items such as ‘For the Maintenance of the Department of the Minister of Defence’ which, although divided into sums of expenditure in each State, were not further allocated between purposes or activities. Further, as noted earlier, immediately before the adoption of the running costs system, the appropriation for the maintenance of departments contained a large sum not specified further than as ‘Administrative Expenses’. It is for the Parliament to identify the degree of specificity with which the purpose of an appropriation is identified (Surplus Revenue Case (1908) 7 CLR 179 at 200 per Isaacs J; AttorneyGeneral (Vic) v The Commonwealth (1945) 71 CLR 237 at 253, 256 per Latham CJ; Victoria v The Commonwealth and Hayden (1975) 134 CLR 338 at 404 per Jacobs J; cf Cincinatti Soap Co v United States (1937) 301 US 308 at 321–322). It may readily be accepted that the constitutional provisions examined earlier in these reasons are to be understood as providing for what, in 1903, was said in relation to the House of Commons (Redlich, The Procedure of the House of Commons (1908), vol 3, p 170) to be ‘a comprehensive and continuous guardianship over the whole finance’ of the Commonwealth. But the manner of exercising that guardianship, within the relevant constitutional limits, is to be determined by the Parliament. …

[The decision confirmed that in large measure it is the parliament that controls appropriation, and declined the opportunity to consider whether Mr Combet had standing.]

[page 559] 5.4.23 In Pape v Federal Commissioner of Taxation (2009) 238 CLR 1, the court was invited to reconsider the meaning of the phrase ‘to be appropriated for the purposes of the Commonwealth’ in s 81 of the Constitution. The Tax Bonus for Working Australians Act (No 2) 2009 (Cth) came into force on 18 February 2009 after a speedy passage through parliament. It provided for payment of what was described as a ‘tax bonus’ of between $250 and $900 to individuals with a taxable income for the 2007–08 financial year of up to $100,000 and who had a tax liability of more than nil for that same period. The payments were designed to stimulate the Australian economy as part of the Commonwealth’s response to the ‘global financial crisis’ then being experienced. It was accepted that Mr Pape was entitled under the Act to a $250 bonus payment. In late February 2009, before any payments had been made, he commenced proceedings in the High Court arguing that the Act was invalid. A majority (French CJ, Gummow, Crennan and Bell JJ) upheld the Act under ss 51(xxxix) and 61 of the Constitution. While this outcome was a win for the Commonwealth, all members of the court effectively drew a line under debate about the broad and narrow meanings of ‘for the purposes of the Commonwealth’ by

finding that s 81 was not, in fact, a substantive spending power. Rather, the justices said that Commonwealth expenditure, as opposed to the bare appropriation of funds, must find support in provisions of the Constitution other than s 81. As the subsequent decisions in Williams v Commonwealth (No 1) (2012) 248 CLR 156 7.5.65C and Williams v Commonwealth (No 2) (2014) 252 CLR 416 7.5.69C demonstrate, the practical effect of the ruling in Pape is to constrain the Commonwealth’s power to spend. 5.4.24C Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 (most footnotes omitted)

Gummow, Crennan and Bell JJ: … … Question 1 — standing … The plaintiff seeks declarations that the tax bonus payable to him by the Commissioner ‘is unlawful and void’, and that the Bonus Act is invalid, and an interlocutory injunction restraining the Commissioner from making any payment to him of the tax bonus. … The defendants submit that the plaintiff has standing to challenge the payment of the tax bonus to him but ‘does not have standing to challenge the validity of the payment of tax bonus to anyone else’. … This and other submissions to like effect should be rejected. … The disposition of the controversy between the plaintiff and the Commissioner and the Commonwealth does not turn solely upon facts or circumstances unique to the plaintiff. If the plaintiff

succeeds in establishing, as a necessary step in making out his case for relief, that the Bonus Act is invalid, then the reasoning of the Court upon the issue of invalidity would be of binding force in subsequent adjudications of other disputes. Hence the very great utility in granting declaratory relief in the plaintiff’s action. … [page 560] Question 3 — appropriation Question 3 of the Special Case asks: Is payment of the tax bonus to which the plaintiff is entitled under the [Bonus Act] supported by a valid appropriation under ss 81 and 83 of the Constitution? … The question assumes that the Commissioner is bound by the terms of s 83 and that this may present a justiciable issue as to the existence of an ‘appropriation’ within the meaning of that section and s 81. Notwithstanding the doubts expressed by Jacobs J, and perhaps by Mason J, in Victoria v The Commonwealth and Hayden (AAP Case) the contrary is not submitted in the present dispute. [Gummow, Crennan and Bell JJ accepted that s 16 of the Taxation Administration Act 1953 (Cth) appropriated money for payment of the tax bonus. The effect of that appropriation was, however, limited:] … The term ‘appropriation’ is an ordinary English word but it is apparent that it is used in the Constitution in a particular sense. The term appears in provisions of the Constitution dealing with the carriage of financial measures within the Parliament. These processes require recommendation by message from the Governor-General to the House of Representatives (s 56) and ss 53 and 54 lay down the respective roles of the two legislative

chambers. Sections 81 and 83 on their face are concerned with the treatment of moneys raised or received by the Executive Government of the Commonwealth and the imposition of a requirement for the drawing of money from the Treasury. The term ‘appropriation’ is used here to identify the conferral of authority upon the Executive to spend public moneys, rather than the subsequent exercise of that authority and the debiting of the relevant account. This understanding is apparent in the statement by Griffith CJ in New South Wales v The Commonwealth (1908) 7 CLR 179 at 190: The appropriation of public revenue is, in form, a grant to the Sovereign, and the Appropriation Acts operate as an authority to the Treasurer to make the specified disbursements. In the same case, Isaacs J said of s 81 [at 200]: ‘Appropriation of money to a Commonwealth purpose’ means legally segregating it from the general mass of the Consolidated Fund and dedicating it to the execution of some purpose which either the Constitution has itself declared, or Parliament has lawfully determined, shall be carried out. The use of the phrase ‘the Constitution has itself declared, or Parliament has lawfully determined’ is significant. Isaacs J was distinguishing the grant of authority to the Executive to appropriate from subsequent expenditure. The grant of an appropriation is not by its own force the exercise of an executive or legislative power to achieve an objective which requires expenditure. … There is, as Mason J indicated in the AAP Case [(1975) 134 CLR 338 at 392–393], no analogy between the validity of legislation and the validity of expenditure. Jacobs J, with respect, correctly said of an appropriation that it ‘is no more than an

earmarking of the money, which remains the property of the Commonwealth’ and the disclosure ‘that the [page 561] Parliament assents to the expenditure of the moneys appropriated for the purposes stated in the appropriation’ (1975) 134 CLR 338 at 411. To the same effect is the statement by Stephen J in the AAP Case (1975) 134 CLR 338 at 386: When an item in an Appropriation Act is attacked as ultra vires it is not in any real sense the Commonwealth Parliament’s legislative power that is attacked but rather the taking of the first step in the expenditure of moneys on a particular purpose. Stephen J also said of an appropriation Act (1975) 134 CLR 338 at 386–387: It is an Act which, while a necessary precondition to lawful disbursement of money by the Treasury, is not in any way directed to the citizens of the Commonwealth; it does not speak in the language of regulation, it neither confers rights or privileges nor imposes duties or obligations. It only permits of moneys held in the Treasury being paid out, upon the Governor-General’s warrant, to departments of the Government. … Once the nature of the process of parliamentary appropriation is appreciated, the sections of the Constitution which provide for it do not serve as sources of a ‘spending power’ by the width of which is determined the validity of laws which create rights and

impose obligations or otherwise utilise the supply approved by an appropriation. Submissions which assume the contrary found upon statements in the several judgments delivered in Attorney-General (Vic) v The Commonwealth (Pharmaceutical Benefits Case) (1945) 71 CLR 237 and in the AAP Case of a range of opinions as to the construction of ss 81 and 83 and their place in the plan of the Constitution. However, it is fair to say that from those decisions no firm consensus emerges which is to the contrary of what has been said in these reasons. [Referring to the Pharmaceutical Benefits case, Gummow, Crennan and Bell JJ said:] … Dr Coppel KC, who appeared for the Commonwealth [in the Pharmaceutical Benefits Case], relied upon ‘the power to spend under s 81’, which was ‘as wide as the power to tax’, and ‘perhaps, for all practical purposes unlimited’ (1945) 71 CLR 237 at 245. The Commonwealth submitted that s 51(xxxix) provided for the means of execution of the power to spend money. That submission reflected the long held view of those instructing counsel for the Commonwealth that s 81 enabled achievement of a financial outcome for the Executive Government without the need for legislation having a root outside s 81. That view saw a power of expenditure as the concomitant of the wide power of taxation enjoyed by the Commonwealth. It had been vigorously expressed by Sir Robert Garran in his evidence given to the 1929 Royal Commission on the Constitution of the Commonwealth. He said: There is in the Commonwealth Constitution no limitation whatever of the purposes for which money may be raised by taxation. The Commonwealth Government can increase its taxation to any extent, and what constitutional or other reason there can be for limiting its power to spend the money so raised, I confess I am unable to see.

In particular, reliance upon a combination of ss 81 and 51(xxxix) made it unnecessary for the Executive Government of the Commonwealth to risk a narrow construction of what might be achieved by use of the power associated with s 61, with or without legislation relying upon s 51(xxxix). [page 562] That construction of s 81 was urged once more by the Commonwealth as its primary argument in the present case … For the reasons given above and following, it should be rejected. Conclusions respecting s 81 Section 81 does not occupy either of the decisive (but opposing) positions which the plaintiff and the defendants sought to give it. The section does not support the validity of the Bonus Act (contrary to the defendants’ submission), and the existence of the appropriation made by s 16 of the Administration Act is not impeached by the absence of s 81 as legislative support for the Bonus Act (contrary to the plaintiff’s second submission). There is no support in the text or structure of the Constitution for the construction for which the plaintiff contends … treating the phrase in s 81 ‘for the purposes of the Commonwealth’ as containing words of limitation of legislative power. The plaintiff answers reliance by the defendants upon s 16 of the Administration Act as the appropriation supporting the payments by the Commissioner under s 7 of the Bonus Act by construing s 81 as requiring a link to a head of legislative power. That submission should be rejected. An issue of legislative power arises, but it does so with the challenge by the plaintiff … to the validity of the Bonus Act itself. It does not arise with respect to the operation of s 81.

[The justices also observed that:] … as the dispute in Combet v The Commonwealth illustrates and as the Court in that case held, it is for the legislature to identify the degree of specificity with which the purpose of an appropriation is identified. One consequence is that, as Jacobs J indicated in the AAP Case, the description given to items of appropriation provides an insufficient textual basis for the determination of issues of constitutional fact and for the treatment of s 81 as a criterion of legislative validity. This underlines the conclusion reached earlier in the present reasons which denies to s 81 the character of a legislative ‘spending power’. [Thus, while Gummow, Crennan and Bell JJ said that ‘for the purposes of the Commonwealth’ in s 81 were not ‘words of limitation’ (238 CLR at 75), an appropriation was simply ‘an earmarking’ of funds by Parliament: 238 CLR at 73, quoting Jacobs J in the Australian Assistance Plan case. Such earmarking was an essential precursor to Commonwealth expenditure but did not itself empower the Commonwealth to make the payments concerned. French CJ took the same general approach as Gummow, Crennan and Bell JJ to the question of the plaintiff’s standing: 238 CLR at 34–6. The Chief Justice likewise found that ss 81 and 83 did not confer a positive power to spend. He differed though from those justices by adopting a narrow reading of ‘for the purposes of the Commonwealth’:] French CJ: … It is necessary now to consider the so-called ‘appropriations power’, which has been called ‘the spending power’, under ss 81 and 83 of the Constitution. Having regard to their text, their historical antecedents in the history of responsible government and their development at the Conventions of the 1890s, these provisions are better seen as parliamentary controls of the exercise of executive power to expend public moneys than as a substantive source of such power. It follows that the ‘purposes of the Commonwealth’, for which appropriation may be

authorised, are to be found in the provisions of the Constitution and statutes made under it which, subject to appropriation, confer substantive power to expend public moneys. … [The Chief Justice restated this point later in his judgment:] [page 563] … In my opinion, the history, the text and the logic underlying the operation of ss 81 and 83 are inconsistent with their characterisation as the source of a ‘spending’ or ‘appropriations’ power, notwithstanding their description as such in some of the judgments of Justices of this Court. There is no clear indication in the judgments of a majority consensus in support of a contrary view. … Neither provision confers power. Section 81 directs all revenues or moneys made by the Executive Government into the Consolidated Revenue Fund. Such moneys are only to be appropriated from that Fund for ‘the purposes of the Commonwealth’. By virtue of s 83 no money can be drawn from the Fund absent such an appropriation by law, that is to say by statute. Substantive power to spend the public moneys of the Commonwealth is not to be found in s 81 or s 83, but elsewhere in the Constitution or statutes made under it. That substantive power may be conferred by the exercise of the legislative powers of the Commonwealth. It may also be an element or incident of the executive power of the Commonwealth derived from s 61, subject to the appropriation requirement and supportable by legislation made under the incidental power in s 51(xxxix). In my opinion, the Commonwealth’s submission that the Tax Bonus Act can be supported by a combination of ss 81 and 51(xxxix) should not be accepted. The requisite power in this case is to be found in s 61 read with s 51(xxxix), conditioned upon the appropriation requirement in s 83 read with the requirement in s

81 that appropriations must be for ‘the purposes of the Commonwealth’. The preceding conclusions do not involve an undesirable shift in the locus of a spending power of uncertain extent from Parliament to the Executive. They leave in place questions about the scope of the executive power which cannot be answered in the compass of a single case. They involve a rejection of the proposition that s 81 is a source of power to spend money on anything that the Parliament designates as a purpose of the Commonwealth. The ‘purposes of the Commonwealth’ are the purposes otherwise authorised by the Constitution or by statutes made under the Constitution. [After dealing with the nature of ss 81 and 83, French CJ and Gummow, Crennan and Bell JJ went on, in their respective judgments, to find that the Commonwealth had authority to respond to the global financial crisis by the economic stimulus plan involved on the facts using its nationhood power in s 61 of the Constitution. As the Bonus Act facilitated this exercise of executive authority, it followed that it was a valid law with respect to s 51(xxxix). This aspect of the case is extracted at 7.5.63C. Hayne and Kiefel JJ denied that the Bonus Act was supported by ss 51(xxxix) and 61. Instead, they found that the Act could be read down to fall within s 51(ii). In agreeing with the other members of the court that s 81 did not give the Commonwealth a substantive power to spend (238 CLR at 113), they observed:] Hayne and Keifel JJ: Although it is convenient to begin the examination of this branch of the Commonwealth’s arguments by considering s 81 and what is meant in that section by ‘for the purposes of the Commonwealth’, it will ultimately be unnecessary to attempt some definitive exposition of the meaning of this phrase beyond saying that there is evident force in the view that it is not limited to purposes in respect of which the Parliament has express power to make laws. Not least is that so when it is recognised that there may be an appropriation for a valid exercise

of the executive power of the Commonwealth and that, at least to the extent of matters going to the very survival of the polity Australian Communist Party v The Commonwealth (Communist Party Case) (1951) 83 CLR 1 at 187–188 and a class of matters like national symbols and celebrations Davis v The Commonwealth (1988) 166 CLR 79, the [page 564] executive power of the Commonwealth is not bounded by the express grants of legislative power. But it is neither necessary nor possible to attempt to chart the boundaries of the area encompassed by the phrase ‘for the purposes of the Commonwealth’ when it is used in s 81. And in particular, it is not necessary to decide whether the phrase encompasses any purpose determined by the Parliament to be a purpose of the Commonwealth. [Later in the judgment they said:] … asking whether a particular appropriation can be described as being for a purpose of the Commonwealth will seldom if ever yield an answer determinative of constitutional litigation in this Court. There are at least two reasons why that is so. First, the generality with which appropriations are ordinarily expressed will not readily permit examination of whether the purposes thus identified are purposes of the Commonwealth. Secondly, if there is a plaintiff (other than a State AttorneyGeneral) who has standing to challenge a particular expenditure, the question at issue will be about a particular application of money to a particular purpose. That is an inquiry that will turn upon the ambit of the power (legislative or executive) that is said to be engaged if the expenditure is made. …

[Heydon J found the Bonus Act invalid. In arriving at this finding, he also rejected the view that s 81 of the Constitution operates as a substantive power to spend: 238 CLR at 210–13.]

5.4.25 In Plaintiff M68/2015 v Minister for Immigration and Border Protection [2016] HCA 1 at [144]–[145], Gageler J made the following observations about Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 and the related decisions, discussed in Chapter 7, in Williams v Commonwealth (No 1) (2012) 248 CLR 156 7.5.65C and Williams v Commonwealth (No 2) (2014) 252 CLR 416 7.5.69C (some footnotes omitted or edited): Pape v Federal Commissioner of Taxation decided that ss 81 and 83 of the Constitution are not a source of Commonwealth legislative power to authorise executive expenditure, with the result that Executive Government expenditure of appropriated funds involves more than simple execution of the law which has appropriated those funds. There must be executive power to make the expenditure. There is, of course, a difference between spending and doing: ‘[t]he power to make a present to a man is not the power to give him orders’ (Australia, Royal Commission on the Constitution of the Commonwealth, Report of Proceedings and Minutes of Evidence (Canberra), 22 September 1927 at 72 [396] (Sir Robert Garran)). Even prior to Pape, it had never been thought that an appropriation alone provided statutory authority for the Executive Government to engage in activities in relation to which it permitted funds to be spent [AAP Case (1975) 134 CLR 338 at 396]. Williams v The Commonwealth [(2012) 248 CLR 156] was described in Williams v The Commonwealth [No 2] [(2014) 252 CLR 416] as having been characterised by the Commonwealth parties in that latter case as having held ‘that many, but not all, instances of executive spending and contracting require legislative authorisation’. Whether that characterisation is warranted need not be explored. For present purposes,

what is to be taken from the various strands of reasoning in Williams [No 1] is a rejection of any notion that the breadth of Commonwealth executive power is to be measured simply by reference to the reach of Commonwealth legislative power, and a rejection of any notion that the non-statutory and non-prerogative capacity of the Executive Government of the Commonwealth is to be equated for all purposes with the capacity of an individual.

[page 565] 5.4.26 The outcome in Pape v Federal Commissioner of Taxation coupled with Williams v Commonwealth (No 1) (2012) 248 CLR 156 and Williams v Commonwealth (No 2) (2014) 252 CLR 416 casts doubt on the validity of the Commonwealth’s expenditure practices in a range of areas. In Attorney-General (Vic); Ex rel Dale v Commonwealth (Pharmaceutical Benefits case) (1945) 71 CLR 237 (see 5.4.14), Latham CJ adopted the wide view of ‘for the purposes of the Commonwealth’ in s 81. In doing so, he referred to the fact that the Commonwealth had long spent money outside its specific fields of legislative authority (71 CLR at 254): I take as illustrations some past appropriations for purposes in relation to which the Parliament has approved the expenditure of moneys but where, when the purposes are considered in themselves, there is no power to legislate with respect to the matters to which the expenditure relates. In some cases there is only an appropriation of money for the purpose stated, in other cases there are statutes containing detailed provisions for the establishment of organizations for the purpose of spending the money. I mention appropriations for Antarctic exploration, medical research, literary grants and pensions, subscriptions to International organizations … public health, assistance to distressed Australians abroad.

Some of these matters would today be regarded as falling within Commonwealth legislative power (such as subscriptions to international bodies) whereas others (such as literary grants) do not have an obvious connection with a s 51 head of power. In either case, in the absence of Commonwealth legislation supporting the expenditure, there must now be a question-mark over the validity of many such payments and their contemporary counterparts. In particular, the Williams decisions show that the Commonwealth’s executive power in s 61 does not include a general power to spend, even in areas corresponding to a s 51 head of power: see 7.5.64–7.5.69C. For the Commonwealth’s legislative response to the Williams decisions, see 7.5.67. See also A Twomey, ‘Post-Williams Expenditure – When Can the Commonwealth and States Spend Public Money Without Parliamentary Authorisation?’ (2014) 33 University of Queensland Law Journal 9. 5.4.27 What other options does the Commonwealth have, especially if the spending concerned is outside an area assigned to the Commonwealth under the Constitution and cannot be authorised by legislation? An obvious alternative, highlighted by Heydon J in his dissent in Pape v Federal Commissioner of Taxation (2009) 238 CLR 1 (see, for example, at 178–9), is for the Commonwealth Parliament to use its power in s 96 to make tied or untied grants to the states.

Chapter references Articles and book chapters Cass, ‘Lionel Murphy and Section 90 of the Constitution’

in M Coper and G Williams (eds), Justice Lionel Murphy: Influential or Merely Prescient?, The Federation Press, Sydney, 1997 Chordia, Lynch and Williams, ‘Williams v Commonwealth [No 2]: Commonwealth Executive Power and Spending After Williams [No 2]’ (2015) 39 Melbourne University Law Review 306 [page 566] Crommelin and Evans, ‘Explorations and Adventures with Commonwealth Powers’ in G Evans (ed), Labor and the Constitution 1972–1975, Heinemann, Melbourne, 1977 Dawson, ‘Commentary’ in G Evans (ed), Labor and the Constitution 1972–1975, Heinemann, Melbourne, 1977 Fenna, ‘Commonwealth Fiscal Power and Australian Federalism’ (2008) 31 University of New South Wales Law Journal 509 Kerr, ‘Pape v Commissioner of Taxation: Fresh Fields for Federalism?’ (2009) 9 Queensland University of Technology Law and Justice Journal 311 Lindell, ‘Excise’ in M Coper and G Williams (eds), The Cauldron of Constitutional Change, Centre for International and Public Law, ANU, Canberra, 1997 Sackville, ‘Social Welfare in Australia: The Constitutional Framework’ (1973) 5 Federal Law Review 248 Saunders, ‘The Development of the Commonwealth Spending Power’ (1978) 11 Melbourne University Law Review 369

Saunders, ‘Federal Fiscal Reform and the GST’ (2000) 11 Public Law Review 99 Saunders, ‘The Uniform Income Tax Cases’ in H P Lee and G Winterton (eds), Australian Constitutional Landmarks, Cambridge University Press, Cambridge, 2003 Twomey, ‘Post-Williams Expenditure — When Can the Commonwealth and States Spend Public Money Without Parliamentary Authorisation?’ (2014) 33 University of Queensland Law Journal 9 Whitlam, ‘The Labor Government and the Constitution’ in G Evans (ed), Labor and the Constitution 1972–1975, Heinemann, Melbourne, 1977 Williams, ‘“Come in Spinner”: Section 90 of the Constitution and the Future of State Government Finances’ (1999) 21 Sydney Law Review 627 Books and texts La Nauze, The Making of the Australian Constitution, Melbourne University Press, Melbourne, 1972 McMinn, A Constitutional History of Australia, Oxford University Press, Melbourne, 1979 Quick and Garran, The Annotated Constitution of the Australian Commonwealth, Legal Books, Sydney, 1995 (reprint of 1901 edition) Sawer, Australian Federal Politics and Law 1901–1929, Melbourne University Press, Melbourne, 1956 Sawer, Australian Federal Politics and Law 1929–1949, Melbourne University Press, Melbourne, 1963 Sawer, Australian Federalism in the Courts, Melbourne University Press, Melbourne, 1967

Stellios, Zines’s The High Court and the Constitution, 6th ed, The Federation Press, Sydney, 2015 Zines, The High Court and the Constitution, 4th ed, Butterworths, Sydney, 1997

[page 567]

Federalism: The Legal Relations

CHAPTER 6

INCONSISTENCY OF LAWS Federal supremacy 6.1.1 Where two or more legislative authorities share power to make laws which are to operate in a single territory, conflict between the laws of each authority is inevitable. The rule that is applied in all federal systems is that the central law-maker prevails: Wheare, 1963, p 74. 6.1.2 In the Australian federal system, the potential for this type of conflict is high because the allocation of legislative powers between the Commonwealth Parliament and the state parliaments assumes a sharing of responsibilities. The power to legislate on most of the topics in s 51 of the Commonwealth Constitution is not taken away from the states (with a few exceptions; for example, Constitution ss 90, 114, 115). There are some Commonwealth legislative powers which are expressed to be exclusive (for example, Constitution s 52) or which are, practically speaking, exclusive

(Constitution s 51(iv), (xxix), (xxx)). However, the bulk of those powers are concurrent; that is, shared with the state parliaments whose legislative powers are defined in the widest terms in their own Constitution Acts. The framers of the Commonwealth Constitution recognised the potential for Commonwealth–state conflict and made express provision to deal with it. 6.1.3E Commonwealth of Australia Constitution Act 1900 (UK) 5 This Act, and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every State and of every part of the Commonwealth, notwithstanding anything in the laws of any State; and the laws of the Commonwealth shall be in force on all British ships, the Queen’s ships of war excepted, whose first port of clearance and whose port of destination are in the Commonwealth … 109 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.

[page 568] 6.1.4 Geoffrey Lindell has doubted the ‘strict legal necessity’ for s 109 in light of covering cl 5 of the Commonwealth of Australia Constitution Act 1900 (UK) (Lindell, 2005), but the High Court’s

jurisprudence regarding inconsistency of Commonwealth and state laws has proceeded under s 109. 6.1.5 Section 109 deals only with conflicts between Commonwealth and state laws; conflicts between Commonwealth laws and laws of the self-governing territories are not dealt with by s 109. ‘Inconsistency’ between the laws of the Commonwealth and the self-governing territories is termed ‘repugnancy’ and is considered below at 6.1.86–6.1.93.

Requirement of valid and operative laws 6.1.6 Before s 109 of the Constitution can operate, it is necessary to demonstrate that there is a valid law of the Commonwealth and a valid law of a state in conflict: Bayside Council v Telstra Corporation Ltd (2004) 216 CLR 595 at 628. An invalid law creates no rights, duties or obligations; it is said to be void ab initio (from the beginning): South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373 at 409. This means that in any s 109 question, it is necessary, as a logically anterior task, to determine the validity of the state and federal laws. In the event that the state law is invalid (otherwise than by the operation of s 109), the Commonwealth law will simply operate in accordance with its terms, as interpreted by the court. If the Commonwealth law is invalid, the state law will operate in accordance with its terms, as interpreted by the court; see, for example, Pirrie v McFarlane (1925) 36 CLR 170 6.2.59C. 6.1.7 Section 109 has no operation where only one law relevantly operates. Butler v Attorney-General of Victoria (1961) 106

CLR 268 illustrates this point. The case concerned a putative conflict between state and federal legislation concerning the employment of ex-service personnel. In previous litigation the state and federal legislative schemes had given rise to inconsistency questions. However, by 1961 the federal legislation had been repealed. Taylor J said (106 CLR at 283): … it should be noticed that the condition for the operation of the section is that a law of the State shall be found to be inconsistent with a law of the Commonwealth. When this appears the Federal law is to prevail and the latter is to the extent of the inconsistency invalid. The section is … dealing with instruments having the force of the law … That being so it seems to me that the words ‘to the extent of the inconsistency’ must be taken to have a temporal as well as a substantive connotation … The Federal Act can ‘prevail’ only whilst it remains in force and invalidity of the State Act is produced only as the counterpart of the ‘supremacy’ of the Federal Act.

Once analysis has been conducted to determine that the Commonwealth and state laws operating in the circumstances are both valid and operative, the resolution of a s 109 problem can be approached by considering the questions: (1) what does ‘law’ mean for the purposes of s 109?; (2) what does the word ‘inconsistent’ mean in s 109?; and (3) what is involved when a state law is ‘invalid’? [page 569]

What is a ‘law’ for the purposes of s 109? 6.1.8

The word ‘law’ in s 109 is a reference to legislation and

instruments made under the authority of legislation: R v Foster; Ex parte Commonwealth Steamship Owners’ Association (1953) 88 CLR 549 at 556. As the court said in Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 6.1.27C at 523: ‘The expressions “a law of the State” and “a law of the Commonwealth” in s 109 are sufficiently general for s 109 to be capable of applying to inconsistencies which involve not only a statute or provisions in a statute, but also … an industrial order or award, or other legislative instrument of regulation, made under a statute’ (footnotes omitted; see also at 516–18). For example, in Clyde Engineering Co v Cowburn (1926) 37 CLR 466 and Jemena Asset Management (3) Pty Ltd & v Coinvest Ltd (2011) 244 CLR 508, an inconsistency arose between a Commonwealth industrial award and a state law. An industrial award is a regulation made, under the authority of legislation, by a conciliation and arbitration commission that settles the rights and duties of employers and employees in an industrial dispute. Accordingly, the High Court has said that where a state law undermines a Commonwealth industrial award, the inconsistency arises between the state law and the Commonwealth law that authorises the industrial award. 6.1.9 Rules of court may also be classified as ‘laws’ for the purposes of s 109. In Flaherty v Girgis (1987) 162 CLR 574, an inconsistency arose when the appellant claimed that Supreme Court Rules (made pursuant to the Supreme Court Act 1970 (NSW)) governing extraterritorial service of process were inconsistent with the Service and Execution of Process Act 1901 (Cth). The court proceeded on the basis that the rules were a state ‘law’ for the purposes of s 109. A law of the Commonwealth enacted in relation to a particular territory under s 122 of the Constitution is also a ‘law’ for the purposes of s 109 and can

override a state law to the extent of its inconsistency: Lamshed v Lake (1958) 99 CLR 132. 6.1.10 Administrative orders and directions will not be treated as laws of the Commonwealth for the purposes of s 109: Airlines of New South Wales Pty Ltd v New South Wales (No 1) (1964) 113 CLR 1 per Taylor J (with whom Kitto and Windeyer JJ agreed at 31; see also Menzies J at 46. They are not ‘laws’ but involve the exercise of executive power.

The common law is not ‘law’ for the purposes of s 109 6.1.11 In Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101 at 108, Gummow ACJ, Kirby, Hayne, Crennan and Kiefel JJ said that ‘the established understanding [is] that s 109 of the Constitution is not directed to displacement of the common law’. In Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, the High Court adopted Sir Owen Dixon’s account of the relationship between the common law and the Constitution (Dixon, 1965), and concluded there is no separate federal and state common law in Australia: pp 562–3. The common law of Australia must conform to the requirements of the Constitution and can be modified by both Commonwealth and state legislation. 6.1.12 This contrasts with the position in the United States, where federal courts (and, it has been argued, some state courts) develop and apply in limited fields a ‘federal common law’ that differs from the common law of the various states. Federal

common law overrides (‘pre-empts’) state common law — and even state statutes — under the supremacy clause [page 570] in Art VI cl 2 of the United States Constitution (the United States equivalent of s 109): New York Central Railroad Co v Winfield 244 US 147 at 169 (1917) per Brandeis J (dissenting); see also Bellia, 2005.

‘Inconsistent’ The orthodox tests 6.1.13 It is now well established that there are two broad types of inconsistency: direct and indirect. Direct inconsistency involves a contradiction in the terms of the respective provisions and has been identified through the application of two tests: (1) ‘the impossibility of simultaneous obedience test’; and (2) ‘the inconsistent rights’ test. Indirect, or ‘covering the field’, inconsistency involves the idea of the Commonwealth Parliament, as the paramount legislature within the federal system, expressing its intention to cover a field or area exclusively, thereby displacing from that field the operation of any state legislation. Unlike the direct forms of inconsistency, indirect inconsistency does not require a contradiction or contrariety in the terms of the respective provisions. The Commonwealth and state provisions might be entirely consistent in their terms. Yet, inconsistency arises if there

is discernible, in the terms of the statute, an intention to regulate the field exhaustively. 6.1.14 This expansive approach to the scope of s 109 developed over time. In the early years of the High Court, s 109 was given a relatively narrow reading, so that a wide range of state legislation was allowed to coexist with Commonwealth legislation. Early decisions during the first 20 years of the court’s work had applied, rather narrowly, the ‘impossibility of simultaneous obedience’ test; that is, that two laws are inconsistent only when obedience to one law automatically and inevitably involves disobedience to the other law. 6.1.15 One early case which appeared to rely on the ‘impossibility of the simultaneous obedience test’ was R v Licensing Court of Brisbane; Ex parte Daniell (1920) 28 CLR 23. Section 166 of the Liquor Act 1912 (Qld) provided that a local referendum (on liquor trading) ‘shall be held at the Senate election in the year 1917’. But s 14 of the Commonwealth Electoral (Wartime) Act 1917 (Cth) declared that ‘no referendum or vote of electors of any state or part of a state shall be taken under the law of a state’ on a Senate polling day. The court held that the two laws were inconsistent. The majority (Knox CJ, Isaacs, Gavan Duffy, Powers, Rich and Starke JJ; Higgins J dissenting) went on to hold that a local referendum held in a part of Brisbane on 5 May 1917 (the Senate polling day) had no legal effect and could not form the basis for administrative proceedings to declare that part of Brisbane ‘dry’. The majority described the inconsistency as ‘a conflict, or inconsistency, between the State Act authorising and commanding the vote on that day and the Commonwealth Act … forbidding the vote on that day. Then s 109 of the Constitution enacts that in

such a case the State law, to the extent of the inconsistency, is invalid’: 28 CLR at 29. 6.1.16 By the mid-1920s, the High Court developed a more expansive approach to s 109. The shift came in Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466, where a majority of the High Court held that the Forty-Four Hours Week Act 1925 (NSW) was inconsistent with the Conciliation and Arbitration Act 1904 (Cth), which supported an award for the engineering industry throughout Australia. The state legislation provided that [page 571] a worker’s ordinary working hours should not exceed 44 hours a week (s 6(1)(a)) and that any worker covered by a federal award fixing a longer working week should be paid the full award wages for working 44 hours: s 13. The award, made by the Commonwealth Court of Conciliation and Arbitration, provided that each worker covered by the award should be paid a fixed wage for a working week of 48 hours, and that any worker who did not attend for the full time ‘should lose his pay for the actual time of such non-attendance’. Knox CJ and Gavan Duffy J accepted that the operation of s 109 was not limited to the ‘simultaneous obedience test’ of inconsistency. As their Honours said (37 CLR at 478 (emphasis added)), that narrow test is: … not sufficient or even appropriate in every case. Two enactments may be inconsistent although obedience to each of them may be possible without the other. Statutes may do more than impose duties; they may, for instance, confer rights; and one statute is inconsistent with another when it takes away a right conferred by that other even though the right be

one which might be waived or abandoned without disobeying the statute which conferred it.

6.1.17 This inconsistent rights test recognised that legislation can operate in different ways. Not only might it impose duties on persons to comply with legislative commands, but it can also confer rights, liberties or powers. Section 109 inconsistency might arise not only where there are conflicting duties in the respective provisions but also where there is a conflict across duties, rights, liberties or powers: see Aroney et al, 2015, pp 217–18. Because legislative provisions can operate in these different ways, the application of the inconsistent rights test to determine inconsistency requires close attention to the respective provisions to determine whether there is a contradiction in their terms. As the court said in Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 523: ‘[Section] 109 requires a comparison between any two laws which create rights, privileges or powers, and duties or obligations, and s 109 resolves conflict, if any exists, in favour of the Commonwealth’. 6.1.18 On the facts in Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466, Knox CJ and Gavan Duffy J considered that the federal award conferred a right on employers to have their employees work 48 hours a week for a full wage. The state provision, which imposed a duty on employers to pay a full wage for 44 hours a week, was in contradiction to the federal award and, consequently, inconsistent for the purposes of s 109. 6.1.19 Clyde Engineering also saw the early articulation of the indirect form of inconsistency. Isaacs J agreed with Knox CJ and Gavan Duffy J that there was inconsistency for the purposes of s

109, but this conclusion was reached on a broader basis (37 CLR at 489): If … a competent legislature expressly or impliedly evinces its intention to cover the whole field, that is a conclusive test of inconsistency where another legislature assumes to enter to any extent upon the same field … If such a position as I have postulated be in fact established, the inconsistency is demonstrated, not by comparison of detailed provisions, but by the mere existence of the two sets of provisions …

6.1.20 Applying this test, Isaacs J explained that the Conciliation and Arbitration Act not only authorised the Commonwealth Arbitration Court to settle interstate industrial disputes, but indicated that such a settlement (expressed in an award) was ‘to end the dispute and thereby [page 572] conclude the parties’. Whatever the arbitration court decided in the award was a conclusive settlement ‘both as to what is granted and what is refused’: at 37 CLR 491–2: As to the industrial conditions in dispute, an award by force of the Act covers the field, even where a wage is stated as the minimum or where hours are stated as the maximum, and establishes what on that field are to be the reciprocal rights and obligations of the parties bound. Any entry, therefore, of a State upon this field is an intrusion upon occupied federal territory and inconsistent with the award, regardless of the specific terms of the State legislation whether direct or indirect.

The same approach was taken by Starke J, who described the state law as undoing ‘what the Commonwealth tribunal considered a

right and just settlement of [the industrial] dispute taken as a whole. Such provisions are, in my opinion, inconsistent with the law of the Commonwealth and, therefore, invalid’: 37 CLR at 527. Rich J adopted the same approach as Knox CJ and Gavan Duffy J (see 37 CLR at 522), while Higgins and Powers JJ dissented on the ground that an employer could obey the state law without disobeying the Commonwealth award: 37 CLR at 503, 516. 6.1.21 Isaacs J’s ‘covering the field’ test was further stated by Dixon J in Ex parte McLean (1930) 43 CLR 472. 6.1.22C

Ex parte McLean (1930) 43 CLR 472

[McLean was a shearer who was hired by a grazier to shear sheep, according to the terms of a written agreement signed by each of them. An award made by the Commonwealth Arbitration Court, which covered the shearing industry throughout Australia, provided that employers and workers in the shearing industry should observe the conditions of the award and of any agreement into which they entered. Section 44 of the Conciliation and Arbitration Act 1904 (Cth) made it an offence for any person to breach an award. During the course of McLean’s employment, a dispute arose between him and his employer. McLean stopped working and his employer prosecuted him under s 4 of the Masters and Servants Act 1902 (NSW), which made it an offence for a ‘servant’, who contracted to perform work for another person, to neglect to fulfil the contract. McLean was convicted by a magistrate, but applied to the New South Wales Supreme Court for prohibition on the ground that any failure on his part to carry out his work was covered by the Commonwealth award. The matter was then removed to the High Court of Australia under s 40 of the Judiciary Act 1903 (Cth).]

Dixon J: … The same acts or omissions were therefore made subject to the penal sanctions of the Federal enactment and the somewhat different penal sanctions of the State enactment. When the Parliament of the Commonwealth and the Parliament of the State each legislate upon the same subject and prescribe what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the rule of conduct is identical which each prescribes, and s 109 applies. That this is so is settled, at least when the sanctions they impose are diverse: Hume v Palmer (1926) 38 CLR 441. But the reason is that, by prescribing the rule to be observed the Federal statute shows an intention to cover the subject matter and provide what [page 573] the law upon it shall be. If it appeared that the Federal law was intended to be supplementary to or cumulative upon State law, then no inconsistency would be exhibited in imposing the same duties or in inflicting different penalties. The inconsistency does not lie in the mere coexistence of two laws which are susceptible of simultaneous obedience. It depends upon the intention of the paramount legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter. But in the present case, conduct which the State law prescribes, namely, the performance of contracts of service, is a matter with which the Commonwealth Parliament has not itself attempted to deal. Although neglect by a shearer to perform such a contract constitutes an offence against Federal law, this does not arise from any statement by the Federal legislature of what the law shall be upon that subject. The

conduct which the Federal statute penalises is the breach of industrial awards. There is ‘no collision between an intention to deal exclusively with disobedience of awards [the Commonwealth law] and a law for the punishment of breach of contract [the state law]’ … But the provisions of [the Conciliation and Arbitration] Act itself, which establish awards made under its authority, may have a meaning and effect consistently with which State law could not further affect a matter for which such an award completely provides. If the Act means not only to give the determinations of the arbitrator binding force between the disputants but to enable him to ‘prescribe completely or exhaustively what upon any subject in dispute shall be their industrial relations’, then s 109 would operate to give paramountcy to these provisions of the statute, unless they were ultra vires and they in turn would give to the award an exclusive operation which might appear equivalent almost to paramountcy. [Dixon J said that ‘the Constitution empowered the Parliament to give and that Parliament had given the award this exclusive authority’: 43 CLR at 484.] … [T]he substance of what the Federal award did in this case was to command performance of the prescribed contracts as an industrial duty proper to be imposed and enforced by Federal law according to the sanctions which it provides, while the State law required performance of the same contract as an industrial duty proper to be imposed and enforced by its authority and according to its sanctions. According to the doctrine deduced from the judgments of the majority of the court in the cases of Clyde Engineering Co v Cowburn (1926) 37 CLR 466 and HV McKay Pty Ltd v Hunt (1926) 38 CLR 308, the Commonwealth Conciliation and Arbitration Act gives full and complete efficacy and exclusive authority to this regulation of the Federal tribunal, and s 109 makes this statute prevail. [Dixon J concluded that no offence had been committed against state

law by the applicant, and the order nisi for prohibition should be made absolute. Isaacs CJ and Starke J delivered a joint judgment to the same effect. Rich J agreed with the judgment of Dixon J.]

Two added layers of complexity: operational inconsistency and the ‘vary, detract from or impair’ test 6.1.23 There are two layers of inconsistency that add complexity to the application of the orthodox tests: the concept of ‘operational inconsistency’ and the ‘vary, detract from or impair’ test. Both of these concepts were discussed by Dixon J in Victoria v The Commonwealth (Kakariki case) (1937) 58 CLR 618. In that case, a vessel called the Kakariki lay wrecked in [page 574] Port Phillip in Victoria. Section 329 of the Navigation Act 1912 (Cth) authorised the relevant Commonwealth minister to require the owner to remove it and, failing compliance, take direct action to have it removed and recover the expenses from the owner. Victorian legislation conferred a similar power of removal. Section 13 of the Marine Act 1928 (Vic) authorised a port officer to seek a warrant from two justices to have the wreck removed if not removed by the owner within the time fixed by the port officer. No action had been taken under either provision for the removal of the wreck. Victoria and the port officer sought a declaration from the High Court that action could be taken pursuant to s 13 of the

Victorian Act. One of the questions for determination by the court was whether the Victorian provision was inconsistent with s 329 of the Navigation Act and thus invalid by virtue of s 109 of the Constitution. 6.1.24C

Victoria v The Commonwealth (Kakariki case) (1937) 58 CLR 618

Dixon J: [Having noted his judgment in Ex parte McLean (1930) 43 CLR 472, Dixon J sought to set out his conception of the inconsistency principle:] When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent. … Now, having regard to the legislative powers of the Commonwealth under which sec. 329 must be taken to have been enacted, viz., sec. 51 (i.) and sec. 98 of the Constitution, and perhaps also to sec. 2 of the Navigation Act, the purpose which must be ascribed to sec. 329 is that of empowering the Minister to secure the removal of wrecks likely to obstruct, embarrass or affect overseas and inter-State navigation. The end in view is not only compatible with, but is aided by, the co-existence of other powers for securing the removal of wrecks. There is nothing in the language of sec. 329 and certainly nothing in its nature or subject matter suggesting that, if a wreck fell within the description to which the section relates, the Commonwealth authority should have the exclusive power of determining whether

or not the owner ought to remove it. Such a wreck might seriously affect the movement of craft engaged in domestic trade and yet be thought unimportant for the purposes of oversea and interState trade, although not so completely outside the waters used by vessels in that trade as to be beyond the Commonwealth power. There is no reason for treating sec. 329 as intending to do more than confer a concurrent or parallel power to enforce the removing of wrecks. No doubt there would be or might be an inconsistency if simultaneous attempts by Commonwealth and State authorities to remove the same wreck were possible. But that means, not that the Federal enactment is an exhaustive statement of what power to compel the removal of wrecks shall exist, but that it confers a power to remove wrecks the exercise of which is intended to be exclusive. In other words, sec. 329 should be interpreted as meaning that the exertion of the power by the Minister shall impose upon the shipowner an obligation to the exclusion of similar obligations which might otherwise arise from the exercise of State authority. It may thus be proper to understand sec. 329 as implying that, when the Minister undertakes the removal of a wreck, he may do so without interference from any other public authority. But, if this be so, no more follows than that, when, but not before, steps are taken under sec. 329 by the Commonwealth authority, the State authority becomes powerless. For under sec. 109 of the Commonwealth Constitution [page 575] a State law is invalid only to the extent of the inconsistency. The inconsistency discoverable in sec. 13 of the Victorian Marine Act 1928 would, on this assumption, extend no further than the application which its general language might otherwise have to wrecks in reference to which the Minister was in course of

proceeding under sec. 329 of the Federal Navigation Act 1912– 1935.

6.1.25 One of the principles arising from the Kakariki case is that of operational inconsistency. There was no expression in the Navigation Act of an intention that s 329 would be the exclusive power for the removal of a wreck. Nor could such an intention be implied from the nature, subject matter or purpose of the Commonwealth Act. There was nothing about the nature, subject matter or purpose that necessarily required the power of removal to rest exclusively with the Commonwealth minister. Furthermore, on their face, there was no contradiction in the terms of the respective provisions; both provisions conferred powers, yet unexercised on the facts in the case, to remove the wreck. As Evatt J said (58 CLR at 636): ‘[T]he mere co-existence of executive or administrative or judicial powers does not necessarily establish repugnancy or inconsistency between the laws of the authorities which confer the power’. Consequently, there was no inconsistency between the provisions on the facts presented to the court. However, there was potential for inconsistency if the Commonwealth power were exercised. In Dixon J’s view, once the Commonwealth power was exercised, any exercise of power pursuant to the state provision would create a contradiction with the enlivened Commonwealth power. Operational inconsistency, then, is not a different species of, or test for, inconsistency. It is an expression that is descriptive of the way an inconsistency may arise where the legal operation of a provision depends upon the exercise of a power under the statute. 6.1.26 Dixon J’s judgment in the Kakariki case also presents an alternative formulation of inconsistency: ‘When a State law, if

valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid’: 58 CLR at 630. How does this formulation sit with the classic tripartite schema of inconsistency tests? Dixon J went on to reiterate his acceptance of covering the field inconsistency. However, with the use of the word ‘Moreover’, the covering the field test appeared to be identified as an alternative test to the ‘alter, impair or detract from’ test. In Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508, the categorisation of the tests was explained in the following way. 6.1.27C

Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508

French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ: Applicable principles have been reiterated in the joint reasons of the whole Court in Dickson v The Queen [(2010) 241 CLR 491 at 502]: The statement of principle respecting s 109 of the Constitution which had been made by Dixon J in Victoria v The Commonwealth [(Kakariki Case)] [(1937) 58 CLR 618 at 630] was taken up in the joint reasons of the whole Court in Telstra Corporation Ltd v Worthing [(1999) 197 CLR 61 at 76] as follows: ‘In Victoria v The Commonwealth [at 630], Dixon J stated two propositions which are presently material. The first was: [page 576]

‘When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid.’ The second, which followed immediately in the same passage, was: ‘Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent.’ …’ The first proposition is often associated with the description ‘direct inconsistency’, and the second with the expressions ‘covering the field’ and ‘indirect inconsistency’. The expression ‘cover the field’ means ‘cover the subject matter’, which was the description used and explained by Dixon J in Ex parte McLean [at 483–6]. From the outset the aspect of inconsistency associated with the expression ‘covering the field’ has not been free from criticism [Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 147 per Evatt J; Kakariki Case (1937) 58 CLR 618 at 633–4 per Evatt J]. There can be little doubt that indirect inconsistency involves ‘more subtle … contrariety’ [Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399 at 406 per Stephen J] than any ‘textual’ [Miller v Miller (1978) 141 CLR 269 at 275 per Barwick CJ] or ‘direct collision’ [Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253 at 258 per Barwick CJ] between the provisions of a Commonwealth law and a State law. The crucial notions of ‘altering’, ‘impairing’ or ‘detracting from’ the operation of a law of the Commonwealth have in common the idea that a State law conflicts with a Commonwealth law if the State law undermines the Commonwealth law. Therefore any alteration or impairment of, or detraction from, a Commonwealth law must be significant and not trivial.

Although the utility of accepted tests of inconsistency, based on recognising different aspects of inconsistency for the purposes of s 109, is well established as Mason J observed in Ansett Transport Industries (Operations) Pty Ltd v Wardley [(1980) 142 CLR 237 at 260], it is not surprising that different tests of inconsistency directed to the same end are interrelated and in any one case more than one test may be applied in order to establish inconsistency for the purposes of s 109. All tests of inconsistency which have been applied by this Court for the purpose of s 109 are tests for discerning whether a ‘real conflict’ [see, eg, Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 at 553] exists between a Commonwealth law and a State law. The appellants’ case incorporated the language of the two propositions of Dixon J set out above and involved asserting the existence of both direct and indirect inconsistency between the Commonwealth Act as embodied in the federal instruments and the State Act. …

6.1.28 A number of points can be emphasised about the formulation and interaction of inconsistency tests. First, some care needs to be taken with the formulation of an all-embracing test of inconsistency. As Evatt J cautioned in the Kakariki case, ‘[w]hether and to what extent a law of a State is inconsistent with a law of the Commonwealth cannot be determined by any rule of universal application’: (1937) 58 CLR 618 at 633. Second, although the court in Jemena appeared to align the alter, impair or detract from test with the tests of direct inconsistency, the better view, as expressed by Geoffrey Lindell, is that the alter, impair or detract from test is an overarching statement of inconsistency capable [page 577]

of application across the orthodox tests: Lindell, 2005; see also Momcilovic v R (2011) 245 CLR 1 at 111 per Gummow J. 6.1.29 Third, the court has expressed some reservation about atomising inconsistency into different tests. It is certainly true, as Gummow J said in Momcilovic v R (2011) 245 CLR 1 at 112, that speaking of different ‘species’ or ‘classes’ ‘tends to obscure the task always at hand … namely to apply [s 109] only after careful analysis of the particular laws in question to discern their true construction’. However, as Mark Leeming has observed, there is utility ‘in using the familiar labels of “direct” and “indirect” inconsistency, or even “covering the field” — so long as it is realised that those categories are ultimately conclusions flowing from the interpretative process, and categories which overlap. For example, every case of a Commonwealth law “covering the field” is, on analysis, a case where either expressly or by implication, the Commonwealth law provides for an immunity from a class of State laws, which immunity would be qualified, altered or impaired by, and is therefore inconsistent with, the operation of a State law within that class’: Leeming, 2012, pp 141–2; see also Momcilovic v R (2011) 245 CLR 1 at 233–4 per Crennan and Kiefel JJ. In any event, as the court accepted in Jemena, the orthodox statement of the tests continues to be an accepted technique for applying s 109. 6.1.30 Fourth, the court has expressed reservations about the covering the field test. For example, in Jemena, the court drew attention to Evatt J’s criticisms of the notion of ‘covering the field’ in Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 147. In Stock Motor Ploughs, the High Court was invited to consider whether provisions of the Bills of Exchange Act 1909 (Cth) and the Moratorium Act 1930 (NSW) were inconsistent with each

other. The Commonwealth Act gave the plaintiff, as payee of promissory notes, the right to sue for and recover any amounts promised to be paid. The state Act, introduced at the height of the Great Depression to suspend payments under loan agreements, required leave of a court before promissory notes could be sued upon. The Full Court of the Supreme Court of New South Wales upheld the leave requirement made by the New South Wales Act, and Stock Motor Ploughs appealed. The defendant, in the course of argument, argued that the Acts were not inconsistent because the Commonwealth Act did ‘not cover, nor purport to cover, the ground covered by the Moratorium Act’. Evatt J said (48 CLR at 147): It is now established, therefore, that State and Federal laws may be inconsistent, although obedience to both laws is possible. There may even be inconsistency although each law imposes the very same duty of obedience. These conclusions have, in the main, been reached, by ascribing ‘inconsistency’ to a State law, not because the Federal law directly invalidates or conflicts with it, but because the Federal law is said to ‘cover the field’. This is a very ambiguous phrase, because subject matters of legislation bear little resemblance to geographical areas. It is no more than a cliché for expressing the fact that, by reason of the subject matter dealt with, and the method of dealing with it, and the nature and multiplicity of the regulations prescribed, the Federal authority has adopted a plan or scheme which will be hindered and obstructed if any additional regulations whatever are prescribed upon the subject by any other authority; if, in other words, the subject is either touched or trenched upon by State authority.

6.1.31 In the Kakariki case, Evatt J repeated these concerns: ‘Any analogy between legislation with its infinite complexities and varieties and the picture of a two-dimensional field seems to me to

be of little assistance’: (1937) 58 CLR 618 at 634. See also Momcilovic v R (2011) [page 578] 245 CLR 1 at 115–19 per Gummow J. Undoubtedly, there are complexities in applying the covering the field test. As Evatt J highlights, the identification of a field of operation, and the ascertainment of an exclusive legislative intention to cover that field, can be difficult. That is particularly the case because the Commonwealth has enumerated powers and its authority to regulate in a particular field may not be complete. There is further difficulty if the search for a legislative ‘intention’ focuses on statements of intent made by those, such as ministers, involved in the legislative process: see Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508 at 527; Dickson v R (2010) 241 CLR 491 at 506–8. However, provided the search for the field of operation, and any intended exclusive reach, focuses on the terms, subject matter and legal operation of the Act, then the covering the field test remains an established approach for determining inconsistency for the purpose of s 109.

There must be a ‘real conflict’ 6.1.32 As indicated toward the end of the Jemena extract 6.1.27C, it remains clear that, for an inconsistency to arise under s 109, there must be a ‘real conflict’ between the respective provisions. The point can be illustrated by the High Court’s decision in Charles Marshall Pty Ltd v Collins (1957) 96 CLR 1.

The Metal Trades Award 1952, made under the Conciliation and Arbitration Act 1904 (Cth), did not deal with the question of long service leave (which was outside the commissioner’s jurisdiction), but dealt comprehensively with conditions of employment, including annual leave. The Factories and Shops (Long Service Leave) Act 1953 (Vic) made provision for long service leave. The appellant was prosecuted at the instance of the respondent, a Victorian factories and shops inspector, for not granting a dismissed employee entitlements under the state Act. The company argued that the award applied, that it occupied the whole field of employment conditions, and that it therefore overrode the state Act to the extent of any inconsistency under s 109 of the Constitution. The Privy Council, in the final appeal by the company, said (96 CLR at 7–8) (emphasis added): Their Lordships agree with the High Court that long service leave is an entirely distinct subject matter from those matters which are determined and regulated by the award. In other words, long service leave differs in kind from … annual leave. This could seem obvious in principle but is placed beyond argument in the present context by the provisions of ss 13 and 25 of the Conciliation and Arbitration Act which specify it as a separate item … That being so their Lordships are of opinion that there are no grounds in principle or authority for construing this award as covering the ‘field’ of long service leave … It is of course possible for Acts dealing primarily with different subject matters to have inconsistent provisions on particular matters. Apparent inconsistencies may however disappear, as here, when the words are construed in the limited context of the respective Acts. If in dealing with annual leave a man said ‘I only get a fortnight’s holiday a year’ he would not mean that he worked seven days a week for fifty weeks.

6.1.33

The same issue arose in Jemena Asset Management (3) Pty

Ltd v Coinvest Ltd (2011) 244 CLR 508. The three appellants were businesses that operated electricity infrastructure assets. In the course of that business, they employed construction workers. Workplace relations were governed by several federal industrial instruments made under the Workplace Relations Act 1996 (Cth). These instruments dealt with various topics, including the provision of long service leave. Victorian legislation, the Construction Industry Long Service Leave Act 1997 (Vic), provided for a scheme for portable long service leave benefits payable to workers in the [page 579] construction industry. Employers in the construction industry were required to pay a long service leave charge into a fund. The state Act gave workers in the construction industry an entitlement to long service leave and to be paid benefits out of the fund. The scheme was put in place to deal with the particular employment circumstances in the construction industry where workers would move from one employer to the next without the usual opportunities to accrue ordinary long service leave entitlements. Where entitlements to long service leave were paid under the Commonwealth instruments, the employer was entitled to reimbursement of the charge under the state Act and the worker’s corresponding entitlement to claim from the fund was reduced. Was there an inconsistency between the Commonwealth and state provisions? The answer to that question depended upon a close consideration of the character and scope of the rights and duties created by the respective provisions. They were each described as regulating long service leave, but were the character and scope of

the rights and duties of long service leave the same? The court held that they were not and, consequently, there was no ‘real conflict’ between the provisions of a direct or indirect kind. 6.1.34C

Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508

French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ: [Their Honours first rejected an argument of direct inconsistency that the state provisions undermined the Commonwealth instruments by imposing additional and greater obligations on employers:] A reading of the whole of the State Act … shows that despite references to ‘long service leave’ in … [that Act] … the operation of the State Act is limited to the provision of a long service leave benefit which can apply in circumstances where a worker may work with different employers during continuous service in the construction industry. Those references to ‘long service leave’ are adjectival in respect of the ‘benefit’ provided under the State Act and do not encompass the distinguishable obligations of an employer and the entitlements of an employee in respect of the grant of, and payment for, long service leave by an employer …. An employee’s entitlement to a long service leave benefit under the State Act can only be in the form of payment from the Fund …. There is no provision for the grant of any long service leave, a subject which is covered by the federal instruments. Importantly, the State Act scheme contemplates that long service leave, as between an employer and an employee, may be paid under the federal instruments. When that occurs employers are entitled to be reimbursed … and a correlative reduction in the worker’s entitlements under the State Act would also follow …. The State Act, and the scheme under it, for the provision of

portable long service leave benefits in the construction industry, do not undermine an employer’s obligations under the federal instruments to grant, and pay for, long service leave or an employee’s correlative entitlement to receive such leave. [Thus, despite the use of the expression ‘long service leave’ in the respective provisions, the character of the rights and duties created by each set of provisions was different and, indeed, the state Act was drafted to accommodate the Commonwealth rights and duties. The court then rejected a covering the field argument. In doing so, their Honours emphasised the ‘importance of clearly identifying the field said to be covered exhaustively by a law of the Commonwealth and correctly characterising a law of a State’: 244 CLR at 529]. [page 580] The appellants also alleged indirect inconsistency by submitting that the field covered exhaustively by the federal instruments is the appellants’ obligations in respect of long service leave accrued in whole or in part through service with the appellants and the entitlements of employees of the appellants in respect of such leave. … The mischief which the State Act remedies is that workers in continuous service in the construction industry will be disadvantaged if they cannot qualify for long service leave, by reason of the itinerant nature of their employment. That subject matter, of portable long service leave benefits in the construction industry, is not covered in the federal instruments. There is no doubt that provision of long service leave for employees in continuous employment with an employer, and the provision of a long service leave benefit for workers in continuous service in the construction industry, are both just and beneficial legislative aims. As with the concurrent legislation for the removal of shipwrecks considered in the Kakariki Case, it is possible to

infer from the beneficial nature of the federal instruments that the Commonwealth legislature did not intend to exclude a compatible State law. In Collins v Charles Marshall Pty Ltd, indirect inconsistency was alleged between a federal award dealing comprehensively with conditions of employment but not long service leave, and State legislation dealing with long service leave, in circumstances where the power of the conciliation commissioner to deal with long service leave was expressly excluded. Although the federal award may have been an ‘exhaustive statement’ of the relations between employer and employee in the relevant industry, there was ‘no attempt in the award’ to deal with the subject matter of long service leave and, accordingly, there was ‘no real conflict’ between the provisions of the federal award and the State legislation [at 553]. A similar result followed in T A Robinson & Sons Pty Ltd v Haylor [(1957) 97 CLR 177] where a conciliation commissioner was empowered to deal with long service leave in an award but did not do so. It was concluded by a unanimous Court that ‘an award which has nothing to say about … a topic’ (there, long service leave) cannot be said to be incompatible with a State law dealing with that subject matter [at 183]. … Whilst the federal instruments deal with all the obligations and entitlements of employers and employees in respect of the grant of, and payment for, long service leave, arising in the employment relationship between employers and employees, they do not deal with, or even mention, portable long service leave benefits, for workers in continuous service within the construction industry.

The tests applied 6.1.35

To understand the way in which the tests considered

above are to be applied, it is helpful to consider some well-known cases. The ‘impossibility of simultaneous obedience’ test is sufficiently demonstrated by the case of R v Licensing Court of Brisbane; Ex parte Daniell (1920) 28 CLR 23 (see 6.1.15). It necessarily requires close attention to the respective provisions to determine whether conflicting duties are imposed which cannot be avoided. 6.1.36 As is evident from the cases already considered, the inconsistent rights test involves a comparative characterisation of the legal operation of the respective provisions: what are the legal rights, duties, liberties or powers which are created or affected by the laws? How do they interrelate? Are they capable of co-existing? This will necessarily require a consideration of the subject, scope and purpose of the laws. The covering the field test requires consideration of three questions: (1) what is the field covered by the Commonwealth law?; (2) is there [page 581] an intention to cover it exclusively?; and (3) has the state provision entered into that field? In answering questions (1) and (2), the High Court has emphasised the need to determine the field of operation and ascertain the Commonwealth legislative intention, from the subject, scope and purpose of the Commonwealth law. Question (3) requires a characterisation of the state law, and that character will be determined by reference to its subject, scope and purpose. Given the analysis required under the inconsistent rights test and the covering the field test, it is not surprising that, like

Jemena, many inconsistency cases involve claims of direct and indirect inconsistency. 6.1.37 In applying the inconsistent rights test, the central inquiry to be undertaken will be whether a law (Commonwealth or state) confers a right, liberty or power that has been impermissibly removed or impaired by the other law (whether through the conferral of a competing right, liberty or power, or by the imposition of a duty). The critical question will be whether the right, liberty or power is intended to operate free from impairment by other legal requirements or, alternatively, whether it should operate against the background of other legal rules. As will be seen, particularly in the case of Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 6.1.42C, a similar analysis will be undertaken in determining whether a Commonwealth law has exhibited an intention to cover a field exclusively. As already emphasised, these inquiries require close attention to the subject, scope and purpose of the laws in question. 6.1.38 As was the case in Jemena, many other inconsistency cases have arisen in the context of Commonwealth industrial instruments and their relationship to state provisions applying to employment relationships. In Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151, an order, made under the Factories and Shops Act 1912 (NSW), prohibited the employment of women on milling machines. Section 41 of the Act made this prohibited employment an offence on the part of the employer. However, an award made by the arbitration court under the Conciliation and Arbitration Act 1904 (Cth) declared that an employer who was party to the award ‘may employ females on work in the industries and callings covered by this award’. Bradley Bros Pty Ltd was covered by the award, but

was prosecuted under s 41 of the state Act for employing women on milling machines. The prosecution was dismissed and, on appeal, the High Court confirmed that the state law was inconsistent with a law of the Commonwealth and was therefore invalid. Latham CJ said (68 CLR at 160): There is an express prohibition by the State authority which is permitted by the Commonwealth authority. A Commonwealth arbitration award prevails over a State statute creating an offence if the State statute is inconsistent with the award (Ex parte McLean (1930) 43 CLR 472). In this case there is, in my opinion, a clear inconsistency, and therefore the Commonwealth award prevails.

Starke J referred to ‘a direct collision between the two laws in the present case’: the state law which ‘provides in effect that females shall not be employed’ and the Commonwealth law which ‘in effect permits employers parties to the award to employ females’: 68 CLR at 161. Williams J also referred to a ‘direct’ inconsistency: 68 CLR at 163. Thus, the Commonwealth provision was not intended as a mere permissive facility intended to be subject to contrary state regulation. The right of employment conferred was intended to operate unimpaired by state regulation. [page 582] 6.1.39 In Australian Broadcasting Commission v Industrial Court (SA) (1977) 138 CLR 399, the court upheld a challenge to the validity of s 15(1)(e) of the Industrial Conciliation and Arbitration Act 1972 (SA), which gave to the Industrial Court of South Australia power to order re-employment of an employee whose dismissal was ‘harsh, unjust or unreasonable’. This provision was,

the court held, inconsistent with the provisions of the Broadcasting and Television Act 1942 (Cth) dealing with the employment of employees by the Australian Broadcasting Commission. Mason J, with whom Barwick CJ and Gibbs J agreed, pointed out that the Commonwealth Act distinguished between permanent and temporary employees of the commission. In dealing with the employment of permanent employees, the Act set out ‘a comprehensive and exclusive code regulating the appointment, termination of appointment, promotion, transfer, retirement and dismissal of officers in the service of the commission’: 138 CLR at 415. It showed an intention to cover the field of employment of permanent employees. Turning to temporary employees, Mason J acknowledged that the provisions of the Act were ‘very much less detailed and less comprehensive than those which apply to [permanent] employees’: 138 CLR 416. Nevertheless, he inferred a Commonwealth intention to cover the field of the commission’s employment of temporary employees from ss 42 and 43 of the Broadcasting and Television Act: 42 Nothing in this Division shall affect the operation of any award made by the Commonwealth Court of Conciliation and Arbitration, or of any determination made by the Public Service Arbitrator, prior to the commencement of this section and applicable to the Commission and any of its officers or temporary employees. 43 … (6) Subject to this Division, the terms and conditions of employment of officers and temporary employees appointed in pursuance of this section are such as are determined by the Commission with the approval of the Public Service Board.

Mason J explained why the Act managed to ‘cover the field’ of

employment of temporary employees in the following terms (138 CLR at 417): The absence of detailed provisions applying to [temporary employees] is not an indication that it is contemplated that other laws will apply to them, but rather that the employer has an unqualified authority to make decisions affecting their employment and the termination of their services.

See also Metal Trades Industry Association v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 at 644; Dao v Australian Postal Commission (1987) 162 CLR 317 at 339. 6.1.40 By contrast, the court in Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 considered that a Commonwealth industrial award setting out a power to dismiss employees was to operate subject to the provisions of the Equal Opportunity Act 1977 (Vic). The Airline Pilots Agreement 1978 had been certified by the Flight Crew Officers’ Industrial Tribunal and, therefore, had the same force as an award of the Commonwealth Conciliation and Arbitration Commission: Conciliation and Arbitration Act 1904 (Cth) s 28(3). Clause 6A of the agreement authorised an employer to employ pilots ‘subject to the provisions of this Agreement’. Clause 6B authorised an employer to dismiss a pilot ‘by seven days’ notice in writing’ (during the first 6 months of employment) or ‘by one month’s notice in writing’ (after the completion of 6 months of service). A dismissed pilot was entitled to have the dismissal reviewed by a Grievance Board unless dismissal occurred during the first 12 months [page 583]

of the pilot’s employment. Section 18 of the Equal Opportunity Act 1977 (Vic) prohibited an employer from discriminating against a person on the ground of sex when determining who should be offered employment; or discriminating against an employee on the ground of sex or marital status by dismissing the employee. Section 37 of the Act authorised the Equal Opportunity Board to inquire into a complaint of discrimination and to order any person to comply with the Act. 6.1.41 Ansett had been ordered by the Equal Opportunity Board to employ Wardley, a woman, as a pilot. Ansett began proceedings in the Supreme Court seeking declarations that the Equal Opportunity Act did not apply to Ansett in its employment or dismissal of pilots. These proceedings were removed to the High Court under s 40 of the Judiciary Act 1903 (Cth). A majority of the court rejected Ansett’s argument that the Airline Pilots Agreement gave it an unqualified right to dismiss its pilots on any ground, while the state Act purported to limit the grounds for dismissal, thus producing direct collision. 6.1.42C Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 Stephen J: In my view there is in this case no inconsistency within the meaning of s 109 of the Constitution. I regard the right of termination of the contract of employment which cl 6 of the Agreement confers as no absolute right, such as that for which Ansett contends. The right which it confers is not one which is capable of exercise regardless of the unlawfulness under State law of the ground for its exercise. On the contrary it is a right the nature of which is to be understood against the

background to its operation which general laws of the land, whether State or federal in origin, provide … When the power of termination which cl 6B confers upon the parties to the contract of employment comes to be construed it can be seen to contain nothing in its quite unexceptional wording to suggest that it should stand inviolate, unresponsive to a general law applicable to the community at large and directed to the prevention of some evil practice which, of its nature, may manifest itself in a variety of ways, including the exercise by an employer of his power of dismissal. The concern of the Agreement is, after all, entirely unremarkable, being exclusively devoted to the settlement of an industrial dispute. This is an inherently improbable source in which to discover, in the form of a simple power to bring their contract to an end conferred upon both parties to a contract of employment, a right on the employer’s part to practise discrimination upon the grounds of sex, contrary to, and immune from the prohibition of, State law … The question as a whole resolves itself, in the end, into a search for legislative intent. While the Agreement and the Act each deals with aspects of the engagement and dismissal of employees, they are essentially dissimilar both in character and in general content. The Act gives legislative effect throughout the Victorian community to a broad social policy concerned with the status of women in that community. It forbids certain acts of discrimination against them on the grounds of sex or marital status and promotes equality of opportunity between the sexes. It applies to widespread areas of human activity: to education, the provision of accommodation and the supply of a great variety of services, as well as to employment. Within these areas it confines itself to the matter of discrimination on the grounds of sex or marital status … [page 584]

[Stephen J distinguished between Acts on different subject matters which nevertheless contained inconsistent provisions, and two measures which were concerned with different subjects:142 CLR at 249–50.] The Victorian legislature has concerned itself quite generally with the social problem of discrimination based upon sex or marital status and occurring in a variety of areas of human activity. It has declared various manifestations of such discrimination to be unlawful. This is a subject matter upon which the Commonwealth’s Conciliation and Arbitration Act is understandably silent, silent because of its general irrelevance to the subject matter of that Act. That silence will necessarily extend to the factum through which it operates, the present Agreement. The disputes with which the Conciliation and Arbitration Act are concerned are disputes as to industrial matters, pertaining to the relationship of employer and employee; they have nothing inherently to do with questions of discrimination on the grounds of sex. No doubt it may happen that in a particular dispute, apparently of an industrial character, some question of discrimination of this sort may appear to be involved. The precise nature of its involvement may then determine whether or not the dispute is indeed an industrial dispute. However, in the present case the Agreement gives not the slightest indication of any such involvement and has all the hallmarks of being made in settlement of an entirely orthodox industrial dispute. In the context of this Agreement it may be said of the topic of discrimination that, in the words of this Court in Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 at 533, it ‘simply is not a subject within the purview of the award’ … Concluding, as I have, that there is here no question of direct collision between Agreement and Act, there is, a fortiori, no such inconsistency arising under the doctrine of ‘covering the field’, and this very much for the reasons which I have stated in dealing with direct collision. Whatever field the Agreement may

cover, the question of dismissal upon the discriminatory ground that the pilot is a woman is in my view no part of it. [Stephen J concluded that he would refuse the declarations sought.] Mason J: [T]he major thrust of Ansett’s case is to establish the existence of what has been called ‘direct inconsistency’, that is, the disconformity which is created by the presence of an absolute right to dismiss for any reason whatsoever, which Ansett finds in the Agreement, and the presence in the State Act of a prohibition against dismissal for the prescribed reasons … As the various tests which have been applied by the Court are all designed to elucidate the issue of inconsistency it is not surprising that they are interrelated and that in a given case more than one test is capable of being applied so as to establish inconsistency. Especially is this so when it is the giving of a permission or the grant of a right by Commonwealth law that is the foundation of a claim of inconsistency. If, according to the true construction of the Commonwealth law, the right is absolute, then it inevitably follows that the right is intended to prevail to the exclusion of any other law. A State law which takes away the right is inconsistent because it is in conflict with the absolute right and because the Commonwealth law relevantly occupies the field. So also with a Commonwealth law that grants a permission by way of positive authority. The Commonwealth legislative intention which sustains the conclusion that the permission is granted by way of positive authority also sustains the conclusion that the positive authority was to take effect to the exclusion of any other law. Again it produces inconsistency on both grounds: cf Airlines of New South Wales Pty Ltd v New South Wales (1965) 113 CLR 54, where the permission for which Commonwealth law provided was neither absolute nor comprehensive. [page 585]

Inconsistency between a Commonwealth award or an agreement having the force of an award and a State law involves special considerations. They were discussed in Robinson (TA) and Sons Pty Ltd v Haylor (1957) 97 CLR 177 at 182–3, and they explain the presence of s 65 in the Act. In truth the case which Ansett makes is one of inconsistency between the Act and the State Act, s 109 giving paramountcy to the Act with the result that the State Act cannot operate if, pursuant to the Act, the Commission has exercised its power to the exclusion of the provisions made by State law on the topic. The issue therefore turns upon the interpretation of the Agreement and, despite the emphasis given to the claim of direct inconsistency, the question is whether the provisions of the Agreement were intended to operate, subject to, or in disregard of, the general law … From my examination of the Agreement as a whole, I conclude that it should not be viewed as a general industry award which seeks to determine exhaustively the respective rights of employer and employee. Although the Agreement does deal with many of the matters usually found in an award, such as pay, hours of work and leave, its emphasis is on setting out in exact detail the manner and procedure governing the advancement of a pilot in terms of seniority and rights dependent thereon. Clause 6B does not deal with the substantive right of dismissal. Instead, its opening words assume the right of the employer under the general law to terminate the employment of a pilot and the import of the clause as laid down in paras 1, 2, 3 and 4 is to prescribe the procedure and regulate the means whereby the right to terminate may be effected … Consequently, I do not find any direct inconsistency between cl 6B and the State Act. The Agreement does not confer on Ansett a substantive right of dismissal; it merely assumes the right of dismissal for which the general law provides. The right of an employer under the general law to dismiss an employee has been altered in Victoria by the State Act in that an

employer may not discriminate against an employee on the ground of sex in offering employment, refusing to offer employment or in the terms on which employment is offered (s 18(1)) or by dismissing an employee by reason of sex (s 18(2) (b)). The Agreement is to be read in the light of this alteration in the general law. The grounds on which I have reached the conclusion that there is no direct inconsistency also require the conclusion that cl 6B of the Agreement does not seek to cover the field of the employer’s substantive right to dismiss … [Mason J refused to make the declarations sought. Murphy J said the declarations sought by Ansett should be refused. The agreement was not exhaustive and did not give an unqualified right to terminate employment. Wilson J also held that the declarations sought by Ansett should be refused because the agreement was not concerned with the grounds for dismissal, but left those to be defined by the general law. By contrast, Aickin J, with Barwick CJ agreeing, dissented.] Aickin J: The argument in this case was primarily directed to the question whether the Agreement was intended to cover the field of the terms of employment of airline pilots by Ansett … regarded as an example of ‘direct conflict’ in that the Agreement appears to permit the dismissal without review of a pilot during his first six months of service on either the giving of notice of seven days, or upon payment of seven days’ salary, upon any ground whatever, whereas the State Act prohibits dismissal on specified grounds. It is therefore convenient to consider first the question of direct conflict. I turn now to a consideration of the Agreement in so far as it applies to a pilot who has been employed for a period of less than twelve months … If it were the fact that the [page 586]

termination involved discrimination on the basis of sex or race the State Act would on its face enable a complaint to be made which could be followed by an order from the Board directing a reinstatement or a re-employment of the pilot so dismissed. This appears to me to involve ‘direct conflict’ in the sense of making unlawful that which the Agreement permits. The Agreement makes an express provision for dismissal of such a pilot, or termination of his employment without restricting in any way the grounds upon which such termination may be given. The State Act would enable such a decision to be set at nought by the Board ordering reinstatement or re-employment, and apparently payment in respect of any period between the termination and the reinstatement. This appears to me to involve inconsistency in the sense that the State Act would if valid ‘impair alter or detract from the operation of’ the Agreement. I take that phrase from the reasons for judgment of Dixon J in Victoria v Commonwealth (1937) 58 CLR 618 at 630 … The two different aspects of inconsistency are no more than a reflection of different ways in which the Parliament may manifest its intention that the federal law, whether wide or narrow in its operation, should be the exclusive regulation of the relevant conduct. Whether it be right or not to say that there are two kinds of inconsistency, the central question is the intention of a particular federal law. The field of its operation may be regarded as wide or narrow and produce inconsistency because of the intention to cover a particular field exclusively or because of an intention to regulate specific conduct so that any other regulation of that conduct is inconsistent because the attempt to regulate the identical conduct in a different manner, or perhaps at all, necessarily impairs the operation of the federal regulation of that conduct. [Aickin J said he would declare that the Equal Opportunity Act would not apply to Wardley’s dismissal if that dismissal was in accordance

with the Airline Pilots Agreement. Barwick CJ agreed with the conclusions and reasons of Aickin J.]

6.1.43 There is, in some of the judgments in Ansett Transport Industries (Operations) Pty Ltd v Wardley, a suggestion of confusion over the nature of the inconsistency argued by Ansett: Mason J identified ‘the major thrust of Ansett’s case’ as intended to establish ‘direct inconsistency’ (142 CLR at 259), while Aickin J said the argument ‘was primarily directed to the question whether the agreement was intended to cover the field’: 142 CLR at 274. This may be not so much a product of confusion as an indication that, in many situations, the separate tests of inconsistency depend upon substantially the same considerations: when we ask ‘What field was the Commonwealth law intended to cover?’, we are also asking ‘What right or immunity did the Commonwealth law intend to confer?’. Aickin J asserted that ‘whether … or not … there are two kinds of inconsistency’, the central question was the intention of the federal law: 142 CLR at 280. A similar point was made by Stephen J (142 CLR at 248) and Mason J: 142 CLR at 260, 261. 6.1.44 The difference between the minority (Barwick CJ and Aickin J) and three of the majority justices (Mason, Murphy and Wilson JJ) seemed to lie in their perceptions of the intention of the Commonwealth law-maker. For the majority, the Commonwealth law was not intended to cover the field of dismissal, nor was it intended to give the employer an unqualified right to dismiss; rather, it was intended to deal with the procedure to be followed when the employer exercised its right to dismiss, a right which flowed from, and could be modified by, other law. That intention was inferred from the agreement’s silence in the face of such

[page 587] restrictions on dismissal as existed in 1978; for example, the Equal Opportunity Act 1977 (Vic) and s 5 of the Conciliation and Arbitration Act 1904 (Cth). However, the minority maintained that the agreement was intended to deal with all aspects of dismissal, grounds and procedure: that it was intended to prescribe completely and exhaustively the rights of employer and employees on, among other matters, Ansett’s right to dismiss pilots, the procedure to be followed, and the pilots’ rights to seek review. That intention was discovered, not so much in the terms of the agreement, as in the essential nature of the process (industrial dispute followed by agreement) which produced that agreement: see 142 CLR at 279). 6.1.45 On the other hand, the difference between Stephen J, and Barwick CJ and Aickin J, lay in the former’s view that the Equal Opportunity Act and the agreement dealt with entirely different subject matters. Stephen J rejected the views of the other majority judges that the agreement dealt only with the procedures to be followed on dismissal: 142 CLR at 253–4. The agreement did confer on Ansett a right of dismissal, but this should be understood as a part of the ‘employment relationships as between Ansett and its pilots’. The agreement was ‘concerned with industrial matters’, and the right to dismiss must be read in that context; it was not intended as a right to dismiss on grounds far removed from industrial considerations — or, to employ the language appropriate to the cover the field test, the agreement dealt with the field of the industrial relations between employer and employees (and covered that field). The Equal Opportunity Act

dealt with another field, the elimination of sexual discrimination, in that it implemented a ‘broad social policy concerned with the status of women’. 6.1.46 The court’s decision in Ansett can be contrasted with that in Dao v Australian Postal Commission (1987) 162 CLR 317. In Dao, the High Court decided that ss 25 and 113 of the AntiDiscrimination Act 1977 (NSW), which made it unlawful for an employer to discriminate against a person on the ground of the person’s sex in determining who should be offered employment, were inconsistent with ss 42 and 51 of the Postal Services Act 1975 (Cth), which authorised the Australian Postal Commission to appoint officers only when the commission was satisfied that the appointee met such requirements as were determined by the commission. In a unanimous judgment, Mason CJ, Wilson, Deane, Dawson and Toohey JJ rejected the appellants’ argument that the refusal of the commission to appoint them as officers, on the basis that their body weights were below the minimum required by the commission, constituted discrimination on the ground of their sex. They said there was a collision or direct inconsistency between ss 25 and 113 of the Anti-Discrimination Act and s 42. They said that the relevant principle had been discussed by Mason J in Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 260: when the Commonwealth law gave an absolute right, ‘then it inevitably follows that the right is intended to prevail to the exclusion of any other law’. The same result followed where the ‘Commonwealth law … grants a permission by way of positive authority’. In either case, it could be said that a state law’s qualification of that right or permission produced both direct and indirect inconsistency.

6.1.47 Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 provides an example of a Commonwealth provision operating against the background of the general law. The Residential Tenancies Act 1987 (NSW) provided that the Residential Tenancies Tribunal (RTT) constituted under s 80 of the Act had the power, on the making of an application by a landlord under a residential tenancy agreement, to make an order authorising the landlord or any other person to enter the premises. The Defence Housing Authority Act 1987 (Cth) empowered the Defence Housing [page 588] Authority (DHA) to provide adequate housing for members of the Australian Defence Force and officers and employees of the Commonwealth Department of Defence. Section 7 provided that the DHA had the power ‘to do all things necessary or convenient to be done for, or in connection with, the performance of its functions’ and listed these as including: purchase of land and houses; development of land; building, demolishing, converting, renting and general management of houses; determination and collection of rents; eviction; provision and improvement of amenities for persons living in houses rented out by it; entering into contracts; and anything incidental to any of its powers: s 7(1)(a)– (h), (p), (x). 6.1.48 The owner of residential premises leased to the DHA filed an application with the RTT for orders that the DHA allow the owner to inspect the premises and that the DHA give the

owner a key to the premises. The DHA disputed the RTT’s jurisdiction on four grounds, including inconsistency under s 109. A majority of the High Court (Dawson, Toohey and Gaudron JJ; Brennan CJ, McHugh and Gummow JJ agreeing; Kirby J dissenting) held that the Defence Housing Authority Act 1987 (Cth) and the Residential Tenancies Act 1987 (NSW) were not inconsistent. Dawson, Toohey and Gaudron JJ (with whom Brennan CJ agreed and McHugh and Gummow JJ concurred in separate judgments) said that the Commonwealth legislation was ‘neither comprehensive nor exclusive, for in conferring the powers which it does upon the DHA it assumes an existing legal system within which and by means of which those powers might be exercised’; it was, they said, ‘meaningless to speak of the power to rent out houses and land or evict tenants in the absence of any law relating to landlord and tenant’: 190 CLR at 432. Their Honours continued (190 CLR at 433): The Defence Housing Authority Act makes no provision for the creation and enforcement of those rights and obligations which are necessary for the performance of its function and it is obvious that it was intended to operate within a legal framework provided by the common law and State law and, for that matter, federal law should any federal law have a relevant application.

6.1.49 As will be explained below, the Commonwealth might make its intention explicit to regulate exclusively on a topic or within a particular field. However, that intention may also be implied or inferred from the legislative scheme that has been enacted. Indeed, the High Court increasingly has emphasised that close attention must be given in all cases to the subject, scope and purpose of the Commonwealth legislative scheme in determining whether parliament has evinced an intention to cover the field.

Bare statements of legislative intention to that effect may assist in reaching that conclusion, but a close analysis is nonetheless required. Three cases demonstrate how a legislative intention to cover the field can arise by implication from the subject, scope and purpose of the legislative scheme. The first is Viskauskas v Niland (1983) 153 CLR 280, where the High Court was asked to declare that sections of the Anti-Discrimination Act 1977 (NSW) were inconsistent with the Racial Discrimination Act 1975 (Cth). The relevant sections of the state Act prohibited discrimination on grounds of race in a wide variety of situations, including the provision of goods and services: s 19. Enforcement of these prohibitions involved investigation and conciliation by a state official, followed by inquiry and orders (damages or injunctions) by a state tribunal: Pt IX. The Commonwealth Act, enacted to give effect in Australia to an international convention, prohibited racial discrimination in, among a wide variety of situations, the provision of goods and services (s 13) and provided [page 589] for inquiry and conciliation by a Commonwealth commission, and enforcement through civil action in a court of competent jurisdiction: Pt III. The High Court (Gibbs CJ, Mason, Murphy, Wilson and Brennan JJ), in a unanimous judgment, held that the state Act was inconsistent with the Commonwealth’s intention to regulate the entire topic of racial discrimination (that is, to cover the field). They discovered this intention in the following way (153 CLR at 292): The Commonwealth Parliament has chosen the course of itself

legislating to prohibit racial discrimination, and having done so it can only fulfil the obligation cast upon it by the convention if its enactment operates equally and without discrimination in all the States of the Commonwealth. It could not, for example, admit the possibility that a State law might allow exceptions to the prohibition of racial discrimination or might otherwise detract from the efficacy of the Commonwealth law. The subject matter of the Commonwealth Act suggests that it is intended to be exhaustive and exclusive, and this conclusion is supported by the fact that the provisions of Pt II (and especially those of s 9) are expressed with complete generality, and by the further fact that s 6 reveals an intention to bind the Crown in right of each State as well as the Crown in right of the Commonwealth. It appears from both the terms and the subject matter of the Commonwealth Act that it is intended as a complete statement of the law for Australia relating to racial discrimination.

6.1.50 The second example is Council of the Municipality of Botany v Federal Airports Corporation (‘Third Runway Case’) (1992) 175 CLR 453. The council had commenced proceedings in the Land and Environment Court of New South Wales seeking relief to require the Federal Airports Corporation (FAC) to comply with Pt 5 of the Environmental Planning and Assessment Act 1979 (NSW) and Pt VII of the Environmental Planning and Assessment Regulation 1980 (NSW) in relation to dredging work undertaken for the purpose of constructing a third runway at Sydney airport. The dredging work was to be conducted on Commonwealth land. The FAC was established by the Federal Airports Corporation Act 1986 (Cth) and was empowered to undertake it activities in accordance with that Act and the Federal Airports Corporation Regulations. In particular, ss 6 and 8 of the Federal Airports Corporation Act set out in some detail the functions to be performed by the FAC. The FAC gave notice of its proposal to construct the runway in accordance with the Environment

Protection (Impact of Proposals) Act 1974 (Cth) and adopted the recommendations of the relevant Commonwealth minister arising from that administrative process. However, the FAC did not obtain an environmental impact statement in relation to the dredging work under the state Act or Regulation. The proceeding was removed to the High Court and a series of questions were stated for the High Court to answer. One of those questions was whether there was inconsistency between, on the one hand, the New South Wales Act and Regulation and, on the other hand, the Federal Airports Corporation Act and Regulations and the Environment Protection (Impact of Proposals) Act 1974 (Cth). The court concluded that the state legislation did not apply to the FAC because it was not a ‘determining authority’ and thus was not covered by the state legislative scheme. Consequently, no inconsistency could arise. However, the court concluded that, if it had applied, the Commonwealth Act evinced an intention to cover the field and the state Act and Regulation would have been invalid. [page 590]

6.1.51C

Council of the Municipality of Botany v Federal Airports Corporation (Third Runway case) (1992) 175 CLR 453

Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ: As pointed out earlier in these reasons, s 8(1)(a) of the Act entrusts the FAC with the functions, inter alia, of ‘determining the necessity or desirability of extending or otherwise altering Federal airports and carrying out necessary or

desirable extensions to, or alterations of, Federal airports’ (emphasis added). In other words, under the Act it is the FAC which determines that an extension to, or an alteration of, a Federal airport is necessary or desirable and, once it has made that determination, it is for the FAC to carry out the extension or alteration. The terms in which the functions are expressed leave no scope for the operation of State laws protecting the environment, a matter recognized in s 8(1)(da) which entrusts the FAC with the protection of the environment from the effects of, and associated with, the operation and use of aircraft operating to or from Federal airports. Even more significant is the requirement in s 7(2)(a) that the FAC shall endeavour to perform its functions in a manner that ‘is in accordance with the policies of the Commonwealth Government’. Those policies include Commonwealth environmental policies as expressed in and under the Environment Protection Act. In other words, the FAC is an authority to which the Environment Protection Act applies and, as such, the FAC must endeavour to perform its functions in accordance with the policies expressed in and under that Act. Indeed, it would be quite remarkable if the Act were to contemplate that the FAC, which holds title to airport land and airport development sites for and on behalf of the Commonwealth [ss 28, 29(1) and (1A) of the Act], should abide by State law environmental requirements rather than the environmental requirements prescribed by the Environment Protection Act. That statement is subject to the qualification that, where particular land at a Federal airport or at a Federal airport development site is to be used for a purpose not directly related to aviation, the use of the land must be allowed by the law of a State or Territory [see s 7(2)(d), (da) of the Act; see also s 7(2)(e) and (ea) dealing with the erection of a building at a Federal airport or Federal airport development site for a purpose that is not directly related to aviation]. But the circumstance that limited provision is made for recognition of the requirements of State law emphasizes the fact that, in general, they do not apply.

The long title to the Environment Protection Act describes it as: An Act to make provision for Protection of the Environment in relation to Projects and Decisions of, or under the control of, the Australian Government, and for related purposes. The object of the statute is to ensure to the greatest extent practicable that matters affecting the environment to a significant extent are fully examined and taken into account by, or on behalf of, the Australian Government and authorities of Australia — the term ‘authority of Australia’ being very widely defined — in relation to the formulation of proposals, the carrying out of works, the making of agreements and arrangements, the making of decisions and recommendations and the incurring of expenditure [s 5(1)]. The Governor-General is authorized to approve administrative procedures for the purpose of achieving the object of the statute [s 6(1)]. The administrative procedures relevant in this case were approved pursuant to this authority. Ministers are required to give directions to ensure that approved procedures are given effect by Departments and authorities and to ensure that any final environmental impact [page 591] statement or public environment report formulated in accordance with those procedures, and any suggestions or recommendations made in accordance with those procedures, are taken into account by the relevant Department or authority [s 8]. The relevant Minister is empowered to direct that an inquiry be conducted in respect of the environmental aspects of a matter [s 11] and the procedure at such inquiries is regulated [ss 14–22]. The Environment Protection Act therefore constitutes a comprehensive code governing environmental aspects of actions and decisions made by or on behalf of the Australian Government

and authorities of Australia. Part 5 of the State Act is likewise a comprehensive code governing environmental aspects of actions and decisions made by government and public authorities though, in our view, it is directed to actions and decisions made by or on behalf of the State. The regime of regulation for which the State Act makes provision is similar in substance and procedure to that prescribed by the Environment Protection Act but not identical to it. Because the FAC is not a ‘determining authority’ within the meaning of s 110 of the State Act, there is no inconsistency between that Act and the Commonwealth legislation — the Act, the Regulations under the Act and the Environment Protection Act. If, however, the FAC were a ‘determining authority’ within the meaning of s 110, then, in our view, Pt 5 of the State Act would be clearly inconsistent with both the Act and the Regulations made under the Act and, for that matter, with the Environment Protection Act in its application to the FAC.

6.1.52 The third example of a case that demonstrates how a legislative intention to cover the field can arise by implication from the subject, scope and purpose of the legislative scheme is Commonwealth v Australian Capital Territory (Marriage Equality Act case) (2013) 250 CLR 441. This case involved an inconsistency between Commonwealth laws and an enactment of the Australian Capital Territory Legislative Assembly, and will be considered further at 6.1.92C. 6.1.53 The High Court’s decision in Australian Mutual Provident Society v Goulden (1986) 160 CLR 330 is a reminder that the assessment of whether there is inconsistency does not always fit into neat categories and involves close attention to the respective statutory schemes. Mr Goulden, the defendant, had been blind

since birth. He took out lie insurance with the plaintiff, Australian Mutual Provident Society (AMP). Goulden sought to add a ‘waiver of premium benefit’ to the policy, the effect of which would have been to waive his liability to pay the premium in the event that he suffered total disablement. ‘Total disablement’ would have been defined as disablement resulting from an illness, accident or injury as a result of which the insured would be unable to engage in any occupation, employment or business. AMP refused the addition of the waiver on account of Goulden’s blindness. Goulden initiated a complaint to the New South Wales Equal Opportunity Commission that AMP’s decision contravened s 49K(1) of the Anti-Discrimination Act 1977 (NSW) which provided that it was ‘unlawful for a person who provides … goods or services to discriminate against a physically handicapped person on the ground of his physical impairment (a) by refusing to provide him with those goods or services or (b) in the terms on which he provides him with those goods or services’. ‘Physical impairment’ was defined in s 4(1) of the New South Wales Act to mean ‘any defect or disturbance in the normal structure and functioning of the person’s body, whether arising from a condition subsisting at birth or from illness or injury …’. AMP, which was registered to carry on business under the Life Insurance Act 1945 (Cth), [page 592] sought a declaration in the High Court that s 49K of the state Act was inconsistent with the Commonwealth Act. In a unanimous judgment, the court held that there was inconsistency for the purposes of s 109.

6.1.54C

Australian Mutual Provident Society v Goulden (1986) 160 CLR 330

Gibbs CJ, Mason, Brennan, Deane and Dawson JJ: By its statement of claim in the present action, which was brought in the Court’s original jurisdiction, the AMP seeks a declaration to the effect that s 49K of the Anti-Discrimination Act is invalid ‘insofar as it purports to apply to the activities of (the AMP) in business within the meaning of the Life Insurance Act 1945 (Cwth) on the ground that the said Section 49K is inconsistent with the provisions’ of that Act. … The Life Insurance Act (‘the Act’) is framed on the basis that it will operate in the context of local laws of the various States and Territories of the Commonwealth. In some cases (see, eg, ss 67(7) and 94(7)), that basis is made express. In other cases (see, eg, s 139A), it is clearly implicit in particular positive provisions of the Act. Generally, however, it appears from the restricted nature of the matters with which the provisions of the Act actually deal. In particular, the Act does not provide for the incorporation, or generally regulate the internal management, of the companies which are registered under its provisions. The ordinary laws of a State or Territory relating to incorporation, or conduct of the affairs, of such companies are left to apply except to the extent that they are modified or excluded by provisions of the Act dealing with particular subject matters. Nor does the Act establish a detailed and special code of contract or insurance law to be applied in relation to the contracts of insurance written by registered life companies. Again, the ordinary provisions of the local law of the particular State or Territory are left to apply except to the extent that they may be so modified or excluded by provisions dealing with particular subject matters such as proof of age (ss 81 and 82), misstatement of age (s 83), the effect of

incorrect statements in proposals (s 84), minors (s 85) and what constitutes an ‘insurable interest’ (s 86). Among the matters in respect of which the Act makes special provision are the statutory funds of life insurance companies, the actuarial investigation of their affairs, the rates of premium charged and various aspects of life insurance policies. In the context of the statutory scheme of registration which confines the carrying on of life insurance business in Australia to companies registered under the Act, those provisions are directed towards ensuring adequate supervision and regulation of the insurance practices of life insurance companies to protect policy holders in respect of, among other things, the financial soundness of such companies, their statutory funds and the financial viability of the rates of premium charged for particular classes of insurance. Central to the practices of the insurance companies which the provisions of the Act are designed to regulate and control are the classification of risks and the setting of premiums. They are the essence of life insurance business. Subject to s 78, to which we shall refer in a moment, the Act does not attempt to restrict the business judgement of a registered life insurance company in classifying risks and setting premiums. To the contrary, the Act proceeds on the underlying legislative assumption that, subject to some qualifications for which the Act provides, the life insurance business of such a company is more likely to prosper and the interests of its policy holders are more likely to be protected, if it is permitted to classify risks and fix rates of premium in that business in accordance with its own judgement founded upon the advice of actuaries and the practice of prudent insurers. [page 593] The Act superimposes on the base of that assumption a number of stringent requirements and controls. …

[Their Honours then referred, in particular, to s 78 of the Act, which provided that a company could not issue any policy unless the rate of premium had been approved by an actuary and gave an oversight role to the relevant Commonwealth regulatory agency.] When the scheme of regulation established by the Act is considered in the light of the matters which we have mentioned, the Act should be understood as giving expression to a legislative policy that the protection of the interests of policy holders is to be achieved by allowing a registered life insurance company to classify risks and fix rates of premium in its life insurance business in accordance with its own judgement founded upon the advice of actuaries and the practice of prudent insurers. In the words of Dixon J in Victoria v The Commonwealth (1937) 58 CLR 618, at p 630, it would alter, impair or detract from the Commonwealth scheme of regulation established by the Act if a registered life insurance company was effectively precluded by the legislation of a State from classifying different risks differently, from setting different premiums for different risks or from refusing to insure risks which were outside the class of risk in respect of which it wished to offer insurance. In particular, State legislation which, either absolutely or subject to qualifications and exceptions, made it generally unlawful for a life insurance company to take account of physical impairment in determining whether it would or would not accept a particular proposal or the terms upon which it would grant insurance cover would be inconsistent with the essential scheme of the provisions of the Act regulating the issue of policies and the fixing of premiums. Indeed, such legislation would undermine and, to a significant extent, negate the legislative assumption of the underlying ability of a registered life insurance company to classify risks and fix rates of premium in accordance with its own judgement based upon actuarial advice and prudent insurance practice upon which, as has been mentioned, the stringent controls and requirements which the Act imposes in respect of

life insurance business of registered life insurance companies are predicated. If s 49K(1) were validly to apply to life insurance companies in respect of the insurance policies which they write, it would, according to its terms, have the effect of rendering prima facie unlawful any refusal to insure a person or any adverse differentiation in the terms of insurance if such refusal or adverse differentiation was on the ground of the ‘physical impairment’ of the person concerned. That operation of the section, if left unqualified, would effectively preclude a registered life insurance company from differentiating, in classifying risks or in fixing rates or conditions in its life insurance business, on the grounds of the ‘physical impairment’ of a physically handicapped proposer. In the context of the wide definition of ‘physical impairment’ in s 4(1), such an unqualified provision would be quite inconsistent with the business practice of any prudent life insurance company and with accepted actuarial practice in relation to the classification of risks and determination of rates by such an insurer. [Their Honours then concluded that there was nothing in the qualifications to s 49K in the state Act that operated to avoid that conflict.]

6.1.55 The court’s conclusion did not turn on an application of the three traditional tests of inconsistency. Instead, the court applied the alter, impair or detract from test in the Kakariki case 6.1.24C to the respective provisions. The whole scheme of the Commonwealth Act operated on the policy that insurance companies would calculate the insurable risk and [page 594]

set the rate of premium. The state provision, which would have prohibited certain decisions central to the determination of that risk, would have undermined the effective operation of the Commonwealth legislative scheme. 6.1.56 One area of considerable difficulty has been cases in which conduct is criminalised under both Commonwealth and state laws. Both Dixon J in Ex parte McLean (1930) 43 CLR 472 6.1.22C at 483 and Isaacs J in Clyde Engineering Co v Cowburn (1926) 37 CLR 466 (see 6.1.16) at 489 noticed the problem of overlapping state and Commonwealth criminal laws. In Ex parte McLean, Dixon J resolved the inconsistency question by concluding that the Commonwealth provisions were intended as an exclusive statement on the topic. 6.1.57 In Hume v Palmer (1926) 38 CLR 441, Palmer laid an information that Hume had breached the Navigation Act 1901 (NSW) for a sea traffic offence which was alleged to have occurred in Port Jackson. At the hearing before a state stipendiary magistrate, Hume objected to the jurisdiction of the magistrate on the basis that proceedings should have been brought under the Navigation Act 1912 (Cth) and its Regulations, as the events occurred in the course of an interstate trading journey. The High Court held that the laws were inconsistent, on a number of grounds. Knox CJ said (38 CLR at 448): The rules prescribed by the Commonwealth law and the State law respectively are for present purposes substantially identical, but the penalties imposed for their contravention differ … In these circumstances, it is, I think clear … that the provisions of the law of the state for the breach of which the appellant was convicted are inconsistent

with the law of the Commonwealth within the meaning of sec 109 of the Constitution and are therefore invalid.

Isaacs J identified a number of features of the laws as being inconsistent, including the penalties imposed: 38 CLR at 450–1. Starke J said (38 CLR at 462): The federal law covers the whole subject matter of the State Regulations in relation to navigation and shipping in inter-State and foreign trade and commerce. It produces in its code of sea rules ‘a uniform whole’, and makes it the law for the regulation of navigation and shipping within the ambit of the Federal power. But, in addition, the Federal law has imposed somewhat different sanctions upon contraventions of its code, than are imposed under the State code for the same acts … It is not difficult to see that the Federal code would be ‘disturbed or deranged’ if the State code applied a different sanction in respect of the same act. Consequently the State regulations are, in my opinion, inconsistent with the law of the Commonwealth and rendered invalid by force of sec 109 of the Constitution.

6.1.58 The subsequent cases involving inconsistent penalties emphasise the importance of ascertaining the intentions of the legislatures. In R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338, the High Court decided that a person who had allegedly damaged Commonwealth property could not be prosecuted for a breach of s 469 of the Criminal Code (Qld) because this section was, in the context of the facts of this case, inconsistent with s 29 of the Crimes Act 1914 (Cth). Section 469 of the Criminal Code provided that ‘any person who wilfully and unlawfully destroys or damages any property is guilty of an offence’ and liable to imprisonment with hard labour for 2 or 3 years, depending on the circumstances of the offence. Section 29 of the Crimes Act provided that ‘any person who wilfully and unlawfully destroys or

damages any property … belonging to the Commonwealth … shall be guilty of an offence’ and liable to imprisonment for 2 years. Menzies J said that ‘s 29 of the Crimes Act should be regarded [page 595] as exhaustive’ because it provided ‘a common rule [operating throughout Australia] to or from which the legislation of a State can neither add nor subtract’: 131 CLR at 342. On the other hand, Mason J held that there was a direct inconsistency between s 469 of the Criminal Code and s 29 of the Crimes Act, and that it was unnecessary to consider whether the Commonwealth Parliament had intended to cover the field (131 CLR at 346–7): Although the provisions are substantially identical in describing the conduct which gives rise to the offence, the penalties prescribed differ. A difference in the penalties prescribed for conduct which is prohibited or penalised by Commonwealth and State laws has been held to give rise to inconsistency between those laws (see Hume v Palmer (1926) 38 CLR 441; Ex parte McLean (1930) 43 CLR 472), at least when it appears that the Commonwealth statute by prescribing the rule to be observed evinces an intention to cover the subject matter to the exclusion of any other law … [T]here is here a direct conflict (in the matter of penalty) between the Commonwealth and the State law; in such a case it is impossible to see how the existence of inconsistency in the constitutional sense can be avoided by an argument which seeks to attribute to the Commonwealth law an intention not to cover the relevant field.

The judgments of Menzies and Mason JJ show a striking difference in approach to the problem of overlapping criminal laws. For Menzies J, the Commonwealth had covered the field because it had made wilful damage to Commonwealth property a federal offence:

the inconsistency lay in the state attempting to penalise the same activity. But for Mason J, the inconsistency arose, not because the state had attempted to penalise that activity, but because it had attached a different penalty to that activity. The difficulty in extracting a common proposition from R v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 was not resolved by the other members of the court, who managed to adopt the reasons of both Menzies and Mason JJ: 131 CLR 338 at 340 per Barwick CJ; 347– 8 per Jacobs J. 6.1.59 In R v Winneke; Ex parte Gallagher (1982) 152 CLR 211, the court was invited to consider whether s 19 of the Evidence Act 1958 (Vic) was inconsistent with s 6 of the Royal Commissions Act 1902 (Cth). The Victorian provision (which applied to state royal commissions) provided that any person who without lawful excuse failed to answer a question touching the subject matter of an inquiry was guilty of an offence and liable to a penalty of $1500 or 3 months’ imprisonment. The Commonwealth provision made it an offence for a person appearing as a witness in a royal commission to refuse to be sworn or to answer any relevant question. The penalty for failure to do so was a fine of $1000. The Commonwealth and Victoria appointed a royal commissioner under separate instruments (‘letters patent’) to conduct a Commonwealth and state royal commission concurrently; however, a single document was used to summon witnesses to the commission. A number of witnesses, including Mr Norman Gallagher, attended but refused to answer certain questions. Fines were imposed under the Evidence Act 1958 (Vic). It was argued that the inconsistent penalties under the Commonwealth and state laws exposed a s 109 inconsistency. Gibbs CJ, Mason and Wilson JJ (Murphy J dissenting; Aickin J died before judgment was

delivered) held that the Commonwealth Act did not preclude the concurrent operation of the Victorian Royal Commission Act, or reveal an intention to affect the duties of witnesses under any concurrently held inquiry: 152 CLR at 218–19, 222, 234). After referring to Hume v Palmer and R v Loewenthal; Ex parte Blacklock, Gibbs CJ observed that proceedings could be taken under either the state or Commonwealth Act, and that s 30(2) of the Acts Interpretation Act 1901 (Cth) provided that once a witness had been punished under state law, he or she would not be liable to punishment under Commonwealth law. [page 596] 6.1.60 In McWaters v Day (1989) 168 CLR 289, Day, the respondent and a member of the Australian Army, was driving on a road within the Enoggera Barracks in suburban Brisbane, Queensland when he was involved in a traffic accident. The accident was attended by both the Garrison Military Police and McWaters, a constable of the Queensland Police. McWaters arrested Day and charged him with an offence under s 16(1)(a) of the Traffic Act 1949 (Qld). The Queensland provision stated: ‘Any person who whilst he is under the influence of liquor or a drug — (i) drives a motor vehicle … is guilty of an offence and liable to a penalty not exceeding $1400 or to imprisonment for a term not exceeding nine months or to both such penalty and imprisonment’. Section 4 of the Commonwealth Places (Application of Laws) Act 1970 relevantly applied. The Full Court of the Supreme Court of Queensland (McPherson and Dowsett JJ; Williams J dissenting) made absolute an order nisi for prohibition restraining the Magistrates Court at Brisbane from hearing the charge on the

grounds that the respondent, as a member of the defence forces, driving on service land, engaged in behaviour that was relevantly governed by s 40(2) of the Defence Force Discipline Act 1982 (Cth), which covered substantially the same offence as s 16(1) of the state Act, which was therefore invalid to the extent of the inconsistency by reason of s 109. The unanimous High Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) said (168 CLR at 310): As evidence of the inconsistency contended for, the respondent points to the different penalties which the respective laws stipulate and to the fact that the Commonwealth offence differs in substance by containing a requirement that the person charged be incapable of having proper control of the vehicle concerned. It is true that a difference in penalties prescribed for conduct prohibited by Commonwealth and State laws has been held to give rise to inconsistency between those laws for the purposes of s 109; Hume v Palmer (1926) 38 CLR 441; Ex parte McLean (1930) 43 CLR 472; Reg v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338. Equally, a difference between the rules of conduct prescribed by Commonwealth and State laws might give rise to such inconsistency. But the mere fact that such differences exist is insufficient to establish an inconsistency in the relevant sense. It is necessary to inquire whether the Commonwealth statute, in prescribing the rule to be observed, evinces an intention to cover the subject matter to the exclusion of any other law: Ex parte McLean, at p 483; Blacklock, at p 347; Reg v Winneke; Ex parte Gallagher (1982) 152 CLR 211, at pp 218, 224, 233; University of Wollongong v Metwally (1984) 158 CLR 447, at p 456 … … But it is clear that the Discipline Act contemplates parallel systems of military and ordinary criminal law and does not evince any intention that defence force members enjoy an absolute immunity from liability under the ordinary criminal law, notwithstanding that the Discipline Act addresses the question of double jeopardy. As is implicit in the judgments in Re Tracey, the Discipline Act does not seek to do other than enact a system of military law in accordance with the traditional

and constitutional view of the supplementary function of such law (see at pp 259, 262; pp 15, 20 of ALR). The different purposes underlying military discipline and the ordinary criminal law were emphasized. Thus, Brennan and Toohey JJ said (at p 270; p 33 of ALR): It is the difference between the purpose of proceedings before service tribunals and the purpose of proceedings before civil courts that justifies the subjection of service personnel to the jurisdiction of both. See also at p 259; p 15 of ALR.

[page 597] It is this difference in purpose that immediately distinguishes the present case from Blacklock where there was no similar basis for concluding that the Commonwealth law was intended to operate as an additional, rather than a replacement, set of rights and duties.

6.1.61 In Dickson v R (2010) 241 CLR 491, the High Court was again faced with potentially inconsistent federal and state criminal legislation. Section 321(1) of the Crimes Act 1958 (Vic) criminalised conspiracy to commit an offence. Section 72(1) prohibited stealing. Section 71(2) indicated that property was regarded as ‘belonging to any person having possession or control of it’ or, with some exceptions, having any proprietary right or interest in it. Section 11.5 of the Criminal Code (Cth) also criminalised conspiracy, although the offence was narrower in important ways. Section 131.1(1) of the Code made theft of Commonwealth property (including the property of the Customs Service, a Commonwealth entity) a criminal offence. The maximum penalty for each offence was 10 years’ imprisonment. As

an indictable offence, the Commonwealth offence would be required to be tried in accordance with the requirements of s 80 of the Constitution (including unanimity of jury verdict). Although not relevant to the facts in this case, it would have been possible under state provisions for majority verdicts on the trial of the state offence. Dickson was charged and convicted by the County Court of Victoria of conspiracy, under the Victorian provision, to steal 40 pallets of cigarettes from a storage facility leased by the Commonwealth Customs Department from a company called Dominion. The trial judge directed the jury that the cigarettes had been under the control of Dominion and thus belonged to it. Dickson appealed his conviction and sentence to the Victorian Court of Appeal but was unsuccessful. He then applied for special leave, and, after the s 109 point was raised by members of the High Court (see Gans, 2011), amended his application for special leave to argue that because the cigarettes were property belonging to the Commonwealth, s 131.1 of the Commonwealth law applied, and this gave rise to the spectre of an inconsistency under s 109 of the Constitution. In a unanimous judgment, the court held there was a direct inconsistency between the Commonwealth and state conspiracy provisions. 6.1.62C

Dickson v R (2010) 241 CLR 491

French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ: Shortly expressed, the appeal to this Court is brought on the ground that conspiracy to steal the cigarettes was not an offence against the law of Victoria so that the presentment preferred against the appellant should have been quashed. This conclusion is said to follow because (a) the cigarettes referred to

in the presentment were property belonging to the Commonwealth to which the theft provision in s 131.1 of the Criminal Code (Cth) … applied, in respect of which the conspiracy provision in s 11.5 attached; and (b) by operation of s 109 of the Constitution, the relevant provisions of the Victorian Crimes Act were pro tanto invalid in the sense of ‘suspended, inoperative and ineffective’ [Western Australia v The Commonwealth (the Native Title Act Case) (1995) 183 CLR 373 at 464–5]. This issue was not raised at trial or in the Court of Appeal … For the reasons which follow the submissions as to ‘direct inconsistency’ which were made by the appellant should be accepted and the appeal allowed. [The court then reviewed the relevant provisions, the statement of Dixon J in Victoria v The Commonwealth (Kakariki case) (1937) 58 CLR 618 6.1.24C at 630, the joint reasons [page 598] of the court in Telstra v Worthing (1999) 197 CLR 61 at 76–7 and Blackley v Devondale Cream (Vic) Pty Ltd (1968) 117 CLR 253. In particular, as mentioned at 6.1.28, the court (241 CLR at 502) appeared to identify ‘direct inconsistency’ with Dixon J’s ‘alter, impair or detracts from test’, and referred to the statement of Barwick CJ in Blackley (117 CLR at 258–9), as reiterated by the court in Telstra (197 CLR at 76), that ‘there will be … “direct collision” where a State law, if allowed to operate, would impose an obligation greater than that for which the federal law has provided’. Their Honours then continued:] Three further points should be made at this stage. The first is the importance, stressed by Gaudron, McHugh and Gummow JJ in Croome v Tasmania (1997) 191 CLR 119 at 129– 130 and earlier by Gibbs CJ and Deane J in University of Wollongong v Metwally (1984) 158 CLR 447 at 457–458 and

476–477 respectively of s 109 not only for the adjustment of the relations between the legislatures of the Commonwealth and States, but also for the citizen upon whom concurrent and cumulative duties and liabilities may be imposed by laws made by those bodies. The second point is that, as Isaacs J indicated in Hume v Palmer [(1926) 38 CLR 441 at 450–1], the case for inconsistency between the two conspiracy provisions with which this appeal is concerned is strengthened by the differing methods of trial the legislation stipulates for the federal and State offences, particularly because s 80 of the Constitution would be brought into operation. In the present case, the jury trial provided by the law of Victoria under s 46 of the Juries Act did not require the unanimity which, because s 4G of the Crimes Act (Cth) would have stipulated an indictment for the federal conspiracy offence, s 80 then would have mandated at a trial of the appellant. The third point concerns the significance of s 4C(2) of the Crimes Act (Cth). This provision provides that where an act or omission constitutes an offence under both a law of the Commonwealth and that of a State, and the offender has been punished for that offence under the State law, the offender shall not be liable to be punished for the Commonwealth offence. Of such a provision, Mason J (with the concurrence of Barwick CJ and Jacobs J) observed in R v Loewenthal; Ex parte Blacklock [(1974) 131 CLR 338 at 347] that it ‘plainly speaks to a situation in which the State law is not inoperative under s 109, as for example when there is an absence of conflict between the provisions of the two laws and the Commonwealth law is not intended to be exclusive and exhaustive’. The direct inconsistency in the present case is presented by the circumstance that s 321 of the Crimes Act (Vic) renders criminal conduct not caught by, and indeed deliberately excluded from, the conduct rendered criminal by s 11.5 of the Criminal Code (Cth). In the absence of the operation of s 109 of the Constitution, the Crimes Act (Vic) will alter, impair or detract from

the operation of the federal law by proscribing conduct of the appellant which is left untouched by the federal law. The State legislation, in its application to the presentment upon which the appellant was convicted, would undermine and, to a significant extent, negate the criteria for the existence and adjudication of criminal liability adopted by the federal law. No room is left for the State law to attach to the crime of conspiracy to steal property in the possession of the Commonwealth more stringent criteria and a different mode of trial by jury. To adapt remarks of Barwick CJ in Devondale Cream [(1968) 117 CLR 253 at 258. See also at 272 per Menzies J] the case is one of ‘direct collision’ because the State law, if allowed to operate, would impose upon the appellant obligations greater than those provided by the federal law. To explain why this is so it is necessary to say something more respecting certain aspects of the common law crime of conspiracy which are picked up without alteration by s 321 of the Crimes Act (Vic). [page 599] [Their Honours referred to the statement of the elements of the common law crime of conspiracy by Weinberg J in R v Caldwell (2009) 22 VR 93 at 99–100: at common law, ‘the prohibited act is the entry into an unlawful agreement, which need never be implemented’ and that the offence ‘is complete the moment that the offenders have entered into the agreement’. His Honour said that ‘an overt act performed in implementing that agreement is not an ingredient, or element, of the offence itself’. The court in Dickson then said (241 CLR at 505) that the legislative history of s 11.5 of the Criminal Code (Cth) showed there had been a ‘deliberate legislative choice’ for s 11.5 to have a narrower scope than the common law offence that had been picked up without alteration by s 321 of the Crimes Act (Vic). Their Honours continued:]

What is immediately important is the exclusion by the federal law of significant aspects of conduct to which the State offence attaches. There are significant ‘areas of liberty designedly left [and which] should not be closed up’, to adapt remarks of Dixon J in Wenn v Attorney-General (Vict) [(1948) 77 CLR 84 at 120]. First, the effect of s 11.5(1) is that the Commonwealth conspiracy provision applies only where there is a primary offence which is punishable by imprisonment for more than 12 months or by a fine of 200 penalty units or more, whereas s 321 of the Crimes Act (Vic) applies to agreements which will involve ‘the commission of an offence’. Secondly, in accordance with the settled principles explained by Weinberg JA in Caldwell, the offence under s 321 is complete upon the making of the agreement without proof of overt acts, whereas par (c) of s 11.5(2) requires that for the person to be guilty that person, or at least one other party to the agreement, must have committed an overt act pursuant to the agreement. Thirdly, a person cannot be found guilty of conspiracy under s 11.5 if, before the commission of an overt act pursuant to the agreement, that person has withdrawn from the agreement and taken all reasonable steps to prevent the commission of the primary offence (s 11.5(5)). There is no such provision in s 321. Further, sub-s (7) of s 11.5 states: Any defences, procedures, limitations or qualifying provisions that apply to an offence apply also to the offence of conspiracy to commit that offence. There is no equivalent provision in Victoria. [Their Honours then distinguished the outcome in McWaters v Day (1989) 168 CLR 289 (see 6.1.60), where Commonwealth and state offence provisions, although expressed with different elements, each applied to penalise defence members driving while intoxicated. It could

not be said, the court in Dickson held, that the Commonwealth provision could be construed ‘as conferring a liberty on a drunken defence member to drive a vehicle’ in a way that fell outside the Commonwealth prohibition but was nonetheless caught by the Victorian provision: 241 CLR at 506. Their Honours then concluded:] The result in the present case is that in its concurrent field of operation in respect of conduct, s 321 of the Crimes Act (Vic) attaches criminal liability to conduct which falls outside s 11.5 of the Criminal Code (Cth) and in that sense alters, impairs or detracts from the operation of the federal legislation and so directly collides with it.

6.1.63 For criticism of the High Court’s decision in Dickson, see Gans, 2011. The decision in Dickson created some apprehension that an inconsistency would arise whenever [page 600] Commonwealth and state provisions criminalised conduct in different terms, particularly where the Commonwealth provision was narrower in scope. It also raised a question as to what relevance the mode of trial had to the assessment of inconsistency, particularly the differences that arise as a consequence of the constitutional requirements for jury trials in s 80 that apply only to the trial on indictment of a Commonwealth offence. 6.1.64 In Momcilovic v R (2011) 245 CLR 1, a majority of the court (Hayne J dissenting) rejected an argument that s 71AC of the Drugs, Poisons and Controlled Substances Act 1981 (Vic), which

prohibited trafficking in a drug of dependence, was inconsistent with s 302.4 of Criminal Code (Cth), a Commonwealth indictable offence criminalising trafficking in a controlled drug. The state offence attracted a maximum term of imprisonment of 15 years, whereas the term of imprisonment for the Commonwealth offence was 10 years. Unlike the position in Dickson, the elements of the Victorian offence imposed ‘a lesser burden’ (245 CLR at 72 per French CJ) than the elements of the Commonwealth offence. As French CJ stated (245 CLR at 71): ‘The coexistence of Commonwealth and State laws creating offences based upon the same or very similar conduct … raises the logical possibility that a person might be prosecuted and convicted of substantially the same offence under State and Commonwealth laws’. Section 4C(2) of the Crimes Act 1914 (Cth) sought to deal with this problem of double jeopardy by including a ‘roll-back’ provision: where an act constituting an offence under Commonwealth and state offence provisions had been punished under the state provision, then the offender would not be liable for punishment for the Commonwealth offence. 6.1.65 Momcilovic raised a number of questions about the operation of s 109 in these circumstances: first, could this case be distinguished from Dickson; second, could an inconsistency arise from differing penalties, or was the analysis limited to comparing the elements of the offence; and, third, as seemed to be suggested in Dickson, could differences in mode of trial, including the requirements of s 80 of the Constitution, give rise to an inconsistency? The judgment of Gummow J, with whom French CJ agreed (245 CLR at 70–4), gave detailed consideration to the s 109 arguments. As explained by Gummow J, Dickson was easily distinguished (245 CLR at 122):

… s 71AC is less stringent than the provisions of the Code: the federal law cannot be said upon its proper construction designedly to have left a liberty which the operation of s 109 does not permit by the State law to be ‘closed up’.

6.1.66 French CJ and Bell JJ (245 CLR at 241) agreed with these conclusions. (See also Heydon J 245 CLR at 190–1). As for the differing penalties, Gummow J concluded that the ‘laws’ to which s 109 applies ‘comprise both the norm or rule of conduct each lays down and the attached sanction and remedies’: 245 CLR at 107. Thus, as was recognised in McLean, Hume, and Winneke, differing penalties can give rise to an inconsistency. However, they did not in this case. His Honour said (245 CLR at 114): If, as in the present case, the federal and State penalty provisions each specify a maximum penalty, and that maximum differs, the provisions thereby confer a judicial discretion or power to be exercised within those respective limits and in the circumstances of the particular case. Conflict may arise, but only upon the exercise of those powers.

6.1.67 However, the roll-back provision in this case ensured that no such operational inconsistency would arise. Ms Momcilovic had not been prosecuted for a federal offence and, [page 601] having been sentenced for a contravention of the state provision, the ‘roll-back’ provision in s 4C(2) of the Crimes Act 1914 (Cth) would have prevented any future punishment for a contravention of the Commonwealth offence. As Gummow J said (245 CLR at 114): ‘[Section] 4C(2) would have removed the occasion for any

“direct” inconsistency’. Thus, unless, as was the case in Ex parte McLean (1930) 43 CLR 472, the differences in penalties can be said to evince an intention by the Commonwealth to cover the field exclusively (which they did not in Momcilovic), inconsistency will fall to be determined according to the principle of operational inconsistency, at least where the sentencing courts have discretion to impose the appropriate sentence. (See also 245 CLR at 235–6 per Crennan and Kiefel JJ.) 6.1.68 As for the difference in modes of trials between Commonwealth and state offences, Gummow J concluded that such differences were not capable of giving rise to an inconsistency under s 109 (245 CLR at 108–9): … the process of abstraction and characterisation which yields that result does not have the consequence that each law with which the appellant seeks to engage s 109, that of the State and that of the Commonwealth, includes the general provisions at federal and State level for the trial by jury of indictable offences. The steps in the prosecution, conviction and punishment of the appellant were taken in the general milieu of the system for adjudication of criminal guilt. The body of legislative provisions for the operation of that system is not part of the ‘law of a State’ which may be rendered inoperative by reason of inconsistency with the federal laws upon which the appellant relied.

See also 245 CLR at 190–1 per Heydon J; 234 per Crennan and Kiefel JJ. Thus, statements to the contrary in Dickson must be taken with some care.

Express intention to displace state law (or ‘cover the field’)

6.1.69 The Commonwealth may include, in its legislation, a clause expressly excluding the operation of state legislation. In Victoria v Commonwealth (Kakariki case) (1937) 58 CLR 618 6.1.24C, Evatt J suggested that such a clause could result in the invalidity of the Commonwealth law, as the Commonwealth’s specific legislative powers did not include the ‘power to define or limit the legislative or executive powers of a State’: 58 CLR at 638. However, it is settled that the Commonwealth may legislate in those terms, although perhaps with a lingering qualification. 6.1.70 In Wenn v Attorney-General (Vic) (1948) 77 CLR 84, the High Court held that the Re-establishment and Employment Act 1945 (Cth) regulated employment preferences for ex-members of the armed forces, although the Act made provision for preference only in hiring and not in promotion. Accordingly, the Discharged Servicemen’s Preference Act 1943 (Vic), which provided for preference in hiring and promotion, was inconsistent with the Commonwealth law. A Commonwealth intention to cover the field was found in the following provision of the Re-establishment and Employment Act: 24 … (2) The provisions of this Division shall 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.

[page 602] Latham CJ observed that the Commonwealth’s intention to

regulate the topic (or cover the field) could be inferred ‘from the nature and scope’ of the legislation (77 CLR at 110): Where such an inference can properly be drawn the Commonwealth legislation prevails over any State law by virtue of s 109 of the Constitution. In the Commonwealth Act now under consideration, however, the Commonwealth Parliament has not left this matter to be determined by an inference (possibly disputable) from the nature and scope of the statute. The Parliament has most expressly stated an intention which in the other cases mentioned was discovered only by a process of inference. If such a parliamentary intention is effective when it is ascertained by inference only, there can be no reason why it should not be equally effective when the intention is expressly stated.

Dixon J described s 24(2) as showing that the Commonwealth Parliament ‘intended to provide … what would be the only rule upon the subject and so would operate uniformly and without differentiation based on locality or other conditions’: 77 CLR at 119. In response to the argument that s 24(2) was beyond the constitutional power of the Commonwealth Parliament, he said (77 CLR at 120): There is no doubt great difficulty in satisfactorily defining the limits of the power to legislate upon a subject exhaustively so that s 109 will of its own force make inoperative State legislation which otherwise would add liabilities, duties, immunities, liberties, powers or rights to those which the Federal law had decided to be sufficient. But within such limits an enactment does not seem to me to be open to the objection that it is not legislation with respect to the Federal subject matter but with respect to the exercise of State legislative powers or that it trenches upon State functions. Beyond those limits no doubt there lies a debatable area where Federal laws may be found that seem to be aimed rather at preventing State legislative action than dealing with a subject matter assigned to the Commonwealth Parliament.

6.1.71 The issue was referred to again by the court in Council of the Municipality of Botany v Federal Airports Corporation (Third Runway case) (1992) 175 CLR 453 6.1.51C. Regulation 9(2) of the Federal Airports Corporation Regulations authorised a licensed worker to carry out work in accordance with the licence ‘in spite of a law’ of New South Wales that was listed in the regulation. The council challenged the validity of the regulation on the basis that ‘the sole object of the making of the Regulations was to displace the operation of a State law upon the dredging and construction activities involved in the proposal for the extension to the airport’: 175 CLR at 463. The court rejected the argument, holding that the ‘most obvious answer’ is that the Regulations had ‘a wider purpose’: 175 CLR at 463. They established a licensing regime for workers to carry out construction activities consistently with the environmental standards, set out in the Environmental Impact Statement published by the Federal Airports Corporation in accordance with the Environmental Protection (Impact of Proposals) Act 1974 (Cth), and unimpeded by state legislation. The court continued (175 CLR at 464–5): Regulation 9(2) is designed to ensure that the carrying out of the works and the exercise of the rights is governed by, and is in accordance with, the environmental standards as defined by the Regulations, that is, the Commonwealth standards, and to ensure that the work authorized by Commonwealth law is neither prevented nor hindered by State law. To attain those two objects, reg 9(2) confers upon a contractor an immunity from liability under State law in respect of what he or she does in accordance with a licence granted by the

[page 603]

Chief Executive Officer. Legislation which attains those objects and confers that immunity is necessarily inconsistent with State law and therefore becomes inoperative by operation of s 109 of the Constitution. Viewed in this way, reg 9(2) is plainly valid. This is not a case in which the Commonwealth law is aimed at preventing or controlling State legislative action rather than dealing with a subject-matter assigned to the Commonwealth Parliament [Wenn per Dixon J at 120]. Nor is it a case in which the Commonwealth law invalidly seeks to displace or expand the operation of s 109. There can be no objection to a Commonwealth law on a subject which falls within a head of Commonwealth legislative power providing that a person is authorized to undertake an activity despite a State law prohibiting, restricting, qualifying or regulating that activity. Indeed, unless the law expresses itself directly in that way, there is the possibility that it may not be understood as manifesting an intention to occupy the relevant field to the exclusion of State law.

6.1.72 In Western Australia v Commonwealth (Native Title Act case) (1995) 183 CLR 373, s 7(1)(a) of the Land (Titles and Traditional Usage) Act 1993 (WA) extinguished any native title to land that existed immediately before the commencement of the Act; and s 7(1)(b) created a new entitlement in members of an Aboriginal group that had held native title to land immediately before the commencement ‘to exercise rights of traditional usage in relation to that land under and subject to this Act’. Section 11(1) of the Native Title Act 1993 (Cth) provided that native title could not be extinguished contrary to the Commonwealth Act; and s 7(1) provided that nothing in the Act affected the operation of the Racial Discrimination Act 1975 (Cth). Section 10(1) of the Racial Discrimination Act provided that, where a state law conferred a narrower right on persons of a particular race, colour or national or ethnic origin than the right of other persons, the first-mentioned group of persons should, ‘notwithstanding anything in that law …

enjoy that right to the same extent’ as the other persons. Among the rights covered by s 10(1) were the right to own property and the right not to be arbitrarily deprived of property. The Wororra Peoples and the Yawuru Peoples sued the State of Western Australia in the High Court for a declaration that the Land (Titles and Traditional Usage) Act was inconsistent with the Racial Discrimination Act and therefore inoperative and invalid. In a separate proceeding, the State of Western Australia sued the Commonwealth for a declaration that the Native Title Act 1993 was invalid. It was argued that s 11 of the Commonwealth law was invalid because it sought to perform the function of s 109, by purporting to prevent the states from making a law upon a particular topic. The court rejected this argument. Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ said (183 CLR at 464–7): It is beyond the power of the Parliament of the Commonwealth to enact a law that is inconsistent with s 107. It is therefore beyond the legislative power of the Commonwealth Parliament to withdraw from any State Parliament a legislative power that is conferred on or confirmed to that Parliament by s 107. Nor does the Parliament of the Commonwealth have power directly to control the content of a State law. By virtue of s 107 of the Constitution, a valid law of a State operates according to its tenor except to the extent, if any, that s 109 of the Constitution renders the State law ‘invalid’. In Gerhardy v Brown (1985) 159 CLR 70 at 121, Brennan J said: It is … outside the powers of the Commonwealth Parliament to prohibit the parliament of a State from exercising that parliament’s powers to enact laws, whether discriminatory or not, with respect to a topic within its competence. It is not to

[page 604] the point that a law, if enacted by the State parliament, will be invalid by reason of its inconsistency with a Commonwealth law. A Commonwealth law purporting to prohibit a State parliament from enacting a law finds no support in s 109 of the Constitution; rather, s 109 operates on a law that a State parliament has lawfully enacted. … If the Commonwealth intends to make a law the exclusive and exhaustive law upon a subject within its legislative power, the intention may appear from the text or from the operation of the law. The text may reveal the intention either by implication or by express declaration. And if it be within the legislative power of the Commonwealth to declare that the regime prescribed by the Commonwealth law shall be exclusive and exhaustive, it is equally within the legislative power of the Commonwealth to prescribe that an area be left for regulation by State law … If the application of State law to a particular subject matter be expressly excluded by a valid law of the Commonwealth, a State law which is expressed to apply to the subject matter is inconsistent with the Commonwealth law and s 109 of the Constitution is thereby enlivened. Such a State law is rendered inoperative not because the Commonwealth law directly invalidates the State law but by force of s 109 of the Constitution … Where it is within the legislative competence of the Commonwealth Parliament to prescribe an exclusive statutory regime, a Commonwealth law which merely expresses an exclusion of the operation of a State law is not construed as an attempt to invalidate the State law directly: Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 at 548–9; Metal Trades Industry Association v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632 at 641–3, 648–9. It is construed as an expression of intention that the Commonwealth law should have exclusive operation. Being construed as a declaration of intention that

the Commonwealth law should operate exclusively of State law on the topic, the Commonwealth law is within power …

Accordingly, Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ held that s 11(1) of the Native Title Act 1993 (Cth) was valid. 6.1.73 An argument that the Commonwealth could not exclude state laws from a particular field was rejected in New South Wales v Commonwealth (Work Choices case) (2006) 229 CLR 1. The case was a challenge to the Workplace Relations Act 1996 (Cth) as amended by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (the facts of this case are covered in more detail in the extract of this decision at 4.2.29C). New South Wales (and all the other states and territories) challenged the constitutional validity of s 16(1) of the Amendment Act, which evinced an intention that the Work Choices legislation was ‘intended to apply to the exclusion of all the following laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer’. Section 16(1) then went on to nominate several categories of state and territory laws for exclusion. Section 16(4) was expressed in a similar way, but purported to exclude state and territory laws prescribed by regulation. The states, led by Western Australia on this argument, contended that s 16 was a bare attempt to limit or exclude state legislative power, and was invalid because it curtailed or significantly interfered with the capacity of states to function as governments, contrary to the implied limitations recognised in the Melbourne Corporation case (as to which, see 6.2.30C and the following paragraphs). The majority of the High Court, Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ, held that the provisions did not constitute

a bare attempt by the Commonwealth to limit or exclude state legislative power. Applying Wenn v Attorney-General (Vic) (1948) 77 CLR 84 [page 605] (see 6.1.70), the majority concluded that it is within the power of the Commonwealth to prevent the operation of separate and possibly varying state enactments dealing with the same subject as the Commonwealth law: 229 CLR at 167–9.

Express intention to avoid inconsistency 6.1.74 What if the Commonwealth Parliament indicates, through an express provision, that it does not intend to cover the field? Would that be effective to remove the spectre of s 109 inconsistency? In R v Credit Tribunal; Ex parte General Motors Acceptance Corporation Australia (1977) 137 CLR 545, the court considered the question of inconsistency between s 40 of the Consumer Credit Act 1972 (SA) and Pt V of the Trade Practices Act 1974 (Cth). Both the state and Commonwealth legislation dealt with consumer protection but there were differences of detail. Pertinently, s 75 of the Trade Practices Act provided that, apart from preventing conviction for offences under both the Act and any state or territory legislation (thereby removing the spectre of double jeopardy), Pt V was ‘not intended to exclude or limit the concurrent operation of any law of a State or Territory’. Mason J (with whose reasons Barwick CJ, Gibbs and Stephen JJ agreed) referred to Wenn v Attorney-General (Vic) (1948) 77 CLR

84, that a Commonwealth law could expressly indicate an intention to regulate a topic (‘cover the field’) (137 CLR at 563): Equally a Commonwealth law may provide that it is not intended to make exhaustive or exclusive provision with respect to the subject with which it deals, thereby enabling State laws, not inconsistent with Commonwealth law, to have an operation. Here again the Commonwealth law does not of its own force give State law a valid operation. All that it does is to make it clear that the Commonwealth law is not intended to cover the field, thereby leaving room for the operation of such State laws as do not conflict with Commonwealth law.

However, even though a federal law might evince an express intention not to cover the field, that would not remove any direct inconsistency that might exist between a state law and a federal law. As Mason J also remarked in R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563– 4: It is of course by now well established that a provision in a Commonwealth statute evincing an intention that the statute is not intended to cover the field cannot avoid or eliminate a case of direct inconsistency or collision, of the kind which arises, for example, when Commonwealth and State laws make contradictory provision upon the same topic, making it impossible for both laws to be obeyed. In Reg v Loewenthal; Ex parte Blacklock (1974) 131 CLR 338 at 346–347, I pointed out that such a provision in a Commonwealth law cannot displace the operation of s 109 in rendering the State law inoperative. But where there is no direct inconsistency, where inconsistency can only arise if the Commonwealth law is intended to be an exhaustive and exclusive law, a provision of the kind under consideration will be effective to avoid inconsistency by making it clear that the law is not intended to be exhaustive or exclusive.

Justice Mason’s analysis in R v Credit Tribunal; Ex parte General

Motors Acceptance Corporation Australia was endorsed in John Holland Pty Ltd v Victorian Workcover Authority (2009) 239 CLR 518 at 527–8 and Momcilovic v R (2011) 245 CLR 1 at 190–4 per Heydon J; 238–9 per Crennan and Kiefel JJ. Some reservation has been expressed about the language used in the drafting of some of these provisions: see, for example, Momcilovic v R (2011) 245 CLR 1 [page 606] at 119–21 per Gummow J. However, the principle is not doubted, at least where the statement of intention accords with the intention revealed by a process of construction of the legislative scheme. See the various examples given by Gummow J in Momcilovic at 119–21 of how such provisions have been drafted. 6.1.75 Can the Commonwealth express an intention to avoid s 109 inconsistency retrospectively? That issue was dealt with in the following case. 6.1.76C

University of Wollongong v Metwally (1984) 158 CLR 447

[Following the High Court’s decision in Viskauskas v Niland (1983) 153 CLR 280 (see 6.1.49) that Pt II of the Anti-Discrimination Act 1977 (NSW), which dealt with racial discrimination, was inconsistent with the Racial Discrimination Act 1975 (Cth) and therefore invalid, the Commonwealth Parliament enacted the Racial Discrimination Amendment Act 1983 (Cth), which came into operation on 19 June

1983, 1 month after the decision in Viskauskas v Niland. This Act inserted s 6A in the 1975 Act. Section 6A(1) stated: This Act is not intended, and shall be deemed never to have been intended, to exclude or limit the operation of a law of a State or Territory that furthers the objects of the Convention and is capable of operating concurrently with this Act. Metwally had made a complaint of racial discrimination against the University of Wollongong under the Anti-Discrimination Act 1977 (NSW) in February 1982. The High Court handed down its decision in Viskauskas v Niland in May 1983 and the Commonwealth Parliament inserted s 6A into the Racial Discrimination Act 1975 (Cth) in June 1983. The New South Wales Anti-Discrimination Tribunal then heard Metwally’s complaint, found it to be established, and ordered the University of Wollongong to pay Metwally damages of $46,500. The university appealed against this decision to the Court of Appeal of New South Wales. One of the grounds of appeal was that s 6A of the Racial Discrimination Act 1983 (Cth) was invalid. That question was removed to the High Court of Australia under s 40(1) of the Judiciary Act 1903 (Cth).] Gibbs CJ: It was submitted that since the Commonwealth Parliament has power to make its enactments retrospective, it could retrospectively amend the Commonwealth Act, so as to indicate an intention not to exclude the operation of the State law, and thereby cause the Anti-Discrimination Act to have a valid operation from its inception, notwithstanding that in truth it was inconsistent with the Commonwealth Act at all times before the Amendment Act was passed. The acceptance of this argument would mean that the Commonwealth Parliament could enact a law which would retrospectively deprive s 109 of the Constitution of its operation … If the respondents’ argument were correct, the Commonwealth Parliament could retrospectively reveal that the Commonwealth law had an intention, which it lacked at the earlier time, either to cover, or not to cover, the whole field, with

the result that the State law would be retrospectively invalidated or validated … But Commonwealth statutes cannot prevail over the Constitution … The short answer to the submissions of the respondents is that the Parliament cannot exclude the operation of s 109 by providing that the intention of the Parliament shall be deemed to have been different from what it actually was and that what [page 607] was in truth an inconsistency shall be deemed to have not existed … [Section 109] is of great importance for the ordinary citizen, who is entitled to know which of two inconsistent laws he is required to observe. Mason J: It is not in issue, for the purposes of determining the questions before us, that s 6A is valid and effective to achieve the concurrent operation of both Acts. What the University denies is that s 6A is valid and effective to bring about a retrospective concurrent operation. … The Parliament could not … either prospectively or retrospectively provide that a State law which was inconsistent with a Commonwealth law should have, or have had, full force and effect, notwithstanding that inconsistency. This is because the invalidity of the inconsistent State law is brought about by the operation of s 109; the Commonwealth law does not operate of its own inherent force to invalidate the State enactment: Wenn v Attorney-General (Vic) (1948) 77 CLR 84 at 119–20 … But there is no objection to the enactment of Commonwealth legislation whose effect is not to contradict s 109 of the Constitution but to remove the inconsistency which attracts the operation of that section. So, where inconsistency between Commonwealth and State laws arises, as it did in Viskauskas, because the Commonwealth law, according to its true

construction, is intended to regulate the subject-matter exhaustively or exclusively, the Commonwealth Parliament may legislate to remove that inconsistency by providing that the Commonwealth law is not intended to regulate the subject-matter exhaustively or exclusively, thereby opening the way to the concurrent operation of a State law on the subject matter. It is, of course, well settled that: ‘a Commonwealth statute may provide that it is not intended to make exhaustive or exclusive provision with respect to the subject with which it deals thereby enabling State laws, not in direct conflict with a Commonwealth law, to have an operation’… What the Parliament can enact prospectively in the exercise of its legislative powers it can also enact retrospectively: R v Kidman (1915) 20 CLR 425. Just as a Commonwealth law can validly provide that it is not intended to operate as an exhaustive or exclusive regulation of the subject-matter so it may validly provide that it never was intended to so operate: Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 at 492. Indeed, as I understand the argument, this is not disputed. The point of departure is reached when and only when the retrospective operation of the Commonwealth statute displaces an inconsistency or cause of inconsistency with a State law which has previously arisen. According to the argument, this is because the Commonwealth statute is attempting to give a valid operation to a State statute which was rendered inoperative by s 109. This analysis misstates the legal operation of s 6A. It says nothing about the State Act; it amends the Commonwealth Act by altering its prospective and retrospective operation. In so doing, as we have seen, it removes the inconsistency with the State Act. And in removing the inconsistency, s 6A does not attempt to contradict the operation of s 109. What the statutory provision does is to eliminate the basis on which s 109 can operate. The argument attributes to s 109 the character of a constitutional fetter on Commonwealth legislative power, inhibiting the Parliament from retrospectively amending a

Commonwealth statute which is inconsistent with a State statute so as to remove the inconsistency. The argument misconceives the nature and effect of the section. In conjunction with covering cl 5 of the Constitution, the object of the section is to secure paramountcy of Commonwealth laws over conflicting State laws. It achieves this object by rendering the State law invalid ‘to the extent of the inconsistency’ and no further … [page 608] The section is not a source of individual rights and immunities except in so far as individual rights and immunities are necessarily affected because the section renders inoperative a State law which is inconsistent with a Commonwealth law. Nor is the section a source of protection to the individual against the unfairness and injustice of a retrospective law. That is a matter which lies quite outside the focus of the provision. In these circumstances to distil from s 109 an unexpressed fetter upon Commonwealth legislative power is to twist the section from its true meaning and stand it upon its head. [Mason J held that, upon the insertion of s 6A in the Racial Discrimination Act 1975 (Cth), Pt II of the Anti-Discrimination Act 1977 (NSW) revived, and that revival was retrospective. Murphy J said that neither federal nor state parliament could render valid what s 109 had made invalid. Section 6A could have a prospective operation and both the federal parliament and the state parliament ‘could legislate retrospectively so that a fresh State law would come into existence giving present legal force to the procedures which have been followed and the remedies which have been obtained by Mr Metwally’. However, the federal parliament could not, through the enactment of retrospective legislation, achieve the retrospective revival of a state law rendered invalid, in respect of a past period, by the operation of s 109:

‘This would elevate legislation above the Constitution’: 158 CLR at 469. Brennan J said that s 109 had a ‘temporal aspect’: 158 CLR at 473. He said that the ‘period during which the State law was inconsistent with the Commonwealth law is a matter of history, not of legislative intention’: 158 CLR at 474. Therefore, he said, ‘[w]here the condition governing s 109 is in truth satisfied, it is not within the power of the Parliament to deem it not to be satisfied. The Parliament can remove an inconsistency, it cannot deem an inconsistency to be removed’: 158 CLR at 474.] Deane J: … [T]he submission [that it would be ‘anomalous’ to interpret s 109 in such a way so as to detract from Commonwealth supremacy and parliamentary sovereignty] fails adequately to acknowledge that … the provisions of the Constitution should properly be viewed as ultimately concerned with the governance and protection of the people from whom the artificial entities called Commonwealth and States derive their authority. So viewed, s 109 is not concerned merely to resolve disputes between the Commonwealth and a State as to the validity of their competing claims to govern the conduct of individuals in a particular area of legislative power. It serves the equally important function of protecting the individual from the injustice of being subjected to the requirements of valid and inconsistent laws of Commonwealth and State Parliaments on the same subject … A parliament may legislate that, for the purposes of the law which it controls, past facts or past laws are to be deemed and treated as having been different to what they were. It cannot, however objectively, expunge the past or ‘alter the facts of history’: cf Akar v Attorney-General (Sierra Leone) [1970] AC 853 at 870 … For the purposes of an organic law, such as the Constitution, which lies above the law which such a parliament may make, it may be a relevant fact that that parliament has

enacted that some fact or law which in truth existed is to be deemed never to have been. If, however, that organic law is framed so as to act upon the reality, the retrospective fictions of the subordinate law will be unavailing … Section 109 of the Constitution is not concerned with legal fictions. It is concerned with the reality of contemporaneous inconsistency between a valid law of the Commonwealth and an otherwise valid law of a State. According to its terms, its operation is immediate. Its terms are unqualified and selfexecuting. If there is inconsistency between an otherwise valid law [page 609] of a State and a valid law of the Commonwealth the State law shall be, to the extent of the inconsistency, invalid. It is not the Commonwealth law which operates to make the State law invalid, it is the Constitution itself … … [T]he Commonwealth Parliament, being subordinate to the Constitution, could not, by its 1983 Amending Act, reverse the past operation of s 109 of the Constitution which had rendered invalid or inoperative the relevant provisions of the New South Wales Act. The Commonwealth Parliament possessed no power unilaterally to override that operation of the Constitution either by amending the terms of s 109 or by creating a legally effective illusion that the section had never operated at all by the introduction of a retrospective fiction into its law. That being so, the position remains that the relevant provisions of the New South Wales Act were not operative at the time the acts complained of in the present case were committed and the conduct for which the appellant has been held responsible was not unlawful under the provisions of the New South Wales Act.

6.1.77 Wilson and Dawson JJ delivered judgments in substantially the same terms as Mason J. In the result, a majority of the court (Gibbs CJ, Murphy, Brennan and Deane JJ) decided that Pt II of the Anti-Discrimination Act 1977 (NSW) did not have a valid operation before the commencement of the Racial Discrimination Amendment Act 1983 (Cth). 6.1.78 While the four majority justices were agreed in University of Wollongong v Metwally (1984) 158 CLR 447 that the Commonwealth Parliament could not achieve the retrospective revival of a state law rendered invalid by s 109 of the Constitution, there was significant disagreement among them over the broader question of the Commonwealth’s capacity to manipulate its legislative supremacy. Murphy J said that, while the Commonwealth Parliament could not ‘undo the previous invalidating effect of s 109, it could clear the way for the state Parliament to make a fresh state Act to apply retrospectively in the same terms’: 158 CLR at 469 (see also at 480 per Deane J). Brennan J appeared to concede that s 6A could be read as a retrospective vacating of the field formerly covered by the Racial Discrimination Act, thereby providing the opportunity for the states to enter that field through the enactment of fresh retrospective legislation. For Brennan J, apparently, the incapacity of the Commonwealth Parliament to deny an established incapacity meant only that retrospective Commonwealth legislation could not revive invalid state legislation: 158 CLR at 475. 6.1.79 If the Commonwealth Parliament could clear the way for state legislation retrospectively to enter a field, it would seem that the Commonwealth Parliament could also retrospectively cover a field so as to exclude state legislation already present in that field.

This point was recognised by Murphy J (158 CLR at 468) and conceded as a possibility by Deane J: 158 CLR at 480. However, Gibbs CJ rejected the proposition that the Commonwealth Parliament could retrospectively indicate its intention to cover a field so as retrospectively to invalidate pre-existing state law, because ‘Commonwealth statutes cannot prevail over the Constitution’: 158 CLR at 457. 6.1.80 The minority views in University of Wollongong v Metwally (1984) 158 CLR 447, on the other hand, were consistent; namely, the Commonwealth Parliament could legislate retrospectively to create or remove inconsistency with state legislation where that inconsistency depended on the Commonwealth Parliament’s intention to cover the field, although it was beyond the power of the Commonwealth Parliament to revive a state law which remained [page 610] directly inconsistent with a Commonwealth law: 158 CLR at 460 per Mason J; 483 per Dawson J. Geoffrey Lindell noted that the Metwally decision is inconsistent with an approach to s 109 that emphasises the importance of the intention of the legislatures. Lindell said: ‘In my view the High Court has substantially qualified the power of the Commonwealth Parliament to legislate retrospectively contrary to previous authority, and has also placed a misconceived reliance on the inability of Parliament to override s 109. It is misconceived because it overlooks the obvious point that, whereas Parliament cannot of course override s 109, that section does not operate unless there is inconsistency’: Lindell, 2005. Gary

Rumble has added that the ‘Metwally decision should be taken as limited to the effect of s 109 on Commonwealth power to remove inconsistency retrospectively and not as rebutting the thesis that inconsistency depends on the intended operation of the Commonwealth law’: Rumble, 2010. 6.1.81 Much of the disagreement between the majority and minority in Metwally can be attributed to their different perceptions of the purpose of s 109. Both Gibbs CJ and Deane J, among the majority, described s 109 as concerned with ‘protecting the individual from the injustice of being subjected to the requirements of valid and inconsistent laws of Commonwealth and State Parliaments on the same subject’: 158 CLR at 477 per Deane J; see also 158 CLR at 458 per Gibbs CJ. On the other hand, Mason and Dawson JJ, among the minority, rejected this view of s 109. As Leslie Zines has observed, the conversion of a provision affirming Commonwealth supremacy into a partial limitation on Commonwealth power was ironic, particularly when it was applied to prevent the Commonwealth from realising its policy objectives (in this instance, ensuring the concurrent operation of state law): Stellios, 2015, p 628. 6.1.82 Chief Justice Gibbs’ observation (158 CLR at 458) that s 109 ‘is of great importance for the ordinary citizen, who is entitled to know which of two inconsistent laws he is required to observe’ has been endorsed in subsequent judgments of the court, including Croome v Tasmania (1997) 191 CLR 119 and Dickson v R (2010) 241 CLR 491 6.1.62C at 503–4. In Croome, Gaudron, McHugh and Gummow JJ referred to the comment of Gibbs CJ in Metwally as a justification for taking a liberal approach to the provision of standing to sue in constitutional cases: 191 CLR at 136–8. In that

case, Rodney Croome argued that s 122(a) and (c), along with s 123 of the Criminal Code (Tas), which prohibited sexual intercourse between males, was inconsistent with s 4(1) of the Human Rights (Sexual Conduct) Act 1994 (Cth), which states that: Sexual conduct involving only consenting adults acting in private is not to be subject, by or under any law of the Commonwealth, a State or a Territory, to any arbitrary interference with privacy within the meaning of Article 17 of the International Covenant on Civil and Political Rights.

Tasmania argued that since it had not enforced the provisions of the Criminal Code against Croome, there was no ‘matter’ within Ch III of the Constitution (as to which, see 8.3.19), and there could therefore be no standing to sue. Gaudron, McHugh and Gummow JJ said (191 CLR at 138): The Constitution may deny to the law in question, wholly or in part, validity as an operative part of the legal order. Section 109 may achieve that result in respect of the law of a State. Where it is established, in the exercise of the judicial power of the Commonwealth, that

[page 611] s 109 does so operate, there is met by the Constitution a call of great importance to the ordinary citizen. Such a person is, to continue with terms used by Gibbs CJ, ‘entitled to know’ whether there continues a requirement to observe that State law. In the circumstances of this case, the claim to declaratory relief is not to be denied at the threshold on the ground that relief is sought prematurely and to establish the legal character of a state of affairs not

yet come to pass. If s 109 operates here, as the plaintiffs seek to establish at the trial or other final disposition of their action, it presently operates upon the provisions of the Code and has done so since the commencement of the Act.

‘Invalid’ 6.1.83 A decision that a state law is inconsistent with a Commonwealth law means, so s 109 says, that the state law is ‘invalid to the extent of the inconsistency’. The state law is not, however, destroyed: Lamb v Cockatoo Docks & Engineering Co Pty Ltd [1961] SR (NSW) 459 at 468. Instead, those parts of the state law which are inconsistent with the Commonwealth law become inoperative; other aspects of the state law continue to operate. In Clyde Engineering Co Ltd v Cowburn (1926) 37 CLR 466 (see 6.1.16), the decision that the Forty-Four Hours Week Act 1925 (NSW) was inconsistent with the Conciliation and Arbitration Act 1904 (Cth) and an award made under the Act only prevented the state Act applying to employers and employees covered by the federal award. The Act would still have validly applied to other employers and employees. 6.1.84 It may be, of course, that a state law is not drafted in such a way that its provisions can have a separate or independent operation. In Wenn v Attorney-General (Vic) (1948) 77 CLR 84 (see 6.1.70), Dixon and Rich JJ concluded that a state Act which provided preference in promotion for ex-members of the armed forces was, in its application to private employers, inconsistent with a Commonwealth Act. They said that the ‘burden of establishing interdependence’ had been discharged. The state Act had been

intended to provide a single code on employment of ex-service personnel, applicable to all employers. The extent to which state provisions are capable of separate or independent operation will depend upon principles of severance: see Momcilovic v R (2011) 245 CLR 1 at 105 per Gummow J. 6.1.85 One consequence of the view that ‘invalid’ means ‘inoperative’ is that the state law will revive if the Commonwealth law is repealed or otherwise disappears. This point is firmly established in Butler v Attorney-General (Vic) (1961) 106 CLR 268. Taylor J said (106 CLR at 283): [T]he words ‘to the extent of the inconsistency’ must be taken to have a temporal as well as a substantive connotation … The Federal Act can ‘prevail’ only whilst it remains in force and invalidity of the State Act is produced only as the counterpart of the ‘supremacy’ of the Federal Act.

Inconsistency between Commonwealth and territory laws 6.1.86 What happens when territory legislatures legislate inconsistently with Commonwealth laws? The courts apply the common law’s approach to ‘repugnancy’ between laws of the Imperial and colonial parliaments; for example, Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582; Webster v McIntosh [page 612]

(1980) 49 FLR 317; University of Wollongong v Metwally (1984) 158 CLR 447 at 464 per Mason J; R v Kearney; Ex parte Japanangka (1984) 158 CLR 395 at 418 per Brennan J; AttorneyGeneral (NT) v Hand (1989) 25 FCR 345. 6.1.87 This approach was taken by Gleeson CJ, Gummow and Hayne JJ in Northern Territory v GPAO (1998) 196 CLR 553. In the absence of different provision in Commonwealth law, the repugnancy test produces results almost identical to those that flow from s 109 of the Constitution in the case of inconsistent state laws. However, the theoretical basis of ‘repugnancy’ differs from that of s 109 inconsistency: repugnancy is said to involve the territory legislature exceeding the powers conferred on it by the parent legislature under any Commonwealth legislation, not just under the Northern Territory (Self-Government) Act 1978 (Cth). Repugnancy is a question of powers, not just laws. In Northern Territory v GPAO, Gleeson CJ and Gummow J explained the basis on which they considered whether territory child welfare legislation was repugnant to the Family Law Act 1975 (Cth). 6.1.88C

Northern Territory v GPAO (1998) 196 CLR 553

Gleeson CJ and Gummow J: There may be discerned in a law … of general application throughout the nation … made by the Parliament in exercise of a power conferred by s 51 of the Constitution the legislative intention to make exhaustive or exclusive provision on the subject with which it deals. Section 109 of the Constitution then will apply … In such a case, it is to be expected also that this field will be covered with respect to the territories …

The same expectation as to legislative intention arises where the power of the Parliament to enact legislation, such as Pt VII of the Family Law Act, is drawn from several sources, including s 122, but the scheme of the legislation is that it operates exclusively across the field it covers, whether in the States or the territories. Different considerations may apply where the law made by the Parliament, whatever the constitutional source of authority, does not evince an intention to cover the relevant field. In such cases, one would expect greater scope for the concurrent operation of territorial laws. This would correspond with the situation respecting State laws, if narrower notions of textual collision or direct inconsistency and repugnancy be applied. Those notions apply in cases such as those where two laws may make ‘contradictory provision upon the same topic, making it impossible for both laws to be obeyed’, as Mason J put it in R v Credit Tribunal; Ex parte General Motors Acceptance Corporation, or one law, as Dixon J said in Stock Motor Ploughs Ltd v Forsyth, varies, detracts from or impairs the other … In a case such as the present, the task is … to ascertain whether it is necessarily implied by the enactment, in the 1995 Act, of Pt VII of the Family Law Act [1975 (Cth)] that a [territory law] has a narrower operation than would otherwise be the case …. [The relevant territory law protected Northern Territory Child Protection officials from being required to produce information (including in the Family Court) relating to their work. However, for Gleeson CJ and Gummow J, this protection did not ‘vary, impair or detract from’ the key principle which the Family Law Act required the Family Court to apply: that the interests of the child are paramount.] [page 613]

It follows that there is no necessary implication in Pt VII which requires qualification to the law-making power conferred upon the Legislative Assembly of the Northern Territory by s 6 of the Self-Government Act so that it does not sustain so much of [the territory law which confers the protection]. Nor, if this be the correct method of characterising the result, does Pt VII, as a matter of necessary implication, have such an overriding effect directly upon [the territory law], rather than through the medium of a restriction on the [Legislative Assembly’s] law-making power … [Hayne J agreed 196 CLR at 650–1. See also Kirby J at 630, 636–8.]

6.1.89 In Western Australia v Ward (2002) 213 CLR 1, the majority judges (Gleeson CJ, Gummow, Gaudron and Hayne JJ) made clear that, where Commonwealth legislation had remained on foot since before Northern Territory self-government, it could also operate as a source of repugnancy with territory laws: 213 CLR at 107. 6.1.90 The power conferred by s 122 is broad enough to allow parliament, when creating self-governing territories, to reduce the scope for repugnancy of territory laws. For example, s 28 of the Australian Capital Territory (Self-Government) Act 1988 (Cth) states that laws made by the Legislative Assembly have no effect to the extent that they are inconsistent with Commonwealth laws, but that such a law ‘shall be taken to be consistent with [a Commonwealth Act] to the extent that it is capable of operating concurrently with [it]’. Gleeson CJ and Gummow J (with whom Hayne J agreed) appeared to say in Northern Territory v GPAO (1999) 196 CLR 553 at 583 that this is a narrower basis for

inconsistency than the tests that apply under s 109 of the Constitution. On this view, Australian Capital Territory laws would not be rendered inoperative simply because the Commonwealth has ‘covered’ a particular legislative ‘field’. However, this view of s 28 of the Australian Capital Territory SelfGovernment Act has not prevailed. 6.1.91 In Commonwealth v Australian Capital Territory (Marriage Equality Act case) (2013) 250 CLR 441, the High Court considered an inconsistency between, on the one hand, the Marriage Equality (Same Sex) Act 2013 (ACT) and, on the other, the Marriage Act 1961 (Cth) and the Family Law Act 1975 (Cth). The Territory Act provided for the ‘marriage’ of same sex couples. ‘Marriage’ was defined as ‘the union of two people of the same sex to the exclusion of all others voluntarily entered into for life’. The Act then sought to confer similar rights and obligations conferred in relation to heterosexual marriages under the Commonwealth Acts. The question for the High Court was whether the Territory Act was ‘inconsistent’ with the Commonwealth Acts within the meaning of s 28 of the Australian Capital Territory SelfGovernment Act. 6.1.92C Commonwealth v Australian Capital Territory (Marriage Equality Act case) (2013) 250 CLR 441 French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ: [Having concluded that the marriage power in s 51(xxi) of the Constitution is broad enough to authorise Commonwealth legislation with respect to same sex marriages (as to which see Chapter 3), their

Honours turned to the question of whether the Territory Act was inconsistent with the Commonwealth Acts:] [page 614] Section 28 of the Australian Capital Territory (SelfGovernment) Act 1988 (Cth) (‘the Self-Government Act’) provides that: (1) A provision of an enactment has no effect to the extent that it is inconsistent with a law defined by subsection (2), but such a provision shall be taken to be consistent with such a law to the extent that it is capable of operating concurrently with that law. (2) In this section: law means: (a) a law in force in the Territory (other than an enactment or a subordinate law); or (b) an order or determination, or any other instrument of a legislative character, made under a law falling within paragraph (a). The ACT Act is an ‘enactment’ [s 3] for the purposes of s 28 of the Self-Government Act. Both the Marriage Act and the Family Law Act are laws in force in the Territory. Is the ACT Act inconsistent with the Marriage Act, the Family Law Act or both? Can the ACT Act operate to any extent concurrently with the Marriage Act and the Family Law Act? Some argument was directed in this matter to whether, and to what extent, the effect of s 28 of the Self-Government Act differs from the operation of s 109 of the Constitution. In that regard, reference was made to the statement [(1999) 196 CLR 553 at 583] by Gleeson CJ and Gummow J, in Northern Territory v

GPAO, that ‘the criterion for inconsistency — incapacity of concurrent operation — is narrower than that which applies under s 109, where the federal law evinces an intention to make exhaustive or exclusive provision upon a topic within the legislative power of the Commonwealth’. It is not necessary, however, to trace the whole of the course of the argument. The Territory submitted that ‘[i]n circumstances where the Parliament appears to have intended that the Commonwealth law shall be a complete statement of the law governing a particular relation or thing’, s 28 requires that ‘the Territory law would not be inconsistent with the Commonwealth law to the extent that the former was capable of operating concurrently with the latter’. How a Territory enactment could operate concurrently with a federal law which is a complete statement of the law governing the relevant relation or thing was not explained. The Territory accepted, correctly, that s 28 operates ‘not as a denial of power otherwise conferred by the Self-Government Act upon the Assembly but as a denial to a law so made of effect ‘to the extent’ of its inconsistency’ [Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 351] (emphasis added). These reasons will show that it follows that, if a Commonwealth law is a complete statement of the law governing a particular relation or thing [cf Stock Motor Ploughs Ltd v Forsyth (1932) 48 CLR 128 at 136–137 per Dixon J; Victoria v The Commonwealth (‘The Kakariki’) (1937) 58 CLR 618 at 630 per Dixon J, 638 per Evatt J], a Territory law which seeks to govern some aspect of that relation or thing cannot operate concurrently with the federal law to any extent. Section 28(1) is directed to ‘[a] provision of an enactment’. The opening words of the sub-section provide that a provision of an enactment has no effect to the extent that it is inconsistent with (among other things) a law of the federal Parliament. The concluding words of s 28(1) provide that ‘such a provision [of an enactment by the Territory Assembly] shall be taken to be

consistent with such a law [of the federal Parliament]’ to the extent described. The text of s 28 thus makes plain that the section is directed to the effect which is to be given to an enactment of the Assembly; it is not directed to the effect which is to be given [page 615] to a federal law. That is, s 28 is a constraint upon the operation of the enactment of the Territory Assembly. It does not say, and it is not to be understood as providing, that laws of the federal Parliament are to be read down or construed in a way which would permit concurrent operation of Territory enactments. To the extent, if any, to which the Territory’s submissions depended upon construing s 28 as requiring the reading down of the relevant federal law, the text of the section requires rejection of the submission. And as Re Governor, Goulburn Correctional Centre; Ex parte Eastman [(1999) 200 CLR 322 at 351] makes plain, what was said in GPAO does not support such a construction of s 28. Rather, the starting point for any consideration of the operation of s 28 must be the determination of the legal meaning of the relevant federal Act (in this case the Marriage Act). Only then is it possible to consider whether and to what extent the enactment of the Territory Assembly can be given concurrent operation. The argument in favour of concurrent operation of the ACT Act and the Marriage Act depended ultimately upon the proposition that, because the Marriage Act defines marriage as between persons of the opposite sex, the ACT Act can operate concurrently with respect to marriage between persons of the same sex. This proposition is flawed and must be rejected. The ACT Act is not capable of operating concurrently with the Marriage Act to any extent.

It is necessary to bear steadily in mind that the federal Parliament has power under s 51(xxi) to make a national law with respect to same sex marriage. (The Parliament’s power under s 122 of the Constitution to make laws for the government of any Territory need not be considered.) The federal Parliament has not made a law permitting same sex marriage. But the absence of a provision permitting same sex marriage does not mean that the Territory legislature may make such a provision. It does not mean that a Territory law permitting same sex marriage can operate concurrently with the federal law. The question of concurrent operation depends [Momcilovic (2011) 245 CLR 1 at 112, 115– 116] upon the proper construction of the relevant laws. In particular, there cannot be concurrent operation of the federal and Territory laws if, on its true construction, the Marriage Act is to be read as providing that the only form of marriage permitted shall be a marriage formed or recognised in accordance with that Act. The Marriage Act regulates the creation and recognition of the legal status of marriage throughout Australia. The Act’s definition of marriage sets the bounds of that legal status within the topic of juristic classification with which the Act deals. Read as a whole, the Marriage Act, at least in the form in which it now stands, makes the provisions which it does about marriage as a comprehensive and exhaustive statement of the law with respect to the creation and recognition of the legal status of marriage. Why otherwise was the Marriage Act amended, as it was in 2004, by introducing a definition of marriage in the form which now appears, except for the purpose of demonstrating that the federal law on marriage was to be complete and exhaustive? The 2004 amendments to the Marriage Act made plain (if it was not already plain) that the federal marriage law is a comprehensive and exhaustive statement of the law of marriage. Those amendments applied the newly introduced definition of marriage to the provisions governing solemnisation of marriage and gave effect to that definition in the provisions governing the

recognition of marriages solemnised outside Australia. Section 88EA of the Marriage Act (inserted by the 2004 amendments) provides expressly that a union solemnised in a foreign country between persons of the same sex must not be recognised as a marriage in Australia. These particular provisions of the Marriage Act, read in the context of the whole Act, necessarily contain [see Momcilovic at 111] the implicit negative proposition that the kind of [page 616] marriage provided for by the Act is the only kind of marriage that may be formed or recognised in Australia. It follows that the provisions of the ACT Act which provide for marriage under that Act cannot operate concurrently with the Marriage Act and accordingly are inoperative. Giving effect to those provisions of the ACT Act would alter, impair or detract from the Marriage Act. Within the Commonwealth, the Marriage Act determines the capacity of a person to enter the union that creates the status of marriage with its attendant rights and obligations of mutual support and advancement. Under the Marriage Act, a person has no legal capacity to attain that status, with the rights and obligations attendant on it, by entry into a union with a person of the same sex. The Territory submitted that the Marriage Act and the ACT Act ‘do not regulate the same status of “marriage”’. Certainly, the conditions for the attainment of the status for which each Act provides differ. But the ACT Act provides for a status of marriage. And as both the short title and the long title to the ACT Act show, the Act is intended to provide for marriage equality. The status for which the ACT Act provides falls within the one topic of juristic classification identified by Windeyer J [in AG (Vic) v Commonwealth (the Marriage Act case) (1962) 107 CLR 529 at

578]. And contrary to the submissions of the Territory, the topic within which the status falls must be identified by reference to the legal content and consequences of the status, not merely the description given to it. By providing for marriage equality, the ACT Act seeks to operate within the same domain of juristic classification as the Marriage Act. And while the Marriage Act carves out a part of that domain for regulation of the creation and recognition of marriage, the Marriage Act also contains a negative proposition which governs the whole of that domain. The negative proposition governs the whole of the domain by providing that the only form of marriage which may be created or recognised is that form which meets the definition provided by the Marriage Act. So long as the Marriage Act continues to define ‘marriage’ as it now does and to provide, in effect, that only a marriage conforming to that definition may be formed or recognised in Australia, the provisions of the ACT Act providing for marriage under that Act remain inoperative. Because those provisions are inoperative, the provisions of the ACT Act which deal with the rights of parties to marriages formed under that Act and with the dissolution of such marriages can have no valid operation. Whether any of those provisions could have operated concurrently with the provisions of the Family Law Act is a question which is not reached. The whole of the ACT Act is inconsistent with the Marriage Act. It is, therefore, not necessary to consider whether the ACT Act is, in some separate sense [cf Leeming, Resolving Conflicts of Laws, (2011) at 84–139], ‘repugnant’ to the Marriage Act.

6.1.93 Thus, the High Court has rejected the idea that s 28 turns on a narrower scope for inconsistency than that controlling the operation of s 109. Although the court avoids the use of the expression ‘covering the field’, it is clear that the type of

inconsistency arising in the Marriage Equality Act case is of that character. For a detailed analysis of repugnancy principles and a critique of the court’s interpretation of s 28 in the Marriage Equality Act case, see Twomey, 2014.

INTERGOVERNMENTAL IMMUNITIES 6.2.1 The structure of our federal system presents a second problem concerned with the legal or juristic relationship between the Commonwealth and states. The system establishes legislatures at both the central (Commonwealth) and regional (state) levels, and it establishes [page 617] executive governments at both levels. The legislatures are given law-making powers that overlap and the governments are charged with a wide range of policy development, executive and administrative functions. The Australian federal system presents the potential not only for conflicts between Commonwealth and state legislation but also for tension between laws made by one legislature and the activities of another executive government. 6.2.2 The text of the Commonwealth Constitution does not provide direct guidance on the resolution of these issues. The Constitution deals only with discrete aspects of the broader problem. For example: s 51(xiii) gives the Commonwealth Parliament power to

make laws with respect to ‘banking, other than State banking’; s 51(xiv) gives the Commonwealth Parliament power to make laws with respect to ‘insurance, other than State insurance’; and s 114 prevents the states from taxing ‘property of any kind belonging to the Commonwealth’, and prevents the Commonwealth from taxing ‘property of any kind belonging to a State’. One might argue that the presence of these specific limitations on power preclude the implication of other limitations on power so that, as a general rule, the Commonwealth and the states are subject to each other’s laws. However, there are other provisions that appear to proceed on the assumption that the Commonwealth and the states enjoy a general immunity, diminished only by specific exceptions: s 51(xxxi) gives the Commonwealth Parliament power to make laws with respect to ‘the acquisition of property on just terms from any State or person’; and s 98 extends the Commonwealth Parliament’s power over trade and commerce ‘to railways the property of any State’. 6.2.3 The s 109 inconsistency rule offers another potential source of guidance on these questions. It could be viewed as, first, inviting Commonwealth regulation of state authorities; and, second, empowering the Commonwealth to shield itself from state regulation. The High Court has not, however, chosen to resolve intergovernmental immunity issues by appealing directly to

individual constitutional provisions. Most judges have instead preferred to deal with these fundamental questions by drawing implications from the whole Constitution, by resorting to their own conceptions of the type of federalism most appropriate to Australia, or by invoking some of the traditional methods of ‘interpreting’ the Constitution (as to which, see 3.3.1ff).

Foundation of intergovernmental immunities 6.2.4 Among the many teething problems that confronted the nascent Australian federation were questions of whether and when Commonwealth actors would be bound by state laws, and vice versa. Until 1920, the High Court maintained that the Commonwealth and the states were, in general, immune from each other’s legislation. That idea found expression in the implied immunity of instrumentalities doctrine, which was understood as a two-way, or ‘reciprocal’, principle. The principle had its origins in D’Emden v Pedder (1904) 1 CLR 91, where the court held that the Stamp Duties Amendment Act 1902 (Tas) could not oblige a Commonwealth public servant to pay a state tax on his salary. The tax was a stamp duty on the written receipt [page 618] which the Audit Act 1901 (Cth) obliged him to give when paid his salary. Chief Justice Griffith, for the court, developed the following statement of principle (1 CLR at 111): [W]hen a State attempts to give to its legislative or executive authority

an operation which, if valid, would fetter, control, or interfere with the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative.

6.2.5 This position was reiterated soon after in Deakin v Webb (1904) 1 CLR 585, where the court held that a state could not impose an income tax on the salary paid to Commonwealth Cabinet ministers. Chief Justice Griffiths, speaking again for the court, found that such an impost ‘in effect diminishes the recompense allotted by the Commonwealth to its officers … [and] interferes with the freedom of action of the Commonwealth in the transfer of its officers from state to state: 1 CLR at 616. 6.2.6 While many of the early immunities cases concerned state attempts to regulate the Commonwealth, there were also cases in which the question flowed the other way. For example, in Federated Amalgamated Government Railway & Tramway Service Association v New South Wales Railway Traffic Employees Association (Railway Servants’ case) (1906) 4 CLR 488, the court held that a New South Wales Government instrumentality could not be subjected, as an employer, to the Conciliation and Arbitration Act 1904 (Cth). Chief Justice Griffith and Barton and O’Connor JJ said that to subject the state railways to Commonwealth legislation regulating the rights of employers and employees would interfere with the control of those railways. This interference would be inconsistent with the principle of intergovernmental immunity, which was reciprocal and not limited to taxation. Nor, in the court’s view, was the state’s immunity confined to those functions which could be described as governmental, because no activity undertaken by a state could be regarded as anything other than governmental: 4 CLR at 538–9.

6.2.7 The High Court was so committed to its doctrine of intergovernmental immunities that it continued to apply it even in the face of Privy Council disapproval. The Privy Council had, in Webb v Outrim [1907] AC 81, criticised the doctrine and refused to apply it. Undeterred, the High Court soon after in Baxter v Commissioner of Taxation (NSW) (1907) 4 CLR 1087 reaffirmed the principle of intergovernmental immunities and the result in Deakin v Webb (1904) 1 CLR 585. In a joint judgment, Griffith CJ, Barton and O’Connor JJ refused to follow Webb v Outrim on the basis that the Privy Council’s decision had dealt with a matter directly concerned with the reciprocal rights and obligations of the Commonwealth and the states — an ‘inter se matter’ within s 74 of the Constitution. According to the justices, s 74 clearly indicated that the High Court was to have exclusive judicial authority on such questions, so that, if the Privy Council delivered judgment on any such question, the High Court could decline to follow that judgment: 4 CLR at 1118. Having disposed of the Privy Council’s contrary view, Griffith CJ, Barton and O’Connor JJ affirmed their support for the principle of intergovernmental immunity and held that New South Wales could not impose an income tax on the salary paid by the Commonwealth to a customs official. Newly appointed to the court, Isaacs J dissented He held that although a state could not fetter, control or interfere with the free exercise by the Commonwealth of its powers, the state income tax at issue did not offend that principle because it did not affect the Commonwealth officer in his capacity as an agent of the Commonwealth, nor did it single out [page 619]

the officer for adverse discriminatory treatment. Rather, Isaacs J insisted, the state Act simply required the officer to bear his share of the burden imposed on all citizens in return for the benefits provided by the state: 4 CLR at 1161. 6.2.8 The rule laid down in D’Emden v Pedder (1904) 1 CLR 91 was supported by two lines of argument, the first historical and the second conceptual. The High Court first accepted and applied the doctrine of intergovernmental immunities as developed by the United States Supreme Court. In Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087, Griffith CJ, Barton and O’Connor JJ described the distribution of legislative powers between the Commonwealth and state parliaments and reasoned (4 CLR at 1122): [A]s the scheme of the Australian Constitution was in this respect practically identical with that of the Constitution of the United States of America, which had been interpreted by the Supreme Court of that republic in a long series of cases familiar to the Australian publicists by whom the Australian Constitution was framed, it ought to be inferred that the intention of the framers was that like provisions should receive a like interpretation.

The conceptual argument was stated as follows in the same case (4 CLR at 1121): It is essential to the attribute of sovereignty of any government that it shall not be interfered with by any external power. The only interference, therefore, to be permitted is that prescribed by the Constitution itself. A similar consequence follows with respect to the constituent States. In their case, however, the Commonwealth is empowered to interfere in certain prescribed cases. But under the scheme of the Constitution there is a large number of subjects upon which the legislative powers of both the Commonwealth and the States

may be exercised. In such a state of things it is not only probable but as shown by the experience of the United States under a similar distribution of powers certain, that questions will constantly arise as to the operation of laws which, although unobjectionable in form, and prima facie within the competence of the legislature which enacted them, would, if literal effect were given to them, interfere with the exercise of the sovereign powers of the other two of the sovereign authorities concerned. Applying then the doctrine quando lex aliquid concedere videtur et illud sine quo res ipsavalere non potest [that is, when the law gives something, it also gives that without which the thing given would be valueless], which is a maxim applied to the construction of all grants of power … it follows that a grant of sovereign powers includes a grant of a right to disregard and treat as inoperative any attempt by any other authority to control their exercise.

6.2.9 Despite that seemingly uncompromising language, the High Court soon began to carve out exceptions to its immunities doctrine, four of which will be noted here. First, the court held in Chaplin v Commissioner of Taxes (SA) (1911) 12 CLR 375 that the Commonwealth Parliament could legislate so as to expose the salaries paid to Commonwealth employees to non-discriminatory state taxation. The court rejected an argument that the Commonwealth Parliament could not allow what the Constitution prohibited; it said that the Commonwealth could relinquish a constitutional privilege granted to it. Second, in R v Sutton (Wire Netting case) (1908) 5 CLR 789, the court held that the states, when importing goods, were subject to Commonwealth customs control. Likewise, in Attorney-General (NSW) v Collector of Customs (Steel Rails case) (1908) 5 CLR 818, the court held that the states were subject to Commonwealth customs duty on the goods which they imported. In that case, Griffith CJ and O’Connor J reasoned that the customs power was

[page 620] exclusive to the Commonwealth (Constitution s 90) and the power was such that it would be frustrated if the states were immune from its operation: 5 CLR at 833. Third, in Federated Engine Drivers’ and Firemen’s Association of Australia v Broken Hill Pty Co Ltd (Federated Engine Drivers’ case) (1911) 12 CLR 398, the High Court held that the principle of state immunity from the Conciliation and Arbitration Act 1904 (Cth), established in the Railway Servants’ case (see 6.2.6), did not extend to protect a municipal corporation established under state legislation when it was carrying out non-governmental functions. The Melbourne Corporation was held to be subject to the Conciliation and Arbitration Act in so far as its employees were engaged in the supply and sale of electricity to consumers. Fourth, in Federated Municipal and Shire Council Employees’ Union of Australia v Melbourne Corporation (1919) 26 CLR 508, a majority of the High Court (Isaacs, Higgins, Rich, Gavan Duffy and Powers JJ; Griffith CJ and Barton J dissenting) held that local government bodies established under state laws and responsible for the construction and maintenance of public roads were not state government agencies and were not immune from the Conciliation and Arbitration Act 1904 (Cth) in their capacity as employers of roadwork labourers. In their joint judgment, Isaacs and Rich JJ explained D’Emden v Pedder (1904) 1 CLR 91 as having been based on inconsistency between Commonwealth and state laws (26 CLR at 532–3) and made no reference to the Railway Servants’ case.

The ‘reserved powers’ doctrine 6.2.10 Simultaneously with the development of the implied immunities doctrine, the original justices of the High Court adopted a narrow, restrictive approach to the interpretation of the Commonwealth’s legislative powers, an approach variously described as the ‘reserved powers’ doctrine or the ‘implied prohibitions’ doctrine. Here the concern was not to protect the constituent governments of the federation against direct regulation or control by other legislatures, but rather to ensure that the residual legislative powers of the states (acknowledged in s 107 of the Constitution) were not diminished through an expansive reading of the Commonwealth’s legislative powers. 6.2.11 In Peterswald v Bartley (1904) 1 CLR 497 (see 5.2.6) the High Court decided that a licence fee imposed by New South Wales on brewers was not an excise duty within the meaning of s 90 of the Constitution and did not, therefore, encroach upon a field reserved exclusively for the Commonwealth Parliament. In adopting a narrow view of the term ‘excise duty’, the court was influenced by what it described as ‘the spirit’ of the Constitution (1 CLR at 507): The Constitution contains no provisions for enabling the Commonwealth Parliament to interfere with the private or internal affairs of the States, or to restrict the power of the States to regulate the carrying on of any business or trades within their boundaries, or even, if they think fit, to prohibit them altogether. That is a very important matter to be borne in mind in considering whether this particular provision [s 90] ought to be construed so as to interfere with the States’ powers in that respect.

6.2.12 In R v Barger (1908) 6 CLR 41 5.1.39C a majority of the court held that the Excise Tariff Act 1906 (Cth) was outside the powers of the Commonwealth Parliament. The Act, which imposed a tax on the manufacturers of agricultural machinery with an exemption for those manufacturers who paid their employees ‘fair and reasonable’ wages, was not a law with respect to taxation within s 51(ii). The taxation power, the majority of the court said, had to [page 621] be read in the light of the prohibition, implicit in the Constitution, against Commonwealth ‘control of the internal affairs of the States’: 6 CLR at 72. 6.2.13 In Attorney-General (NSW) v Brewery Employés Union of New South Wales (Union Label case) (1908) 6 CLR 469, the court held by majority that Pt VII of the Trade Marks Act 1905 (Cth), which authorised manufacturers to affix a workers’ trade mark to their goods if manufactured by trade union labour, was outside the powers of the Commonwealth Parliament. In particular, it was not a law with respect to trade marks within s 51(xviii) of the Constitution. Chief Justice Griffith took the view that ss 51(i) and 107 left (or reserved) the control of ‘internal trade and commerce’ to the states. Other grants of power to the Commonwealth Parliament must be read in light of that reservation (6 CLR at 503): In my opinion it should be regarded as a fundamental rule in the construction of the Constitution that when the intention to reserve any

subject matter to the States to the exclusion of the Commonwealth clearly appears, no exception from that reservation can be admitted which is not expressed in clear and unequivocal words. Otherwise the Constitution will be made to contradict itself, which upon a proper construction must be impossible.

A strict reading of s 51(xviii) confined ‘trade marks’ to marks indicating an industrial property rather than ‘every kind of mark which might be used in trade’: 6 CLR at 512. 6.2.14 Similar considerations prompted a majority of the court to hold, in Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 (see 4.2.3), that ss 5 and 8 of the Australian Industries Preservation Act 1906 (Cth) were invalid. These sections prohibited combinations in restraint of trade and trade monopolies by foreign, trading and financial corporations. However, said the majority, the sections were not supported by s 51(xx), the corporations power. While ‘the words of pl xx, if they stood alone, might be capable of’ supporting the legislation, s 51(xx) ‘ought not to be construed as authorizing the Commonwealth to invade the field of State law as to domestic trade’. The provision gave the Commonwealth limited powers to control the interstate recognition of corporations but not their corporate activities, ‘the control of which is exclusively reserved to the States’: 8 CLR at 348, 354 per Griffith CJ.

Erosion of the two doctrines 6.2.15 The appointment to the High Court in 1906 of two additional justices, Isaacs and Higgins JJ, broke the unanimity of the court on both the implied immunities and reserve powers

doctrines. While Isaacs J initially accepted the implied immunities doctrine (see, for example, the Federated Engine Drivers’ case (1911) 12 CLR 398 at 451–3 at 6.2.9), he argued for a relatively narrow application of the doctrine. In Baxter v Commissioner of Taxation (NSW) (1907) 4 CLR 1087 (see 6.2.7), Isaacs J accepted the authority of D’Emden v Pedder (1904) 1 CLR 91 but dissented from the court’s decision, that a Commonwealth public servant’s salary was immune from state income tax, because he held that the tax did not interfere with Commonwealth Government activities: 4 CLR at 1160–1. 6.2.16 In Attorney-General (Qld) v Attorney-General (Cth) (1915) 20 CLR 148, Isaacs J joined with the rest of the court in rejecting a claim that tenants of Queensland Crown lands were immune from Commonwealth land tax. His argument was that the Commonwealth’s power of taxation should ‘be given its full natural meaning’ and not restricted by ‘an implied [page 622] prohibition, somewhere in the structure of the Constitution, not contained in any word or phrase and not deducible by means of any principle of construction’: 20 CLR at 171–2. 6.2.17 A similar concentration on the language of the grant of Commonwealth legislative power is apparent in the joint judgment of Isaacs and Rich JJ in Federated Municipal and Shire Council Employees’ Union of Australia v Melbourne Corporation (1919) 26 CLR 508. They argued that D’Emden v Pedder (1904) 1 CLR 91

was founded on s 109 of the Constitution ‘and nothing else’: 26 CLR at 532. Manifestly, therefore, there could be no reciprocity. The Commonwealth or its agents might be immune from state legislation because of the existence of overriding Commonwealth legislation, but local councils set up under state law could not claim an immunity from Commonwealth laws made under s 51(xxxv), the industrial arbitration power: 26 CLR at 532. While Isaacs and Rich JJ refrained from describing the Railway Servants’ case (1906) 4 CLR 488 (see 6.2.6) as wrong, their analysis of the claim of immunity is impossible to reconcile with that decision. 6.2.18 Higgins J, on the other hand, was outspoken in his criticism of the implied immunities doctrine. In Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087, he joined Isaacs J in dissenting from the court’s decision that New South Wales could not tax the salary of a Commonwealth public servant. In concluding that a state could tax a Commonwealth payment, Higgins J rejected the American cases on which Deakin v Webb (1904) 1 CLR 585 had relied (4 CLR at 1164) and accepted as authoritative the view of the Privy Council in Webb v Outrim [1907] AC 81 that there was no constitutional immunity for Commonwealth payments. (See also his judgment in the Federated Engine Drivers’ case (1911) 12 CLR 398 at 459–60.) 6.2.19 As for the reserve powers doctrine, Isaacs and Higgins JJ were unequivocal in their condemnation. For Isaacs J, it was ‘contrary to reason to shorten the expressly granted powers [of the Commonwealth] by the undefined residuum [of the states]’, meaning that, in this case, the Commonwealth’s power of taxation was subject to ‘no limitation … but those expressly enacted’: R v

Barger (1908) 6 CLR 41 at 84–5 (see 6.2.12). In the same case, Higgins J said (6 CLR at 113): To say that the Federal Parliament cannot make a law because legislation on the subject belongs to the States is rather to invert the true position. The Commonwealth has certain powers, and as to those powers it is supreme; the State has the rest. We must find what the Commonwealth powers are before we can say what the State powers are. The Federal Parliament has certain specific gifts; the States have the residue. We have to find out the extent of the specific gifts before we make assertions as to the residue.

6.2.20 The appointment to the High Court of new members Gavan Duffy, Powers and Rich JJ in 1913, Knox CJ in 1919 and Starke J in 1920, and the death and retirement of the founding justices (O’Connor J died in 1912 and Barton J in 1920; Griffith CJ retired in 1919) shifted the balance of opinion on the bench. In 1920, the court seized the opportunity presented by a challenge to the jurisdiction of the Commonwealth Conciliation and Arbitration Court to review all the earlier cases which had laid down the implied immunities and reserve powers doctrines.

[page 623]

Commonwealth laws and state governments 6.2.21C

Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129

[The Amalgamated Society of Engineers, a trade union with members throughout Australia, served a log of claims on 844 employers throughout Australia, claiming from them improved wages and conditions of employment for the union’s members. When the employers did not concede the claims, the union began proceedings in the Commonwealth Arbitration Court against the 844 employers, seeking a resolution of the industrial dispute between the union and the employers. The court’s jurisdiction was defined in s 18 of the Conciliation and Arbitration Act 1904 (Cth): The Court shall have jurisdiction to prevent and settle, pursuant to this Act, all industrial disputes. Section 4 of the Act defined ‘industrial disputes’: ‘Industrial dispute’ means an industrial dispute extending beyond the limits of any one State and includes — (i) any dispute as to industrial matters, and (ii) any dispute in relation to employment in an industry carried on by or under the control of the Commonwealth or a State, or any public authority constituted under the Commonwealth or a State, and

(iii) any threatened or impending or probable industrial dispute. Among the employers who were made parties to these proceedings were the West Australian Minister for Trading Concerns, the West Australian State Implement and Engineering Works and the West Australian State Sawmills. These respondents objected that the Commonwealth Conciliation and Arbitration Act could not apply to them as employers. The president of the court, Higgins J, stated a case for the opinion of the Full High Court under s 18 of the Judiciary Act 1903 (Cth). The critical question posed for resolution by the High Court was: ‘Has the Parliament of the Commonwealth power to make laws binding on the States with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one State?’.] Knox CJ, Isaacs, Rich and Starke JJ (delivered by Isaacs J): The more the decisions are examined, and compared with each other and with the Constitution itself, the more evident it becomes that no clear principle can account for them. They are sometimes at variance with the natural meaning of the text of the Constitution; some are irreconcilable with others, and some are individually rested on reasons not founded on the words of the Constitution or on any recognised principle of the common law underlying the expressed terms of the Constitution, but on implication drawn from what is called the principle of ‘necessity’, that being itself referable to no more definite standard than the personal opinion of the judge who declares it. The attempt to deduce any consistent rule from them has not only failed, but has disclosed an increasing entanglement and uncertainty, and a conflict both with the text of the Constitution and with distinct and clear declarations of law by the Privy Council. [page 624]

It is therefore, in the circumstances, the manifest duty of this court to turn its earnest attention to the provisions of the Constitution itself. That instrument is the political compact of the whole of the people of Australia, enacted into binding law by the Imperial Parliament, and it is the chief and special duty of this court faithfully to expound and give effect to it according to its own terms, finding the intention from the words of the compact, and upholding it throughout precisely as framed … In doing this, to use the language of Lord Macnaghten in Vacher & Sons Ltd v London Society of Compositors [[1913] AC 107 at 118], ‘a judicial tribunal has nothing to do with the policy of any Act which it may be called upon to interpret. That may be a matter for private judgment. The duty of the Court, and its only duty, is to expound the language of the Act in accordance with the settled rules of construction’. [The justices referred to the argument that neither the Commonwealth nor the states could legislate so as to control the other, and to Griffith CJ’s view in Attorney-General (Qld) v Attorney General (Cth) (1915) 20 CLR 148 at 163 that the implication of mutual non-interference arose from necessity, and continued:] It is an interpretation of the Constitution depending on an implication which is formed on a vague, individual conception of the spirit of the compact, which is not the result of interpreting any specific language to be quoted, nor referable to any recognised principle of the common law of the Constitution, and which, when started, is rebuttable by an intention of exclusion equally not referable to any language of the instrument or acknowledged common law constitutional principle, but arrived at by the Court on the opinions of Judges as to hopes and expectations respecting vague external conditions. This method of interpretation cannot, we think, provide any secure foundation for Commonwealth or State action, and must inevitably lead — and in fact has already led — to divergencies and inconsistencies more and more pronounced as the decisions accumulate.

[The justices referred to several decisions of the United States Supreme Court and declared that these did not offer a ‘secure basis’ for developing Australian constitutional doctrine: 28 CLR at 146. In reaching that view, their Honours referenced two key features distinguishing the Australian Constitution from its United States counterpart, namely, the indivisible sovereignty of the Crown and responsible government: 28 CLR at 146.] It is plain that, in view of the two features of common and indivisible sovereignty and responsible government, no more profound error could be made than to endeavour to find our way through our own Constitution by the borrowed light of the decisions, and sometimes the dicta, that American institutions and circumstances have drawn from the distinguished tribunals of that country … We therefore look to the judicial authorities which are part of our own development, which have grown up beside our political system, have guided, it, have been influenced by it and are consistent with it, and which, so far as they existed in 1900, we must regard as in the contemplation of those who, whether in the convention or in the Imperial Parliament, brought our Constitution into being, and which, so far as they are of later date, we are bound to look to as authoritative for us … [The plurality then considered what rules of interpretation should be applied to the Commonwealth Constitution. Their Honours continued:] Before approaching, for this purpose, the consideration of the provisions of the Constitution itself, we should state explicitly that the doctrine of ‘implied prohibition’ against the exercise of a power once ascertained in accordance with ordinary rules of construction, [page 625]

was definitely rejected by the Privy Council in Webb v Outrim [1907] AC 81; 4 CLR 356. Though subsequently reaffirmed by three members of this Court, it has as often been rejected by two other members of the Court, and has never been unreservedly accepted and applied. From its nature, it is incapable of consistent application, because ‘necessity’ in the sense employed — a political sense — must vary in relation to various powers and various States, and, indeed, various periods and circumstances. Not only is the judicial branch of the government inappropriate to determine political necessities, but experience, both in Australia and America, evidenced by discordant decisions, has proved both the elusiveness and the inaccuracy of the doctrine as a legal standard. Its inaccuracy is perhaps the more thoroughly perceived when it is considered what the doctrine of ‘necessity’ in a political sense means. It means the necessity of protection against the aggression of some outside and possibly hostile body. It is based on distrust, lest powers, if once conceded to the least degree, might be abused to the point of destruction. But possible abuse of powers is no reason in British law for limiting the natural force of the language creating them. It may be taken into account by the parties when creating the powers, and they, by omission of suggested powers or by safeguards introduced by them into the compact, may delimit the powers created. But, once the parties have by the terms they employ defined the permitted limits, no Court has any right to narrow those limits by reason of any fear that the powers as actually circumscribed by the language naturally understood may be abused … If it be conceivable that the representatives of the people of Australia as a whole would ever proceed to use their national powers to injure the people of Australia considered sectionally, it is certainly within the power of the people themselves to resent and reverse what may be done. No protection of this Court in such a case is necessary or proper. Therefore, the doctrine of political necessity, as [a] means of interpretation, is indefensible on any ground. The one clear line of

judicial inquiry as to the meaning of the Constitution must be to read it naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it … Applying these principles to the present case, the matter stands thus: s 51(xxxv) is in terms so general that it extends to all industrial disputes in fact extending beyond the limits of any one State, no exception being expressed as to industrial disputes in which States are concerned; but subject to any special provision to the contrary elsewhere in the Constitution … [I]t is a fundamental and fatal error to read s 107 as reserving any power from the Commonwealth that falls fairly within the explicit terms of an express grant in s 51, as that grant is reasonably construed, unless that reservation is as explicitly stated. The effect of State legislation, though fully within the powers preserved by s 107, may in a given case depend on s 109. However valid and binding on the people of the State where no relevant Commonwealth legislation exists, the moment it encounters repugnant Commonwealth legislation operating on the same field the State legislation must give way. This is the true foundation of the doctrine stated in D’Emden v Pedder 1 CLR 91 in the so-called rule quoted, which is after all only a paraphrase of s 109 of the Constitution …. The doctrine of ‘implied prohibition’ [reserve powers] finds no place where the ordinary principles of construction are applied so as to discover in the actual terms of the instrument their expressed or necessarily implied meaning. The principle we apply to the Commonwealth we apply also to the States, leaving their respective acts of legislation full operation within their respective areas and subject matters, but, in case of conflict, giving to valid Commonwealth legislation the supremacy expressly declared by the Constitution, measuring that supremacy according to the very words of s 109 … We therefore hold that States, and persons natural or artificial representing States, when parties to industrial disputes

[page 626] in fact, are subject to Commonwealth legislation under pl xxxv of s 51 of the Constitution, if such legislation on its true construction applies to them. [The justices proceeded to rationalise the earlier decisions of the court (28 CLR at 156–7): ‘D’Emden v Pedder (1904) 1 CLR 91 was a case of conflict between Commonwealth law and State law’, and had been settled by s 109; the decision was sound. Deakin v Webb (1904) 1 CLR 585 and Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 could also be explained in this way and, therefore, survived. However, the Railway Servants’ case (1906) 4 CLR 488 (where ‘D’Emden v Pedder was applied in a way not referable to s 109) was wrong and could no longer be regarded as good law. Higgins J delivered a concurring judgment. Gavan Duffy J dissented.]

6.2.22 Writing of the Engineers’ case in 1937, R T E Latham (the son of Latham CJ) criticised the majority judgment for cutting off ‘Australian constitutional law from American precedents, a copious source of thoroughly relevant learning, in favour of the crabbed English rules of statutory interpretation, which are one of the sorriest features of English law’: Latham, 1937, p 563. Latham continued (p 564): The fundamental criticism of the decision is that its real ground is nowhere stated in the majority judgment. This real ground was the view held by the majority that the Constitution had been intended to create a nation, and that it had succeeded; that in the Great War the nation had in fact advanced in status while the States stood still, and (as was a patent fact) that the peace had not brought a relapse into the status quo

ante bellum; that a merely contractual view of the Constitution was therefore out of date, and its persistence in the law was stultifying the Commonwealth industrial power, which they believed to be a real and vital power; and finally, that the words of the Constitution permitted the view of the federal relationship which the times demanded.

6.2.23 A more generous appraisal of the Engineers’ decision, and one which attempted to place it in its historical context, was provided by Windeyer J in Victoria v Commonwealth (Payroll Tax case) (1971) 122 CLR 353 (see 6.2.34) at 395–7: The colonies which in 1901 became States in the new Commonwealth were not before then sovereign bodies in any strict legal sense; and certainly the Constitution did not make them so. They were selfgoverning colonies which, when the Commonwealth came into existence as a new dominion of the Crown, lost some of their former powers and gained no new powers. They became components of a federation, the Commonwealth of Australia. It became a nation. Its nationhood was in the course of time to be consolidated in war, by economic and commercial integration, by the unifying influence of Federal law, by the decline of dependence upon British naval and military power and by a recognition and acceptance of external interests and obligations. With these developments the position of the Commonwealth, the Federal Government, has waxed; and that of the States has waned. In law that is a result of the paramount position of the Commonwealth Parliament in matters of concurrent power. And this legal supremacy has been reinforced in fact by financial dominance. That the Commonwealth would, as time went on, enter progressively, directly or indirectly, into fields that had formerly been occupied by the States, was from an early date seen as likely to occur. This was greatly aided after the decision in the Engineers’ Case (1902) 28 CLR 129, which diverted the flow of constitutional law into new channels.

[page 627] I have never thought it right to regard the discarding of the doctrine of the implied immunity of the States and other results of the Engineers’ Case as the correction of antecedent errors or as the uprooting of heresy. To return today to the discarded theories would indeed be an error and the adoption of a heresy. But that is because in 1920 the Constitution was read in a new light, a light reflected from events that had, over 20 years, led to a growing realization that Australians were now one people and Australia one country and that national laws might meet national needs. For lawyers the abandonment of old interpretations of the limits of constitutional powers was readily acceptable. It meant only insistence on rules of statutory interpretation to which they were well accustomed. But reading the instrument in this light does not to my mind mean that the original judges of the High Court were wrong in their understanding of what at the time of federation was believed to be the effect of the Constitution and in reading it accordingly. As I see it the Engineers’ Case, looked at as an event in legal and constitutional history, was a consequence of developments that had occurred outside the law courts as well as a cause of further developments there. That is not surprising for the Constitution is not an ordinary statute: it is a fundamental law. In any country where the spirit of the common law holds sway the enunciation by courts of constitutional principles based on the interpretation of a written constitution may vary and develop in response to changing circumstances. This does not mean that the courts have transgressed lawful boundaries: or that they may do so.

6.2.24 There are many aspects to the reasoning of the majority in the Engineers’ case which are unconvincing: see Sawer, 1967, pp 130–2; and Zines’ analysis in Stellios, 2015, pp 11–14. Do the words of the Constitution (or of any instrument) convey a single unequivocal meaning in all circumstances and to all readers? Are words any more than ambiguous symbols, the precise meaning of

which can only be grasped with the aid of various preconceptions, prejudices and insights which the reader brings to the task of interpretation? The words in legislation do not speak and act for themselves; they express ideas, the nature and significance of which will be appreciated in different ways by different readers and at different times: see the discussion of this in Chapter 3. For a partial defence of the doctrine of state reserved powers, see Aroney, 2008. 6.2.25 The Engineers’ plurality offered two reasons for rejecting American guidance as to the legal relationship between the Commonwealth and states: the ‘common sovereignty’ (or ‘indivisibility of the Crown’) and the system of responsible government. These concepts are, however, of doubtful relevance to the capacity of the Commonwealth Parliament to legislate so as to control state governments. The ‘indivisibility of the Crown’ is an artificial concept. It asserts that, as the executive government of each political unit in the former British Commonwealth is legally vested in the one monarch, those executive governments are, legally, the same institution. But such an assertion is quite misleading. The United Kingdom, Canada and the Commonwealth of Australia do not have the same legal personality; they are autonomous, each with its own legal identity capable of negotiating and contracting with the others. What of the second distinction referred to by the majority? It is true that the relationship between executive government and legislature is radically different in Australia when compared with the United States? In Australia, the several executive governments are responsible to and may (in theory) be controlled by the legislature; in the United States, the executive governments are elected separately from the legislatures and (short of removal through

impeachment) are not subject to the legislatures’ control. It is unclear, however, where that distinction takes us. [page 628] In particular, it is difficult to see how this difference negates the value of American insights into the interrelationship of polities within a federation. 6.2.26 In the Engineers’ case, an important aspect of the plurality judgment was its formal denunciation of the doctrine of ‘implied prohibition’ (reserve powers): 28 CLR at 150, 155. The plurality insisted that powers granted to the Commonwealth Parliament were not to be reduced by applying some limitation not expressly stated in the Constitution. This assertion was to have an important effect on the development of constitutional law in Australia. The attitude which had been strongly expressed in early High Court decisions, that the powers of the Commonwealth Parliament should be read narrowly so as to preserve the maximum area for unimpeded state regulation, was undermined by this assertion. Decisions such as R v Barger (1908) 6 CLR 41 and Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 had held that the taxation power (s 51(ii)) and the corporations power (s 51(xx)) should be construed narrowly in order to prevent Commonwealth legislation extending into areas presumed to have been preserved for state regulation and, through the impact of s 109, ousting the states from those areas. Once the Engineers’ case was decided, and the doctrine of implied prohibitions rejected, the way was laid for an expansive reading and exploitation of the Commonwealth’s powers.

Although this expansion did not unfold rapidly in the wake of the Engineers’ case, that decision’s pivotal influence was unmistakable, even many decades later: see, for example, Fairfax v Commissioner of Taxation (1965) 114 CLR 1 (see 3.3.12) and Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 468 4.2.5C, where the narrow interpretations of s 51(ii) and (xx) respectively were discarded by the High Court. 6.2.27 Over several decades, and with Dixon J’s arrival and Isaacs CJ’s retirement, the High Court inched its way back to a recognition that immunities principles were in some measure appropriate to a federal governmental arrangement. This shift first registered in Australian Railways Union v Victorian Railways Commissioners (1930) 44 CLR 319, where it was decided that the Commonwealth could not enforce a financial liability lawfully imposed on a state by Commonwealth law. Justice Dixon took the opportunity in this case to frame his own, significantly qualified, restatement of the Engineers’ holding on immunities (44 CLR at 390): This rule I understand to be that, unless, and save in so far as, the contrary appears from some other provision of the Constitution or from the nature or the subject matter of the power or from the terms in which it is conferred, every grant of legislative power to the Commonwealth should be interpreted as authorizing the Parliament to make laws affecting the operations of the States and their agencies, at any rate if the State is not acting in the exercise of the Crown’s prerogative and if the Parliament confines itself to laws which do not discriminate against the States or their agencies.

6.2.28 In Federal Commissioner of Taxation v Official Liquidator of EO Farley Ltd (1940) 63 CLR 278, some members of the High

Court discussed the nature and extent of one of Dixon J’s proposed exceptions to the Engineers’ rule: that relating to the prerogative. EO Farley Ltd was being wound up under the Companies Act 1899 (NSW), which did not bind the Crown, neither in right of the state nor in right of the Commonwealth. The company owed money to both the state and Commonwealth governments, and there were insufficient assets to pay these debts. It was accepted that each class of debt was to be satisfied before debts of equal degree owed to private creditors; this was the prerogative right of priority for Crown [page 629] debts: see Chapter 7. It was also accepted that, absent any legislation, the Commonwealth and the state would share the money available in proportion to their debts. The High Court held that there was no existing Commonwealth legislation purporting to alter that position by prioritising debts due to the Commonwealth. Considering first the inverse possibility, of a state attempting to displace the Commonwealth’s priority, Dixon J argued that a state parliament could not impair or destroy the Commonwealth’s prerogative priority and its right to stand equally with the state when competing for the payment of debts due to each of them. He then proceeded to outline, with no hint of defensiveness, why the Commonwealth’s position was different, and stronger (63 CLR at 312–14): The right of the State to receive payment of its debts before the subject springs from a prerogative of government; and the State’s claim to stand on an equality with the Commonwealth in respect of demands upon the

same fund is the consequence of the federal system by which two governments of the Crown are established within the same territory, neither superior to the other. They are not rights conferred by the federal Constitution, but they do depend on the existence of the state as a separate government. The federal Constitution does not imply as a matter of meaning or intention that debts due to the Crown in right of the state shall, in a distribution of assets, stand on an equality with debts due to the Commonwealth. If it did so, there would, of course, be an end of the matter. But it does mean to establish two governments, state and federal, side by side, neither subordinate to the other, and it is this that gives rise to their equality in a competition of claims to be satisfied out of assets in a course of administration. The right of the state to rank equally with the Commonwealth is not a thing that falls exactly under s 106 of the Constitution. Even if it be treated as forming part of the ‘constitution’ of the state, it is not easy to regard it as existing as at the establishment of the Commonwealth. But to destroy the equality does spell an interference with an existing governmental right of the state flowing from the constitutional relations of the two polities. The Engineers’ Case (1920) 28 CLR 129 shows that this consideration may not be enough to protect the right of the state from the exercise of a specific legislative power of the Commonwealth. The claim that debts of equal degree due to the Crown in right of the state and in right of the Commonwealth rank equally in a distribution of assets, unlike the claim that the Crown is to be preferred to the subject, does not depend upon the prerogative and is therefore not within the reservation made in the Engineers’ Case (1920) 28 CLR at 143 in favour of the ‘prerogative in the broader sense,’ whatever that reservation may mean. On two previous occasions I have attempted to reduce to a brief legal statement the doctrine which I understand that case to establish: see Australian Railways Union v Victorian Railways Commissioner (1930) 44 CLR at 390 and West v Commissioner of Taxation (NSW) (1937) 56 CLR at 682. It is a rule of construction of the legislative powers expressly conferred by the Constitution upon the parliament of the Commonwealth. For present purposes it is enough to repeat the general proposition. ‘The principle is

that whenever the Constitution confers a power to make laws in respect of a specific subject matter, prima facie it is to be understood as enabling the parliament to make laws affecting the operations of the states and their agencies. The prima facie meaning may be displaced by considerations based on the nature or the subject matter of the power or the language in which it is conferred or on some other provisions in the Constitution. But, unless the contrary thus appears, then, subject to’ certain ‘reservations, the power must be construed as extending to the States’ (1937) 56 CLR at 682.

[page 630] The power given by s 51(xvii) to make laws with respect to bankruptcy and insolvency is an example of a legislative power which, as a result of this principle, might be interpreted as enabling the parliament of the Commonwealth to destroy or vary the ranking of debts due to the state and Commonwealth in any administration of assets falling under the description of bankruptcy or insolvency. For it is a specific power, and priority in the distribution of assets among a bankrupt’s creditors is a matter to be governed by bankruptcy legislation. It is a subject to be dealt with as a coherent whole, and prima facie no reason appears why the position of the Crown in right of the state and of the Commonwealth as a creditor should not be governed by laws made in the exercise of the power, alike with the position of ordinary creditors.

To this point, Dixon J’s enthusiasm for a revival of immunities principles had met with little support from his fellow justices. Yet that would soon change, with Dixon J’s vision winning the day in the landmark decision in Melbourne Corporation v Commonwealth (State Banking case) (1947) 74 CLR 31. 6.2.29

After the conclusion of World War II, the Chifley

federal Government sought to make permanent the extensive controls over the national banking industry that it had maintained during wartime. To that end it secured passage of the Banking Act 1945 (Cth), which, among other things, provided for state and local governments to be forced to transfer their banking business to the (then publicly owned) Commonwealth Bank. These reforms soon became the subject of a High Court challenge. 6.2.30C Melbourne Corporation v Commonwealth (State Banking case) (1947) 74 CLR 31 [The Banking Act 1945 (Cth) provided: 48(1) Except with the consent in writing of the Treasurer, a bank shall not conduct any banking business for a State or for any authority of a State, including a local government authority. Penalty: One thousand pounds. (2) Any consent of the Treasurer under this section may apply to all such business conducted by any particular bank or at a particular office of a bank, or to the business of any particular State or authority conducted by any particular bank or at any particular office of a bank. (3) Until a date fixed by the Treasurer by notice published in the Gazette, this section shall apply only in relation to banking business conducted for a State or for an authority of a State including a local government authority, specified by the Treasurer by notice in writing, and if an office of a bank is specified in the notice, at the office so specified. Section 4 defined ‘bank’ as ‘a body corporate authorised under Pt II of this Act to carry on banking business in Australia’. These bodies corporate were listed in the first schedule of the Act and were all the

private banks then operating in Australia. Section 5(1) declared that s 48 did not apply to banking conducted with or by publicly owned ‘State banks’. In May 1947, the Treasurer of the Commonwealth wrote to the Melbourne City Council (the Melbourne Corporation), and advised it that, as of 1 August 1947, it would be ‘specified’ in accordance with s 48(3): ‘In effect this will mean that as from the date on which this specification was made a private bank will not be able legally to conduct business on behalf of any local governing authority specified in the notice’. The Treasurer [page 631] also indicated that he was satisfied that the Commonwealth Bank was ‘in a position to provide full banking facilities to’ the Council. The Commonwealth Bank had been established as a statutory agency in 1911. By 1947, it was operating under the Commonwealth Bank Act 1945 (Cth), s 9 of which declared that the bank should give effect to a monetary and banking policy determined by the Commonwealth Government. The Melbourne City Council went to the High Court seeking a declaration that s 48 of the Banking Act was beyond the legislative powers of the Commonwealth and thus void. The Commonwealth demurred to the statement of claim and the demurrer was argued before the Full Court. South Australia and Western Australia were given leave to intervene in support of the plaintiff. Victoria, by leave, intervened to support the Commonwealth.] Latham CJ: In the Engineers’ Case (1920) 28 CLR 129 it was decided that ‘laws validly made by authority of the Constitution bind, so far as they purport to do so, the people of every State considered as individuals or as political organisms called States — in other words, both bind Crown and subjects’ (28 CLR at 153). Thus the validity of a Commonwealth law is to

be determined by reference to the terms of the Constitution, without applying any presumption that there are certain powers reserved to the States which must not be impaired or interfered with by federal laws. But this principle does not mean that the States are in the position of subjects of the Commonwealth. The Constitution is based upon and provides for the continued co-existence of Commonwealth and States as separate Governments, each independent of the other within its own sphere. The Engineers’ Case recognizes, in the case of State legislation, a difference between ‘provisions which apply generally to the whole community without discrimination’ and ‘an act of the State legislature discriminating against Commonwealth officers.’ … In West’s Case (1937) 56 CLR 687 Evatt J referred to the distinction between general laws and laws ‘discriminating against’ Commonwealth or State officials and said: ‘A different angle of approach to the question of discriminatory legislation is this, that it must at least be implied in the Constitution, as an instrument of federal government, that neither the Commonwealth nor a State legislature is at liberty to direct its legislation toward the destruction of the normal activities of the Commonwealth or States’. [The Chief Justice referred to a number of decisions of the United States Supreme Court which expressed the same proposition — ‘that Federal laws expressed in general terms may apply to the States … but that federal laws which “discriminate” against the States are not laws authorized by the Constitution’: 74 CLR at 60. His Honour continued:] … The Commonwealth Parliament has no power to make laws with respect to State government functions as such, and the State Parliaments have no power to make laws with respect to Commonwealth governmental functions as such. It is upon this ground, in my opinion, that what is called ‘discriminatory’ legislation may properly be held to be invalid … Similarly, federal

legislation which, though referring to a subject of federal power, is really legislation about what is clearly a State governmental function, may be said to ‘interfere unduly’ with that function and therefore to be invalid. ‘Undue’ interference is a rather vague conception, and an attempt to apply it as a standard for determining the validity of legislation would invite and would certainly produce differences of opinion which would often be due to other than objective considerations. In my opinion the invalidity of a federal law which seeks to control a State governmental function is brought about by the fact that it is in substance a law with respect to a subject as to which the Commonwealth Parliament [page 632] has no power to make laws. Though there will sometimes be difficulties in applying such a criterion, this is a more satisfactory ground of decision than an opinion that a particular federal ‘interference’ with a State function reaches a degree which is ‘undue’. The application of these principles in the present case brings about the conclusion that s 48 of the Banking Act is invalid. The section requires the consent of the Treasurer to the conduct of banking business by a bank only in the case of States and State authorities, including local governing authorities. It singles out States and State agencies and creates a rule for them and for no others. It is in substance legislation about States and State authorities. It can fairly be described as being aimed at or directed against States and it none the less falls within this disqualifying category because it is also aimed at and directed against what are called ‘private banks’. On this ground, in my opinion, s 48 is invalid. … Rich J: I may say at once that I agree with the submissions

that [s 48 of the Banking Act] relates to banking, and that it does not relate to State banking in the sense in which that phrase is used in [s 51(xiii) of the Constitution], namely the carrying on by the State of the business of banking … The question then is, whether the provision being prima facie within power, it is obnoxious to the Constitution. The first point to be kept in mind is that the Constitution expressly provides for a federal form of government … [His Honour referred to the overthrow of the reserved powers doctrine in the Engineers’ case, and continued:] There is no general implication in the framework of the Commonwealth Constitution that the Commonwealth is restricted from exercising its defined constitutional powers to their fullest extent by a supposed reservation to the States of an undefined field of reserved powers beyond the scope of Commonwealth interference. But this is always subject to the provisions of the Commonwealth Constitution itself. That Constitution expressly provides for the continued existence of the States. Any action on the part of the Commonwealth, in purported exercise of its constitutional powers, which would prevent a State from continuing to exist and function as such is necessarily invalid because inconsistent with the express provisions of the Constitution, and it is to be noted that all the powers conferred by s 51 are conferred ‘subject to this Constitution’. Such action on the part of the Commonwealth may be invalid in two classes of case, one, where the Commonwealth singles out the States or agencies to which they have delegated some of the normal and essential functions of government, and imposes on them restrictions which prevent them from performing those functions or impede them in doing so; another, where, although the States or their essential agencies are not singled out, they are subjected to some provision of general application, which, in its application to them, would so prevent or impede them. Action of the former

type would be invalid because there is nothing in the Commonwealth Constitution to authorize such action by the Commonwealth. A general income tax Act which purported to include within its scope the general revenues of the States derived from State taxation would be an instance of the latter. [His Honour concluded that the free use of banking facilities by government was ‘regarded as essential to the efficient working of the business of government’ and accordingly s 48 was invalid: 74 CLR at 67. Starke J reviewed a number of United States and Australian decisions, and continued:] [page 633] Starke J: … It is a practical question, whether legislation or executive action thereunder on the part of a Commonwealth or of a State destroys, curtails or interferes with the operations of the other, depending upon the character and operation of the legislation and executive action thereunder. No doubt the nature and extent of the activity affected must be considered and also whether the interference is or is not discriminatory but in the end the question must be whether the legislation or the executive action curtails or interferes in a substantial manner with the exercise of constitutional power by the other. The management and control by the States and by local governing authorities of their revenues and funds is a constitutional power of vital importance to them. Their operations depend upon the control of those revenues and funds. And to curtail or interfere with the management of them interferes with their constitutional power. Yet the Commonwealth by its legislation prescribes that, except with the consent in writing of the Treasurer, no bank shall conduct any banking business for a State, including any local governing authority. It operates to prevent the States and local

governing authorities from dealing with their old and tried bankers except with the consent in writing of the Treasurer. The object is, of course, to compel the States and the local governing authorities to bank with the Commonwealth Bank, which is a central bank. And it was said that the handling of public funds is the appropriate function of a central bank. But that does not establish any constitutional power of the Commonwealth to compel the States so to bank. The States and the local governing authorities, and not the Commonwealth, have the power and the duty of administering, controlling and banking their revenues and funds. Dixon J: The prima facie rule is that a power to legislate with respect to a given subject enables the Parliament to make laws which, upon the subject, affect the operations of the States and their agencies. That, as I have pointed out more than once, is the effect of the Engineers’ Case (1920) 28 CLR 129 stripped of embellishment and reduced to the form of a legal proposition. It is subject, however, to certain reservations and this also I have repeatedly said. Two reservations, that relating to the prerogative and that relating to the taxation power, do not enter into the determination of this case and nothing need be said about them. It is, however, upon the third that, in my opinion, this case turns. The reservation relates to the use of federal legislative power to make, not a general law which governs all alike who come within the area of its operation whether they are subjects of the Crown or the agents of the Crown in right of a State, but a law which discriminates against States, or a law which places a particular disability or burden upon an operation or activity of a State, and more especially upon the execution of its constitutional powers. In support of such a use of power the Engineers’ Case (1920) 28 CLR 129 has nothing to say. Legislation of that nature discloses an immediate object of controlling the State in the course which otherwise the executive government of the State might adopt, if that government were left free to exercise its authority. The control may be attempted in

connection with a matter falling within the enumerated subjects of Federal legislative power. But it does not follow that the connection with the matter brings a law aimed at controlling in some particular the State’s exercise of its executive power within the true ambit of the Commonwealth legislative power. Such a law wears two aspects. In one aspect the matter with respect to which it is enacted is the restriction of State action, the prescribing of the course which the executive government of the State must take or the limiting of the courses available to it. As the operation of such a law is to place a particular burden or disability upon the State in that aspect it may correctly be described as a law for the restriction of State action in the field chosen. That is a direct operation of the law. [page 634] In the other aspect, the law is connected with a subject of Commonwealth power … [If in this] second aspect the law operates directly upon a matter forming an actual part of a subject enumerated among the federal legislative powers, its validity could hardly be denied on the simple ground of irrelevance to a head of power. Speaking generally, once it appears that a federal law has an actual and immediate operation within a field assigned to the Commonwealth as a subject of legislative power, that is enough. It will be held to fall within the power unless some further reason appears for excluding it. That it discloses another purpose and that the purpose lies outside the area of federal power are considerations which will not in such a case suffice to invalidate the law … [I]t is one thing to say that a Federal law may be valid notwithstanding a purpose of achieving some result which lies directly within the undefined area of power reserved to the States. It is altogether another thing to apply the same doctrine to a use of Federal power for a purpose of restricting or burdening the State in the exercise of its

constitutional powers. The one involves no more than a distinction between the subject of a power and the policy which causes its exercise. The other brings into question the independence from federal control of the State in the discharge of its functions. … [T]o attempt to burden the exercise of State functions by means of the power to tax needs no ingenuity, and that, no doubt, is why that power occupies such a conspicuous place in the long history in the United States and here of the question how far federal power may be used to interfere with the States in the exercise of their powers. … [His Honour referred to decisions of the United States Supreme Court which established ‘that a taxing law discriminating against a State is unconstitutional and void’: 74 CLR at 81.] What is important is the firm adherence to the principle that the federal power of taxation will not support a law which places a special burden upon the States. They cannot be singled out and taxed as States in respect of some exercise of their functions. Such a tax is aimed at the States and is an attempt to use federal power to burden or, may be, to control State action. The objection to the use of federal power to single out States and place upon them special burdens or disabilities does not spring from the nature of the power of taxation. The character of the power lends point to the objection but it does not give rise to it. The federal system itself is the foundation of the restraint upon the use of the power to control the States. The same constitutional objection applies to other powers, if under them the States are made the objects of special burdens or disabilities. Not of course all powers, for some of them are concerned with the States specially or contemplate some measure in particular relation to a State. Examples can be seen in paras (xxxi), (xxxii), (xxxiii), and (xxxiv) of s 51. The meaning and nature of the power cannot be left out of account. Of this the defence power is a conspicuous example. But plainly the greater number of powers contemplate legislation of general application.

I do not think that either under the Constitution of the United States or The British North America Act or the Commonwealth Constitution has countenance been given to the notion that the legislative powers of one government in the system can be used in order directly to deprive another government of powers or authority committed to it or restrict that government in their exercise, notwithstanding the complete overthrow of the general doctrine of reciprocal immunity of government agencies and the discrediting of the reasoning used in its justification. For that reason the distinction has been constantly drawn between a law of general application and a provision singling out governments and placing special burdens upon the exercise or the fulfilment of functions constitutionally belonging to them. It is but a consequence of the conception upon which the Constitution is framed. [page 635] The foundation of the Constitution is the conception of a central government and a number of State governments separately organised. The Constitution predicates their continued existence as independent entities. Among them it distributes powers of governing the country. The framers of the Constitution do not appear to have considered that power itself forms part of the conception of a government. They appear rather to have conceived the States as bodies politic whose existence and nature are independent of the powers allocated to them. The Constitution on this footing proceeds to distribute the power between State and Commonwealth and to provide for their interrelation, tasks performed with reference to the legislative powers chiefly by ss 51, 52, 107, 108 and 109. In the many years of debate over the restraints to be implied against any exercise of power by Commonwealth against State and State against Commonwealth calculated to destroy or detract from

the independent exercise of the functions of the one or the other, it has often been said that political rather than legal considerations provide the ground of which the restraint is the consequence. The Constitution is a political instrument. It deals with government and governmental powers. The statement is, therefore, easy to make though it has a specious plausibility. But it is really meaningless. It is not a question whether the considerations are political, for nearly every consideration arising from the Constitution can be so described, but whether they are compelling. … The considerations I have just mentioned have been used in relation to the question what the federal Government may do with reference to the States and the question of what a State may do with reference to the federal Government. But these are two quite different questions and they are affected by considerations that are not the same. The position of the federal Government is necessarily stronger than that of the States. The Commonwealth is a government to which enumerated powers have been affirmatively granted. The grant carries all that is proper for its full effectuation. Then supremacy is given to the legislative powers of the Commonwealth. These two considerations add great strength to the implication protecting the Commonwealth from the operation of State laws affecting the exercise of Federal power. But they also amplify the field protected. Further, they limit the claim of the States to protection from the exercise of Commonwealth power. For the attempt to read s 107 as the equivalent of a specific grant or reservation of power lacked a foundation in logic. Accordingly, the considerations upon which the States’ title to protection from Commonwealth control depends arise not from the character of the powers retained by the States but from their position as separate governments in the system exercising independent functions. But, to my mind, the efficacy of the system logically demands that, unless a given legislative power appears from its content, context or subject matter so to intend, it should not be

understood as authorising the Commonwealth to make a law aimed at the restriction or control of a State in the exercise of its executive authority. In whatever way it may be expressed an intention of this sort is, in my opinion, to be plainly seen in the very frame of the Constitution … [Section 48 of the Banking Act] forbids the banks to do the business of the States unless the Treasurer of the Commonwealth consents. Section 5 of the Crimes Act 1914–41 operates to make the Treasurer and any subordinate officer of the State guilty of the same offence as the bank if they should procure the bank to disregard the prohibition. There is thus a law directly operating to deny to the States banking facilities open to others, and so to discriminate against the States or to impose a disability upon them. The circumstance that the primary prohibition is laid upon the banks and not upon the States does not appear to me to be a material distinction. It is just as effectual to deny to the States [page 636] the use of the banks and that is its object. This I think is not justified by the power to make laws with respect to banking. I cannot see that it is to the point to argue that under s 51(xiii) the Commonwealth might give the Commonwealth Bank a monopoly complete, except for State banks, and that what s 48 does is to give a monopoly restricted to State business. That is only to say that instead of establishing a monopoly with all its advantages and disadvantages shared by the whole community, States have been singled out and deprived of the freedom of choice which the existing system afforded. … In my opinion s 48 of the Banking Act is void because an inseverable part of it is directed to control or restrict the

Executive Government of the States in the use of banks for the conduct of their banking business. [Williams J delivered a concurring judgment in which he appeared to adopt the views of Latham CJ and also those of Rich J and Starke J. McTiernan J dissented. He referred to writings on the function of central banks and central banking and said that s 48 had, as its object, the proper division of business between the central bank of a country and its trading banks. It was ‘in substance a law with respect to the subject of banking’ and rightly within the Commonwealth’s legislative power: 74 CLR at 94.]

6.2.31 This decision marked a significant shift away from the Engineers’ case (1920) 28 CLR 129 6.2.21C. It established a clear exception — for ‘discriminatory’ legislation — to the general Engineers’ rule that the Commonwealth could legislate so as to bind the states. Importantly, this exception had not been foreshadowed in the Engineers’ case. Three of the five justices in the majority based this exception on implications drawn from their understanding of the federal system. The reasoning of Rich J and Starke J seemed to go even further, contemplating a broad exception which would invalidate non-discriminatory Commonwealth legislation that interfered with ‘normal and essential’ state functions. 6.2.32 The decision in the State Banking case provoked the Commonwealth Parliament to enact the Banking Act 1947 (Cth), which nationalised the private banks. A principal object of this nationalisation was to achieve the central control over state government banking business which the State Banking case had denied to the Commonwealth. This legislation may have been

inspired, in part, by Dixon J’s imagining such a scheme in the State Banking case: 74 CLR at 84. Even so, in Bank of New South Wales v Commonwealth (Bank Nationalisation case) (1948) 76 CLR 1, the High Court invalidated the nationalisation scheme. Yet it did not do so by reason of state immunity from Commonwealth law. Chief Justice Latham and McTiernan J emphasised that the 1947 Act did not discriminate against the states: 76 CLR at 243, 397. Justice Starke said (76 CLR at 325–6): If the Parliament of the Commonwealth has power to enact the Banking Act of 1947, no constitutional power or function of a State is curtailed or impeded. The States can, through their own banks, provide their own financial facilities or resort to the general banking system otherwise established. The Melbourne Corporation Case is distinguished because there the States were subjected to a particular direction.

[page 637] Dixon J also dismissed the relevance of any immunities argument (76 CLR at 337): [T]he States would be bound to take the banking system as any general law, made in the exercise of Federal power, left it. Just as when the Federal Government desires to use or take advantage of anything the nature or character of which is determined by an exercise of the exclusive power of the State, it must take it as it finds it, so the States, when they avail themselves of services or facilities regulated or determined by Federal law, must accept it as part of the system enjoyed by the whole community. Such things are a consequence of the distribution of powers and stand apart altogether from some exercise of legislative power which singles out the States or which operates specially to impede them in their functions.

6.2.33 While the decision in the State Banking case (1947) 74 CLR 31 was unmistakably a significant departure from the immunities reasoning in the Engineers’ case, the extent of the shift was difficult to assess given the sharp differences in approach adopted by the majority justices. Chief Justice Latham held that a law could have only a single characterisation and a Commonwealth law would be invalid if best characterised as ‘aimed at or directed against States’ (74 CLR at 62) rather than as a law with respect to a matter in s 51. Justice Dixon said that the states could claim immunity from a Commonwealth law ‘which discriminates against States, or … places a particular disability or burden’ upon them: 74 CLR at 79. Justices Rich and Starke were minded to regard as invalid any general, non-discriminatory Commonwealth legislation which threatened ‘the continued existence of the States’ (74 CLR at 66 per Rich J) or ‘curtail[ed] or interfere[d] in a substantial manner with the exercise of constitutional power’ by a state: 74 CLR at 74 per Starke J. These disparate approaches were revisited in the next major state immunity case: Victoria v Commonwealth (Payroll Tax case) (1971) 122 CLR 353 (see 6.2.34). That decision brought some clarity to an issue that had been circled around, in post-Engineers’ discussions of immunities issues, but never squarely addressed. The question was the use by the Commonwealth of its taxation power so as to impose taxation on the states. 6.2.34 The momentum that Sir Owen Dixon had brought to the development of immunities principles faltered following his retirement from the High Court. The first significant test, absent Dixon CJ’s dominating influence, of what was becoming known as the ‘Melbourne Corporation doctrine’ resulted in disappointment for the states. That case was Victoria v Commonwealth (Payroll Tax

case) (1971) 122 CLR 353 and it concerned the application to states of the Payroll Tax Act 1941 (Cth), which imposed a tax of 2.5 per cent on all wages paid or payable by an employer. The tax was to be paid to the Commonwealth by the employer. The Payroll Tax Assessment Act 1941 (Cth) defined ‘employer’ to include the Crown in right of a state: s 3. The State of Victoria contended that it was beyond the power of the Commonwealth Parliament to levy a tax on wages paid or payable by the state to its employees in certain government departments. The government departments referred to in the plaintiff’s statement of claim included the Premier’s Department, the Education Department, the Crown Law Department and the Treasury. The Commonwealth demurred to the statement of claim, asserting that the legislation was a valid exercise of the s 51(ii) taxation power. The demurrer was heard before the Full Court. Chief Justice Barwick, McTiernan and Owen JJ held that the Commonwealth’s legislative powers, subject to any express restrictions, could operate to ‘bind the Crown in right of a State in like manner that they bind individuals and corporations’: 122 CLR at 367 per Barwick CJ (see also at 405 per Owen J; 385–6 per McTiernan J). Justices Menzies, Windeyer, Walsh [page 638] and Gibbs rejected the argument that Victoria had framed around the State Banking case. Justice Menzies observed that the laws did not ‘operate to interfere with a State carrying out its constitutional functions’, and he contrasted it with a ‘Commonwealth tax upon

State tax revenues’: 122 CLR at 392–3; see also at 413 per Walsh J. Justice Windeyer said the law was ‘not aimed at [the states] otherwise than as employers along with other employers’: 122 CLR at 403. Justice Gibbs remarked that it ‘has not been shown that the tax in the present case prevents the States from employing civil servants or operates as a substantial impediment to their employment’: 122 CLR at 425. 6.2.35 The earliest discussions by Dixon J of the idea of state immunity had, drawing on comments made by the plurality in the Engineers’ case, nominated state prerogative power as a discrete area insulated from Commonwealth interference. Yet the existence or parameters of this suggested strand of state immunity doctrine were only to be put squarely before the High Court many decades later. In Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25, the Victorian Government had argued that a Federal Court order restraining a state royal commissioner had involved an interference with the state prerogative which was, according to the reservations made in the Engineers’ case (1920) 28 CLR 129 at 143–4, beyond the reach of Commonwealth legislative power. Justice Mason pointed out that Sir Owen Dixon himself had passed up opportunities to lift this putative rule out of the realm of obiter dicta and apply it to the facts of a case. His Honour, with Stephen, Murphy and Aickin JJ agreeing, went on to reject Victoria’s argument (152 CLR at 93): Although the grant of legislative powers to the Commonwealth Parliament in s 51 is prefaced by the words ‘subject to this Constitution’, there is nothing elsewhere in the Constitution which subordinates the exercise of these powers to the prerogatives of the Crown in right of the States. Elsewhere the emphasis, as in s 109, is on the supremacy

throughout the Commonwealth of all laws validly made under the Constitution. There is no secure foundation for an implication that the exercise of the Parliament’s legislative powers cannot affect the prerogative in right of the States and the weight of judicial opinion, based on the thrust of the reasoning in the Engineers’ Case, is against it.

In Mason J’s opinion, if it was necessary to make any implication to protect the states from the Commonwealth, then such an implication should prevent the Commonwealth discriminating against the states and impairing their continued existence or their capacity to function. The conferral on the Federal Court of its power to restrain a contempt of court by a state royal commissioner did not offend those implications. The power was framed in general and non-discriminatory terms and its exercise did not impair the states’ existence or capacity to function: 152 CLR at 93– 4. The formulation of state immunity doctrine advanced here by Mason J came to dominate the High Court’s conception of that principle over the next 20 years. 6.2.36 Justice Mason’s two-limbed formulation received another outing soon after, in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.3.22C. Tasmania argued that Commonwealth legislation prohibiting the construction of a hydro-electric dam upon Tasmanian Crown lands was invalid because it impaired a governmental function of the state: the management of Crown lands. [page 639]

Justices Mason and Brennan, in the majority, accepted that Commonwealth legislation is subject to some broad constraint along the lines developed by Menzies, Walsh and Gibbs JJ in Victoria v Commonwealth (Payroll Tax case) (1971) 122 CLR 353 (see 6.2.34). In Mason J’s view, a non-discriminatory Commonwealth law which ‘inhibits or impairs the continued existence of a State or its capacity to function’ would be invalid. There must be, Mason J said, ‘a substantial interference with the State’s capacity to govern, an interference which will threaten or endanger the continued functioning of the State as an essential constituent element in the federal system’: 158 CLR at 139. Although the impugned legislation restricted the state in the exercise of its powers, Mason J said, it fell short of impairing the state’s continued existence or its capacity to function. His Honour acknowledged the possibility that Commonwealth control over state government activities in a large area of the state might impair its capacity to function, but noted that the controls under challenge affected only 14,125 hectares, a relatively small area. Justice Murphy agreed, in even more emphatic terms. Noting that Tasmania had relied on the Melbourne Corporation case to argue that the Commonwealth provisions threatened the continued existence of the state and its capacity to function as a government, Murphy J found: ‘The Acts manifestly do not have such an operation; the argument is frivolous. The mere fact that the Acts impair, undermine, make ineffective or supersede various State functions or State laws is an ordinary consequence of the operation of federal Acts and does not affect their validity’: 158 CLR at 169. His Honour added, referring to the Engineers’ case (1920) 28 CLR 129 at 151, that: ‘Any “extravagant” use of the granted powers in the actual working of the Constitution is a matter to be guarded

against by the constituency and not by the courts’: 158 CLR at 169–70. In a similar vein, Brennan J indicated that the constraint on Commonwealth legislation was limited to protecting the functioning of the organs of state government. The present legislation did not overstep that constraint because it applied only to prescribed Crown land; it did not purport ‘to restrict the use by the central departments of government or by Parliament or by the Supreme Court of the buildings appointed for their use in performing their respective functions’: 158 CLR at 214. The fourth member of the majority, Deane J, acknowledged (158 CLR at 281) that the Commonwealth law interfered, in some sense, with the legislative or executive functions of Tasmania. However, he insisted that it did not, ‘in any relevant sense, involve ‘a discriminatory attack’ upon the exercise by Tasmania of its executive authority’: 158 CLR at 281. 6.2.37 While the notion of a Commonwealth interference with the states’ constitutional functioning had dominated the immunities analysis in the Tasmanian Dam case (1983) 158 CLR 1, the other component of Mason J’s two-limbed vision of state immunity — the idea that Commonwealth legislation cannot single out the states for special burdens — became the focus of the following case. 6.2.38C

Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192

[The Queensland Electricity Commission was constituted by s 9 of the

Electricity Act 1976 (Qld) and declared to represent the Crown in right of the State of Queensland. The function of the commission was to generate electrical power and to distribute that [page 640] power through electricity boards, constituted under ss 101–103 of the Electricity Act 1976. Although the boards did not represent the Crown, they functioned under the control of the state government. During 1984, the commission, the boards and some of their employees became involved in an industrial dispute. The terms of the employees’ employment were controlled by state legislation and industrial awards. During the course of the dispute, the Queensland Parliament passed further legislation, varying the conditions of employment provided by the commission and the boards. On 18 April 1985, a commissioner of the Commonwealth Conciliation and Arbitration Commission found that there existed an industrial dispute, within the Conciliation and Arbitration Act 1904 (Cth), between the employees’ union, the Electrical Trades Union of Australia, and the Queensland Electricity Commission. The Commonwealth Parliament then enacted the Conciliation and Arbitration (Electricity Industry) Act 1985 (Cth), which came into operation on 31 May 1985. The Act was declared, by s 6(1), to apply ‘to the industrial dispute between the Electrical Trades Union of Australia and certain authorities that was found to exist by a Commissioner on 18 April 1985’. According to s 6(2), the Act was also to apply to any industrial dispute found to exist between a specified union of employees and one or more electricity authorities ‘if the industrial dispute could result in the making of an award that would be binding on an electricity authority of Queensland and would establish terms or conditions of employment of employees of that authority’. No union of employees had been specified for the purpose of s 6(2).

Section 7 of the Act directed the Conciliation and Arbitration Commission ‘to settle the industrial dispute as expeditiously as is appropriate having regard to all the circumstances’. Section 8(1) removed the power, which the commission would otherwise have had under s 41(1)(d) of the Conciliation and Arbitration Act 1904 (Cth), to dismiss or refrain from hearing a matter which had been, was being or could be dealt with by a state industrial authority of Queensland or in which further proceedings were unnecessary or undesirable in the public interest. Section 9(1) provided that the powers of the Arbitration Commission in relation to the industrial dispute ‘shall … be exercised by the Full Bench’. However, s 9(6) authorised the Full Bench to separate that part of the industrial dispute which involved employers other than electricity authorities of Queensland, so that the separated part would be dealt with in accordance with the standard procedures under the Conciliation and Arbitration Act. The Queensland Electricity Commission and nine electricity boards commenced action against the Commonwealth in the High Court, seeking a declaration that the Conciliation and Arbitration (Electricity Industry) Act 1985 (Cth) was not a valid law of the Commonwealth Parliament. A similar action was brought by the State of Queensland. The Commonwealth demurred to the statement of claim and these demurrers were heard by the Full Court.] Mason J: [A] review of the authorities shows that the [State immunity] principle is now well established and that it consists of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities; and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments: Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25 at 93. The second element of the prohibition is necessarily less precise than the

[page 641] first; it protects the States against laws which, complying with the first element because they have a general application, may nevertheless produce the effect which it is the object of the principle to prevent. Three comments should be made in relation to the prohibition as it has been expressed. First, the principle prohibits discrimination against a particular State as well as against the States generally. … Secondly, notwithstanding its basis in a constitutional conception of a relationship between a central government and separate State governments and the emphasis given to its application to the exercise of executive power by the States, the principle … protects legislatures as well as executive governments. Third, it does not follow that every law which deprives a State of a right, privilege or benefit which it enjoys will amount to discrimination in the sense already discussed. A law which deprives a State of a right, privilege or benefit not enjoyed by others, so as to place the State on an equal footing with others, is not a law which isolates the State from the general law. So, in Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd (1940) 63 CLR at 313–14 Dixon J suggested that a Commonwealth law enacted under s 51(xvii) might regulate the Crown’s priority in payment of debts in bankruptcy and insolvency, both in respect of the Commonwealth and the States: see also In re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (1947) 74 CLR 508 at 529; Victoria v Commonwealth (‘the Second Uniform Tax Case’) (1957) 99 CLR 575 at 611–12. And this leads to the more general proposition that the Commonwealth Parliament may by an exercise of its legislative powers abrogate a prerogative of the States without necessarily offending the prohibition against discrimination. The prohibition against discrimination operates to strike down laws which apply to agencies of a State as well as to a State

itself: see, eg, Melbourne Corporation (1947) 74 CLR at 78–9. … The foundation for the implication is not the special character and privileges of the Crown in right of the States, but the constitutional conception of the Commonwealth and the States as constituent entities of the federal compact having a continuing existence reflected in a central government and separately organised State governments. To restrict the prohibition to a State and such of its agencies as represent the Crown in right of that State would significantly limit the protection given to the States which, as governments, are free to choose whether a function should be carried out by a department of government or by an authority brought into existence for that purpose. The object of the implied prohibition is to protect the State in the exercise of its functions from the operation of discriminatory laws whether the functions are discharged by the executive government or by an authority brought into existence by the State to carry out public functions even if the authority acts independently and is not subject to government direction and even if its assets and income are not property of the State. … There can be no objection to an exercise of the conciliation and arbitration power which establishes a particular tribunal or a particular procedure for the settlement of disputes in one industry, say the electricity industry. In relation to that industry Parliament might, if it saw fit, require that, in the interests of expedition, the jurisdiction of the Commission be exercised by a Full Bench. It might even provide that disputes in that industry be not referred to a State industrial authority but be determined by the Commission itself. Such a law would apply to all without differentiation. But when the Parliament singles out disputes in the electricity industry to which agencies of the State of Queensland are parties and subjects them to special procedures which differ from those applying under the principal Act to the prevention and settlement of industrial disputes generally, and of industrial disputes in the electricity

[page 642] industry in particular, it discriminates against the agencies of the State by subjecting them to a special disability in isolating them from the general law contained in the principal Act. The limitation on the power of the Commission provided for in s 8(1), the restriction of the exercise of the Commission’s jurisdiction to the Full Bench (s 9(1)) and the power given to the Commission by s 9(6) to hear the Queensland element of the dispute separately and then to declare that s 9 does not apply to the remainder of the dispute, are three patent illustrations of the differential treatment for which the Act provides. … It has been acknowledged that some federal legislative powers are concerned with the States specially or contemplate some measure in particular relation to a State or are of such a nature that they may require to be exercised in relation to a particular State, eg, defence power: Melbourne Corporation (1947) 74 CLR at 81. Conciliation and arbitration is not such a power. … [Mason J referred to the argument that the Conciliation and Arbitration (Electricity Industry) Act 1985 could not be treated as discriminating against Queensland because it applied to some private employers as well as to Queensland statutory authorities. His Honour continued:] A law may discriminate against a State even if it subjects some others (eg, private employers) as well as agencies of the State to a special burden or disability. In such a situation the true effect of the law may be to isolate the State agency and the private employers from the general law. This, on the assumption that I am presently making, is the effect of the Act. It discriminates against the State of Queensland by singling out disputes to which employers in that State are parties, those employers being for the most part authorities brought into

existence by the State to carry out public functions, and then subjecting those disputes to a regime of differential treatment. … What I have already said leads to the conclusion that ss 8 and 9 of the Act are invalid. As these sections are the principal operative provisions, in each action I would overrule the demurrer and declare that the entire Act is invalid as being beyond power. [Deane J noted that, since the decision in Melbourne Corporation v Commonwealth (State Banking case) (1947) 74 CLR 31 6.2.30C, the conclusions of Dixon J about the foundation, rationale and content of principles of state immunity had attracted substantial support. His Honour described that restriction on Commonwealth power, which he termed ‘the third reservation’, as follows:] Deane J: Its central operation is to preclude the exercise of Commonwealth legislative or executive powers ‘to control the States’ or in a manner which would be inconsistent with the continued existence of the States as independent entities and their capacity to function as such. It is not suggested that that central operation of the reservation applies here. What is relevant to the present case is that the reservation also extends to preclude discriminatory treatment of the States in the sense of the use or exercise by the Commonwealth of such powers to single out the States to place upon them ‘special burdens or disabilities’. … [His Honour then nominated some Commonwealth powers which, because of their ‘content, context or subject-matter’, ought to be regarded as authorising legislation singling states out for special burdens or disabilities: acquisition of property on just terms from a particular state (s 51(xxxi)), defence (s 51(vi)), quarantine (s 51(ix)) and medical services such as immunisation (s 51(xxiiiA)). As to the power conferred by s 51(xxxv), ‘a singling out of a State or a State instrumentality for discriminatory treatment would … only be within

[page 643] the intended scope of the legislative power with respect to conciliation and arbitration if it can be seen to be justified as an integral part of a coherent legislative provision with respect to conciliation and arbitration for the prevention or settlement of the particular dispute’: 159 CLR at 251–2. He continued:] The discriminatory operation of s 6(2) of the Act cannot be justified as itself coming within the intended scope of the grant of legislative power contained in s 51(xxxv). The disputes mentioned in s 6(2) are not existing disputes. They could relate to a wide diversity of matters. The involvement of the electricity authorities in them could be central or peripheral. They could be centred or have their origins in Queensland or in some other State. There is nothing in their designated character which could warrant the conclusion that the discriminatory treatment of the electricity authorities in relation to them was a necessary or integral part of a coherent scheme of conciliation and arbitration for their settlement. There is nothing in the nature of that discriminatory treatment which could properly be seen as bringing it itself within what can be seen, from the content, context or subject-matter of s 51(xxxv), to be the intended scope of that grant of legislative power. Section 6(1) of the Act stands in contrast to s 6(2). It applies the provisions of the Act to a particular identified interstate industrial dispute: see R v Ludeke; Ex parte Queensland Electricity Commission (1985) 159 CLR 178. Of itself, s 6(1) makes no distinction between the parties to the dispute. The electricity authorities are not affected by s 6(1) by reason of their being singled out for the imposition of special burdens or disabilities. They are affected by s 6(1) by reason of the fact that they are parties to the particular industrial dispute to which the legislation applies.

6.2.39 Justice Deane held that ss 6(2)–(5), 8 and 9 of the Act were invalid. Chief Justice Gibbs, Wilson and Dawson JJ held, in separate judgments, that the entire Act was invalid, for substantially the same reasons as Mason J. Justice Brennan held that, although the Act discriminated against the Queensland electricity authorities, ss 6(1), 7, 8 and 9 were supported by s 51(xxxv) of the Constitution. The Commonwealth Parliament had been ‘entitled to make a political assessment that there were distinguishing features of the dispute mentioned in s 6(1) which made the dispute one which required speedy settlement’: 159 CLR at 243. However, his Honour concluded that s 6(2) revealed ‘[n]o purpose of recurring industrial peace’, and its ‘imposition of such a discriminatory burden on the electricity authorities of Queensland cannot find support in s 51(xxxv) of the Constitution’: 159 CLR at 243. The court overruled the demurrer and declared the Conciliation and Arbitration (Electricity Industry) Act 1985 (Cth) invalid. 6.2.40 Although Queensland Electricity Commission v Commonwealth was decided and the Conciliation and Arbitration (Electricity Industry) Act held invalid on the basis of the specific principle concerning discriminatory Commonwealth laws enunciated by Dixon J in the State Banking case (1947) 74 CLR 31 6.2.30C, all members of the court expressed support for a more general principle, approximating to the principle proposed by Rich and Starke JJ in the State Banking case, concerning general, nondiscriminatory Commonwealth legislation: 159 CLR at 206, 217, 226, 231, 247, 260. 6.2.41

It was that more general principle which Victoria turned

to in the next successful invocation of the state immunity principle. The High Court’s decision in Re Australian [page 644] Education Union; Ex parte Victoria (1995) 184 CLR 188 was considered a partial, but still significant, victory for the states’ interest in resisting Commonwealth regulation of their internal workings. However, the case does point out the difficulty in formulating a precise, and judicially manageable, formula delimiting the states’ protection from general, non-discriminatory Commonwealth legislation. The starting point in that quest was the general principle articulated by Rich and Starke JJ in the State Banking case (1947) 74 CLR 31. 6.2.42C

Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188

[Following a general election in October 1992 in Victoria, the newlyelected government introduced radical changes to the state’s industrial relations system. At the same time, the government made offers of voluntary redundancy payments to a large number of public sector employees, whose employment was then covered by state industrial awards. Several trade unions, representing public sector employees, in response filed logs of claims against the State of Victoria and other states in the Commonwealth Industrial Relations Commission, with the objective of obtaining federal awards to govern the employment of their members. The commission found there were industrial disputes between the trade unions and the states, extending beyond the limits of one state.

The State of Victoria applied to the High Court for orders of prohibition and certiorari to prevent the commission from deciding the disputes. The Commonwealth and the States of Tasmania, South Australia, New South Wales and Queensland intervened. The principal argument advanced by the states was that the Commonwealth, through the commission, could not direct the states as to whom they should employ or cease to employ and could not set the terms and conditions of employment of state employees engaged in carrying out the functions of government. Justice McHugh referred the applications for orders of prohibition and certiorari to the Full Court of the High Court. Chief Justice Mason, Brennan, Deane, Toohey, Gaudron and McHugh JJ affirmed the proposition that the Commonwealth’s power under s 51(xxxv) of the Constitution could extend to regulation of the states as employers: 184 CLR at 222. Their Honours then turned their attention to what the parties had termed an ‘administrative services exception’, said to follow from the general implied limitation on Commonwealth legislative power: 184 CLR at 224.] Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh J: Although the comments of Dixon J [in the State Banking Case (1947) 74 CLR 31 at 79–80] were couched principally in terms of discrimination against States and the imposition of a particular disability or burden upon an operation or activity of a State or the execution of its constitutional powers, his Honour clearly had in mind, as did Latham CJ, Rich and Starke JJ, that the legislative powers of the Commonwealth cannot be exercised to destroy or curtail the existence of the States or their continuing to function as such. Whether this means that there are two implied limitations, two elements or branches of one limitation, or simply one limitation is a question which does not need to be decided in this case. However, for convenience, we shall proceed on the footing that the limitation has two elements, the nondiscriminatory element having a particular relevance to the argument now being considered … … The fact is that the existence of the States and their

Constitutions and their capacity to function as governments would not be impaired by the operation of federal awards [page 645] made in respect of the vast majority of the employees sought to be covered by the logs of claims, at any rate if the award provisions were confined to minimum wages and working conditions which take appropriate account of any special functions or responsibilities which attach to them. The freedom of State governments to determine terms and conditions of employment of employees would be restricted but that is a consequence of the application of the arbitration power to States. Whether the making of a comprehensive award would result in a relevant impairment is another question which we leave for later discussion. [Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ rejected the argument advanced by the states that their ‘administrative services’ were protected against Commonwealth regulation: the exception, the justices said, was based on a concept that was ‘difficult to define or describe’: 184 CLR at 230–1. The justices then described an argument advanced by the Solicitor-General for South Australia as having ‘some force’. The argument was ‘that the implied limitation protects the integrity or autonomy of a state’ by protecting ‘internal services [such as] policy formulation, reporting to Parliament, the collection and administration of government revenue and the provision of services to Parliament and the judiciary’, but did not protect ‘external services’: 184 CLR at 231.] (g) Conclusion with respect to the scope and content of the implied limitation Our rejection of the particular submissions made by the prosecutor and supporting interveners other than that advanced

by South Australia as to the scope and content of the implied limitation leads us, subject to consideration of one gloss put forward by the prosecutor, to express the scope and content of the limitation in this way. The limitation consists of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities (‘the limitation against discrimination’) and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments [citing Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 at 217, per Mason J] … At this point it is convenient to consider South Australia’s argument based on impairment of a State’s ‘integrity’ or ‘autonomy’. Although these concepts as applied to a State are by no means precise, they direct attention to aspects of a State’s functions which are critical to its capacity to function as a government. It seems to us that critical to that capacity of a State is the government’s right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State’s rights in these respects would, in our view, constitute an infringement of the implied limitation. On this view, the prescription by a federal award of minimum wages and working conditions would not infringe the implied limitation, at least if it takes appropriate account of any special functions or responsibilities which attach to the employees in question. There may be a question, in some areas of employment, whether an award regulating promotion and transfer would amount to an infringement. That is a question which need not be considered. As with other provisions in a comprehensive award, the answer would turn on matters of degree, including the character and responsibilities of the employee.

[Their Honours then considered whether s 111(1A) of the legislation was discriminatory according to the principle in Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 6.2.38C. The effect of s 111(1A) was to preclude the Commonwealth Conciliation [page 646] and Arbitration Commission from exercising its discretion, contained in s 111(1)(g) of the Act, to dismiss or refrain from hearing matters for reasons related to the public interest. The new subsection was inserted in response to Victoria’s shift to individual employment agreements to replace compulsory arbitration.] The prosecutor submitted that s 111(1A) discriminates against Victoria and employers and employees in that State by denying them recourse to s 111(1)(g). The new provision is said to discriminate against Victoria and any other State that enacts similar legislation; alternatively, it is said that the legislation is aimed at Victoria. No doubt the events which had recently taken place in Victoria, particularly the enactment of the Victorian legislation, were the occasion for the introduction of s 111(1A) but that is not enough to justify characterisation of the provision as one which is aimed at Victoria. The provision is framed in general terms and is capable of applying to any State which introduces a system similar to the Victorian system. The fact that Victoria is the only State presently affected by s 111(1A) is not a compelling consideration, though it could conceivably be so in the absence of a rational and relevant connection between the basis on which that provision denies access, the application of s 111(1)(g) and the exercise of the powers conferred by the last-mentioned provision … … If the view be taken, as it has been taken by the

Commonwealth Parliament that, in the public interest, industrial disputes should be resolved by means of compulsory arbitration, it is logical for the Parliament to conclude that a power given to the Commission to refrain from proceeding where it is in the public interest to do so should only be exercisable when an alternative system of compulsory arbitration is available. Further, the introduction of s 111(1A) can be supported on the ground that it eliminated or alleviated problems that would arise once state compulsory arbitration was no longer available. Applications under s 111(1) (g) would involve delay, even if the Commission decided to proceed due to the absence of compulsory arbitration. And, if the Commission were to decline to proceed and leave the dispute to voluntary arbitration, interstate industrial disputes might not be resolved satisfactorily.

6.2.43 Justice Dawson dissented for two reasons. First, his Honour found that the disputes under consideration did not extend beyond the limits of one state, because they were disputes between a state government and its employees: 184 CLR at 249. Second, Dawson J rejected two distinctions which were critical to the judgment of the majority: he rejected the coherence of any distinction between the number and identity of employees and their terms and conditions of employment, and therefore did not accept, as did the majority, that the latter could be regulated and the former could not; and he rejected as ‘artificial’ any distinction between higher level and lower level employees: 184 CLR at 249– 50. 6.2.44C

Victoria v Commonwealth (Industrial Relations case) (1996) 187 CLR 416

[Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ struck down provisions of a federal award made under the Industrial Relations Act 1988 (Cth) which infringed the second limb of the prohibition, as it had been reformulated in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188. [page 647] Following Re Australian Education Union, and the comments by the majority in that case regarding states’ employment relations with higher level employees, Victoria, South Australia and Western Australia commenced proceedings seeking declarations that provisions of the Industrial Relations Act 1988 (Cth) were invalid in their application to the states. By consent, an order was made that the proceedings be heard together before the Full Court of the High Court. A number of the questions in the case stated concerned the ambit of ss 51(xx), (xxix) and (xxxv) of the Constitution, and these aspects of the case are dealt with in Chapter 4. Victoria and the other states challenged the provisions of the Act that allowed for the imposition of, or in fact imposed, obligations on employers with respect to minimum wages, equal pay, termination of employment, discrimination in employment and family leave, and which, in addition, provided for collective bargaining and the right to strike. The minimum wage provisions were specifically challenged on the basis that they offended the Melbourne Corporation doctrine.] Brennan CJ, Toohey, Gaudron, McHugh and Gummow J: The arguments for the plaintiff States with respect to the minimum wage provisions in Div 1 of Pt VIA were put in two different ways, reflecting the two elements of the prohibition as stated in Re Australian Education Union. First, they argued that, in their primary operation, the provisions discriminate against those States which do not have or, perhaps, elect not to maintain a system of compulsory arbitration for the resolution of

industrial disputes. Second, they contended that the provisions of Div 1 of Pt VIA infringe the second element of the prohibition in that they purport to apply to persons employed by the States at the higher levels of government. In this last regard, the argument was made by reference to the primary operation of Div 1, but applies mutatis mutandis to its secondary operation. As already indicated, the first argument was made by reference to s 170AE, which sets out the limits of the primary operation of the Division. As previously described, by s 170AE(1), the Commission is required to make an order setting minimum wages if, and is required not to make an order unless, satisfied: (a) that the terms of employment of the group of employees to be covered by the order are such that coverage by a system of minimum wages is appropriate; and (b) at least some of the employees in the group are not ineligible under subsection (3). By sub-s (2) the order must specify and exclude ineligible employees. Sub-section (3) identifies ineligible employees as those for whom minimum wages are set ‘by an award within the meaning of (the) Act’, or in respect of whom minimum wage proceedings are pending under Pt VI of the Act, and by pars (a) and (d) respectively, those for whom ‘minimum wages … can be set and adjusted from time to time by a State arbitrator’ and those for whom ‘a State employment agreement sets minimum wages’. In general terms, the effect of the definitions of ‘State arbitrator’ and ‘State employment agreement’ in s 170AE(6) is that a minimum wages order cannot be made for employees for whom a minimum wage can be set by compulsory arbitration by a State industrial tribunal or in respect of whom minimum wages which could have been arbitrated but have, instead, been agreed under a State law which allows that agreement to prevail over awards. It is common ground that, when Div 1 of Pt VIA came

into operation, some States had legislated for a system of compulsory arbitration and some had not. Western Australia still has not. It is put that the provisions of Div 1 single out and, thus, discriminate against Western Australia and any other State which elects not to maintain a system of compulsory arbitration. [page 648] The provisions of Div 1 of Pt VIA are of general application and do not distinguish between employees of a State and other employees. And there is no suggestion that, in their practical operation, they operate upon States and their employees differently from other employers and employees. Rather, the argument that the provisions are discriminatory was put on the basis that ‘if a particular State does not maintain a compulsory arbitration system for its employees, the State and its employees are subjected to the power of the Commission to impose a common rule which fixes minimum wages for those employees’ while other States are not. That argument mistakes the nature and effect of the provisions in question. The provisions of Div 1 of Pt VIA are directed to ensuring that persons whose wages are not protected by an award (whether State or Federal) or by an agreement which prevails over awards may obtain the benefit of a minimum wages order under s 170AE. The class of persons in respect of whom an order may be made is selected, not by reference to employment by or in a State, but by reference to practical criteria which take account of the general pattern of industrial regulation and of the way in which the rights of wage earners are generally protected in Australia. Moreover, the criteria which determine those for whom an order may be made under Div 1 of Pt VIA do not necessarily entail the consequence that proportionately more employees who work in

Western Australia will be covered by orders under Div 1 of Pt VIA than those who work in other States. Nor do they necessarily entail the consequence that proportionately more employees of the State of Western Australia will be covered than employees of other States. Coverage will depend on a range of factors, including, significantly, the pattern of federal award coverage. The question whether a provision is discriminatory is to be determined from the purpose of the enactment ascertained ‘by reference to the substance and actual operation of the law in the circumstances to which it applies’. Given that, first, the criteria selected to determine those for whom an order may be made under s 170AE bear a real and rational relationship with the general system of wage fixation as it has developed in this country and, second, that it cannot be said that the provisions of Div 1 of Pt VIA necessarily operate with different impact on or in Western Australia, there is no basis for holding that the provisions in question discriminate against that State or, indeed, any other State which elects not to maintain an industrial system involving compulsory arbitration. The second argument with respect to the provisions of Div 1 of Pt VIA of the Act is based on the holding in Re Australian Education Union (1995) 184 CLR 188 that the Commonwealth may not legislate to prevent a State from determining the rights and conditions of those employed at the higher levels of government. According to the argument, the power conferred on the Commission by ss 170AE and 170AH is conferred in terms wide enough to include such employees and, thus, the provisions of Div 1 of Pt VIA are, to that extent, invalid. As already indicated, s 6 specifies that the Act binds the Crown in various capacities, including ‘in right of … each of the States’. That provision governs the application of the substantive provisions of the Act. In so far as the substantive provisions are expressed in general terms or in terms wide enough to apply to or permit of orders regulating the terms and conditions of those employed at the higher levels of government, the question is not

whether, on that account, those provisions are invalid in their application to the States, but whether s 6 is invalid in its specification that the Act and, thus, those provisions bind the States. Section 6 of the Act is not, in terms, subject to any limitation or prohibition. More particularly, it is not, in terms, made subject to those matters pertaining to State employees which were identified in Re Australian Education Union (1995) 184 CLR 188 as falling within the scope and content of the implied limitation recognised in the Melbourne Corporation Case (1947) 74 CLR 31. … [The majority read the provisions down.]

[page 649]

6.2.45C

Austin v Commonwealth (2003) 215 CLR 185

[In August 1996, the Commonwealth Government announced its intention to impose a 15 per cent surcharge on superannuation contributions made by or on behalf of members of superannuation funds. Legislation to give effect to that policy was enacted early in 1997, imposing a tax liability not on the recipient of superannuation but on the superannuation provider. That legislation (referred to here as the Surcharge Legislation) was expressed not to apply so as to impose a tax on property of any kind belonging to a state within the meaning of s 114 of the Constitution. (As to s 114, see 6.2.54–6.2.57.) Towards the end of 1997, legislation to extend the superannuation surcharge to ‘members of constitutionally protected superannuation funds’ was enacted: Superannuation Contributions Tax (Members of

Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) (referred to here as the Protected Funds Surcharge Legislation). The members of the constitutionally protected superannuation funds included state judicial officers. In New South Wales and Victoria, retirement benefits were provided out of public funds, in the form of a non-contributory pension, equal to 60 per cent of the current judicial salary, for which a judge qualified after 10 years’ service and after attaining a specified age (60 in New South Wales; 65 in Victoria). Whereas the Surcharge Legislation imposed liability to pay the annual surcharge on superannuation providers and calculated the surcharge by reference to the amount of annual superannuation contributions, the Protected Funds Surcharge Legislation imposed liability to pay the surcharge upon members of the constitutionally protected superannuation funds — including state judicial officers. The Surcharge Legislation set the amount of the annual surcharge for each judicial officer by reference to the value of the pension to which the judicial officer was entitled on retirement. Payment of the surcharge was deferred until the judicial officer retired but its quantum continued to increase each year, so that, as Gaudron, Gummow and Hayne JJ observed, the amount of the surcharge would continue to grow while the judicial officer remained in service after the time that her or his right to retire with a full pension had accrued, and the increase in the total amount of the surcharge would continue even though the worth of the pension was diminishing because the pension would be payable for a shorter period of time: 215 CLR at 185. Judicial office-holders in New South Wales (Justice Austin of that state’s Supreme Court) and Victoria (Master Kings of that state’s Supreme Court) commenced proceedings in the High Court challenging the validity of the Protected Funds Surcharge Legislation. Gleeson CJ agreed with Gaudron, Gummow and Hayne JJ that the first plaintiff (Justice Austin) was liable to pay the superannuation

surcharge, but the second plaintiff (Master Kings) was not. He said that the feature of the Acts of greatest significance to a judge in the position of the first plaintiff was the incurring and accumulation of a liability to pay a substantial capital sum, on retirement, in discharge of an accrued superannuation contributions surcharge debt, at a time when payment of his pension commenced. Federal judges were exposed only to a reduction in the amount of their periodic pension payments, while other high income earners incurred no personal liability; ‘the difference’, Gleeson CJ said, ‘is obvious’: 195 CLR at 210. [page 650] His Honour went on to observe that one of the most striking differences between the State Banking case (1947) 74 CLR 31 6.2.30C and the Engineers’ case (1920) 28 CLR 129 6.2.21C was the approach to United States authority.] Gleeson CJ: … the Parliament’s power to make laws with respect to taxation does not extend to enable it to legislate to single out State judges for the imposition of a special fiscal burden. Judges, like other citizens, are subject to general, nondiscriminatory taxation, and the mere fact that the incidence of taxation has a bearing upon the amount and form of remuneration they receive does not mean that federal taxation of State judges is an interference with State governmental functions. It is otherwise when, as here, a federal law with respect to taxation treats State judges differently from the general run of high income earners and federal judges, and to their practical disadvantage. That differential treatment is constitutionally impermissible, not because of any financial burden it imposes upon the States, but because of its interference with arrangements made by States for the remuneration of their judges. The practical manifestation of that interference is in its capacity to affect recruitment and retention of judges to perform an essential constitutional function

of the State. Evidence of that capacity is to be found in the legislative response which the state of New South Wales was, in effect, forced to make. The Parliament could never have compelled the State of New South Wales to alter the design of its judicial pension scheme. Indeed, at the time of the Acts, the State judicial pension scheme was not materially different from the federal judicial pension scheme. But the State scheme was substantially altered as a result of the practical necessity that followed from the subjection of State judges to a discriminatory federal tax. [Gaudron, Gummow and Hayne JJ found that the Protected Funds Surcharge Legislation made the first plaintiff (Justice Austin) liable to pay the surcharge. Their Honours then turned to consider the validity of that legislation by reference to principles derived from Melbourne Corporation v Commonwealth (1947) 74 CLR 31 6.2.30C:] Gaudron, Gummow and Hayne JJ: At some stages in the argument in the present case it was suggested to be sufficient to render the legislation invalid in its application to the first plaintiff and other State judicial officers that the legislation treated them differently to beneficiaries under the unfunded private sector schemes … and differently from Ch III judges, by imposing the taxation liability upon them rather than the provider of the benefits. This differential treatment was said, without more, to attract the Melbourne Corporation doctrine; the like was treated as the unlike and thereby the States were burdened in a ‘special way’. That would appear to give ‘discrimination’ a standing on its own which in this field of discourse it does not have. There is, in our view, but one limitation, though the apparent expression of it varies with the form of the legislation under consideration. The question presented by the doctrine in any given case requires assessment of the impact of particular laws by such criteria as ‘special burden’ and ‘curtailment’ of ‘capacity’ of the States ‘to function as governments’. These criteria are to be

applied by consideration not only of the form but also ‘the substance and actual operation’ of the federal law: Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 240; Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 at 249–50; Industrial Relations Act Case (1996) 187 CLR 416 at 500. Further, this inquiry inevitably turns upon matters of evaluation and degree and of ‘constitutional facts’ which are not readily established by objective methods in curial proceedings … [page 651] The scope of the doctrine In Queensland Electricity (1985) 159 CLR 192 at 260, in a passage with which we respectfully agree, Dawson J referred to these difficulties as inherent in any attempt to formalise the Melbourne Corporation doctrine and added: These difficulties explain why there has been a preference to speak in terms of those aspects of legislation which may evidence breach of the doctrine rather than to generalise in terms of the doctrine itself. Discrimination against the States or their agencies may point to breach as may a special burden placed upon the States by a law of general application. The reasoning in the foundation decisions, and that in the contemporary United States cases, bears out the view later taken by Dawson J in this passage. … To fix separately upon laws addressed to one or more of the States and upon laws of so-called ‘general application’, and to present the inquiry as differing in nature dependent upon the form taken by laws enacted under the one head of power, tends to

favour form over substance. The substance is provided by considerations which arise from the constitutional text and structure pertaining to the continued existence and operation of the States. Further, to treat as the decisive criterion of validity the form of an impugned law with respect to taxation is to distract attention from the generality of the terms in which in s 51(ii) the power is expressed (save for the specific reference to discrimination). It is to attend insufficiently to what in this realm of discourse is the essential question in all cases. This is whether the law restricts or burdens one or more of the States in the exercise of their constitutional powers. The form taken by a particular law may, as Dawson J explained in the passage from Queensland Electricity set out at [159 CLR 192 at 249], assist more readily in answering that question, but in all cases the question must be addressed. In Queensland Electricity (1985) 159 CLR 192 at 217, Mason J may have taken a contrary view. His Honour said that the principle applied in Melbourne Corporation was then well settled and that it consists of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities; and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments: Victoria v Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 152 CLR 25 at 93. The second element of the prohibition is necessarily less precise than the first; it protects the States against laws which, complying with the first element because they have a general application, may nevertheless produce the effect which it is the object of the principle to prevent. However, that is to be read with an earlier passage in that judgment. Mason J, with reference to what had been said by

Dixon J in [Bank of NSW v Commonwealth (the Banking Case) (1948) 76 CLR 1 at 338], concerning laws of general application, there said ((1985) 159 CLR 192 at 216): Plainly, his Honour was speaking of a law which, though referable to a head of legislative power, is, by reason of its impact on the States and their functions, inconsistent with the fundamental constitutional conception which underlies the prohibition against discrimination. [page 652] That ‘fundamental constitutional conception’ has proved insusceptible of precise formulation. Nevertheless, an understanding of it is essential lest propositions such as those expressed by Mason J in Queensland Electricity take on, by further judicial exegesis, a life of their own which is removed from the constitutional fundamentals which must sustain them. The later decisions Some guidance as to the content of the limited State immunity is provided by the later decisions in this Court. In [Commonwealth v Tasmania (1983) 158 CLR 1 at 140, 213–15], Mason J and Brennan J pointed out that the concern was with the capacity of a State to function as a government rather than interference with or impairment of any function which a State government may happen to undertake. Later, in the Native Title Act Case ((1995) 183 CLR 373 at 480), it was said in the joint judgment of six members of the Court that the relevant question for the application of the Melbourne Corporation doctrine was not whether Commonwealth law effectively restricted State powers or made their exercise more complex or subjected them to delaying

procedures. Their Honours continued ((1995) 183 CLR 373 at 480): The relevant question is whether the Commonwealth law affects what Dixon J called the ‘existence and nature’ of the State body politic. As the Melbourne Corporation Case illustrates, this conception relates to the machinery of government and to the capacity of its respective organs to exercise such powers as are conferred upon them by the general law which includes the Constitution and the laws of the Commonwealth. A Commonwealth law cannot deprive the State of the personnel, property, goods and services which the State requires to exercise its powers and cannot impede or burden the State in the acquisition of what it so requires. Later in that judgment ((1995) 183 CLR 373 at 481), their Honours distinguished between a federal law which impaired capacity to exercise constitutional functions and one which merely affected ‘the ease with which those functions are exercised’. In Melbourne Corporation ((1947) 74 CLR 31 at 80, 99–100), Dixon J spoke of the ‘restriction or control of the State … in respect of the working of the judiciary’, and Williams J of laws seeking to direct the States as to the manner of exercise of judicial governmental functions. Later, in Australian Education Union ((1995) 184 CLR 188 at 229), the joint judgment identified the State courts as an essential branch of the government of the State. In the present case, the question thus becomes whether the two laws with respect to taxation [the Protected Funds Imposition Act and the Protected Funds Assessment Act] restrict or control the States, in particular New South Wales and Victoria, in respect of the working of the judicial branch of the State government.

Unlike the situation in the Pay-roll Tax Case and the Second Fringe Benefits Tax Case, these laws do not impose a taxation liability upon the States themselves. It is the plaintiffs who are taxed. In Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 at 172– 173, Mason CJ, Deane, Toohey and Gaudron JJ distinguished, for the application of the Melbourne Corporation doctrine, a federal taxation law which, whilst it imposed tax upon a State officer, did not ‘affect any interest or purpose of the State’. In that case this was because the Registrar was taxed in his capacity as trustee for private citizens. [page 653] Similar considerations, where the tax is imposed not upon the State itself but upon officers or employees thereof, were considered in the United States in the period when Melbourne Corporation was decided. In [Helvering v Gerhardt 304 US 405, 419–420 (1938)], the Supreme Court spoke of a State function which was important enough to demand immunity from a tax upon the State itself but which did not extend to a tax which might well be substantially [or] entirely absorbed by private persons; there, the burden on the State was ‘so speculative and uncertain’ as not to warrant restriction upon the federal taxing power. However, as Dixon CJ pointed out in the Second Uniform Tax Case [(1957) 99 CR 575 at 610], Melbourne Corporation itself was an instance where a restriction was imposed not on the State or its servants but on others, yet the federal law impermissibly interfered with the governmental functions of a State. Section 48 of the Banking Act imposed a prohibition upon banks but was effectual to deny to the States the use of the banks and that was the object of the law [(1947) 74 CLR 31 at 62, 66–67, 75, 84, 100–101].

The joint judgment of six members of the Court in Australian Education Union [(1995) 184 CLR 188 at 233. See also the Industrial Relations Act Case (1996) 187 CLR 416 at 498] is of central importance for the present case, in particular for two propositions. They are that (a) it is ‘critical to a State’s capacity to function as a government’ that it retain ability to determine ‘the terms and conditions’ on which it engages employees and officers ‘at the higher levels of government’, and (b) ‘Ministers, ministerial assistants and advisers, heads of departments and high level statutory office holders, parliamentary officers and judges would clearly fall within this group’. One result, with which Australian Education Union was immediately concerned, would protect the States to some degree from the exercise by the Commonwealth Industrial Relations Commission of power under federal law to fix minimum wages and working conditions in respect of persons to whom the federal law otherwise would extend. Another result is to support the foundation for the case made by the first plaintiff. [Gaudron, Gummow and Hayne JJ gave a number of reasons why governments might wish to provide judges with secure and high levels of remuneration, and continued:] Views may vary from time to time as to the relevant [sic] importance of these considerations and the measures to give effect to them. But in the constitutional framework in this country these are matters, respecting State judges, for determination by State legislatures. That constitutional framework also constrains those legislatures, in particular, by requiring them to take as they find federal laws of ‘general application’ as part of the system enjoyed by the whole community [Bank of NSW v Commonwealth (1948) 76 CLR 1 at 337]. Hence the statement by Frankfurter J in O’Malley v Woodrough [307 US 277, 282 (1939)]: To subject them to a general tax is merely to recognize that judges are also citizens, and that their particular function in

government does not generate an immunity from sharing with their fellow citizens the material burden of the government whose Constitution and laws they are charged with administering. However, that is not the present case. Section 5 of the Protected Funds Assessment Act speaks of ‘high-income members of constitutionally protected superannuation funds’. They are taxed in a fashion which differs from that required by the Surcharge Imposition Act and the Surcharge Assessment Act. A law taxing them is not in the sense of the authorities a law of ‘general application’ which, with reference to the classification by Dixon J, falls into category (a) identified [above at p 251] … [page 654] [Gaudron, Gummow and Hayne JJ rejected the Commonwealth’s argument that differential treatment of members of constitutionally protected superannuation funds was justified by the operation of s 114 of the Constitution. It was, their Honours said, ‘no answer to a case of alleged invalidity to assert that the federal law in question takes its form from a perceived need to escape the peril of invalidity presented by another constitutional restraint upon federal legislative power’: 215 CLR at 264. They noted that question 2(a) of the case stated asked whether the Protected Funds Surcharge Legislation was invalid because it discriminated against New South Wales or imposed a particular burden or disability on the operations and activity of that State; and continued:] … That issue may be narrowed by asking whether that result comes about by a sufficiently significant impairment of the exercise by the State of its freedom to select the manner and method for discharge of its constitutional functions respecting the remuneration of the judges of the courts of the State. That

requires consideration of the significance for the government of the State of its legislative choice for the making of provision for judicial remuneration. Having regard to what is said earlier in these reasons … that significance is to be taken as considerable. In The Second Fringe Benefits Tax Case, in a passage which is no less significant for its presence in a dissenting judgment, given the later statement in Australian Education Union referred to [above] at 260–261, Brennan J observed: The essential organs of government — the Governor, the Parliament, the Ministry and the Supreme Court — are the organs on which the ‘existence and nature’ of the body politic depends. (I mention only the Supreme Court, for that is the court of general jurisdiction in which, subject to the jurisdiction of this Court, the laws of the State are finally interpreted and the constitutional and administrative law of the State is applied.) The existence and nature of the body politic depends on the attendance to their duties of the officers of the essential organs of government and their capacity to exercise their functions. The emoluments which a state provides to the officers of the essential organs of government ensure or facilitate the performance by those organs of their respective functions. … The conclusion reached is that, in its application to the first plaintiff, the [Protected Funds Surcharge Legislation is] invalid on the ground of the particular disability or burden placed upon the operations and activities of New South Wales. The reasoning for that conclusion would apply also to the application of the legislation to the judges of other State courts as members of unfunded non-contributory pension schemes resembling that provided by the NSW Pensions Act.

6.2.46

Justice McHugh held that the Protected Surcharge

legislation was invalid because it discriminated ‘against State judicial officers in a way that interferes in a significant respect with the States’ relationships with their judges’: 215 CLR at 283. The legislation interfered with the financial arrangements that govern the terms of judges’ offices, ‘not as an incidence of a general tax applicable to all but as a special measure designed to single them out and place a financial burden on them that no one else in the community incurs’: 215 CLR at 283. Justice McHugh disagreed with the plurality’s criticism of the two-pronged test enunciated in Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 6.2.38C and Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 6.2.42C; see also Simpson, 2004. [page 655] 6.2.47 Justice Kirby dissented from the court’s judgment that the Protected Funds Surcharge legislation was invalid, but agreed with Gaudron, Gummow and Hayne JJ that the Melbourne Corporation doctrine should be regarded as one single limitation without distinct elements: 215 CLR at 301. His Honour found that the Protected Funds Surcharge legislation did not contravene that principle because it did not ‘affect the selection and retention of State judicial officers to such a degree that the State judiciary is placed in jeopardy of not fulfilling its constitutional functions’ so as to impair ‘the essential governmental activities of a State’ and threaten ‘the continued existence and integrity of a State’: 215 CLR at 313. Justice Kirby’s views here might be seen as consistent with his Honour’s dissenting reasons in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 47–50. In

both cases, Kirby J’s critique of the majority’s reasoning seems to imply that their reasons lacked objectivity and were overprotective of judicial officers. 6.2.48 Amelia Simpson has criticised the approach taken by the plurality in Austin v Commonwealth (2003) 215 CLR 185 6.2.45C, and has argued that the concept of ‘discrimination’ employed in the Melbourne Corporation case 6.2.30C and favoured by the court in Queensland Electricity Commission was preferable: Simpson, 2004. Simpson asks: ‘[I]s the fact of a Commonwealth law’s singling out States and placing burdens upon them alone a factor deserving a structured role in the Court’s State immunity jurisprudence?’, and answers in the affirmative. The question was left unaddressed in Clarke v Commissioner of Taxation (2009) 240 CLR 272 6.2.50C. Anne Twomey has also criticised Austin, remarking that it is ‘difficult to see how a tax on judicial superannuation threatens the continued existence of the State or its ability to function’: Twomey, 2003. 6.2.49 The Protected Funds Surcharge legislation was again challenged in Clarke v Commissioner of Taxation (2009) 240 CLR 272. Clarke had been a parliamentarian in South Australia for 9 years, and the commissioner took steps to impose the surcharge on him. Clarke sought review in the Administrative Appeals Tribunal (AAT). The AAT referred a number of questions to the Full Court of the Federal Court, including whether the scheme was invalid by reference to the Melbourne Corporation principle or s 114 of the Constitution. That court found, among other things, that the Commonwealth legislation did not impair South Australia’s autonomous constitutional functioning to the degree necessary to

trigger the Melbourne Corporation principle. Clarke appealed successfully to the High Court, where the argument was focused on the Melbourne Corporation point. Each of the three unanimous High Court judgments explicitly approved of the way in which the state immunity principle was formulated by the plurality in Austin v Commonwealth (2003) 215 CLR 185. While contributing little to the substance of that formulation, there is evident effort in the two lengthiest judgments to repackage that substance within a strong narrative of continuity, seeking to present the reasons of the Austin plurality as entirely congruent with prior statements of principle in this area. 6.2.50C Clarke v Federal Commissioner of Taxation (2009) 240 CLR 272 French CJ: The Constitution assumes the continuing existence of the States, their co-existence as independent entities with the Commonwealth, and the functioning of their governments. This assumption is readily inferred from the reference to ‘one indissoluble [page 656] Federal Commonwealth’ in the Preamble and the terms of ss 3, 5 and 6 of the Commonwealth of Australia Constitution Act 1900 (Imp) and the provisions of Ch V of the Constitution itself. It underpins an implied limitation on Commonwealth power to make laws affecting the States. The existence of that limitation, variously expressed, has been acknowledged repeatedly in the decisions of this Court. In the early, post-Engineers authorities, it was expressed in terms of ‘reservations’ from the Engineers

principle. The ‘reservations’ evolved into propositions, sometimes treated as discrete principles or elements, that the Commonwealth could not make laws singling out the States by placing special burdens on them, nor could it make laws of general application which would destroy or curtail the continued existence of the States or their capacity to function as governments. In their joint judgment in Austin, Gaudron, Gummow and Hayne JJ identified ‘but one limitation’ requiring the assessment in any given case of ‘the impact of particular laws by such criteria as “special burden” and “curtailment” of “capacity” of the States “to function as governments”’: (2003) 215 CLR 185 at 249. These criteria required consideration of the form, substance and actual operation of the relevant federal law. They would involve ‘matters of evaluation and degree and of “constitutional facts” which are not readily established by objective methods in curial proceedings’: 215 CLR at 249. Kirby J expressed a similar view. Gleeson CJ, in like vein, put it thus: ‘Discrimination is an aspect of a wider principle; and what constitutes relevant and impermissible discrimination is determined by that wider principle’: 215 CLR at 217. Gleeson CJ referred back to the identification by Mason J in the Queensland Electricity Commission Case of the foundation for the implied limitation in the ‘constitutional conception of the Commonwealth and the States as constituent entities of the federal compact having a continuing existence reflected in a central government and separately organised State governments’: 215 CLR at 249. The identification in Austin of a generally stated implied limitation, variously manifested, is consistent with the origins and evolution of the implication through decisions of this Court after the Engineers Case. … The constitutional implication considered in Austin and its precursors means that the Commonwealth cannot, by the exercise of its legislative power, significantly impair, curtail or

weaken the capacity of the States to exercise their constitutional powers and functions (be they legislative, executive or judicial) or significantly impair, curtail or weaken the actual exercise of those powers or functions. The Constitution assumes the existence of the States as ‘independent entities’. This implies recognition of the importance of their status as components of the federation. The ‘significance’ of a Commonwealth law affecting the States’ functions is not solely to be determined by reference to its practical effects on those functions. This is not a return to any generalised concept of inter-governmental immunity. It simply recognises that there may be some species of Commonwealth laws which would represent such an intrusion upon the functions or powers of the States as to be inconsistent with the constitutional assumption about their status as independent entities. The application of the implied limitation is evaluative. It has always been thus. There is a normative element in the criterion of ‘significance’ by which the adverse effects of a Commonwealth law on State capacities or functions must be characterised, before such a law will be held to be invalid. Whether the effects of a law upon the capacities or functions of the States are ‘significant’ is to be judged qualitatively and also, but not only, by reference to its practical effects. To take an extreme example, a law of the Commonwealth purporting to subject the Governor of each of the States to a special ‘gubernatorial privileges tax’ might fix the tax at a level which, in a financial sense, would be of little practical importance to the [page 657] States or to their Governors. It might be thought, nevertheless, that the nature of such a law would mark it as asserting an intrusive legislative authority with respect to the constitutional

office of Governor that was inconsistent with the status of the States as independent entities under the Constitution. In my opinion, the application of the implied limitation requires a multifactorial assessment. Factors relevant to its application include: 1.

2. 3. 4. 5. 6.

Whether the law in question singles out one or more of the States and imposes a special burden or disability on them which is not imposed on persons generally. Whether the operation of a law of general application imposes a particular burden or disability on the States. The effect of the law upon the capacity of the States to exercise their constitutional powers. The effect of the law upon the exercise of their functions by the States. The nature of the capacity or functions affected. The subject matter of the law affecting the State or States and in particular the extent to which the constitutional head of power under which the law is made authorises its discriminatory application.

None of these factors, considered separately, will necessarily be determinative of the application of the limitation. The decisions of this Court indicate that the fact that a law singles out the States or a State will be of considerable significance, to be weighed together with the effects of such a law on their capacities and functions. The fact that a law is of general application may make it more difficult to demonstrate, absent operational discrimination in its impact upon the States, that it transgresses the limitation. In the present case, the factors relevant to the validity of the CPSF Assessment and Imposition Acts in their application to members of the South Australian Parliament are:

1.

2.

3.

4.

5.

The State is singled out by reference to benefits and funds established by State laws which are specifically designated by the Commonwealth laws. The laws, in so far as they relate to the PS Scheme, impose a tax specifically upon persons holding office as members of the Parliament of the State. The laws effectively and specifically burden the pension and superannuation benefits able to be enjoyed by members of the State Parliament. Unlike income tax laws and other tax laws of general application, the impugned laws are specifically aimed at the remuneration arrangements between the State and members of its legislature. The significance of the effects of the surcharge upon State legislators was reasonably evidenced by the amendment which the State made to the commutation provisions affecting pension and superannuation entitlements.

In my opinion, when these factors are taken together, the [impugned Commonwealth provisions] … significantly interfered with the remuneration arrangements made between the State and its legislators and, to that extent, significantly burdened the exercise by the State of its powers and functions in fixing the remuneration of its legislators. Gummow, Heydon, Kiefel and Bell JJ: The appellant, and the States of South Australia, New South Wales, Victoria, Queensland and Western Australia in his support, rely upon that implication, derived from the federal structure established by the Constitution and consistent [page 658]

with its express terms, which is associated with Melbourne Corporation v The Commonwealth and has been elucidated in later authorities, of which Austin is the most recent. The effect of the implication for which the appellant and his supporters contend is to restrain, in addition to the express limitation in s 114 of the Constitution, the scope of the power of the Parliament to make laws with respect to ‘taxation; but so as not to discriminate between States or parts of States’ (s 51(ii)). Six points may conveniently be made here. The first concerns the emphasis placed in Austin upon both the reference in s 5 of the Assessment Act to ‘high-income members of constitutionally protected superannuation funds’ and the different taxation regime applicable to other superannuation funds as indicative that the Imposition Act and the Assessment Act are not laws of ‘general application’ which the States must take as they find them as part of the system governing the whole community. In Austin Gleeson CJ pointed out, as instances of federal laws of ‘general application’ that validly had been imposed on the States, along with taxpayers generally, pay-roll tax and fringe benefits tax. The second point is that members of a State legislature are within that class of persons ‘at the higher levels of government’ in respect of whom it is critical to the State’s capacity to function as a government that it retain the ability to fix the terms and conditions under which they serve upon election to the Parliament of the State in question. The third concerns the significance of the size of any financial burden. In that regard the following remarks of Gleeson CJ in Austin are in point: The adverse financial impact on the States of the pay-roll tax, or the fringe benefits tax, both of which were held valid, far exceeded the financial consequences of the laws held invalid in Melbourne Corporation or Queensland Electricity Commission. It was the disabling effect on State authority that was the essence of the invalidity in those cases. It is the

impairment of constitutional status, and interference with capacity to function as a government, rather than the imposition of a financial burden, that is at the heart of the matter, although there may be cases where the imposition of a financial burden has a broader significance: 215 CLR at 217. The fourth point is a corollary to the third. The governmental capacities of the States, for example with respect to the terms and conditions under which parliamentarians serve, often will be manifested in legislation. But this will not always be so. The Melbourne Corporation Case immediately concerned the effect of the Banking Act 1945 (Cth) upon the freedom of the plaintiff to continue to bank with the National Bank of Australasia Ltd, a private bank, rather than with the Commonwealth Bank of Australia. The more general consideration, emphasised by Dixon J, was that State and federal governments being separate bodies politic, ‘prima facie each controls its own moneys’. Further, where there is State legislation, as in the present case, this does not entail the consequence that the question of the application of the Melbourne Corporation doctrine as a restraint upon federal legislative power is to be determined by the methods of comparison between federal and State laws enacted under concurrent powers but said to attract the operation of s 109 of the Constitution. The issue in this appeal concerns alleged federal legislative impairment of the relevant capacity of the State of South Australia. The fifth point is that in Austin, a majority of the Court, Gleeson CJ and Gaudron, Gummow and Hayne JJ, concluded that the notion of ‘discrimination’ by federal law against a State is but an illustration of a law which impairs the capacity of the State to function in accordance with the constitutional conception of the Commonwealth and States as constituent entities [page 659]

of the federal structure. Too intense a concern with identification of discrimination as a necessity to attract the Melbourne Corporation doctrine involves the search for the appropriate comparator, which can be a difficult inquiry and is apt to confuse, rather than to focus upon the answering of the essential question of interference with or impairment of State functions. It also may be that the references to discrimination by Dixon J in Melbourne Corporation use the term in the somewhat different sense of a law which is ‘aimed at’ or places a ‘special burden’ on the States. This leads to the final point, which indicates the nature of the inquiry for the present appeal. It was made as follows in the joint reasons in Austin: There is, in our view, but one limitation, though the apparent expression of it varies with the form of the legislation under consideration. The question presented by the doctrine in any given case requires assessment of the impact of particular laws by such criteria as ‘special burden’ and ‘curtailment’ of ‘capacity’ of the States ‘to function as governments’. These criteria are to be applied by consideration not only of the form but also ‘the substance and actual operation’ of the federal law. Further, this inquiry inevitably turns upon matters of evaluation and degree and of ‘constitutional facts’ which are not readily established by objective methods in curial proceedings: 215 CLR at 249. [Hayne J delivered a separate judgment agreeing with the plurality.]

6.2.51 The Commonwealth provisions impugned in Clarke would not likely have fallen foul of the state immunity principle were it not for the latter’s having a ‘symbolic’ dimension. That dimension was explicated most clearly by French CJ in the extract

above (240 CLR at 298). His Honour observed that some impositions upon states may be negligible in their fiscal impact and yet still attack the autonomy of states in ways that are constitutionally impermissible. One could imagine that the cost to states of absorbing the full financial impact of the surcharge would have been negligible, in the overall scheme of a state’s fiscal position. It is likewise hard to imagine the superannuation surcharge having a material impact on the quality or suitability of persons contesting state parliamentary elections — many of whom would suffer no appreciable diminution of income upon election (perhaps in contrast to the situation of newly-appointed superior court judges as considered in Austin). Such a claim of minimal impact was in fact a key premise of the Commonwealth’s argument in Clarke. The plurality, in asserting that the Commonwealth had here framed the issue too narrowly, seemed to be referencing the symbolic dimension of the state immunity principle. Their Honours noted that ‘the interest of the State in attracting, by the making of suitable remuneration, competent persons to serve as legislators, and thus as potential Ministers, is a long-standing constitutional value’ and that ‘the capacity to fix the amount and terms of remuneration of parliamentarians is a critical aspect of the conduct of the parliamentary form of government by the State’: 240 CLR 272 at 307–8, 309 per Gummow, Heydon, Kiefel and Bell JJ. 6.2.52 Underscoring the importance of this symbolic dimension to the state immunity principle is the High Court’s decision in the more recent case of ‘Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548. The reasoning in the judgments in that case was focused principally upon the claims made under ss 51(ii) and 99 of the Constitution, considered at 6.4.20C. However, the

plaintiff mining company, along with the State of Western Australia, [page 660] also advanced an argument based on the state immunity principle. They contended that the package of Commonwealth legislation under which the Mineral Resource Rent Tax (MRRT), commonly known as the Mining Tax, was imposed interfered with the state’s ability to use mining royalties as an economic lever, to attract investment or incentivise particular activity. The plurality judgment of Hayne, Bell and Keane JJ, with which the other members of the court agreed, gave short shrift to this attempt to engage the state immunity principle in a context where the symbolic (or core constitutional) dimension was clearly lacking. 6.2.53C Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 Hayne, Bell and Keane JJ: The plaintiffs submitted that the States own the minerals in their lands and have the ability to regulate extraction of those minerals on terms that the persons granted the right to take minerals pay in return royalties fixed by the States at whatever level the States choose. … The plaintiffs and Western Australia argued that the MRRT Legislation was apt to neutralise the positive effect upon the level of mining activity in a State that might be expected to flow from the exercise of the State’s ability to effect a reduction in the State’s royalty rate. … The Commonwealth did not dispute that each State’s ownership, management and control of its territory (including,

particularly, the waste lands of the Crown within that territory) is a necessary attribute of statehood and that a State’s ability by legislation to make laws to promote the development of its territory in the interests of, or to promote the welfare of the community of, the State is important. And the Commonwealth did not dispute that it is for the States to determine the level of royalty to be paid as the price for extracting minerals from their territories. But the Commonwealth submitted that the MRRT Legislation does not subject that ability to Commonwealth control and proceeded on the assumption that the States were free to fix royalties as they chose. … [A]s the decisions in Austin and Clarke each demonstrate, the Melbourne Corporation principle requires consideration of whether impugned legislation is directed at States, imposing some special disability or burden on the exercise of powers and fulfilment of functions of the States which curtails their capacity to function as governments. The extent and importance of the States’ function of managing their lands and mineral resources must be acknowledged. But the plaintiffs’ submissions contended for a view of the Melbourne Corporation principle which, if accepted, would subvert not only the position established by the decision in the Engineers’ case but also s 109 of the Constitution. Western Australia submitted that it is ‘central to the capacity of [the] State to function as a government under the Constitution that it have the power to determine the most appropriate means of financing the development of communities in Western Australia’. This submission bore a striking resemblance to arguments advanced by that State, and rejected, in Western Australia v The Commonwealth (Native Title Act case): (1995) 183 CLR 373. Western Australia alleged, in the Native Title Act case, that, because the ‘capacity and power to grant, regulate and otherwise deal with land and other resources in Western Australia … is a fundamental sovereign function of the Government

of Western Australia as a State’, provisions of the Native Title Act 1993 (Cth) were invalid. But as the plurality held in that case: The [Native Title Act] does not purport to affect the machinery of the government of the State. The constitution of the three branches of government is unimpaired; [page 661] the capacity of the State to engage the servants it needs is unaffected; the acquisition of goods and services is not impeded; nor is any impediment placed in the way of acquiring the land needed for the discharge of the essential functions of the State save in one respect, namely, the payment of compensation. The Act does not impair what Dawson J described [in QEC v Commonwealth] as ‘the capacity to exercise’ constitutional functions though it may affect the ease with which those functions are exercised: 185 CLR at 481. If the MRRT Legislation does affect the States’ control over land and resources, the effect is less direct and more speculative than the effect of the Native Title Act. If, then, the MRRT Legislation does diminish the choices available to the executive governments of the States, that diminution does not engage the Melbourne Corporation principle. … The MRRT Legislation is not aimed at the States or their entities as was the legislation considered in each of Melbourne Corporation, Queensland Electricity Commission, Austin and Clarke. The MRRT Legislation does not impose any special burden or disability on the exercise of powers and fulfilment of functions of the States which curtails their capacity to function as governments. The MRRT Legislation does not deny the capacity of any State to fix the rate of royalty for minerals

extracted by miners, and no burden upon a State attaches to any decision by the State to raise or lower that rate. If, as the plaintiffs asserted, the MRRT Legislation affects the States’ ability to use a reduction in royalty rate as an incentive to attract mining investment in the State, the MRRT Legislation does not impose any limit or burden on any State in the exercise of its constitutional functions.

6.2.54

Section 114 of the Constitution provides as follows:

A State shall not, without the consent of the Parliament of the Commonwealth, … impose any tax on property of any kind belonging to the Commonwealth, nor shall the Commonwealth impose any tax on property of any kind belonging to a State.

The loci of controversy as regards s 114 were spelled out clearly by Gleeson CJ, Gaudron, McHugh and Hayne JJ in SGH Pty Ltd v Federal Commissioner of Taxation (2002) 210 CLR 51 at 65: At least three kinds of issue may arise. First, what is meant by ‘tax on property’? That requires consideration of what constitutes a tax and what constitutes a tax on property. Secondly, what is meant by ‘property … belonging to’ a State? Thirdly, how is ‘State’ to be understood?

The first type of issue arose in Queensland v Commonwealth (1987) 162 CLR 74, where the High Court held that the imposition of fringe benefits tax on the states, calculated on the value of stateowned cars and houses provided to some of its employees, was not a tax on property belonging to a state within the meaning of s 114. Justices Mason, Brennan and Deane described s 114 as protecting a state (162 CLR at 98): … from a tax on the ownership or holding of property but … not …

from a tax or transactions which affect its property … This … gives a powerful measure of protection to the financial integrity of a state without preventing the Commonwealth from taxing every form of transaction to which a state is a party.

[page 662] Their Honours said that taxes on the possession, use or proceeds of sale of state-owned property would offend s 114. However, in their view the fringe benefits tax did not fall into any of those categories. The critical difference was that the fringe benefits tax was not imposed on the state’s ownership or use of the particular property concerned. Rather, the tax was attracted when a state provided benefits to employees in connection with their employment. Justices Wilson and Dawson agreed with Mason, Brennan and Deane JJ. Chief Justice Gibbs dissented, classifying the fringe benefits tax on the provision of state-owned cars and housing as a tax on the use of the state’s property: 162 CLR at 93. 6.2.55 The s 114 case was framed more broadly in Deputy Commissioner of Taxation v State Bank of New South Wales (1992) 174 CLR 219. There, the High Court held that a Commonwealth sales tax imposed upon the sale value of goods manufactured by the State Bank of New South Wales for its own use was a tax on property belonging to a state and therefore invalid. In its joint judgment, the court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) said that, in Queensland v Commonwealth (1987) 162 CLR 74, ‘a tax on the use of state property or a tax on the use of property for state purposes was instanced as an illustration of a tax which fell within the

prohibition contained in s 114’: 174 CLR at 227. They said, of the Commonwealth’s sales tax under challenge in the present case (174 CLR at 228): The plaintiff says that the tax imposed by s 17(1) is not imposed on the use of property as such but is imposed on application to use. According to the argument, the distinction is important because application to use is a transitory or momentary event which stands in high contrast with ownership or use of property over a long period. The short answer to this submission is that a tax on application to use of property is not the less a tax on the use of property because it attaches to a momentary activity rather than to use or ownership over a period. The tax attaches to use, that being the exercise of a right central to the concept of ownership, and that is enough to bring the tax within the ambit of the constitutional prohibition.

The court also considered, and rejected, the Commonwealth’s argument that the State Bank of New South Wales, a statutory corporation established by the State Bank Act 1981 (NSW), was not the state for the purpose of s 114 (174 CLR at 230–1): Once it is accepted that the Constitution refers to the Commonwealth and the states as organisations or institutions of government in accordance with the conceptions of ordinary life, it must follow that these references are wide enough to denote a corporation which is an agency or instrumentality of the Commonwealth or a state as the case may be. The activities of government are carried on not only through the departments of government but also through corporations which are agencies or instrumentalities of government. Such activities have, since the nineteenth century, included the supply on commercial terms of certain types of goods and services by government owned instrumentalities with independent corporate personalities.

The court referred to the distinction, current at the beginning of the 20th century, between, on the one hand, traditional and

inalienable functions of government and, on the other, business, commercial and trading functions undertaken by government, and continued (174 CLR at 231–2): That distinction has since been discarded. And it can have no place in the interpretation of s 114, which must take account of the historical circumstance that colonial governments in Australia carried on a wide range of governmental functions which were not traditional and inalienable.

[page 663] 6.2.56 Heard immediately following Deputy Commissioner of Taxation v State Bank of New South Wales, and decided on the same day, was the similar case of South Australia v Commonwealth (1992) 174 CLR 235. In the latter case, a majority of the High Court (Mason CJ, Deane, Dawson, Toohey and Gaudron JJ; Brennan and McHugh JJ dissenting) held that a Commonwealth income tax levied on the interest derived from the investments of a state instrumentality was not a tax on property within s 114. However, the court was unanimous in holding that an income tax levied by the Commonwealth upon capital gains derived by a state upon the sale of its property was a tax on property belonging to the state within s 114 of the Constitution and, therefore, invalid. In their joint judgment, Mason CJ, Deane, Toohey and Gaudron JJ said that the immunity from taxation conferred by s 114 was expressed in wide terms; that there were no doubt policy reasons for a broad interpretation of s 114; but that the ‘course of judicial decisions’ had confined the operation of the section so as to protect the states (and the Commonwealth) against a tax imposed

by reason of the ownership or holding of property (174 CLR at 248): Accordingly, a tax is properly characterised, for the purposes of s 114, as a ‘tax on property’ if, and only if, it is imposed upon a taxpayer by reference to a relationship between the taxpayer and the relevant property and the relationship is such that the tax represents a tax on the ownership or holding of the property in question.

Dealing with the income tax imposed by the Commonwealth on interest derived by the State Bank from moneys lent, Mason CJ, Deane, Toohey and Gaudron JJ said (174 CLR at 253): In the ultimate analysis the tax is imposed not upon the ownership or holding of property belonging to the taxpayer but upon gains of a revenue kind in the form of interest on money lent derived by the taxpayer in the relevant period, the derivation being ascertained by reference to the conceptions, principles and practices already mentioned. Granted that the taxpayer comes under a liability because he or she derives income which can be identified with a chose in action of which he or she is the owner or holder, nevertheless the true character of the tax is, as the name implies, that of income tax rather than a tax on the ownership or holding of property. The derivation of income by a taxpayer is a subject relevantly different from the ownership or holding of property.

However, a capital gains tax, in their Honours’ view, was a tax (174 CLR at 254–5): … imposed on the disposal or deemed disposal of an asset owned by a taxpayer, the tax being effectively imposed upon the net capital gain which accrues to the taxpayer … [T]he reason for the imposition of the tax is the exercise by the taxpayer of the right of disposition, a right central to the concept of ownership of property. Furthermore, the capital gains tax imposed by the Act has the additional element already

mentioned, namely, that the amount of the capital gain is computed by reference to the length of time during which the taxpayer has been the owner of the asset. Viewed in this light, the tax is a tax on the ownership or holding of property belonging to the taxpayer.

6.2.57 The question of how far the concept of ‘state’ would extend was posed again in SGH Ltd v Federal Commissioner of Taxation (2002) 210 CLR 51. The appellant claimed that it should be regarded as part of the State of Queensland for purposes of s 114’s protection and that funds transferred to it, as capital, by the State of Queensland should not be assessed for income tax by the respondent commissioner. The plurality judgment of Gleeson CJ, Gaudron, McHugh and Hayne JJ, while acknowledging (210 CLR at 66) that ‘references in s 114 to the [page 664] Commonwealth and a State are not to be understood narrowly’ nonetheless found that the appellant corporation was not entitled to the protection of s 114 (210 CLR at 73): [T]here was no provision in the rules of SGH, or its governing statute, that it should pursue the interests of the State or the public or that its policies could be determined by the executive government. It follows that the control which could be exercised by [Suncorp — a Queensland state instrumentality] over the affairs of SGH (whether through the board or at a General Meeting) was hedged about by the obligation not to disregard the interests of persons other than the State. Those other persons were corporators but it is not the presence or absence of corporators which is of critical significance to the application of s 114 in this case. There may be cases in which a corporation, which has corporators, is within the operation of s 114. What matters, here, is

that there were corporators who did not hold their interests on behalf of the State but did so because they were depositors. As a result, the body, in whose name stood the property on which it was said that the Commonwealth had imposed a tax was a body whose organs of management, in making decisions about that property, could not disregard the interests of persons other than the State. In this case, that requires the conclusion that the entity concerned, SGH, was not the State for the purposes of s 114. Other features of the relationship between SGH and the State to which reference was made in argument — Suncorp’s provision of a standby facility, the audit of SGH’s financial statements by the Auditor-General, Suncorp’s power to direct SGH to change its name — do not permit, let alone require, the opposite conclusion. At the relevant time, SGH was not the ‘State’ for the purposes of s 114 of the Constitution.

Justices Gummow and Callinan agreed in separate judgments. Justice Kirby, in a dissenting judgment, found that SGH ought to be regarded as the state for purposes of s 114.

State laws and the Commonwealth 6.2.58 In Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129 6.2.21C, the majority said in their joint judgment (28 CLR at 155): The principle we apply to the Commonwealth we apply also to the states, leaving their respective acts of legislation full operation within their respective areas and subject matters but, in case of conflict, giving to valid Commonwealth legislation the supremacy expressly declared by the Constitution, measuring that supremacy according to the very words of s 109.

The principle referred to was that Commonwealth legislative

powers should be read as authorising the Commonwealth Parliament to legislate so as to bind the states. Later, the majority explained such decisions as D’Emden v Pedder (1904) 1 CLR 91 and Deakin v Webb (1904) 1 CLR 585 as depending on s 109 of the Commonwealth Constitution. State legislation taxing salaries paid by the Commonwealth was inconsistent with the Commonwealth legislation fixing the rate of salary and therefore was invalid. In so far as those cases declared that state taxation of Commonwealth salaries was an invalid interference with the Commonwealth’s constitutional functions, the cases were declared ‘erroneous’: 28 CLR at 156–7. The Engineers’ case therefore appeared to lay down a general reciprocal rule: state legislation would bind the Commonwealth, just as Commonwealth legislation binds the states, although [page 665] the Commonwealth might protect itself against state legislation by enacting an inconsistent law which triggered the operation of s 109. However, that reciprocal proposition has not survived. Rather, the states’ capacity to enact laws binding upon the Commonwealth has been steadily eroded. The first significant opportunity for the court to consider what might have remained of this capacity, in the wake of the Engineers’ case, was Pirrie v McFarlane (1925) 36 CLR 170. 6.2.59C

Pirrie v McFarlane (1925) 36 CLR 170

[McFarlane was a member of the Royal Australian Air Force. In November 1924 he was instructed by his superior officer to drive an RAAF motor car on public roads in Melbourne. While driving the car, he was stopped by Pirrie, a member of the Victoria Police, who asked to see his driver’s licence. McFarlane held no driver’s licence under the Motor Car Act 1915 (Vic). Pirrie then lodged an information in the Melbourne Magistrates’ Court and McFarlane was charged with a breach of s 6 of the Motor Car Act. That section read: (1) No person shall drive a motor car upon any public highway without being licensed for that purpose and no person shall employ to drive a motor car any person who is not so licensed … (4) Any person driving a motor car as aforesaid shall on demand by any member of the police force produce his licence and if he fails so to do shall be guilty of an offence against this Act … At the hearing of the charge the magistrate dismissed the information on the ground that the Motor Car Act could not validly apply to members of the defence forces. Pirrie obtained an order nisi to review the decision from the Victorian Supreme Court. When the order nisi came on for argument before the Supreme Court, the matter was removed to the High Court.] Starke J: The argument denying the power of the states to affect Commonwealth officers based upon some prohibition expressed or implied in the Constitution can no longer be sustained … So the immunity claimed in this case must rest upon some law enacted by the Parliament: Engineers’ case; D’Emden v Pedder (1904) 1 CLR 91; coupled with s 109 of the Constitution which provides that ‘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’. How, then, is the Motor Car Act 1915, and particularly s 6 thereof, inconsistent with any law of the Commonwealth? …

… These Acts restrict to some extent the civil rights and duties of soldiers, but nowhere do they exempt them from obedience to the civil law … Unless there be some limitation upon the states, expressed or implied in the Constitution, with respect to interference with persons who are federal officers, then the case must be founded upon some inconsistency between the law of the state and the law of the Commonwealth. There is no express limitation in the Constitution, and the Engineers’ case (1920) 28 CLR 129 denies any such implied limitation. When a power exists in the states, then ‘they are entitled to the same complete independence in its exercise as is the national government in wielding its own authority,’ subject only to the provisions of s 109 of the Constitution (cf Cooley’s Principles of Constitutional Law, 3rd ed, p 35). The Motor Car Act, it is said, will paralyse the Defence Forces of the Commonwealth and impair the efficiency of their service: they cannot, in Victoria, be trained in peace nor used in war without the sanction of the state. Extravagant arguments such as [page 666] this may well be considered when the state passes legislation calculated to lead to such dangerous consequences … All the state has done in this case is to regulate the use of motor cars and to require all citizens to observe provisions for the preservation of public safety and security. The Act is directed to acts of a purely local character, and its object is peculiarly within the authority of the state. It is not aimed particularly at the Defence Forces of the Commonwealth, nor is it in opposition to any express provision of the laws of the Commonwealth. A civil duty is, no doubt, established for all citizens using the public highways of Victoria, reasonable in itself and in no wise interfering with or infringing the military duties and obligations of the Defence Forces of the Commonwealth. Again, we were urged

to consider the possible consequences of s 4 of the Act relating to the registration of motor cars. Must the Commonwealth, it was said, register all its motor vehicles required for defence purposes? It will be time enough to answer that question when it arises. It may be found that s 4 does not require either the Commonwealth or the state governments to register any motor vehicle. But, however that may be, the Commonwealth has ample legislative power to maintain its Forces free from any inconvenient legislation of the states. The magistrate, in my opinion, was wrong in his decision, and the defendant should have been convicted of the offence charged against him.

6.2.60 Chief Justice Knox and Higgins J delivered judgments to the same effect. Isaacs and Rich JJ dissented. In a judgment with which Rich J agreed, Isaacs J held that the Victorian Act was not intended to bind the Crown, and that if it had been so intended it would be invalid for two reasons. First (36 CLR at 199): [A]n enactment expressly or by necessary implication purporting to bind the Crown in right of the Commonwealth in respect of ‘primary and inalienable functions of the constitutional government’ of the Commonwealth — that is, of the King in right of the Commonwealth … — is entirely outside the range of the state Constitution. Those functions were expressly taken from the states and vested exclusively in the Commonwealth by the Constitution itself.

The second reason was the inconsistency between any such state law and Commonwealth legislation, the Air Force Act 1923 (Cth), which authorised the RAAF to choose its own drivers for the purpose of public defence: 36 CLR at 200–12.

6.2.61 Justices Isaacs and Rich, who dissented in Pirrie v McFarlane (1925) 36 CLR 170, had subscribed to the joint judgment in the Engineers’ case (1920) 28 CLR 128 6.2.21C, which appeared to demolish the notion of intergovernmental immunity. But in this case, they made two points about the capacity of the states to legislate so as to control the Commonwealth and its agents. State legislation would have to give way to inconsistent Commonwealth legislation because of s 109 of the Constitution, and state legislation would be invalid if it interfered with any matter which, by the Constitution, was reserved for the exclusive control of the Commonwealth. Neither Rich J nor Isaacs J referred to the provision of the Constitution which gave this exclusive control to the Commonwealth. They were probably referring to s 52(ii), which gives the Commonwealth Parliament the ‘exclusive power to make laws … with respect to … matters relating to any department of the public service the control of which is by this Constitution transferred to the executive government of the Commonwealth’. [page 667] (Section 69 transferred, inter alia, the naval and military defence departments in each state to the Commonwealth.) It is clear that there can be no reciprocal rule on the power of the Commonwealth and states to regulate each other’s activities. Not only does the Constitution give supremacy to Commonwealth legislation where there is a conflict, but it places certain matters within the exclusive control of the Commonwealth Parliament. A

state law, otherwise valid, would be invalid to the extent that it touched those ‘exclusive’ matters. 6.2.62 In West v Commissioner of Taxation (NSW) (1937) 56 CLR 657, the High Court held that the Special Income and Wages Tax (Management) Act 1933 (NSW) validly imposed a state income tax on a Commonwealth superannuation pension received by a New South Wales resident formerly employed by the Commonwealth. Chief Justice Latham looked for the answer to the validity of state legislation in specific constitutional provisions. He found that the Commonwealth legislation authorising payment of the pension had not protected the pension from state taxation, although the Commonwealth Parliament had the power to legislate to confer such a protection. This excluded the possibility of s 109 inconsistency between the Commonwealth legislation and the state taxing law, which did not discriminate against incomes from Commonwealth sources. If the state tax had discriminated, or purported ‘to deal specifically with Federal salaries or pensions’, it could be in conflict with s 52(ii) of the Constitution, which gave exclusive power to the Commonwealth Parliament over the departments of the public service transferred to the Commonwealth, ‘including the salaries and pensions of Commonwealth officers’ (56 CLR at 668) — or such legislation might be seen as lying outside the state parliament’s power to make laws for the peace, welfare and good government of the state, because it dealt with the government of the Commonwealth: 56 CLR at 669. Justices Starke and Evatt adopted a similar approach, although Evatt J denied that the Commonwealth Parliament could legislate to grant Commonwealth salaries and pensions an immunity from state taxation.

On the other hand, Rich, Dixon and McTiernan JJ apparently assumed that the states were generally incompetent to tax Commonwealth salaries and pensions, because they stressed the importance of a provision in the relevant Commonwealth legislation which, in Dixon J’s words, ‘treats the pension as potentially subject to taxation by a state’: 56 CLR at 678. That consideration and the non-discriminatory character of the state tax combined to destroy the foundation of the claimed immunity from state taxation: 56 CLR at 679. Dixon J went on to consider why a state tax which discriminated against Commonwealth pensions, salaries or other payments would be invalid. One reason would be inconsistency, under s 109, between the state tax and the Commonwealth law which authorised the payment (56 CLR at 681–2): Surely it is implicit in the power given to the executive government of the Commonwealth that the incidents and consequences of its exercise shall not be made the subject of special liabilities or burdens under state law. The principles which have been adopted for determining for the purposes of s 109 whether a state law is consistent with a Federal statute are no less applicable when the question is whether the state law is consistent with the Federal Constitution. Since the Engineers’ case a notion seems to have gained currency that in interpreting the Constitution no implications can be made. Such a method of construction would defeat the intention of any instrument, but of all instruments a written constitution seems the last to which it could be applied. I do not think that the judgment of the majority of the court in the Engineers’ case meant to propound such a doctrine. It is inconsistent

[page 668] with many of the reasons afterwards advanced by Isaacs J himself for his

dissent in Pirrie v McFarlane (1925) 36 CLR at 191.

6.2.63 The view expressed by Latham CJ in West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 that the Commonwealth Parliament could legislate to grant immunity from state taxation to Commonwealth pensioners must be regarded as vindicated by the High Court’s decision in Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46. In that case, the question before the High Court was whether the Australian Coastal Shipping Commission was liable to pay stamp duty on receipts issued by it in Victoria. The Stamps Act 1946 (Vic) imposed such a liability. The commission was set up as a statutory corporation by the Australian Coastal Shipping Commission Act 1956 (Cth) to establish, maintain and operate shipping services for the carriage of passengers, goods and mails in interstate, overseas and territorial trade. It was conceded that the commission was not an instrumentality of the Crown, so it had no special immunity from the state legislation. However, s 36(1) of the Commonwealth legislation provided that the commission was not subject to taxation under a law of a state or territory to which the Commonwealth was not subject. The court (Dixon CJ, McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen JJ) held that s 36(1) was valid. In his judgment (with which Kitto, Taylor and Owen JJ agreed), Dixon CJ referred to a series of decisions of the United States Supreme Court (107 CLR at 55–6): An analogy is to be found in the cases where the United States employs contractors for its government purposes. The question has repeatedly arisen whether an immunity claimed from state taxes exists. Of this a majority of the Supreme Court speaking through Black J has said recently: ‘Today the United States does business with a vast number of

private parties. In this court the trend has been to reject immunising these private parties from non-discriminatory state taxes as a matter of constitutional law. Cf Penn Dairies v Milk Control Commission (1943) 318 US 270. Of course this is not to say that Congress, acting within the proper scope of its power, cannot confer immunity by statute where it does not exist constitutionally. Wise and flexible adjustment of intergovernmental tax immunity calls for political and economic considerations of the greatest difficulty and delicacy. Such complex problems are ones which Congress is best qualified to resolve. As the Government points out Congress has already extensively legislated in this area by permitting states to tax what would have otherwise been immune’. The doctrine propounded in the foregoing passage applies to federalism in Australia. Given the power in reference to a subject matter of legislation to set up a federal governmental corporation, the power of the Parliament extends to excluding the imposition of state taxes on its operations and the exclusion of liability on the part of the corporation to state taxes upon its activities. The fact that a government agency is set up at all brings under consideration the question whether its operations should or should not be exposed to state taxes. How that question should be decided is a matter of policy. But the legislative power under which, ex hypothesi, the agency is validly set up must surely be enough to enable the legislature to decide it.

6.2.64 In Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227, a majority (Gibbs CJ, Stephen and Aickin JJ; Mason and Murphy JJ dissenting) decided that s 90 of the Family Law Act 1975 (Cth) was invalid. The section exempted from state taxes transfers of property under maintenance agreements between husband and wife approved by the Family Court. This exemption was not, the majority said, a law with respect to marriage (s 51(xxi)), or divorce and matrimonial causes (s 51(xxii)). Justice Gibbs conceded that, if s 90 ‘render[ed] effective

[page 669] orders made by a court under the … Family Law Act … and is therefore incidental to the subject matter of the power given by paras (xxi) and (xxii)’, it would be valid. But he thought that the purpose of an order approving the transfer of property between husband and wife could be fully achieved whether or not state tax was payable on the transfer. He regarded Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46 as ‘quite distinguishable from the present case’ (149 CLR at 238) and went on to explain the basis of exemption from state legislation (149 CLR at 238): The question whether a [Commonwealth] law is reasonably incidental to the subject matter of the power is always one of degree, and it depends to some extent on the nature of the power. Thus the Parliament might, under the defence power, exempt soldiers travelling on duty from the necessity of complying with the traffic regulations of a state, but it could not validly grant a similar exemption in favour of a married person travelling to avail himself or herself of an order for access made under the Family Law Act.

Another majority justice, Stephen J, purported to follow Menzies J’s judgment in Australian Coastal Shipping Commission v O’Reilly (1962) 107 CLR 46 (149 CLR at 243–4). However, this appears to have been based on confusion as to the basis of Menzies J’s reasoning: see Stellios, 2015, p 514. Zines has described the majority judgments in Gazzo v Comptroller of Stamps (Vic) (1981) 149 CLR 227 as ‘unsatisfactory in their reasoning’ and observed that, because ‘the decision was a two to three majority, it is a very weak precedent’: Stellios, 2015, p 514.

6.2.65 The status of Gazzo must now be regarded as significantly weakened by the unanimous judgment of the High Court in Botany Municipal Council v Federal Airports Authority (1992) 175 CLR 453. In that case, the High Court upheld reg 9(2) of the Federal Airports Corporation Regulations, which were made under the Federal Airports Corporation Act 1986 (Cth), which authorised a licensee to carry out works for the corporation ‘in spite of a law, or a provision of a law, of the State of New South Wales that … relates to … environmental assessment’. 6.2.66 An important feature of the judgments in West v Commissioner of Taxation (NSW) (1937) 56 CLR 657 is the sharp distinction in approach adopted by Latham CJ and Dixon J. The former appealed to the express provisions of the Commonwealth Constitution and state Constitution Acts to resolve the issues before the court. The latter appealed in his judgment to a proposition which he said was ‘implicit in the power given to the executive government of Commonwealth’ that it should not be subjected to special burdens under state law: 56 CLR 681. Justice Dixon also asserted that a written constitution should be the last instrument to be interpreted literally and without resort to implications. This sharp distinction in approach (the one relying on a legislative reading of the text of the Constitution, the other appealing to broad political propositions implied in the Constitution) was to be repeated in a number of other decisions in this area: see, for example, Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case) (1947) 74 CLR 508; Melbourne Corporation v Commonwealth (1947) 74 CLR 31 6.2.30C; Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1 6.2.69C.

[page 670]

6.2.67C Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case) (1947) 74 CLR 508 [Richard Foreman & Sons Pty Ltd was a company in voluntary liquidation under the Companies Act 1936 (NSW). The liquidator of the company, Uther, had paid a dividend of 4s in the pound to various creditors of the company, and there remained £1459 of the company’s assets for distribution. The Federal Commissioner of Taxation then lodged a claim for £594 sales tax and £172 payroll tax owing by the company. It was common ground that, apart from ss 282 and 297 of the Companies Act, the Commonwealth would be entitled to a degree of priority in the payment of these debts over other creditors. The common law had developed a hierarchy of debts for the payment of the creditors of ‘insolvent estates’. Debts were classified in an order of degrees. For example, a judgment debt ranked higher than a debt due under statute, which was of a higher degree than a debt due under a contract made under seal, which ranked above a debt arising out of a simple contract. Creditors of each degree were entitled to be paid out of the assets of the debtor before any creditor of the next degree. When there were insufficient assets to meet the debts due to creditors of a particular degree, those creditors shared the assets in proportion to their debts. However, the Crown had a prerogative right of priority to be paid before private individuals or corporations who were creditors of the same degree (on this right, see Chapter 7). Section 297 of the Companies Act 1936 (NSW) listed the sequence in which certain debts were to be paid, but the only priority given to the

Commonwealth was for money owing to it as unpaid income tax. In respect of all other debts owing to it, the Commonwealth was to rank equally with private creditors. Section 282 affirmed that, apart from preferred creditors, the assets of an insolvent company were to be applied to satisfying its liabilities. The liquidator applied to the Supreme Court of New South Wales under s 286 of the Companies Act to determine whether the Commissioner of Taxation was entitled to be paid the sales and payroll tax owing by the company in priority to all other unsecured creditors. The Supreme Court (Roper J) believed the matter raised a question as to the limits inter se of the powers of the Commonwealth and the states and proceeded no further with the case. The High Court then made an order removing the case into the High Court.] Latham CJ: The principle enunciated and applied in the Banking Case (1947) 74 CLR 31 cannot, in my opinion, be applied in favour of the Commonwealth in the same way as it may properly be applied in favour of a State. A State has no means of protecting itself against Commonwealth legislation if that legislation is valid. The position in the case of the Commonwealth, however, is very different. Section 109 … as has often been pointed out, relates only to state laws which, apart from s 109, would be valid … Accordingly, the Commonwealth Parliament is in a position to protect the Commonwealth against state legislation which, in the opinion of the Parliament, impairs or interferes with the performance of Commonwealth functions or the exercise of Commonwealth rights … [His Honour noted that, in South Australia v Commonwealth (First Uniform Tax case) (1942) 65 CLR 373, it was held that the Commonwealth Parliament could legislate to provide for priority for Commonwealth taxes over debts due to creditors other than state governments.] [page 671]

Accordingly, there is no need to invoke any principle of non-interference with governmental functions … The Commonwealth Parliament has the means of protection in its own hands, and by suitable legislation can prevent the application of inconsistent state legislation … [His Honour accepted that there were some subjects beyond state legislative power, such as the functions of the Governor-General in relation to the summoning and the dissolution of the Commonwealth Parliament, because laws on those subjects were not laws ‘for the peace, welfare and good government of New South Wales in all cases whatsoever’ within s 5 of the Constitution Act 1902 (NSW). Was the Commonwealth prerogative right of priority in respect of debts owed to the Commonwealth one of those matters?] The Commonwealth of Australia was not born into a vacuum. It came into existence within a system of law already established. To much of that law the Commonwealth is necessarily subject; for example, the Commonwealth has no general power to legislate with respect to the law of property, the law of contract, the law of tort. In relation to those subjects speaking generally, it lives and moves and has its being within a system of law which consists of the common law (in the widest sense) and the statute law of the various states. The question of the application of general law to the Commonwealth came before this court in Pirrie v McFarlane (1925) 36 CLR 170. It was there held that general provisions in a Traffic Act relating to motor cars applied to the Commonwealth when there was no Commonwealth law with which the state law was inconsistent: see the report (1925) 36 CLR at 182–3, 213–14, 228–9. Provision for the ranking of debts inter se in the liquidation of companies in the forum of a state is a common feature of ordinary company law. It is as much a part of the general law of the community as a traffic law. It usually involves distinction between classes of creditors. It is a general law which can be applied to the Commonwealth where the Commonwealth is a creditor in the same way as to other creditors.

If the state legislation abolishes or reduces the priority in payment to which the Commonwealth is entitled at common law the Commonwealth may, by Commonwealth legislation, prevent that state law from operating. But, in my opinion, until the Commonwealth Parliament passes such legislation, the state law is applicable according to its terms. [Rich, Starke and Williams JJ delivered judgments to the same effect. Dixon and McTiernan JJ dissented, the latter on the ground that the Sales Tax Assessment Act and the Payroll Tax Assessment Act conferred a statutory right of priority on the Commissioner of Taxation.] Dixon J: We are here concerned with nothing but the relation between the Crown in right of the Commonwealth as a creditor for public moneys and the subjects of the Crown as creditors for private moneys. There are no conflicting claims between state and Commonwealth. The conflict is between the Commonwealth and its own subjects. What title can the state have to legislate as to the rights which the Commonwealth shall have as against its own subjects? The fact that the priority claimed by the Commonwealth springs from one of the prerogatives of the Crown is an added reason, a reason perhaps conclusive in itself, for saying that it is a matter lying completely outside state power. But there is the antecedent consideration that to define or regulate the rights or privileges, duties or disabilities, of the Commonwealth in relation to the subjects of the Crown is not a matter for the states. General laws made by a State may affix legal consequences to given descriptions of transaction and the Commonwealth, if it enters into such a transaction, may be bound by the rule laid down. [page 672]

For instance, if the Commonwealth contracts with a company the form of the contract will be governed by s 348 of the Companies Act. Further, State law is made applicable to matters in which the Commonwealth is a party by s 79 of the Judiciary Act. But these applications of State law, though they may perhaps be a source of confusion, stand altogether apart from the regulation of the legal situation which the Commonwealth, as a government, shall occupy with reference to private rights … A federal system is necessarily a dual system. In a dual political system you do not expect to find either government legislating for the other. But supremacy, where it exists, belongs to the Commonwealth, not to the States. The affirmative grant of legislative power to the Parliament over the subjects of bankruptcy and insolvency may authorise the enactment of laws excluding or reducing the priority of the Crown in right of the states in bankruptcy and it has been held that the taxation power extends to giving the Commonwealth a right to be paid taxes before the states are paid: South Australia v Commonwealth (1942) 65 CLR 373. But these are the results of express grants of specific powers, plenary within their ambit, to the Federal legislature, whose laws, if within power, are made paramount. Because of their content or nature, the express powers in question are considered to extend to defining the priority of debts owing to the states or postponing state claims to taxes. The legislative power of the States is in every material respect of an opposite description. It is not paramount but, in case of a conflict with a valid Federal law, subordinate. It is not granted by the Constitution. It is not specific, but consists in the undefined residue of legislative power which remains after full effect is given to the provisions of the Constitution establishing the Commonwealth and arming it with the authority of a central government of enumerated powers. That means, after giving full effect not only to the grants of specific legislative powers but to all other provisions of the Constitution

and the necessary consequences which flow from them. It is a fundamental constitutional error to regard the question of the efficacy of s 282 of the Companies Act 1936 of New South Wales as if it were an exercise of an express grant, contained in the Constitution, to the states of a power to make laws with respect to the specific subject of the winding up of insolvent companies. It is a provision enacted in intended pursuance of a general legislative power to make laws for the peace, welfare and good government of New South Wales in all cases whatsoever. The content and strength of this power are diminished and controlled by the Commonwealth Constitution. It is of course a fallacy, in considering what a state may or may not do under this undefined residuary power to reason from some general conception of the subjects which fall within it as if they were granted or reserved to the states as specific heads of power. But no fallacy in constitutional reasoning is so persistent or recurs in so many and such varied applications. In the present case the fallacious process of reasoning could not begin from s 107 as the error has so commonly done in the past. For it is not a question whether the power of the parliament of a Colony becoming a State continues as at the establishment of the Commonwealth. The colony of New South Wales could not be said at the establishment of the Commonwealth to have any power at all with reference to the Commonwealth. Like the goddess of wisdom the Commonwealth unoictu [that is, all at once] sprang from the brain of its begetters armed and of full stature. At the same instant the colonies became states; but whence did the states obtain the power to regulate the legal relations of this new polity with its subjects? It formed no part of the old colonial power. The federal Constitution does not give it. Surely it is for the peace, order and good government of the Commonwealth, not for the peace, welfare and good government of New South Wales, to say what shall [page 673]

be the relative situation of private rights and the public rights of the Crown representing the Commonwealth, where they come into conflict. It is a question of the fiscal and governmental rights of the Commonwealth and, as such, is one over which the state has no power.

6.2.68 As discussed at 6.2.74C, in Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 a majority of the High Court (Dixon CJ, Kitto, Windeyer, Menzies and Owen JJ) overruled the decision in Uther’s case, endorsing Dixon J’s dissenting judgment in that case. In his judgment in Uther, Dixon J recognised one of the real problems associated with a general immunity for the Commonwealth Government from state legislation. He said that, when the Commonwealth enters into a transaction, it may be bound by state laws which affix legal consequences to that type of transaction. He also said that s 79 of the Judiciary Act 1903 (Cth) (see 6.2.80E) could subject the Commonwealth as a litigant to state law. This was a recognition of the fact that, without a system of law by which the Commonwealth’s rights and liabilities are defined, the Commonwealth can have no rights or liabilities. There is no general Commonwealth law of contract, tort or property law — the Commonwealth Parliament lacks power to enact such comprehensive legislation. Nor is there a Commonwealth regime governing these legal relationships as they involve the Commonwealth. Yet, as discussed in Chapter 7, the Commonwealth executive daily enters into a variety of arrangements, transactions and relationships which are clearly intended to have some legal consequences. It buys and sells

commodities, contracts for the provision of services, and leases property (real and personal). If the various state laws which regulate such transactions do not affect the Commonwealth’s rights and liabilities, where are those rights and liabilities to be found? Presumably, Dixon J’s proposal that state laws would affect the Commonwealth in such situations was meant to resolve the difficulties created by a more general Commonwealth immunity from those laws. But that proposal may create as many problems as it attempts to eradicate. For instance, how do we distinguish between those situations where the Commonwealth’s legal relations with its subjects are immune from state legislation and those situations where the Commonwealth’s transactions with its subjects are subject to state legislation? Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 6.2.86C attempted to resolve this problem by distinguishing between state laws which purport to affect the executive capacities of the Commonwealth and state laws which merely regulate the exercise of those capacities. This distinction has also been subject to criticism. It might be argued that Latham CJ’s approach to this issue — of treating the Commonwealth as bound by state laws unless it immunises itself against them via s 109 of the Constitution — both avoids these difficult distinctions and achieves a workable result. 6.2.69C Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1 [Criterion Theatres Ltd was the owner of land in the city of Essendon. From 30 September 1942 to 11 September 1944 (that is, during World

War II), the land was occupied by the Commonwealth under regulations made under the National Security Act 1939 (Cth). [page 674] The Council of the City of Essendon levied rates on both the owner and the occupier of the land, under the Local Government Act 1928 (Vic): 264(1) The council of every municipality shall once at least in every year, and may from time to time as it sees fit in manner hereinafter mentioned, make and levy rates to be called ‘General rates’ equally in respect of all rateable property within the municipal district … 265 Every general rate which the council of any municipality is by this Act authorised to make or levy shall be made and levied by it … (b) upon every person who occupies, or if there is no occupier or if the occupier is the Crown … then upon the owner of any rateable property whatsoever within the municipal district. Criterion Theatres Ltd and the Commonwealth failed to pay the rates, and the council brought an action in the High Court to recover the rates. The Commonwealth claimed that the Local Government Act did not render it liable to pay rates. The majority of the court (Latham CJ, Dixon, McTiernan and Williams JJ) held that the reference to ‘the Crown’ in s 265(b) of the Local Government Act meant the state executive government; therefore, where land was occupied by the Commonwealth, the section imposed no liability on the owner of the land. Rich J dissented on this point. All members of the court held that the reference to ‘every person who occupies’ in s 265(b) of the Local Government Act did not render the Commonwealth liable to pay the rates. Rich, McTiernan and Williams JJ reached that conclusion by interpreting the phrase as not

extending to the Commonwealth executive. Latham CJ held that it did extend to the Commonwealth but that it was in conflict with s 114 of the Commonwealth Constitution, by imposing a tax on ‘a kind of property’ belonging to the Commonwealth: 74 CLR 13–14. Dixon J assumed that the phrase did refer to the Commonwealth but that, as so construed, the Local Government Act would be invalid.] Dixon J: For my part, I cannot see how the Commonwealth can be made liable for rates in respect of the Army’s use or occupation of land for military purposes during the war … The first step in the reasoning upon which I rely is a simple proposition about the nature of the rates. The rates are not a charge for services. They go into the general funds of the municipality to be applied to any objects within its powers. The municipality levies the rates as a subordinate authority of the state and they are a tax: Municipal Council of Sydney v Commonwealth (1904) 1 CLR 208. The second step is a proposition no less simple but one concerning the law of the Constitution. It is that the state may not levy a tax directly upon the Commonwealth in respect of the execution of its duties or the exercise of its functions. That proposition I shall proceed to justify. [His Honour said that he did not base his decision on s 114 of the Constitution, because the Commonwealth’s occupation of the land was ‘not that of passive ownership but of the actual carrying on of measures of defence’, and continued:] … I … prefer to base my decision upon the ground that the Constitution does not permit the state to tax that kind of action of the Commonwealth … Clearly enough the Commonwealth took and retained possession of the land in executing a function of government. Let it be added, should there still be those who think it matters, one of ‘the primary and inalienable functions of a constitutional government’: Coomber v Justices of Berks (1883) 9 App Cas 74. The imposition of the tax that is attempted is

directly upon the Commonwealth itself and to make it worse the occasion of the imposition is the act of the Commonwealth in so taking [page 675] and retaining possession of the land. I believe that I am on sound ground in saying that the Constitution does not allow this. I say sound ground because I do not think it is a proposition involved in the general overthrow of the discredited doctrine by which a wide immunity from state legislation was given to agents and instruments employed by the Federal Government. There is a world of difference between, on the one hand, a denial to the states of a power to tax the Commonwealth in respect of the execution of its duties or the exercise of its authority and, on the other hand, the earlier doctrine protecting so-called instrumentalities of government, Federal or state, from the exercise of some legislative power of the other government on the ground that to concede that they fell within the operation of the power at all would concede to the second government a means, an indirect means, of burdening, or interfering with, the first. But even when the earlier doctrine was abandoned by this court an express reservation was made covering, among other things, the power of taxation. The reservation is expressed in a somewhat indefinite manner, perhaps designedly, but it appears at least certain that, because of the special nature of the power to tax, it was considered that there might be implied restraints upon its use to which the legislative powers of neither government were generally subject: Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 at 143. The retreat from the earlier doctrine began in the United States later, I think, and its abandonment was effected by progressive steps and not, as here, unoictu [all at once].

[Dixon J referred to a series of decisions of the United States Supreme Court, which had moved away from the proposition that the governments within the federal union were immune from each other’s legislation. Yet these decisions had indicated that tax laws raised special problems and suggested that ‘an attempt by means of the tax power on the part of one member of the federal system to interfere with the other’ would be invalid. His Honour continued:] … To my mind the incapacity of the States directly to tax the Commonwealth in respect of something done in the exercise of its powers or functions is a necessary consequence of the system of government established by the Constitution. It is hardly necessary at this stage of our constitutional development to go over the considerations which make it impossible to suppose that the Constitution intended that the states should levy taxes upon the Commonwealth — the nature of the Federal Government, its supremacy, the exclusiveness or paramountcy of its legislative powers, the independence of its fiscal system and the elaborate provisions of the Constitution governing the financial relations of the central Government to the constituent states. To describe the establishment of the Commonwealth as the birth of a nation has been a commonplace. It was anything but the birth of a taxpayer. The idea that a tax liability might be directly imposed upon the Commonwealth by State law would not, I think, have been entertained, if it had not been for misapprehensions which obtain concerning the effect of the Engineers’ case (1920) 28 CLR 129. One such misapprehension is that the decision meant that the Constitution implies nothing; that it means nothing that it does not say in express words. I shall repeat two statements upon this subject which I thought it necessary to make in West v Commissioner of Taxation (NSW) (1937) 56 CLR at 681–2. One deals with what the Engineers’ case actually did decide: the other with implications that are to be made in the Constitution: ‘There is little justification for seeking to find in the Engineers’ case authority for more than was decided. The importance alike of

the principle there applied and of the application given to it is sufficiently great and far reaching. It is a principle adopted for the interpretation of the legislative powers of the Parliament. The principle is that whenever the Constitution confers a power to make laws in respect of a [page 676] specific subject-matter, prima facie it is to be understood as enabling the Parliament to make laws affecting the operations of the states and their agencies. The prima facie meaning may be displaced by considerations based on the nature or the subject matter of the power or the language in which it is conferred or on some other provision in the Constitution. But, unless the contrary thus appears, then, subject to two reservations, the power must be construed as extending to the states. The first reservation is that in the Engineers’ case the question was left open whether the principle would warrant legislation affecting the exercise of a prerogative of the Crown in right of the states. The second is that the decision does not appear to deal with or affect the question whether the Parliament is authorized to enact legislation discriminating against the states or their agencies’ (1937) 56 CLR at 682. To this should be added a third reservation, namely, that to which I have already referred concerning the taxation powers of the governments. The second passage contains almost all that I have to say about the need of implying some restraints on state action with reference to the Commonwealth. ‘Surely it is implicit in the power given to the executive government of the Commonwealth that the incidents and consequences of its exercise shall not be made the subject of special liabilities or burdens under state law. …’. The expression ‘special liabilities or burdens under state law’ relates to ‘the incidents and consequences’ of the exercise of

Commonwealth power. But a tax directly upon the Commonwealth is subject to the same objection. It is, perhaps, desirable to add that this case cannot be considered as one in which the Commonwealth comes in to avail itself of privileges, facilities or a course of business established by or under state law to which a charge or even a tax is incident … For the foregoing reasons, I am of the opinion that the Commonwealth is not liable to the municipality for the rates it seeks to recover.

6.2.70 In the Engineers’ case (1920) 28 CLR 129 6.2.21C, the majority of the High Court expressed some reservation about taxing legislation, but that reservation was equivocal and did no more than leave open the question of the application of the Engineers’ rule to taxing legislation. This reservation was made in the context of the Commonwealth taxing the states and was expressed in rather complex terms which brought in state prerogative functions: 28 CLR at 143. It might, therefore, be difficult to appeal to the ‘reservation’ in the Engineers’ case to support the proposition that the states cannot tax the Commonwealth. 6.2.71 The assertion that the establishment of the Commonwealth was the birth of a nation, and not of a taxpayer, seems little more than rhetoric. But, if it is to be taken as a constitutional proposition, should it not form the basis for a general Commonwealth immunity from state laws? How would Dixon J justify drawing a distinction between a state taxation law and a state motor car licensing law of the type considered in Pirrie v McFarlane (1926) 36 CLR 170 6.2.59C?

Indeed, there are signs in the judgment of Dixon J that he was developing a general Commonwealth immunity. In particular, he cited, with apparent approval, the opinion of the Supreme Court of the United States in SRA (Inc) v Minnesota 327 US 558 (1946), where the court had said that the property and operations of the federal government ‘must be exempt from state control in tax, as in other matters’: 74 CLR at 22. Certainly, if we look at Dixon J’s judgment in this case in the context of his dissent in Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case) (1947) 74 CLR 508 6.2.67C and of his agreement with [page 677] Fullagar J in Commonwealth v Bogle (1953) 89 CLR 229 (see 6.2.72), then it is clear that Dixon J was developing such a general immunity. 6.2.72 In 1949, the Commonwealth established migrant hostels, managed by a Commonwealth department. In January 1952, the Commonwealth arranged for a company, Commonwealth Hostels Ltd, to be incorporated under the Companies Act 1938 (Vic), with the shares held by Commonwealth public servants. The directors of the company were appointed (and could be removed) by the responsible Commonwealth minister. The company took over the management of several migrant hostels, including the Brooklyn Hostel in Victoria. In April 1952, Commonwealth Hostels Ltd announced that it was increasing the charges for accommodation at the Brooklyn Hostel. Bogle, a resident of the hostel since July 1951, refused to pay the increased charges, claiming that the

company was prevented from increasing those charges by the Victorian Prices Regulation Order No 436 made under the Prices Regulation Act 1948 (Vic), which limited the charges which could be made for the provision of board and lodging. The Commonwealth and Commonwealth Hostels Ltd sued Bogle in the High Court to recover the unpaid accommodation charges. Kitto J stated several questions for the opinion of the Full Court, which decided (by majority) that the company was not an agency or instrumentality of the Commonwealth ‘Crown’ (as to this relationship, see Chapter 7) and that the Prices Regulation Act 1948 (Vic) and the order made under that Act therefore applied to the company: Commonwealth v Bogle (1953) 89 CLR 229. However, Fullagar J (with whom Dixon CJ, Webb and Kitto JJ agreed) expressed the view that the state Act could not bind the Commonwealth because the Commonwealth ‘Crown’ had not consented to it (89 CLR at 259): In the view which I have ultimately taken of this case it is not necessary to decide whether the Commonwealth is bound by the Prices Regulation Act (Vic) … however, … in my opinion, the Commonwealth is not bound by that Act … To say that a state can enact legislation which is binding upon the Commonwealth in the same sense in which it is binding upon a subject of the state appears to me to give effect to a fundamental misconception. The question whether a particular state Act binds the Crown in right of a state is a pure question of construction. The Crown in right of the state has assented to the statute, and no constitutional question arises. If we ask whether the same statute binds the Crown in right of the Commonwealth, a question of construction may arise on the threshold. In considering that question we are, or should be, assisted by a presumption that references to the Crown are references to the Crown in right of the state only. If the answer to the question of construction be that the statute in question does purport to bind the Crown in right of the Commonwealth, then a constitutional

question arises. The Crown in right of the state has assented to the statute, but the Crown in right of the Commonwealth has not, and the constitutional question, to my mind, is susceptible of only one answer, and that is that the state Parliament has no power over the Commonwealth. The Commonwealth — or the Crown in right of the Commonwealth, or whatever you choose to call it — is, to all intents and purposes, a juristic person, but it is not a juristic person which is subjected either by any state Constitution or by the Commonwealth Constitution to the legislative power of any state Parliament.

Justice Fullagar observed that the Commonwealth might ‘become affected by state laws’, for example, by making a contract in Victoria — in which case, the terms and effect of that [page 678] contract might have to be sought in the Goods Act 1928 (Vic). However, his Honour said (at 89 CLR 260): … I should think it impossible to hold that the Parliament of Victoria could lawfully prescribe the uses which might be made by the Commonwealth of its own property, the terms upon which that property might be let to tenants, or the terms upon which the Commonwealth might provide accommodation for immigrants introduced into Australia.

6.2.73 The exception to Fullagar J’s general proposition of Commonwealth immunity referred to the Commonwealth becoming ‘affected by state laws’. This recognition that the Commonwealth regularly enters into transactions which must have some legal dimension was also mentioned by Dixon J in Re Richard Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case) (1947) 74 CLR 508 6.2.67C. Such an exception has

the potential to create serious problems. It assumes we can distinguish between those situations when the Commonwealth ‘makes use of its own property’ (when there will be immunity from state law), and those when the Commonwealth ‘makes a contract’ (where it will be subject to state law). Thirteen years after Uther’s case, the High Court had another opportunity to consider the impact of state company law on the Commonwealth’s prerogative priority as a creditor. 6.2.74C Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 [The Supreme Court of New South Wales ordered that Cigamatic Pty Ltd be wound up under the Companies Act 1936 (NSW) and that its assets be distributed among its creditors according to the order of priority specified in s 297 of the Act. The Commonwealth claimed to be a creditor of Cigamatic Pty Ltd. In particular, it claimed that the company owed the government £17,013 under the Sales Tax Assessment Act 1930 (Cth) and £126 under the Post and Telegraph Act 1901 (Cth). As in Uther v Federal Commissioner of Taxation (1947) 74 CLR 509 6.2.67C, it was common ground that, apart from ss 282 and 297 of the Companies Act 1936 (NSW), the Commonwealth would be entitled to a degree of priority over other creditors. The Commonwealth began an action in the High Court of Australia, seeking a declaration that it was entitled to be paid its debts in priority to other creditors and an injunction to restrain the liquidator of the company from satisfying any other debts until the Commonwealth’s debts had been satisfied. The company and the liquidator (the defendants in the action) argued that the Commonwealth was bound by the provisions of the Companies Act 1936 (NSW).] Dixon CJ: In the first instance the Commonwealth rests its

claim on the right at common law of the Crown to priority of payment when in any administration of assets debts of equal degree due to the Crown and due to subjects of the Crown come into competition. This right arose from the sovereignty of the Crown and was accordingly expressed in terms of prerogative but it is today one of the fiscal rights of government and of course it clearly attaches to the Commonwealth. The claim of the Commonwealth in the present case resting on its rights is, however, denied on the ground that by force of the State Companies Act it is excluded. This conclusion is doubtless supported, if not completely at all events to no inconsiderable degree, by the judgments of the majority in Uther v Federal Commissioner of Taxation, but it seems to me now as it seemed to me then to imply a fundamental proposition about the power [page 679] of legislatures of the state which ought not to be entertained. The proposition that is implied is that an exercise of State legislative power may directly derogate from the rights of the Commonwealth with respect to its people. It is a proposition which must go deep in the nature and operation of the federal system. There can be no doubt as to the nature or the source of the right of the Commonwealth in an administration of assets to be paid in preference to subjects of the Crown if there is a competition among debts of equal degree. It springs from the nature of the Commonwealth as a government of the Queen. Therefore to treat those rights as subject to destruction or modification or qualification by the legislature of a state must mean that under the Constitution there resides in a state or states a legislative power to control legal rights and duties between the Commonwealth and its people. Indeed in Uther’s Case Rich J actually says: ‘In so far as the right of the Crown in the right of the Commonwealth to rank as a preferential creditor is based

merely on the prerogative of the Crown as such, I see no reason why the state legislature cannot validly abridge or abolish it just as it could any other Crown prerogative of this sort’ (74 CLR at 523). Except by adopting such a doctrine I cannot see how it could be thought that state legislative power could directly deprive the Commonwealth of the priority to which it is entitled under the law derived from the prerogative. Believing, as I do, that the doctrine thus involved is a fundamental error in a constitutional principle that spreads far beyond the mere preference of debts owing to the Commonwealth, I do not think we should treat Uther’s Case as a decisive authority upon that question which we should regard as binding. It is not a question, as it appears to me, of interpreting some positive power of the state over a given subject matter. It is not a question of making some implication in favour of the Commonwealth restraining some acknowledged legislative power of the state. If you express the priority belonging to the Commonwealth as a prerogative of the Crown in right of the Commonwealth, the question is whether the legislative powers of the states could extend over one of the prerogatives of the Crown in right of the Commonwealth. If, as in modern times I think it is more correct to do, you describe it as a fiscal right belonging to the Commonwealth as a government and affecting its Treasury, it is a question of state legislative power affecting to control or abolish a federal fiscal right. It is not a question of the authority of the power of a state to make some general law governing the rights and duties of those who enter into some description of transaction, such as the sale of goods, and of the Commonwealth in its executive arm choosing to enter into a transaction of that description. It is not a question of the exercise of some specific grant of power which according to the very meaning of the terms in which it is defined embraces the subject matter itself: for it is not the plan of the Constitution to grant specific powers to the states over defined subjects. It is, I think, a question which cannot be regarded as simply governed by the applicability of the principles upon which Melbourne

Corporation v Commonwealth [(1947) 74 CLR 31] depended. In truth it imports a principle which if true would apply generally with respect to the legal rights of the Commonwealth in relation to its subjects. I do not speak of legal rights which are the immediate product of federal statute and so protected by s 109 of the Constitution. But because it imports such a principle I think we ought not to give effect to the view taken in Uther’s Case that s 297 of the Companies Act 1936 of New South Wales operated directly to nullify the priority to which the Commonwealth might have been entitled. I shall not recapitulate the reasons against this conclusion which I gave in Uther’s Case. [Kitto and Windeyer JJ concurred with Dixon CJ. Menzies J delivered a separate judgment in which he adopted the dissenting judgment of Dixon J in Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case) (1947) 74 CLR 508. Owen J concurred with Menzies J. McTiernan and Taylor JJ dissented, following the decision in Uther’s case.]

[page 680] 6.2.75 In a series of cases, culminating in Victoria v Commonwealth (Second Uniform Tax case) (1956) 99 CLR 575, the High Court considered the reciprocal issue: could the Commonwealth Parliament legislate so as to interfere with the prerogative right of the states to priority in the payment of their debts by giving absolute priority to Commonwealth debts? Ultimately, the majority of the court was prepared to uphold such legislation when it operated in the context of bankruptcy and insolvency, but would not concede that the Commonwealth Parliament could give priority to Commonwealth debts outside

that context. Of course, when one is considering the issue of priority for the payment of debts, the context of bankruptcy and insolvency is the critical context; and, in so far as the Commonwealth has power to rearrange priorities in that context (including the priority of the state executive governments), it has a significant power which, according to Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372, the states do not have. 6.2.76 The proposition established by the High Court in Cigamatic was far-reaching; indeed, it probably overruled that part of the Engineers’ case (1920) 28 CLR 129 6.2.21C which implied that state parliaments have the power to legislate so as to bind the Commonwealth: 28 CLR at 155. This proposition was that state parliaments have no power to enact legislation binding on the Commonwealth which defines or regulates its rights and duties towards its subjects, or that regulates or controls the governmental rights, including fiscal and prerogative rights, of the Commonwealth. The Cigamatic proposition was a general one. It was not a specific exception (limited to the Commonwealth’s prerogative rights) to a general rule that state parliaments could legislate so as to bind the Crown. The proposition did not depend on any exercise of Commonwealth legislative power which, by virtue of s 109, would invalidate inconsistent state legislation. Such a proposition cast doubt on the authority of Pirrie v McFarlane (1925) 36 CLR 170 6.2.59C. 6.2.77 The argument of Dixon CJ in support of the proposition established in Cigamatic was to be found in Uther’s case 6.2.67C, and was quite simple. The steps were:

(1) Before federation and the establishment of the Commonwealth, the colonies that became states had no legislative power with reference to the Commonwealth. (2) The legislative power of the states after federation was that of the colonies before federation, subject to the Commonwealth Constitution. (3) The Commonwealth Constitution did not give the states legislative power with reference to the Commonwealth. Therefore, the conclusion was, the states have no legislative power over the Commonwealth. The first two steps in the argument were unassailable; the third was, however, dubious. The state parliaments were not expressly given power to legislate with reference to the Commonwealth or to bind the Crown in right of the Commonwealth, but might have such an implicit power. Individuals become subject to state legislative power by their involvement in situations which are within the legislative jurisdiction of the state parliaments; that is, by their involvement in situations which can be described as ‘in and for Victoria’ or related to the ‘peace, welfare and good government of New South Wales’. The assumption of the Engineers’ case was that there was no general constitutional barrier preventing the state parliaments enacting laws, otherwise valid, which bind the Commonwealth (28 CLR at 153): The Commonwealth Constitution as it exists for the time being, dealing expressly with sovereign functions of the Crown in its relation to Commonwealth and to States, necessarily

[page 681]

so far binds the Crown, and laws validly made by authority of the Constitution, bind, so far as they purport to do so, the people of every State considered as individuals or as political organisms called States — in other words, bind both Crown and subjects.

The general propositions of the Engineers’ case applied equally to Commonwealth and states. Why, then, should it be assumed that the Commonwealth is different from other persons and institutions that become subject to state legislative power by entering into situations within the legislative power of the states? This question was explored in Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 6.2.86C. The proposition advanced by Dixon CJ in Cigamatic and Uther’s case was not reciprocal: it did not in any way limit Commonwealth power over the states. The implication that the Commonwealth, as a government, is different from other persons and institutions within the legislative power of the states, is not applied in reverse to protect the states from Commonwealth legislative power. The federal system does not create an equality or reciprocal relationship between governments. Dixon J, in Uther’s case, explained this imbalance on a number of grounds. First, his Honour said that the Commonwealth has, under the Constitution, been granted supremacy. However, it might be argued instead that the supremacy conferred on the Commonwealth is only a supremacy of Commonwealth law over inconsistent state law pursuant to s 109 of the Constitution. Second, Dixon J said that the legislative powers of the Commonwealth Parliament are specifically defined and are plenary within their ambit. Arguably, though, the undefined residue of

state power is also plenary within its ambit: see Cobb & Co v Kropp [1967] 1 AC 141 at 154. The grant of specific legislative power to the Commonwealth and residual legislative power to the states can be explained by the fact that the Commonwealth was set up on the foundation of existing colonial governments with established powers. A new institution of central government was created with limited, but defined, governmental powers. Why should the grant of specific powers to the Commonwealth Parliament carry a power to bind the Crown in right of the states, and the grant of residual power to the states carry no reciprocal power? 6.2.78 Chief Justice Dixon did not, however, propose a complete immunity of the Commonwealth executive from all state laws. In Federal Commissioner of Taxation v Official Liquidator of EO Farley Ltd (1943) 63 CLR 278, Dixon J said (at 308): In many respects the executive government of the Commonwealth is affected by the condition of the general law. For instance, the general law of contract may regulate the formation, performance and discharge of the contracts which the Commonwealth finds it necessary to make in the course of the ordinary administration of government. Where there is no Federal statute affecting the matter, an exercise of the legislative power of the state over the general law of contract might apply in the case of the Commonwealth alike with the citizen. In the practical administration of the law, the decision of questions of that sort depends less upon constitutional analysis than on s 80 and perhaps s 79 of the Judiciary Act 1903. There is, however, a clear distinction between the general law, the content or condition of which, though a matter for the legislatures of the States, may incidentally affect Commonwealth administrative action, and, on the other hand, governmental rights and powers belonging to the Federal executive as such.

For discussion of the application of the law of contract to governments, see Chapter 7. [page 682] 6.2.79 For many years, the question of the correctness of Cigamatic was largely a theoretical one. As Zines noted, the principle was never applied by the High Court (although it was applied by other courts), and a broad reading of s 64 of the Judiciary Act 1903 (Cth) (see Chapter 7) meant that the consequences of Cigamatic could be ‘avoided’: Stellios, 2015, p 546. Sections 79 and 80 of the Judiciary Act 1903 (Cth), to which Dixon CJ referred in Cigamatic, are now in the following terms. 6.2.80E

Judiciary Act 1903 (Cth)

2 Interpretation In this Act, unless the contrary intention appears: … ‘Suit’ includes any action or original proceeding between parties. 79 State or Territory laws to govern where applicable (1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

(2) A provision of this Act does not prevent a law of a State or Territory covered by subsection (3) from binding a court under this section in connection with a suit relating to the recovery of an amount paid in connection with a tax that a law of a State or Territory invalidly purported to impose. (3) This subsection covers a law of a State or Territory that would be applicable to the suit if it did not involve federal jurisdiction, including, for example, a law doing any of the following: (a) limiting the period for bringing the suit to recover the amount; (b) requiring prior notice to be given to the person against whom the suit is brought; (c) barring the suit on the grounds that the person bringing the suit has charged someone else for the amount. (4) For the purposes of subsection (2), some examples of an amount paid in connection with a tax are as follows: (a) an amount paid as the tax; (b) an amount of penalty for failure to pay the tax on time; (c) an amount of penalty for failure to pay enough of the tax; (d) an amount that is paid to a taxpayer by a customer of the taxpayer and is directly referable to the taxpayer’s liability to the tax in connection with the taxpayer’s dealings with the customer. 80 Common law to govern So far as the laws of the Commonwealth are not applicable or so far as their provisions are insufficient to carry them into effect, or to provide adequate remedies or punishment, the common law in

Australia as modified by the Constitution and by the statute law in force in the State or Territory in which the Court in which the jurisdiction is exercised is held shall, so far as it is applicable and not inconsistent with the Constitution and the laws of the Commonwealth, govern all Courts exercising federal jurisdiction in the exercise of their jurisdiction in civil and criminal matters. [page 683] [Sub-sections (2)–(4) of s 79 were added in 2008, in response to the High Court’s decision in British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30 (an aspect of which is discussed in Chapter 7). These sub-sections reinstate the application, as Commonwealth law, of special limitation periods in state laws relating to actions against state governments to recover invalidly collected taxes, which otherwise might be invalid for inconsistency, under s 109 of the Constitution, with the litigation ‘level playing field’ created by s 64 of the Judiciary Act. As discussed in Chapter 7, s 64 provides that the rights of government parties in civil suits ‘shall as nearly as possible be the same … as in a suit between subject and subject’.]

6.2.81 Being directives to courts, rather than general prescriptions, ss 79 and 80 of the Judiciary Act are concerned not with questions of the application of state laws to the Commonwealth generally but with the law applicable by courts exercising federal jurisdiction (that is, jurisdiction under the Commonwealth Constitution or Commonwealth laws, stemming from either of ss 75 and 76 of the Constitution: see Chapter 8. These provisions reflect the ‘dual federalism’ recognised in cases such as Re Wakim; Ex parte McNally (1999) 198 CLR 511 8.3.60C: the states have no independent power to affect, or

regulate the exercise of, federal jurisdiction, even when it is invested in state courts pursuant to s 77(iii) of the Constitution. As Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ explained in Solomons v District Court of New South Wales (2002) 211 CLR 119 at 134: It is well settled … that State laws upon which s 79 operates do not thereby apply of their own force in the exercise of federal jurisdiction. The State laws apply, as Kitto J put it in Pedersen v Young [(1964) 110 CLR 162 at 165], ‘as federal law’ … [There are] three relevant limitations in the text of s 79. First, the section operates only where there is already a court ‘exercising federal jurisdiction’ … Secondly, s 79 is addressed to those courts; the laws in question ‘shall … be binding’ upon them. The section is not, for example, directed to the rights and liabilities of those engaged in noncurial procedures under State laws. Thirdly, the compulsive effect of the laws in question is limited to those ‘cases to which they are applicable’. To that it may be added, fourthly, the binding operation of the State laws is ‘except as otherwise provided by the Constitution’.

Put simply, ss 79 and 80 of the Judiciary Act do ‘not purport to do more than pick up state laws with their meaning unchanged’: Pedersen v Young (1964) 110 CLR 162 at 165 per Kitto J. For further discussion of the operation of ss 79 and 80, see Hill and Beech, 2005; Stellios, 2010, Ch 9. 6.2.82 The difference between s 64 of the Judiciary Act and ss 79 and 80 was explained by Kitto J in Asiatic Steam Navigation Co Ltd v Commonwealth (1956) 96 CLR 397 at 427: [T]he rights referred to in s 64 include the substantive rights to be given effect to in the suit. If that be so, it follows that s 64 must be interpreted as taking up and enacting, as the law to be applied in every suit to which the Commonwealth or a State is a party, the whole body of the law,

statutory or not, by which the rights of the parties would be governed if the Commonwealth or State were a subject instead of being the Crown. The portion of that law which is taken by s 64 from statutes, whether Imperial, Commonwealth or State, is then to be applied in such suits by the independent force of that section; and if in its original setting any provision of that law was so expressed as not to apply to the Crown, s 64

[page 684] nevertheless explicitly makes it applicable, as completely as possible, to the determination of the rights of the Commonwealth or State against its opponents and of their rights against the Commonwealth or State.

6.2.83 Justice Kitto’s reading of s 64 was endorsed by a majority of the High Court in Maguire v Simpson (1977) 139 CLR 362, a case about the application of the Limitation Act 1969 (NSW) to what was then the Commonwealth Trading Bank, which the court treated as an agent of the Commonwealth ‘Crown’. The judges assumed that this made the bank immune from state legislation, but treated s 64 of the Judiciary Act as producing the result that the bank’s action to recover a debt was barred by s 14 of the Limitation Act (a procedural restriction), and its cause of action destroyed by s 63 of that Act (a substantive alteration of its rights). Justice Mason referred to Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 6.2.74C and said (139 CLR at 402): … I should point out that no mention was made of s 64 in that case, although there seems to be no reason why it should not have had an application if it extended to substantive rights. … [A]s the section was not argued I do not regard the decision as constituting authority for the proposition that the section does not apply to substantive rights.

Jacobs J (139 CLR at 404) referred to: … the somewhat curious situation that the effect of the Judiciary Act was not discussed in the reasons for judgment of any member of the Court in Cigamatic and yet it would appear to me that, at least in respect of the money owing to the Commonwealth … the provisions of the Judiciary Act were as relevant … as they are in the present case.

6.2.84 In Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254, the High Court endorsed the view of s 64 outlined in Maguire v Simpson (1977) 139 CLR 362. In Evans Deakin, a company had entered into a contract with the Commonwealth to construct a building at Brisbane airport. Evans Deakin then agreed with the company to supply and erect steel components for the building, as a subcontractor. After the work was completed, but before the Commonwealth had paid the company or the company had paid Evans Deakin, the company went into liquidation. Evans Deakin then exercised its rights under the Subcontractors’ Charges Act 1974 (Qld) and gave notice to the Commonwealth that the Commonwealth should pay Evans Deakin directly the money owing under the subcontract. When the Commonwealth did not comply, Evans Deakin began proceedings in the Queensland Supreme Court for an order, under the Subcontractors’ Charges Act, that the Commonwealth should pay Evans Deakin the money owing. The Queensland Supreme Court ruled that the Commonwealth was not bound by the Act. On appeal, a majority of the High Court (Gibbs CJ, Mason, Wilson, Deane and Dawson JJ) confirmed the reading of s 64 given in Maguire v Simpson (161 CLR at 262–3): [I]n every suit to which the Commonwealth is a party s 64 requires the rights of the parties to be ascertained, as nearly as possible, by the same

rules of law, substantive and procedural, statutory and otherwise, as would apply if the Commonwealth were a subject instead of being the Crown.

The five justices conceded ‘that there must be a suit to which the Commonwealth is a party before s 64 commences to operate’: 161 CLR at 263. However, this did not mean that the cause of action against the Commonwealth must arise under a law of the Commonwealth. [page 685] The commencement of a suit against the Commonwealth, the precondition for s 64, required no more than the bringing of an action against the Commonwealth in a court of competent jurisdiction (161 CLR at 264): Once the suit is commenced the substantive rights of the parties shall be, as nearly as possible, as in a suit between subject and subject. If the Commonwealth were a subject, Evans Deakin, as sub-contractor, would, on the facts alleged in the statement of claim, be entitled to enforce the charge given by the Subcontractors’ Charges Act.

Their Honours said it was unnecessary to consider whether in some cases the special position of ‘the Crown’ should be taken into account. Here the Commonwealth had made ‘a contract of a kind commonly entered into by ordinary members of the public’ — that is, it had not been ‘performing a function peculiar to government’ — and so determining its rights and liabilities under the Subcontractors’ Charges Act ‘would not be incompatible with the

position of the Commonwealth or detrimental to the public welfare’: 161 CLR at 265. 6.2.85 As with ss 79 and 80 of the Judiciary Act 1903 (Cth), s 64 cannot operate in the face of an inconsistent Commonwealth statute. In Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 55, the court held that s 64 does not operate where a Commonwealth law evinces an intention that state laws are not to apply in suits against the Commonwealth. The court (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ) decided that the Deputy Commissioner could sue in the Queensland Supreme Court to recover taxes payable under the Income Tax Assessment Act 1936 (Cth) notwithstanding that the limitation period set by the Limitation of Actions Act 1974 (Qld) had expired. The court said that the provisions of the Income Tax Assessment Act dealing with the collection and recovery of tax ‘relevantly cover the field’, and that the state limitation period would ‘undermine … the coherent scheme which the Assessment Act embodies’: 165 CLR at 66–7. The Assessment Act was intended, the court said, to give the Commissioner for Taxation wide powers relating to the recovery of taxes. In concluding that s 64 could not apply state law to a situation where its application would be inconsistent with a law of the Commonwealth (in the s 109 sense), the court said (165 CLR at 64): [W]here a Commonwealth legislative scheme is complete upon its face, s 64 will not operate to insert into it some provision of State law for whose operation the Commonwealth provisions can, when properly understood, be seen to have left no room.

See also Dao v Australian Postal Commission (1987) 162 CLR 317

at 331–2. Like ss 79 and 80 of the Judiciary Act, s 64 does not apply outside of the context of ‘suits’ in federal jurisdiction (for example, to proceedings before administrative tribunals). Its relevance for overcoming Commonwealth immunity from state laws in the context of such litigation has also been reduced by the fairly narrow application of Cigamatic in the following decision. 6.2.86C Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410. [The Defence Housing Authority (the DHA) was established under s 4 of the Defence Housing Authority Act 1987 (Cth). Under s 5(1) of that Act, the function of the DHA was to provide adequate and suitable housing for members of the Australian Defence [page 686] Force. Section 5(2) required the DHA to provide such housing as the minister directed was necessary to meet the operational needs of the Defence Force. Section 31(2) stated that, where the minister was satisfied that it was desirable in the public interest to do so, the minister could give directions to the DHA with respect to the performance of its function and the exercise of its powers. The Residential Tenancies Act 1987 (NSW) conferred functions on the Residential Tenancies Tribunal of New South Wales (the RTT) with respect to landlords and tenants. With one ‘immaterial exception’ (190 CLR at 430 per Dawson, Toohey and Gaudron JJ), s 4 provided that the Act shall bind the Crown ‘not only in right of New South

Wales but also, so far as the legislative power of Parliament permits, the Crown in all its other capacities’. Mr Henderson, the new owner of a home unit in Epping, New South Wales, which had been leased by its previous owner to the DHA for the purposes of sub-letting to defence personnel, brought an application in the RTT, under s 24 of the New South Wales Act, for an order that the DHA give him a key and allow him to inspect the premises. The DHA obtained an order nisi for prohibition in the High Court which would have prevented the RTT from hearing the application. Among the arguments advanced by the DHA were an argument based on s 109 of the Constitution; an argument that the principle in Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 applied to prevent the state law from binding a Commonwealth instrumentality; and an argument that the Commonwealth could choose whether or not to subject itself to state law (for example, via s 64 of the Judiciary Act 1903 (Cth)). The court discharged the order nisi and the majority (Dawson, Toohey and Gaudron JJ; Brennan CJ, McHugh and Gummow JJ agreeing; Kirby J dissenting) decided that the state legislation applied of its own force to the DHA. Even had the question of the application of the New South Wales Act to the DHA arisen in a court exercising federal jurisdiction, there would have been no need to resort to s 64 of the Judiciary Act to put the DHA in the position of an ordinary ‘subject’ lessee. Considering s 64’s applicability to proceedings before the RTT, Gummow J made the following observations:] Gummow J: … It is true that in many instances s 64, alone or in combination with s 79 and s 80, may operate to deny what otherwise would be the operation of the Cigamatic doctrine. The significance of s 64 was not touched upon in Cigamatic itself, a point made by Mason J and Jacobs J in Maguire v Simpson … But s 64 will not always provide an answer to reliance upon Cigamatic. Much will depend upon the meaning of the phrase ‘the rights of parties shall as nearly as possible be the same’ …

Further, there must be a ‘suit’, that is to say an action or original proceeding to which ‘the Commonwealth’ or ‘a State’ is a party. … [The DHA] … may be classified as ‘the Commonwealth’ within the meaning of s 64 … However, s 64, like s 79 and s 80, is only applicable in a proceeding in which a court is exercising federal jurisdiction. This was emphasised by Stephen J in China Ocean Shipping Co v South Australia [(1979) 145 CLR 172 at 223–4] … The proceeding in the [RTT] which gives rise to the present litigation is not one before a State court which is exercising federal jurisdiction with which it has been invested pursuant to s 77(iii) of the Constitution and s 39(2) of the Judiciary Act. Rather, as was conceded, and indeed asserted, by Mr Henderson, the [RTT] is an administrative body. The ‘orders’ which it makes under provisions such as s 24(4) … of the [Residential] Tenancies Act are attended by the penalties provided by a combination of ss 115 and 125(1). Proceedings for these offences are dealt with not by the [RTT] but by a Local Court …

[page 687] The point is that, whilst in some circumstances the Cigamatic doctrine may be engaged in the course of a proceeding that is administrative in nature and which is conducted before a body which is not exercising federal jurisdiction, that consideration is not determinative of the present litigation … [Brennan CJ agreed with Dawson, Toohey and Gaudron JJ that there was no inconsistency under s 109 (see below). He also agreed that a distinction should be drawn between the ‘capacities and functions’ of the Commonwealth executive and the transactions which the executive may choose to enter into in exercise of those ‘powers, privileges and immunities’:]

Brennan CJ: By ‘capacities and functions’ I mean the rights, powers, privileges and immunities which are collectively described as the ‘executive power of the Commonwealth’ in s 61 of the Constitution. The executive power of the Commonwealth, being vested in the Queen and exercisable by the GovernorGeneral, derives its content mediately or immediately from the Constitution. Executive power may be conferred by a law of the Commonwealth or it may be the power which, at least in earlier times, was seen as part of the Royal prerogative. The executive power of the Commonwealth may be modified by valid laws of the Commonwealth but it is beyond the legislative reach of the States. The States have no legislative power that can modify a grant of power to the Crown in right of the Commonwealth by a law of the Commonwealth nor any legislative power that can modify a prerogative power conferred by the Constitution. In Cigamatic (1962) 108 CLR 372 at 378, Dixon CJ clearly distinguished between the prerogatives of the Crown in right of the Commonwealth and transactions into which the Crown may choose to enter … A State law which purports on its face to impose a burden on the Crown in right of the Commonwealth fails for one of two reasons. If the burden falls on the enjoyment of the Commonwealth prerogative, the law would be offensive to s 61 of the Constitution; if it falls on the enjoyment of a statutory power, it would be inconsistent with the Commonwealth law conferring the power and would be invalid by reason of s 109 … However, there is no reason why the Crown in right of the Commonwealth should not be bound by a state law of general application which governs transactions into which the Crown in right of the Commonwealth may choose to enter. The executive power of the Commonwealth, exercised by its choice to enter the transaction, is not affected merely because the incidents of the transaction are prescribed by a State law. That, I understand, was

the view which Dixon CJ was expressing in the passage cited from his Honour’s judgment in Cigamatic. [Dawson, Toohey and Gaudron JJ held that the Defence Housing Authority Act was not inconsistent with the Residential Tenancies Tribunal Act: 190 CLR at 432.] Dawson, Toohey and Gaudron JJ: It was submitted by the DHA and by the Attorney-General for the Commonwealth intervening that state laws cannot by their own force bind the Crown in right of the Commonwealth. That submission was said to be supported by the decision of this Court in Commonwealth v Cigamatic Pty Ltd (In Liquidation) (1962) 108 CLR 372, but in truth it represents a basic misconception of what was decided in that case … It is necessary at the outset to observe a distinction between the capacities of the Crown on the one hand, by which we mean its rights, powers, privileges and immunities, and the exercise of those capacities on the other. In referring to the capacities of the Crown so defined, we are speaking of the same thing of which Dixon J spoke when he used the words ‘capacity or functions’ in West v Commissioner of Taxation (NSW) in quoting from the dissenting judgment of Isaacs J in Pirrie v McFarlane. Elsewhere he used other expressions to [page 688] convey essentially the same meaning, such as the ‘governmental rights and powers belonging to the Federal executive as such’ or ‘the rights or privileges, duties or disabilities, of the Commonwealth in relation to the subjects of the Crown’. In Cigamatic, Dixon CJ also spoke of the ‘legal rights of the Commonwealth in relation to its subjects’ and that expression is,

as shall appear, of some use in applying the principle which he expounded. The purpose in drawing a distinction between the capacities of the Crown and the exercise of them is to draw a further distinction between legislation which purports to modify the nature of the executive power vested in the Crown — its capacities — and legislation which assumes those capacities and merely seeks to regulate activities in which the Crown may choose to engage in the exercise of those capacities. In Cigamatic, it was held that a State legislature had no power to impair the capacities of the Commonwealth executive, but at the same time it was recognised that the Commonwealth might be regulated by state laws of general application in those activities which it carried on in common with other citizens. Dixon J had earlier drawn the same distinction in Federal Commissioner of Taxation v Official Liquidator of EO Farley Ltd (1940) 63 CLR 278 at 308, where he said: In many respects the executive government of the Commonwealth is affected by the condition of the general law. For instance, the general law of contract may regulate the formation, performance and discharge of the contracts which the Commonwealth finds it necessary to make in the course of the ordinary administration of government. Where there is no Federal statute affecting the matter, an exercise of the legislative power of the state over the general law of contract might incidentally apply in the case of the Commonwealth alike with the citizen … There is, however, a clear distinction between the general law, the content or condition of which, though a matter for the legislatures of the states, may incidentally affect Commonwealth administrative action, and, on the other hand, governmental rights and powers belonging to the Federal executive as such. The fundamental principle which lies behind those observations is

that which was recognised in Melbourne Corporation v Commonwealth, namely, that the Constitution is predicated upon the continued separate existence of the Commonwealth and the States, not only in name, but as bodies politic to which the Constitution proceeds to distribute powers of government. In the application of the principle, however, it is necessary to differentiate between the Commonwealth on the one hand and the States on the other. [Dawson, Toohey and Gaudron JJ noted that the Commonwealth was given enumerated legislative powers which might authorise it to affect the executive capacities of a state; that the Commonwealth’s laws would prevail over state laws under s 109 of the Constitution; but the states were protected against Commonwealth laws that imposed a special burden on them or inhibited or impaired the continued existence of the states or their capacity to function. On the other hand, the states lacked specific legislative powers that might be construed as authorising them to restrict or modify the executive capacities of the Commonwealth.] No implication limiting an otherwise given power is needed; the character of the Commonwealth as a body politic, armed with executive capacities by the Constitution, by its very nature places those capacities outside the legislative power of another body politic, namely a State, without specific powers in that respect. Having regard to the fundamental [page 689] principle recognised in Melbourne Corporation v Commonwealth, only an express provision in the Constitution could authorise a state to affect the capacities of the Commonwealth executive and there is no such authorisation. … … Dixon J in Uther suggested that the bankruptcy and insolvency power granted to the Commonwealth Parliament by s

51(xvii) might extend as a matter of construction to laws excluding or reducing the priority of the Crown in right of a State in the payment of debts due to it … But the fundamental point made in Cigamatic is that in the absence of a like power being conferred upon the States, the priority of the Crown in right of the Commonwealth in the payment of debts is not something over which the States have legislative power. In Cigamatic this Court adopted the view which Dixon J had expressed in dissent in Uther. Both cases were concerned with the power of a State legislature to restrict or abolish a particular capacity enjoyed by the Crown in right of the Commonwealth — its prerogative right to the payment of all debts due to it in priority to all other debts of equal degree. The view which was adopted treats that prerogative as part of the definition of Commonwealth executive power going, as it does, to the rights or privileges of the Crown in right of the Commonwealth … [T]he important consideration is whether a suggested capacity is enjoyed by the Commonwealth executive, not its character as a prerogative or otherwise. The principle that a State law cannot affect the capacities of the Commonwealth executive clearly extends beyond those rights, powers, privileges or immunities which might be described as having their origin in the prerogative. Both in Uther and Cigamatic a distinction is drawn between State laws affecting Commonwealth executive capacities and State laws of general application regulating activities carried on by the Crown in the exercise of those capacities in the same manner as its subjects. Thus in Uther (1947) 74 CLR 508 at 528, Dixon J said: The fact that the priority claimed by the Commonwealth springs from one of the prerogatives of the Crown is an added reason, a reason perhaps conclusive in itself, for saying that it is a matter lying completely outside State power. But there is the antecedent consideration that to define or regulate the

rights or privileges, duties or disabilities, of the Commonwealth in relation to the subjects of the Crown is not a matter for the States. General laws made by a State may affix legal consequences to given descriptions of transaction and the Commonwealth, if it enters into such a transaction, may be bound by the rule laid down. … In that passage Dixon CJ spoke of the legal rights of the Commonwealth in relation to its subjects. Sometimes that relationship will be one of equality: for example, the capacity of the Crown to enter into contracts is no more or less than that of its subjects. Sometimes the relationship will be one of privilege or immunity on the part of the Crown alone: for example, the right to the payment of debts in priority to others. Where the relationship is one of privilege or immunity it is immediately apparent that any diminution of the privilege or immunity will alter the relationship of the Crown with its subjects. But it is equally so when the relationship is one of equality and the Crown is singled out and treated differently, for the relationship then ceases to be one of equality. When Dixon CJ spoke of general laws he meant laws of general application which bind the Crown and its subjects alike. Such laws are laws which do not have an impact upon any relationship of equality. But a State law which discriminates against the Commonwealth government and imposes a disability upon it will have an impact upon such a relationship and [page 690] will constitute an interference with its executive capacities. In the same way, a Commonwealth law which discriminates against a State and imposes a disability upon it will constitute an interference with State executive capacities. …

[Dawson, Toohey and Gaudron JJ referred to Queensland Electricity Commission v Commonwealth (1985) 159 CLR 192 6.2.38C and Melbourne Corporation v Commonwealth (1947) 74 CLR 31 6.2.30C:] … There is nothing in the principles recognised in Melbourne Corporation v Commonwealth or in any extrapolation of those principles to be found in the judgment of Dixon J in Uther or in the reasons of the majority in Cigamatic which would suggest that the Crown or its agents enjoy any special immunity from the operation of laws of general application, State or federal. Indeed, the contrary is affirmed. The rule of law requires such a result. In A v Hayden (1984) 156 CLR 532 at 562, Murphy J described as elementary the principle that: The executive power of the Commonwealth must be exercised in accordance with the Constitution and the laws of the Commonwealth. The Governor-General, the federal Executive Council and every officer of the Commonwealth are bound to observe the laws of the land. Of course, the laws of the land are not confined to the laws of the Commonwealth but include the common law and the statute law in force in each of the States. Thus in Pirrie v McFarlane, a person acting in the execution of his duties as a member of the Royal Australian Air Force was held to be bound by the provisions of a Victorian Act requiring him to hold a driver’s licence when driving a vehicle on a public highway in the course of those duties … Whilst the principle that executive power must be exercised in accordance with the law applies to both Commonwealth and State governments, the Commonwealth enjoys a paramount position within its area of legislative competence because of s 109 of the Constitution. A valid Commonwealth law will prevail over any inconsistent State law. Thus, if there had been a law validly enacted under the defence power relieving servicemen of the

obligation to hold drivers’ licences when acting in the execution of their duties, the result in Pirrie v McFarlane would have been different. … Yet in Commonwealth of Australia v Bogle (1953) 89 CLR 229, Fullagar J, with whom Dixon CJ and Webb and Kitto JJ agreed, denied that a State statute might bind the Commonwealth. He was speaking generally, and not of a State statute purporting to interfere with the executive capacities of the Commonwealth. Indeed, in direct contrast with observations made in the authorities discussed above, he said: To say that a state can enact legislation which is binding upon the Commonwealth in the same sense in which it is binding upon a subject of the State appears to me to give effect to a fundamental misconception: 89 CLR at 259. Those words are obiter and are, in any event, contrary to the later decision of this Court in Cigamatic. They form no part of the reasoning leading to the actual conclusion in Bogle and in the light of Cigamatic it can hardly be said that Dixon CJ and Kitto J, in agreeing to the reasoning and conclusion of Fullagar J in Bogle, were assenting to that proposition. In any event, and with the greatest of respect, the proposition is insupportable. Of course, as a matter of construction and aided by the presumption which we have discussed, a court may conclude that a statute was not intended to bind the Crown, but that is not to [page 691] say that a State parliament lacks the power to bind the Crown in right of the Commonwealth and its agencies. It cannot do so where the result would affect the executive capacities of the

Commonwealth for the reasons already given. But the Commonwealth executive is not above the law and where a State statute is applicable it forms part of the law. The reason given by Fullagar J for the view which he expressed is that the Crown in right of a State is bound by a State statute (provided it extends to the Crown as a matter of construction) because the Crown has assented to the statute whereas the Crown in right of the Commonwealth has not assented to the State statute and is thus not bound. However, the Crown, whether in right of a State or the Commonwealth, acts as part of the legislature when it assents to legislation. Once a statute is validly passed by the legislature (for which purpose the assent of the Crown is necessary) it passes into law and its binding force upon the Crown, whether in right of the Commonwealth or a State, cannot be dependent upon the assent of the executive government. The reason why a Commonwealth statute extending to the Crown binds the Commonwealth executive is to be found in the supremacy of parliament over the executive, such supremacy being exercised by legislation passed pursuant to power conferred on the Parliament by the Constitution, not the assent of the Crown as part of the parliamentary process. Within the scope of its grant of legislative power, the parliament of a State is no less supreme than the Parliament of the Commonwealth, although State legislation which is inconsistent with Commonwealth legislation is inoperative under s 109 of the Constitution to the extent, and during the continuance, of the inconsistency. It was to s 109 that Dixon J was referring in Uther (1947) 74 CLR 508 at 529, when he said that ‘supremacy, where it exists, belongs to the Commonwealth’. And, of course, by exercising the legislative power granted to it by the Constitution the Commonwealth Parliament can legislate to exclude the operation of a State law with respect to the Commonwealth executive or its agencies. But that is a very different thing from saying, as Fullagar J did, that a State legislature cannot enact legislation which is binding on the

Commonwealth in the same way as it is binding upon a ‘subject of the State’. Fullagar J in Bogle sought to support his view by observing ((1953) 89 CLR 229 at 260) that ‘it is surely unthinkable that the Victorian Parliament could have made a law rendering the Commonwealth liable for torts committed in Victoria’. That, however, is to disregard the distinction, which is fundamental to the decision in Cigamatic, between the capacities of the executive government and the exercise of them. The immunity of the Crown from liability in tort, however dubious its origins, is a prerogative of the Crown operating at common law to define the relationship between the Crown and its subjects in a manner analogous to the Crown entitlement to priority in the payment of debts. In that way it involves the capacities of the Crown. It is for that reason that, supposing it not to have been abrogated by statute, the immunity of the Crown in right of the Commonwealth from liability in tort would lie outside the power of a state legislature and not for the reason that a State legislature cannot bind the Crown in right of the Commonwealth. In an effort to recognise practical realities in a situation in which the Commonwealth executive increasingly engages in transactions upon the same basis as ordinary citizens in a State, Fullagar J acknowledged that the Commonwealth may be ‘affected by state laws’ in, for example, entering into a contract in a State. But it is impossible to say what is meant by ‘affected by State laws’ if it does not mean that the Crown in right of the Commonwealth is bound by them. As we have said, it is not a matter of choice for the Commonwealth executive whether or not it is bound by the law of the land. If in regulating activities engaged in by the Crown and its subjects alike a State statute extends as a matter of construction to the Crown [page 692]

in right of the Commonwealth, then that Crown is bound by the statute in the same way as the subject is bound, subject always to any inconsistency with a valid Commonwealth law. Nothing has emerged in this case to indicate any purported alteration or denial of the executive capacity of the Crown in right of the Commonwealth by the provisions of the Residential Tenancies Act. The DHA is the creature of the Defence Housing Authority Act and that Act is predicated upon the existence of a legal system of which the Residential Tenancies Act forms a part. The latter Act does nothing to alter or deny the function of the DHA, notwithstanding that it regulates activities carried out in the exercise of that function in the same way as it regulates the same activities on the part of others. If, and to the extent that, the DHA in carrying out its functions is acting in the exercise of the executive capacity of the Commonwealth, the Residential Tenancies Act neither alters nor denies that capacity notwithstanding that it regulates its exercise. [McHugh J agreed with the reasons of Dawson, Toohey and Gaudron JJ that there was no s 109 inconsistency. However, McHugh J (and Gummow J) held that Cigamatic does not apply in circumstances in which the Commonwealth’s executive power is conferred by legislation — in those circumstances s 109 applies: at 452–3 and 469–70 respectively; see further Twomey, 2003, pp 516–17.] McHugh J: It is settled doctrine that the States have no constitutional power to bind the Commonwealth … In the absence of a grant of power, express or implied, no polity within a federation has the power to bind another polity within that federation. Within their respective domains, the polities that make up a federation are regarded as sovereign. Because that is so, it is a necessary implication of the document that creates the federation that no polity in that federation can legislate for another. Federalism is concerned with the allocation of legislative power, and it is a natural and, to my mind, necessary implication

of a federation that no polity can legislate in a way that destroys or weakens the legislative authority of another polity within that federation … Before the Engineers’ Case, this rule was regarded as a fundamental rule of constitutional law in this country, as applicable to the Commonwealth as it was to the States. But it is a rule that arises by implication from the nature of a federation. In the event of inconsistency with an express term of the document that creates the federation, it must give way. That was all that the Engineers’ Case decided. This Court held in that case that, having regard to the affirmative grants of power to the Commonwealth which are contained in the Constitution, the states could not rely on the implication to resist the application of federal laws. Nevertheless, as Melbourne Corporation v Commonwealth (1947) 74 CLR 31 at 83 demonstrated, the States are not wholly unprotected by the implication, for the Commonwealth cannot ‘make a law aimed at the restriction or control of a State in the exercise of its executive authority’. … However, the fact that legislation of the States cannot of its own force bind the Commonwealth does not mean that State legislation may not attach legal consequences to the activities of the Commonwealth Executive. If the Parliament of the Commonwealth authorises the Executive Government to carry out an activity, its legislation, in the absence of an indication to the contrary, will be read as indicating that the Executive is to be bound by the common law rules and statutes applying in the States. The Constitution is framed on ‘the unexpressed assumption that the one common law surrounds us and applies where it has not been superseded by statute’: Dixon, ‘The Common Law as an Ultimate Constitutional Foundation’, Australian Law Journal, vol 31 (1957) 240 at 241. …

[page 693] That being so, it is axiomatic that, subject to a contrary legislative intention, the common law is binding on the executive activities of the Commonwealth government. If federal legislation authorises a Commonwealth instrumentality to buy land, sell goods or enter into contracts, the common law rules concerning those matters are taken as binding the Commonwealth unless the legislation indicates to the contrary. Similarly, federal legislation will be construed as indicating that Commonwealth executive activity is to be carried out in accordance with the existing statute law of the State unless the legislation indicates to the contrary. In such cases, State law may apply to the Commonwealth even when it takes the form of imposing affirmative duties on the Commonwealth government. Moreover in some cases, quite apart from the operation of s 64 of the Judiciary Act, the terms of federal legislation may indicate that State law is to apply during the continuance as well as the creation of a relationship between the Commonwealth and a citizen. In such cases, if a question arises as to whether a particular State provision applies to the Commonwealth, the matter is resolved by recourse to s 109 of the Constitution. A different area is reached, however, when State laws purport to alter rights acquired by the Commonwealth as the result of executive activity or to fetter an executive capacity or power of the Commonwealth where the source of authority for that activity, capacity or power is s 61 of the Constitution rather than federal legislation. These cases fall outside s 109 and are determined by the fundamental constitutional principle expounded in Cigamatic. That case decided that the States cannot legislate so as to abolish the Commonwealth’s prerogative right to priority of payment ‘when in any administration of assets debts of equal degree due to the Crown and due to subjects of the Crown come into competition’: 108 CLR at 376. Dixon CJ said that ‘to treat those

rights as subject to destruction or modification or qualification by the legislature of a State must mean that under the Constitution there resides in a State or States a legislative power to control legal rights and duties between the Commonwealth and its people’: 108 CLR at 377. … In my view, there can be no doubt that … the States have no power to alter legal rights or obligations existing between the Commonwealth and its subjects even though they are not the immediate product of a federal statute. Just as the States cannot alter the common law right of the Commonwealth to priority in the payment of its debts, so they cannot alter the existing contractual or proprietary rights and obligations of the Commonwealth in relation to its subjects that arise from the exercise of the executive power conferred by s 61 of the Constitution. It would be absurd to suppose that Dixon CJ, while denying that the States could alter the Commonwealth’s common law priority in payment of the debt, accepted that the States could alter the common law rights of the Commonwealth that gave rise to the debt. … [L]ogically it is impossible to see any ground for distinguishing between the common law prerogative rights of the Crown and the rights conferred by s 61 of the Constitution. … It follows from Cigamatic that, once the executive power of the Commonwealth arising from s 61 of the Constitution has authorised a relationship creating rights and duties, a State has no power to alter that relationship even by a law that operates generally within the State. I do not think that the validity of this proposition turns on any distinction between the capacities of the Commonwealth and the exercise of them. It is not a distinction which I find illuminating in this constitutional context. Nor can I see anything in the judgment of Dixon CJ in Cigamatic which supports such a distinction. The executive capacity of the Commonwealth can only mean its legal right or power to do or refrain from doing something. I cannot see any constitutional rationale for a doctrine that would

hold, for example, that the States Commonwealth from entering into

cannot

prevent

the

[page 694] a specific class of contract but can alter the legal rights and obligations of the Commonwealth and the subject once they have entered into a contract of that class. Moreover, the distinction between a capacity of the Commonwealth and its exercise is not easily drawn. If a State law prevents the Commonwealth from using its contractual right to forfeit a lease or terminate an employment, is the State law fettering a Commonwealth capacity or only the exercise of it? In most cases, state law including the common law will govern the creation of a relationship between the Commonwealth and a subject even when the creation of the relationship arises from the Constitution’s grant of executive power. If the Commonwealth chooses to enter into the relationship without negating the consequences of relevant state law, it necessarily submits to the State law governing the incidents of the relationship. But, for the reasons given by Dixon CJ in Cigamatic, once the Commonwealth has entered into such a relationship and created legal rights and duties in accordance with that State law, it is not open to the State to change their nature or effect. If the Commonwealth enters into a contract relying on the grant of executive power conferred by s 61 of the Constitution, a State has no power to change the consequences of that contract even by a law of general application. Many activities of the Commonwealth government, however, do not result in relationships with the ordinary subjects of the Commonwealth. In some cases, these activities may concern only the Commonwealth and its servants and agents. In other cases, they may have no more than indirect or potential consequences for the subjects of the Commonwealth. If the activity falls within

the terms of s 52 of the Constitution, the States plainly have no power over the activity. But many activities occur within the territorial boundaries of the States and outside the protection that s 52 gives to Commonwealth activities. If the activity is authorised by a federal enactment, the case will be governed by s 109 of the Constitution. But much Commonwealth activity does not depend on statutory authorisation. In the ordinary course of administering the government of the Commonwealth, authority is frequently given to Commonwealth servants and agents to carry out activities in the exercise of the general powers conferred by the Constitution. Section 61 of the Constitution ‘enables 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’: Barton v Commonwealth (1974) 131 CLR 477 at 498. The provision of transport for officers of the Commonwealth and the carrying of Commonwealth property, for example, may depend upon no more than a combination of the powers conferred by ss 61, 81, 82 and 83 of the Constitution. Can a general State law validly regulate the Commonwealth transport system? Can it insist upon compulsory insurance for and periodic maintenance inspections of Commonwealth vehicles? Can it require the Commonwealth to use only drivers licensed by State law? The judgment of Fullagar J in Commonwealth v Bogle (1953) 89 CLR 229 at 259–60, a judgment with which Dixon CJ, Webb, Kitto and Taylor JJ agreed, denies that the States have any power to control the Commonwealth. [McHugh J quoted two passages from Fullagar J’s judgment in Bogle (1953) 89 CLR 229 at 259, including the statement that ‘the Commonwealth is not a juristic person which is subjected either by any State Constitution or by the Commonwealth Constitution to the legislative power of any State Parliament’.]

McHugh J: … I do not think that there is any warrant for concluding that this passage is contrary to what Dixon CJ said in Cigamatic. To the contrary, I think that the judgment of [page 695] Dixon CJ in Cigamatic is entirely in accord with what he had agreed to in Bogle and with what he had been saying ever since Uther. … I do not think that Fullagar J was saying that every act or omission of a Commonwealth servant or agent executed in the course of carrying out an activity on behalf of the Commonwealth is outside the law of the States. His Honour’s statement was not directed to the aggregate of the legal and personal capacities enjoyed by the Commonwealth and its individual servants and agents. Rather, Fullagar J was directing himself to those extraordinary executive powers and capacities which the Constitution gives to the Commonwealth itself to carry out as a political sovereign in the federation. He was saying that the States cannot control or restrain the Commonwealth in the discharge of its powers or capacities arising under the Constitution. The States could not, for example, control or regulate the Commonwealth’s capacity or power to engage in diplomatic relations with another country. In so far as a general State law purported to have that effect on a diplomat’s work, it would be invalid. But that does not mean that a diplomat engaged on Commonwealth business can ignore State traffic laws. Whether or not a general law of the State validly applies to a Commonwealth servant or agent acting in the course of his or her duties depends on a number of considerations, the chief of which are the nature of the Commonwealth activity upon which the servant or agent is engaged and the act or omission which the State law purports to regulate. In my opinion, however, the answer to the question whether a servant or agent of the Commonwealth

Crown must obey a State law does not depend on any general proposition that the Commonwealth cannot authorise its servants or agents to perform their duties contrary to the penal laws of a State. In determining whether a Commonwealth authorisation of executive activity is outside the law of a State, one naturally begins with the proposition that the Constitution is superimposed on a background of common law rules and principles. Except where those rules and principles are inconsistent with the grant of executive power under the Constitution or a federal statute made pursuant to the Constitution, the carrying out of Commonwealth executive activity must conform with those rules. By the Bill of Rights 1688 and probably by the common law, the Crown had no power to authorise its servants to ignore the law. But in a federation that does not mean that the Executive Government of one polity of the federation is bound to obey the law of another polity in that federation. The rule that the Crown cannot give its agents any dispensation to ignore a statute was formulated for a unitary system of government. Just as the common law rule of the supremacy of Parliament had to be modified to accord with the Constitution, so must the rule that the Crown cannot authorise a breach of a law be modified to accord with the division of legal power between the Commonwealth and the States. In a federation, an anterior question must be answered before that rule has any operation. That question is, is there a law that the servants and agents of the relevant Sovereign must obey? It follows therefore that, in determining whether the Commonwealth Crown has power to authorise its servants or agents to disobey a State law, the first question is, is the State law binding on the Commonwealth Crown? Only when that question is answered can one determine whether the Commonwealth Crown can authorise its servants to ignore the law of a State. If a State law attempted to discriminate against the exercise of an executive activity arising from the operation of s 61 of the Constitution, it would be plainly invalid for the reasons given by

Dixon J in West v Commissioner of Taxation (NSW). On the other hand, a general law that merely regulates the manner or mode of performing an activity which a servant or agent of the Commonwealth carries out in the course of executing functions and duties arising from the operation of s 61 of the Constitution is unlikely to constitute an infringement [page 696] of those extraordinary capacities or powers of the Commonwealth to which I have referred. Such laws are to be contrasted with State laws that purport to bind the Commonwealth itself in exercising the capacities and powers conferred by s 61 of the Constitution alone or in conjunction with other powers of the Commonwealth. State laws purporting to have that effect can only operate as interpretation clauses. They show that the State law is intended to apply to the Commonwealth. However, they can do so only to the extent that the Commonwealth submits to the law by express words or conduct or by inference from its silence. But that is all. [Gummow J, like McHugh J, did not find ‘illuminating’ the distinction relied upon by the majority between the supposed capacities of the Commonwealth and their exercise: 190 CLR at 472; but his Honour nevertheless agreed with Dawson, Toohey and Gaudron JJ that the Cigamatic principle did not apply in this case. Specifically, the type of statutory corporation represented by the DHA did not enjoy ‘the preferences, immunities and exceptions, including that zone of immunity conferred by the Cigamatic doctrine, which are enjoyed by the Executive Government and denied to citizens and corporations in their dealings inter se’: 190 CLR at 472. Kirby J dissented, holding that the operation of the state law was excluded by s 52(ii) of the Constitution.]

6.2.87 How far does Re Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 go towards clarifying the application of Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 6.2.74C? The majority in Re Residential Tenancies Tribunal claimed simply to uphold the principle in Cigamatic: 190 CLR at 438–48 per Dawson, Toohey and Gaudron JJ; 451, 453 per McHugh J; 473, 474 per Gummow J. But, according to Dawson, Toohey and Gaudron JJ, some may have been operating under a ‘misconception’ that Cigamatic stood for the proposition that the Commonwealth was immune from the reach of state law: 190 CLR at 438. Zines (in Stellios, 2015, p 546) remarks that ‘because of the difficulties and ambiguities presented by Residential Tenancies Tribunal, we can be thankful for s 64 having a substantive operation’ in courts exercising federal jurisdiction. For additional analysis, see Twomey, 2003, pp 516–17. According to the majority in Re Residential Tenancies Tribunal, the decision in Cigamatic was based on a distinction between state laws which purported to modify the Commonwealth’s executive ‘capacities’ and ‘legislation which assumes those capacities and merely seeks to regulate activities in which the Crown may choose to engage in the exercise of those capacities’: 190 CLR at 439. Their Honours seemed to assert that, in Cigamatic, the latter were valid but the former were not. In the result, it may be that the real effect of the case is to shift the onus to the Commonwealth to show that the activities which a state law seeks to regulate are an inherent part of the Commonwealth’s executive ‘capacities’ (as to which, see Chapter 7) and therefore beyond the reach of state legislative power. 6.2.88

A state cannot alter or deny a capacity of the

Commonwealth, but it can regulate the exercise of a Commonwealth capacity. In the words of Brennan CJ in Re Residential Tenancies Tribunal, when the Commonwealth chooses to enter a transaction, the incidents of that transaction can be prescribed by state law: 190 CLR at 427. Justice McHugh rejected the distinction, saying that he did not find it ‘illuminating’: 190 CLR at 454. His Honour said the distinction was ‘not easily drawn’ and that there was no ‘constitutional rationale’ for [page 697] distinguishing, for example, between a state law which would ‘prevent the Commonwealth from entering into a specific class of contract, and one which would alter the legal rights and obligations of the Commonwealth and subject once they [had] entered into a contract of that class’: 190 CLR at 454–5. Kirby J was also critical of the distinction: 190 CLR at 505. 6.2.89 In Re Residential Tenancies Tribunal (1997) 190 CLR 410 6.2.86C, Dawson, Toohey and Gaudron JJ said that laws of general application which affect the Commonwealth in its activities in common with other citizens may be valid under Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372: 190 CLR at 439. But this proposition seems to leave key questions unanswered. States may not bind the Commonwealth in relation to its prerogatives because these are part of its executive capacities: 190 CLR at 441. States may not discriminate against the Commonwealth because this would ‘constitute an interference with its executive capacities’: 190 CLR at 443. States may not diminish a ‘privilege or immunity’ which the Crown alone enjoys over its

subjects, because this would ‘alter the relationship of the Crown with its subjects’: 190 CLR at 443. But what of a state law of general application which nevertheless impairs or denies the executive capacity of the Commonwealth? 6.2.90 One justification given by the majority in Re Residential Tenancies Tribunal for the difference between state and Commonwealth legislative power is related to the structure of Australian federalism. Justices Dawson, Toohey and Gaudron said that, in a federal system where Commonwealth power is enumerated in the Constitution, and state power exists merely in an ‘undefined residue’, the states lack any specific, express authorisation to legislate with respect to Commonwealth executive power: 190 CLR at 440. This is a view which harks back to Sir Owen Dixon in Re Foreman & Sons Pty Ltd; Uther v Federal Commissioner of Taxation (Uther’s case) (1947) 74 CLR 508 6.2.67C at 529 and Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 6.2.74C at 377. Their Honours put it this way (190 CLR at 440): [T]he character of the Commonwealth as a body politic, armed with executive capacities by the Constitution, by its very nature places those capacities outside the legislative power of another body politic, namely a State, without specific powers in that respect.

Why does the state, within the areas in which it has power, and, subject to s 109 and other federal implications, necessarily lack the power to alter the capacities of the Crown in right of the Commonwealth? The contrary view was put in Re Residential Tenancies Tribunal by Kirby J, who also referred to s 107 of the Constitution and

federal principles in justification. His Honour said that ‘the States are themselves creations of the Constitution’ and that ‘[e]very power of the Parliament of a colony which became a State was “continued as at the establishment of the Commonwealth”’: 190 CLR at 504. Is the difference between Commonwealth and state legislative power based simply on the fact that the Commonwealth has been granted specific express heads of power and the state has not? Why should state power, within its confines, be any less ‘plenary’ than Commonwealth legislative power, which, it is conceded, can alter Commonwealth and state executive power?: see 190 CLR at 441. Recall that the Engineers’ case was meant to operate in relation to both levels of power; the principle that instruments conferring legislative power be given their plain natural meaning applied also to state legislative power. In Re Residential Tenancies Tribunal, Gummow J said that the Cigamatic doctrine did not apply to the DHA because it had not had ‘imparted to it’ the ‘zone of immunity conferred by the Cigamatic doctrine’: 190 CLR at 472. He noted that this was consistent with a trend in [page 698] Australian law towards the use of statutory corporations ‘to conduct what in other hands could have been seen as no more than ordinary commercial transactions’: 190 CLR at 471. The aim of this trend had been to ‘assist rather than to detract from the position of those dealing with such bodies’: 190 CLR at 471. In the light of increasing privatisation and corporatisation of government activities, how would the adoption of this view affect the doctrine in Cigamatic as reinterpreted in Re Residential Tenancies Tribunal?

6.2.91 Twomey notes that both McHugh and Gummow JJ, in the years following the court’s decision in Re Residential Tenancies Tribunal, ‘continued to advocate their positions and to argue that the doctrine remains unsettled’, citing Commonwealth v Western Australia (1999) 196 CLR 392 at 421 and SGH Ltd v Commissioner of Taxation (2002) 210 CLR 51 at 78–9, respectively. In SGH, Gummow J observed (210 CLR at 78–9): The doctrine of intergovernmental immunities, as protective of the States, survived after Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 in a much modified form. The implied limitation upon the legislative powers of the Commonwealth was said in the joint judgment of the Court in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 231 to consist ‘of two elements: (1) the prohibition against discrimination which involves the placing on the States of special burdens or disabilities (‘the limitation against discrimination’) and (2) the prohibition against laws of general application which operate to destroy or curtail the continued existence of the States or their capacity to function as governments’. With respect to the affectation of the Commonwealth by State legislative power, it is necessary to have regard to the Cigamatic doctrine. The scope of that doctrine remains unsettled. In our judgments in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority, McHugh J and I expressed the view that the Cigamatic doctrine is concerned with those aspects of Commonwealth executive power sourced in the Constitution rather than in federal statute; except to the extent that the latter are protected by s 109 of the Constitution, State law may apply to them.

State laws and Commonwealth places 6.2.92 Where the Commonwealth carries out activities within a place, in a state, being a place that the Commonwealth has

acquired for public purposes, then the Commonwealth will have an additional basis for claiming immunity from state laws. Section 52(i) of the Commonwealth Constitution gives the Commonwealth Parliament ‘exclusive power to make laws for peace, order and good government of the Commonwealth with respect to … [t]he seat of government of the Commonwealth and all places acquired by the Commonwealth for public purposes’. 6.2.93 In Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89, the High Court elaborated, for the first time, on the meaning and effect of s 52(i). A majority of the court (Barwick CJ, Menzies, Windeyer and Walsh JJ; McTiernan, Kitto and Owen JJ dissenting) held that s 52 gave the Commonwealth sole legislative authority in Commonwealth places, excluding the legislative authority of the states in those places: 123 CLR at 103, 120, 131, 139. It followed that state occupational health and safety legislation did not apply to a private employer whose worksite was located on a Royal Australian Air Force base, because the base was a place acquired by the Commonwealth for public purposes. [page 699] This means that a state law attaching legal consequences to activities in the state (and not directed at any Commonwealth place) has no force or effect in a place that is acquired by the Commonwealth: R v Phillips (1971) 125 CLR 93. The measure of exclusivity is emphasised by the proposition that, in the event that the Commonwealth gives up its ownership of a Commonwealth place, state laws may not automatically revive and operate in that place: see Attorney-General (NSW) v Stocks and Holdings

(Constructors) Pty Ltd (1970) 124 CLR 262; however, note Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) (2003) 219 CLR 325. The problems presented by s 52(i) and the Commonwealth Places (Application of Laws) Act 1970 (Cth) were reviewed in Ryan and Hiller, 1971, and Rose, 1971. 6.2.94 In Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) (2003) 219 CLR 325, the High Court held that state land tax legislation enacted in 1956 validly imposed a land tax in respect of land that had been acquired by the Commonwealth for public purposes in 1922 after it was transferred to the appellant, a private company, in January 1998. The court held that, at the time the notices of assessment to land tax were issued, the state land tax legislation was no longer legislation with respect to a place acquired by the Commonwealth for public purposes within the meaning of s 52(i) of the Constitution because the land ceased having that character when the Commonwealth transferred it to the company. As Gleeson CJ, McHugh, Gummow, Kirby and Hayne JJ observed (219 CLR at 352): The interest or concern of the Commonwealth in aid of which s 52(i) gave to the Parliament exclusive legislative power subsisted for so long as the Commonwealth held the Land for public purposes and the grant of exclusive power was correspondingly circumscribed. That interest or concern did not extend to the exclusion of any exercise of State legislative power which might tax the ownership of the Land in the hand of a transferee from the Commonwealth. To the extent that it could be shown that the projected operation of a State tax regime might or could affect the price obtained on a transfer by the Commonwealth when land was no longer held for public purposes, the connection would be so insubstantial, tenuous and distant as to be beyond the preserve of federal exclusive legislative power. That is a consequence of the

construction of the second limb of s 52(i) which sees it as being concerned with the fulfilment of the public purpose, freed from any exercise of State legislative power with respect to the place.

6.2.95 The principle underpinning the exclusion of state laws from Commonwealth places was explained by Brennan CJ in Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630 at 638: The denial of power to the Parliaments of the States does not depend upon the enactment of a law in exercise of a power conferred on the Commonwealth Parliament by s 52. Section 52, unlike s 109, does not suspend the operation of a valid State law that is inconsistent with a valid Commonwealth law; it denies the validity of a measure enacted by the State Parliament to the extent that s 52 confers on the Parliament of the Commonwealth power to enact a measure having the same operation.

In Allders, a majority of the court (Brennan CJ, Gaudron, McHugh, Gummow and Kirby JJ; Dawson and Toohey JJ dissenting) held that state stamp duty legislation, imposing a tax on all leases of premises in the state, could not validly apply to a lease of land in a Commonwealth place. This decision led to the enactment of the Commonwealth Places (Mirror Taxes) Act 1998 (Cth), considered further below. [page 700] 6.2.96 After the High Court’s judgment in Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 (see 6.2.93), the Commonwealth Parliament enacted the Commonwealth Places

(Application of Laws) Act 1970 (Cth). Subject to some exceptions (including state laws imposing taxes), s 4(1) of the Act declares that state laws from time to time in force shall apply to each place in that state that is or was a Commonwealth place at that time. The exceptions include state laws imposing any tax, state laws conferring judicial power, state laws which, if enacted by the Commonwealth, would be beyond the power of the Commonwealth Parliament and any state law which would, for reasons not stemming from s 52(i) of the Constitution, be invalid in its operation in or to Commonwealth place: s 4(2)(a), (5). It follows that a state law that is invalid because it purports to modify the Commonwealth’s executive capacities (see Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 6.2.86C) or because it is inconsistent with a law of the Commonwealth, cannot operate in, or in relation to, a Commonwealth place. The purpose of the Act was to ensure that ordinary laws of the states, such as the general criminal law, town planning laws and motor traffic regulations, continue to apply in Commonwealth places in the states; however, those laws now apply as laws of the Commonwealth — they have been picked up and re-enacted by the Commonwealth Parliament by operation of s 4(1) of the Act. 6.2.97 After the High Court’s judgment in Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630, the Commonwealth Parliament enacted the Commonwealth Places (Mirror Taxes) Act 1998 (Cth). Section 6(2) of the Act declares that, subject to the Act: … the excluded provisions of a State taxing law, as in force at any time before or after the commencement of this Act, apply, or are taken to

have applied, according to their tenor, at that time, in relation to each place in the State that is or was a Commonwealth place at that time.

Section 6(1) of the Mirror Taxes Act defines ‘excluded provisions’ as meaning the provisions of a state taxing law that are excluded by s 52(i) of the Constitution. A ‘state taxing law’, according to s 3 of the Mirror Taxes Act, is a state law listed in the Schedule to the Act or a state law imposing taxation that is prescribed by regulations. According to s 6(6) of the Act, s 6 does not have effect in relation to a state unless an arrangement between the Commonwealth and that state is in operation. Such an arrangement is made under s 9 of the Act, and will provide for the state to administer the applied taxing law. Section 23(1) of the Act provides: The Commonwealth is liable to pay to a State amounts equal to amounts received by the Commonwealth (including amounts received by a State on behalf of the Commonwealth) under an applied law of the State.

That is, the system established by the Mirror Taxes Act is that a state’s taxing laws apply as laws of the Commonwealth in and in relation to Commonwealth places in that state, but are administered by the state, with the proceeds of any taxes going (through the Commonwealth’s Consolidated Revenue Fund) to that state. [page 701] The effect of the reference in s 6(2) of the Mirror Taxes Act to a

state taxing law ‘as in force’ is sufficient to ensure that a state taxing law that is invalid because it purports to modify the Commonwealth’s executive capacities (see Residential Tenancies Tribunal of New South Wales and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410), or because it is inconsistent with a law of the Commonwealth, will not be picked up and applied in, or in relation to, a Commonwealth place. It should also be noted that the Mirror Taxes Act provides in s 6(3) that the Act does not pick up a state taxing law if it would not be within the authority of the Commonwealth Parliament to make that law applicable in relation to a Commonwealth place. 6.2.98 The Mirror Taxes Act was considered in Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 6.4.18C. In 2001, the Commissioner of State Revenue made an assessment of stamp duty in respect of an instrument of lease that concerned a hotel development on land at Melbourne’s Tullamarine Airport. The land had previously been vested in the Commonwealth, which had leased it to a company for use as an airport. Permanent Trustee Ltd had a financial interest in the development. It objected to the assessment on a number of grounds, including that a law made under s 52 of the Constitution should be subject to the prohibition against discrimination between states or parts of states in s 51(ii) of the Constitution. The court declined to reopen Allders on this point, confirming that s 52(i) included a power to make a law imposing taxation and that such a law was not subject to the prohibition against discrimination in s 51(ii): 220 CLR at 421 per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. However, the court did confirm that a law made under s 52 that imposes taxation is subject to the manner and form requirements contained in s 55 of the Constitution, and also

to the prohibition on giving ‘preference’ contained in s 99 of the Constitution. We return to consider the court’s jurisprudence on s 99 later in this chapter: see 6.4.1–6.4.26.

INTERGOVERNMENTAL CO-OPERATION: INVOLVEMENT OF OFFICIALS 6.3.1 As discussed at 1.4.22, Australian intergovernmental cooperation increased with the establishment of the Council of Australian Governments (COAG) by the Hawke Government in 1990, and has accelerated rapidly in the 21st century. However, Commonwealth and state governments have co-operated over an even longer period under arrangements for state officials to exercise functions under Commonwealth laws, and joint Commonwealth– state regulatory institutions, particularly in the natural resources industry. The Commonwealth resorted to using state officers because of its relatively small size before World War II (there were just 25,000 Commonwealth public servants in 1922 and 36,000 in 1941, compared with 100,000 by 1947: Australian Public Service Commissioner, 2004), and the distance of the federal capital from major population centres where Commonwealth work needed to be done. For example, although there was no Australian Federal Police force before 1979, state police are involved in enforcing Commonwealth criminal laws, in a manner complementary to the involvement of state courts in trying Commonwealth offences, and accused persons sometimes face joint Commonwealth–state indictments arising out of one set of factual circumstances. Under s 68 of the Judiciary Act 1903 (Cth) (which operates in a manner

similar to s 79, discussed at 6.2.80E–6.2.82), state criminal procedure laws relating to matters such as grants of bail to, [page 702] and committal for trial of, offenders are applied as laws of the Commonwealth by state courts invested with federal jurisdiction to try offences against Commonwealth laws. 6.3.2 Major oil and gas discoveries in Bass Strait in the mid1960s led to the establishment, pursuant to a 1967 intergovernmental agreement, of joint regulatory authorities for the offshore petroleum industry under virtually identical Commonwealth and state laws: Crommelin, 2009. Although the states and the Commonwealth had agreed, in 1967, to put aside a dispute over which level of government was entitled to control, and benefit from, this new industry, in 1973 the Whitlam Government unilaterally asserted Commonwealth jurisdiction over the territorial sea and seabed surrounding Australia — a claim upheld by the High Court in New South Wales v Commonwealth (1975) 135 CLR 337. However, a subsequent intergovernmental agreement produced the ‘Offshore Constitutional Settlement’ and continued a role for state and Commonwealth ministers as ‘Joint Authorities’ responsible for petroleum exploration and development beyond state ‘coastal waters’. These arrangements are preserved by the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth), which also gives state ministers a lesser role as ‘Designated Authorit[ies]’ responsible for some administrative elements of the federal regime. Complementary state legislation (for example,

Offshore Minerals Act 1998 (Qld) s 30) authorises state ministers to carry out these roles under the federal Act.

Commonwealth–state ‘bucket’ schemes 6.3.3 For several decades prior to 2001, an intergovernmental ‘bucket’ scheme (into which two levels of government contributed legal authority so as to supplement one another’s constitutional powers) regulated the New South Wales coal industry. Under this scheme, ‘mirror’ provisions of Commonwealth and state Coal Industry Acts permitted the Governor-General and the New South Wales Governor to establish a Joint Coal Board to manage the industry and a Coal Industry Tribunal to deal with industrial relations within it. The constitutionality of the scheme was upheld by the High Court. 6.3.4C R v Duncan; Ex parte Australian Iron & Steel Pty Ltd (1983) 158 CLR 535 Gibbs CJ: … [A] challenge was made to the legislative competence of the Commonwealth to create an authority jointly with a State, or at least an authority which derives from a State power which the Commonwealth itself could not confer upon it. It does not seem to me to matter whether the effect of the statutes of the Commonwealth and the State was to create one tribunal which derived power from two sources, or two tribunals, deriving power from different sources, but constituted by one person. In my opinion, it was within the power of the Commonwealth Parliament to follow either course. The Constitution … nowhere forbids the Commonwealth and the States to exercise their

respective powers in such a way that each is complementary to the other. There is no express provision in the Constitution, and no principle of constitutional law, that would prevent the Commonwealth and the States from acting in cooperation, so that each, acting in its own field, supplies the deficiencies in the power of the other, and so that together they may achieve, subject to such limitations as those provided by s 92 of the Constitution, a uniform and complete legislative scheme … Further, [page 703] no reason is provided by constitutional enactment or constitutional principle why the Commonwealth and a State or States should not simultaneously confer powers on one person and empower that person to exercise any or all of those powers alone or in conjunction. In one instance the Constitution has expressly recognized the possibility of co-operation of that kind when it enables the Parliament to invest a court of a State with federal jurisdiction: Constitution, ss 71, 77(iii). It would be an absurd result, for example, if the Commonwealth and a State were unable, by complementary legislation, to empower an officer of police to enforce both the laws of the Commonwealth and the laws of the State, or to give power to a fisheries inspector to act in Australian waters both within and beyond territorial limits, or to authorize a public servant to collect State taxes as well as Commonwealth taxes … The position of an administrative body such as the Tribunal is no different; legislation of the Commonwealth Parliament, otherwise within power, is not invalid because it establishes, jointly with a State, one body which derives its powers from the State as well as from the Commonwealth. … I incline to the view that the Tribunal, once constituted, can exercise any of the powers validly conferred on it either by the Commonwealth or by the State Act. In other words, it can exercise

both Commonwealth and State powers in the one case … [or] whichever power appears available and appropriate in any particular case. … Mason J: … It is obvious that neither the Commonwealth nor the State could validly empower the Tribunal to undertake all the functions or equip it with all the powers with which the joint legislation seeks to entrust it … [and] that the joint legislation is designed to overcome the shortfall in the respective legislative powers of the Commonwealth and the State by combining the exercise of those powers … There is nothing in the prosecutor’s argument that the executive power of the Commonwealth does not extend to the making of the [intergovernmental agreement recited in the preamble to both Coal Industry Acts] or to the making of an arrangement for the appointment of a person to constitute the Tribunal. The executive power of the Commonwealth is not, as the prosecutor would have it, limited to heads of power which correspond with enumerated heads of Commonwealth legislative power under the Constitution. Victoria v The Commonwealth and Hayden (the AAP case) [(1975) 134 CLR 338] did not decide that the executive power was so limited … The scope of the executive power is to be ascertained, as I indicated in the AAP Case, from the distribution of the legislative powers effected by the Constitution and the character and status of the Commonwealth as a national government. Of necessity the scope of the power is appropriate to that of a central executive government in a federation in which there is a distribution of legislative powers between the Parliaments of the constituent elements in the federation. It is beyond question that it extends to entry into governmental agreements between Commonwealth and State on matters of joint interest, including matters which require for their implementation joint legislative action, so long at any rate as the end to be achieved and the means [of achieving it] are consistent with and do not contravene the Constitution. …

I see no strong reason why the Commonwealth Parliament in the exercise of the conciliation and arbitration power (s 51(xxxv)) and the trade and commerce power (s 51(i)) cannot establish a tribunal with powers and functions appropriate to the exercise of those powers and declare that the tribunal has the capacity to exercise such conciliation and arbitration powers and functions as may be given to it by a State Parliament, so that powers derived from both sources may be exercised in relation to the one dispute or matter. … [page 704] [T]he Constitution, when it divides legislative powers between the Parliaments of the Commonwealth and the States, necessarily contemplates that there will be joint co-operative legislative action to deal with matters that lie beyond the competence of any single legislature. As with an exercise of the executive power for a co-operative purpose, Commonwealth legislative action for such a purpose is subject to the limitation that the end to be achieved and the means by which it is to be achieved are consistent with and do not contravene the Constitution. It is an integral element in joint legislation for a co-operative purpose that a legislature, whether Commonwealth or State, can give its authority or office holder a capacity to receive additional powers and functions as may be conferred by another legislature. [Brennan J agreed. Like the other judges, his Honour emphasised the need for Commonwealth consent to the vesting of state powers in institutions created by parallel legislation, to avoid s 109 inconsistency problems.] The objection is not so much to the mode of creation and appointment of the Tribunal but rather to the hybrid nature which the submission attributes to the Tribunal. It is of course beyond the power of the Commonwealth Parliament to vest the Tribunal

with State power, but that is not what the Commonwealth Act does. The Act approves the Tribunal’s having and exercising State powers but it does not purport to vest them. It vests only federal powers (s 32(2)). If the Act had merely constituted or authorized the constitution of a tribunal and had vested federal powers of conciliation and arbitration in it without reference to State powers, an attempt by a State Act to vest similar State powers in the same tribunal would fail — not because of a constitutional incapacity in a Commonwealth tribunal to have and to exercise State power, but because the Commonwealth Act would be construed as requiring the tribunal to have and to exercise only such powers as the Commonwealth Parliament had chosen to vest in it. If the Commonwealth Act were construed as not permitting the tribunal to be a repository of State power, it would prevail over the State Act by reason of the inconsistency between them. But the Commonwealth Act permits the State Act to repose State powers in the Tribunal.

Commonwealth officials performing functions under state law 6.3.5 The regulation of corporations has been another locus of extensive intergovernmental co-operation in Australia. This reflects doubt, persisting until quite recent times, about the extent of Commonwealth power to regulate corporate behaviour and status (considered further in Chapter 4). Between the 1950s, when companies were governed by different state regimes, and 2001, when the Commonwealth enacted national legislation based on powers referred to it by the states under s 51(xxxvii) of the Constitution, the regulation of corporations was subject to convergent regimes. These regimes were based first (from the

1960s) on uniform legislation enacted by each state and then (from the 1980s) on two successive Commonwealth Acts applicable only to the Australian Capital Territory which were also enacted by state parliaments as the law of each state. The Corporations Act 1989 (Cth) and its mirror state regimes (known, collectively, as the Corporations Law) created offences which were, outside of the Australian Capital Territory, state offences. However, both the Commonwealth and the state laws permitted the prosecution of all of these offences by the Commonwealth Director of Public Prosecutions. In R v Hughes (2000) 202 CLR 535, the High Court considered whether a Commonwealth official such as the Director of Public Prosecutions could be given such powers. [page 705]

6.3.6C

R v Hughes (2000) 202 CLR 535

Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ: … This case concerns the provisions of legislation of the Commonwealth and Western Australia respecting the institution and conduct of prosecutions under the national [corporations] scheme … The issues By indictment dated 15 July 1997 and presented to the District Court of Western Australia, Craig Allan Hughes (the accused) … is prosecuted on three counts of making available at Perth, between 1 February 1992 and 24 November 1994, ‘prescribed interests’

contrary to s 1064(1) of the Corporations Law (‘the Law’) read with s 1311(1)(a) of the Law. The indictment opens with the words: ‘The Commonwealth Director of Public Prosecutions [‘the DPP’] who prosecutes in this behalf for Her Majesty the Queen …’ and is signed: ‘IAN RUSSELL BERMINGHAM for and on behalf of the Commonwealth Director of Public Prosecutions.’ The DPP holds an office established by s 5(2) of the Director of Public Prosecutions Act 1983 (Cth) (the DPP Act). Section 6 details various functions of the DPP and s 9 confers various powers to be exercised for the purpose of the performance of those functions. One of the functions of the DPP is to institute and carry on prosecutions on indictment for indictable offences against the laws of the Commonwealth (s 6(1)(a), (b)). However, the DPP contends that, by reason of other provisions in the DPP Act and of the operation of other Commonwealth and State laws, in the present case he is prosecuting for offences against the laws of Western Australia. It will be necessary to determine whether this is so and, if so, whether the DPP is competent to act in that fashion. The accused denies that competence. … … [T]he accused submits that there is lacking the necessary legislative authority under Commonwealth and State law for the DPP to prosecute the offences specified in the indictment. … In particular, the accused contends that the effect of the State legislation is to render offences against State law offences against Commonwealth law. Such a transmutation is said to be beyond the competence of the State legislature. … Section 7 of the Corporations (Western Australia) Act 1990 (WA) (‘the WA Corporations Act’) provides: The Corporations Law set out in section 82 of the

Corporations Act [1989 (Cth)] as in force for the time being — (a) applies as a law of Western Australia; and (b) as so applying, may be referred to as the Corporations Law of Western Australia. Paragraph (a) of s 1311(1) of the Law renders guilty of an offence, by reason of that subsection, a person who does an act or thing that the person is forbidden to do by or under a provision of the Law. [page 706] Section 1064(1) of the Law stated: A person, other than a public corporation, must not make available, offer for subscription or purchase, or issue an invitation to subscribe for or buy, any prescribed interest. … In addition to those functions specified in s 6(1), the functions of the DPP include ‘functions that are conferred’ on the DPP ‘by or under any other law of the Commonwealth’ (s 6(2)(a)). This invites attention to Div 3 (ss 46–48) of Pt 8 (ss 37–48) of the Corporations Act … headed ‘Performance of functions that corresponding laws of States confer on Commonwealth authorities and officers’. … [Section] 47(1) states: Regulations under section 73 may provide that prescribed authorities and officers of the Commonwealth have prescribed functions and powers that are expressed to be conferred on them by or under corresponding [State] laws.

Section 73 of the Corporations Act [1989 (Cth)] empowers the Governor-General to make regulations prescribing matters, so far as presently relevant, required or permitted by Pt 8 to be prescribed. Regulation 3(1)(d) of the Corporations (Commonwealth Authorities and Officers) Regulations (the Regulations) provides that the DPP is one of the officers of the Commonwealth who has the functions and powers expressed to be conferred on them by or under a ‘corresponding law’. State law … Section 28(1) is the first provision in Div 2 of Pt 8 of the WA Corporations Act. It states that an object of Div 2 is to further the object of Pt 8 by providing (s 28(1)(a)): for an offence against an applicable provision of Western Australia to be treated as if it were an offence against a law of the Commonwealth. Where, by reason of the operation of Div 2, a function or power is conferred on an officer or authority of the Commonwealth, that function or power may not be performed or exercised by an officer or authority of Western Australia. Section 33 so specifies. … Undoubtedly this responsibility includes the exercise of what in argument was referred to as the ‘prosecutorial discretion’. But it also is apparent [from the inter-governmental agreement on which the Corporations Law was based] that the responsibility which is withdrawn by the State legislation from State authorities is to be conferred on officers or authorities of the Commonwealth as a matter of obligation to which they are subjected, not as a power or function the exercise of which by them is merely permitted. … Section 29(1) then operates, for present purposes, by stating that the DPP Act applies as a law of Western Australia in relation to an offence against provisions of the Corporations Law (WA) ‘as if’ those provisions were not laws of Western Australia but were laws of the Commonwealth.

Then, ‘[f]or the purposes of a law of Western Australia’, s 29(2) provides that an offence against the Corporations Law (WA) ‘is taken to be’ an offence against the laws of the Commonwealth (again, as if the Corporations Law (WA) were a law of the Commonwealth) and not ‘an offence against the laws of Western Australia’ … This indicates that the State legislature [page 707] is not purporting to dictate to the Commonwealth Parliament what are Commonwealth laws. Rather, it is requiring certain of the laws of Western Australia to be treated as if they were Commonwealth laws for the purposes of Western Australian law. … Section 29 is not invalid as an exercise of State legislative power because it represents an ‘abdication’ rather than the exercise of such an authority. There is no such principle applicable here. The authorities rejecting submissions to this effect are collected in Byrnes v The Queen [(1999) 199 CLR 1, 11]. Section 29 does not deny or displace the binding effect upon the courts, judges and people of Western Australia given, by covering cl 5 of the Constitution, to the Constitution and laws made by the Parliament of the Commonwealth. Nor is s 29 defective for want of sufficient specification of the command which, in an Austinian sense, it directs to the community. Difficulties of interpretation by reason of such a ‘pick up’ provision may arise from case to case but that prospect does not entail invalidity. … [T]he DPP Act is rendered applicable as a law of Western Australia in relation to the offences against the Corporations Law (WA) which are the subject of the indictment. Section 31(1) is thus enlivened. It states: A Commonwealth law applying because of section 29 that confers on an officer or authority of the Commonwealth a

function or power in relation to an offence against the applicable provisions of the [Australian] Capital Territory also confers on the officer or authority the same function or power in relation to an offence against the corresponding applicable provision of Western Australia. The functions of the DPP under pars (a) and (b) of s 6(1) of the DPP Act include the institution and carrying on of prosecutions on indictment for indictable offences against the laws of the Commonwealth, including ss 1064(1) and 1311(1)(a) of the Law. Powers relevant to that function are contained in s 9 of the DPP Act. It follows that, as a matter of Western Australian law, the corresponding function or power is conferred on the DPP in relation to offences against ss 1064(1) and 1311(1)(a) of the Corporations Law (WA). … Commonwealth law … With respect to the DPP … the provisions of s 47 of the Corporations Act and of reg 3(1)(d) of the Regulations … operate, as a matter of Commonwealth law, to specify that that officer has the functions and powers expressed to be conferred on him or her by the WA Corporations Act. … [S]ubject to what may be the operation of negative implications arising from the Constitution, for example Ch III, in the exercise of the incidental power the Parliament may permit officers of the Commonwealth holding appointments by or under statute to perform functions and accept appointments in addition to their Commonwealth appointments. Provisions such as … s 47 illustrate two further propositions. The first is that a State by its laws cannot unilaterally invest functions under that law in officers of the Commonwealth; the second is that a State law which purported to grant a wider power or authority than that the acceptance of which was prescribed by Commonwealth law would,

to that extent, be inconsistent with the Commonwealth law and invalid under s 109 of the Constitution. However, those propositions do not … provide a basis for the imposition by federal law upon Commonwealth officers of duties to perform functions or exercise powers created and conferred by State law. Such a federal law must be supported by a head of power. As indicated earlier in these reasons, the effect of the national scheme was to substitute the Commonwealth prosecution apparatus for that of the relevant State. [page 708] … [W]hat is involved in the federal legislation is more than consent or permission by the Commonwealth to the exercise by its officers of additional functions and powers derived entirely from State law. These additional functions and powers are imposed by federal law as a matter of duty or obligation, lest there be an abdication of State authority with no certainty of its effective replacement. We have stated above our acceptance of a proposition as to permissive provisions respecting the exercise of additional functions by Commonwealth officers. Whether the further step taken here of imposing duties by Commonwealth law was [constitutionally] necessary … we need not stay to consider. The immediate point is that, the step having been taken, the federal law taking it required support by an available head of power. … [The Cth law amounts to] a ‘positive provision’ which vests ‘ancillary powers which the Commonwealth Parliament could alone confer’. … [I]t is the operation of Commonwealth law which enables the DPP to expend Commonwealth resources in exercise of powers and functions ‘conferred’ by State law. … The Executive Government of the Commonwealth, which is provided for in Ch II of the Constitution (ss 61–70) and of which

the Attorney-General is part, involves the execution and maintenance of laws of the Commonwealth, not those of the States. Validity … [T]he effect of s 47(1) of the Corporations Act is to support the provision in reg 3(1)(d) of the Regulations made under s 73 of that statute that the DPP has the functions and powers conferred by or under the WA Corporations Act … [Before us] there was some discussion of the validity of the operation of these laws of the Commonwealth with respect to the indictment and prosecution of the accused. It may be that [because the Corporations Law originated in an inter-governmental agreement to which the Commonwealth was a party] in their present operation these provisions are to be supported as laws with respect to matters incidental to the execution of a power vested by Ch II of the Constitution in the Government of the Commonwealth or in any department or officer of the Commonwealth. That is the language of s 51(xxxix) of the Constitution … [However, because of their conclusions about the external affairs power (see below), their Honours did not need to pursue this issue.] … The DPP Act in a sense is supported by as many heads of power as from time to time have been exercised by the Parliament to create offences against Commonwealth laws. State law may create offences in fields where it would have been competent for the Parliament of the Commonwealth to enter directly by its own offence-creating legislation. The power conferred by s 51(xx) with respect to foreign corporations and trading or financial corporations is an obvious example. In such a situation, a federal law which specifies that certain Commonwealth officers have powers and functions expressed to be conferred by the State law with respect to the prosecution of State offences is a law with respect to that head of federal

legislative power. This will be true of perhaps the very great majority of offences created by the State legislation which adopts the Law. [Their Honours considered that, because the particular offence to which this indictment related was alleged to have been committed in the United States, in its application to this case s 1064(1) would be supported by parliament’s ‘trade and commerce’ or ‘external affairs’ powers under s 51(i) or (xxix) of the Constitution, if not by its ‘corporations’ power under s 51(xx): see Chapter 4.] [page 709] … Accordingly, the federal legislation identified above (s 47(1) of the Corporations Act and reg 3(1)(d) of the Regulations) operates to provide such authority as is necessary under federal law to support the prosecution by the DPP of the offences against the law (WA) which are specified in the indictment. … The present case emphasises that for the Commonwealth to impose on an officer or instrumentality of the Commonwealth powers coupled with duties adversely to affect the rights of individuals, where no such power is directly conferred on that officer or instrumentality by the Constitution itself, requires a law of the Commonwealth supported by an appropriate head of power. [See further Hill, 2003.]

6.3.7 Note the different approach taken by the Hughes judges to Commonwealth permission for its officers to become involved in

enforcing state law, and Commonwealth imposition on those officers of duties to enforce state law. Commonwealth legislation is required for both purposes — not just where the rights of individuals might be affected by the imposition of duties. Legislation is required where the Commonwealth provides mere permission because a state may not unilaterally invest executive functions in the Commonwealth, and to avoid any s 109 consequences. Permissive legislation may, their Honours suggested, be adequately supported by the relevant inter-governmental agreement entered into in the exercise of Commonwealth executive power under s 61 of the Constitution, in combination with the ‘express incidental’ power (s 51(xxxix)). However, if duties to enforce state law are to be imposed on Commonwealth officers, legislation supported by a substantive head of power under s 51 of the Constitution will be required. The relevant duties could be specifically framed by reference to that legislative power, but it could also be the case (as in Hughes) that more general duties (to enforce state corporations legislation) are brought within a particular s 51 head or heads of power by the Commonwealth executive action taken (here, prosecution of an offence arising in overseas trade and commerce, outside Australia and in relation to a corporation).

Performance of functions under Commonwealth law by state officials 6.3.8 The United States Supreme Court treats the Constitution of that federation as based on ‘dual sovereignty’: the states enjoy sovereignty independently of that of the Federal Government within their spheres of responsibility: see further Hill, 2003. On

the basis of this theory, the Supreme Court has developed a doctrine protecting state officials from being ‘commandeered’ into federal executive roles. In Printz v United States 521 US 898 at 935 (1997), in an opinion in which Rehnquist CJ and O’Connor, Kennedy and Thomas JJ joined, Scalia J held that: The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States’ officers, or those of their political subdivisions, to administer or enforce a federal regulatory program … [S]uch commands are fundamentally incompatible with our constitutional system of dual sovereignty.

6.3.9 As discussed in Chapter 8, Ch III of the Commonwealth Constitution provides for the investment of federal judicial power in state courts. One reason for this ‘autochthonous expedient’ was the lack of adequate Commonwealth judicial ‘manpower’. However, there is [page 710] no comparable provision for the discharge of Commonwealth functions by state officials in Ch II of the Constitution, which deals with executive power (or, for that matter, in Ch I, which deals with Commonwealth legislative power). It was argued in Austin v Commonwealth (2003) 215 CLR 185 6.2.45C that the Commonwealth was prohibited from conscripting state government personnel for (in that case, arduous actuarial) duties, but the High Court did not find it necessary to decide this point. 6.3.10

These issues were raised again in challenges to three

extradition decisions in O’Donoghue v Ireland (2008) 234 CLR 599 6.3.11C. Ireland, Hungary and the United States requested the extradition from Australia of, respectively, Vincent O’Donoghue, Charles Zentai and Larry Williams for offences of, respectively, embezzlement, war crimes and tax evasion. These extraditable persons challenged decisions made under Pt II of the Extradition Act 1988 (Cth) by a New South Wales and two Western Australian state magistrates acting as persona designata — that is, in an administrative rather than a judicial capacity (see 8.4.13) — that they were eligible for surrender to the requesting country by the Commonwealth Attorney-General. As Gleeson CJ explained in O’Donoghue (234 CLR at 613), the involvement of state magistrates in Commonwealth extradition proceedings has a long history, as does their involvement in other Commonwealth administrative proceedings relating to the criminal law (for example, committal proceedings or grants of search warrants). The Commonwealth can use its own judicial officers acting in a personal capacity (see Chapter 8) to discharge these functions, but confronts the same personnel problems as it would if federal jurisdiction could not be vested in state courts: there is a lot of this kind of work, but only a few dozen each of Federal Court judges and federal magistrates (and, before 2009, there were none of the latter). By contrast, between them, the states have appointed hundreds of magistrates. Three main provisions of the Extradition Act 1988 (Cth) were relevant in O’Donoghue. Section 5 defined ‘magistrate’ to include ‘a magistrate of a State … in respect of whom an arrangement is in force under section 46’. Section 46 permitted the GovernorGeneral to arrange with the Governor of a state for state magistrates to perform functions under the Extradition Act, and s

19 provided that, where the Attorney-General had passed on an extradition request to a magistrate, the magistrate ‘shall conduct proceedings to determine whether [a] person is eligible for surrender in relation to the extradition offence or extradition offences for which surrender of the person is sought by the extradition country’. Also relevant was the following provision of the Crimes Act 1914 (Cth): 4AAA Commonwealth laws conferring non-judicial functions and powers on officers Application (1) This section sets out the rules that apply if, under a law of the Commonwealth relating to criminal matters, a function or power that is neither judicial nor incidental to a judicial function or power, is conferred on one or more of the following persons: … (a) a State or Territory judge; (b) a magistrate; … Functions and powers conferred personally (2) The function or power is conferred on the person only in a personal capacity and not, in the case of a … State or Territory judge or magistrate, as a court or a member of a court.

[page 711] Function or power need not be accepted (3) The person need not accept the function or power conferred. …

This section applies regardless of when Commonwealth law made (6) This section applies whether the law conferring a function or power was made before, on or after, the commencement of this section. …

Finally, New South Wales and Western Australian legislation authorised the Governors of those states to permit state magistrates to take on other work, including Commonwealth administrative work: Local Courts Act 1982 (NSW) s 23; Magistrates’ Court Act 2004 (WA) s 6. In O’Donoghue v Ireland (2008) 234 CLR 599, the High Court assumed that the executive government arrangements contemplated by both the state legislation and s 46 of the Extradition Act 1988 (Cth) were in place to allow the particular magistrates whose decisions were challenged to exercise functions under the Extradition Act 1988. 6.3.11C

O’Donoghue v Ireland (2008) 234 CLR 599

Gummow, Hayne, Heydon, Crennan and Kiefel JJ (with whom Gleeson CJ agreed): These proceedings concern the operation of the federal system in a situation which is the converse to that considered in R v Hughes [(2000) 202 CLR 535] … It is settled by authority including Pasini v United Mexican States [(2002) 209 CLR 246] and Vasiljkovic v Commonwealth [(2006) 227 CLR 614] that the determination under s 19(1) of eligibility to surrender … involves the exercise of administrative functions and not the exercise of the judicial power of the Commonwealth. Accordingly, s 19 is not the product of an exercise by the Parliament of its power conferred by s 77(iii) of the Constitution to make laws investing State courts with federal jurisdiction …

The [appellants’] submissions begin with the propositions that when the magistrate embarks upon the exercise of the power conferred by s 19(1) the magistrate is obliged to proceed to determine eligibility to surrender and to make appropriate consequential orders … The next [argument] is that the Parliament of the Commonwealth lacks the power, without State legislative approval, to impose upon the holder of a State statutory office an administrative duty enforceable by legal remedy where the functions and incidents of that office are ‘exhaustively’ defined by State legislation … The [argument that] … the giving of consent by State legislation, rather than by the State executive government, [is required] appears to be placed by the appellants upon two related bases. The first is that a State executive has no power to add to the functions of an office created by a statute of that polity any more than it can alter the content of any other law made by the State legislature. The second is that the executive cannot dispense with or suspend the operation of those laws … As will appear, these proceedings may be resolved without a determination of whether that requirement for State legislative, rather than executive, approval is sound doctrine. This is because of what follows from the distinction drawn by the appellants between the conferral by federal law of a power and the imposition of a duty. The appellants concede that their case must fail in any event if s 19(1) of the Act confers a power but does not impose a duty. [page 712] [This concession] … reflects the reasoning evident in the joint judgment of the Court in Aston v Irvine [(1955) 92 CLR 353]. The provisions of the Service and Execution of Process Act 1901 (Cth) which were held valid in that case conferred powers upon

State magistrates or other officers in respect of interstate service of process, and did not impose duties upon them. The Court said that to give the magistrates and other State officers mentioned in the federal law the powers in question involved no interference with the executive governments of the States. The legislation upheld in Aston v Irvine relied upon the power of the Parliament with respect to service and execution of process conferred by s 51(xxiv). The provisions of the Act dealing with extradition from this country rely upon the external affairs power conferred by s 51(xxix). The appellants correctly take no point seeking to distinguish Aston v Irvine by reason of the differences in these heads of legislative power … Counsel for the appellants submitted that the constitutional requirement for State legislative approval for the imposition upon a State officer of an administrative duty is ‘a particular per se application’ of the implication drawn from the federal structure in Melbourne Corporation v The Commonwealth and subsequent authorities including Re Australian Education Union; Ex parte Victoria and Austin v The Commonwealth. In Austin the majority applied the proposition drawn from Australian Education Union that it is critical to the capacity of a State to function as a government that it retain the ability to determine the terms and conditions of engagement of employees and officers at the higher levels of government. However, in Austin the Court left for another day consideration of a larger proposition than that previously accepted as required by the Melbourne Corporation doctrine. The proposition put to one side was that it is critical to the constitutional integrity of the States that they alone have the capacity to give directions to their officials and determine what duties they perform. Acceptance of such a proposition could lead to the invalidity of federal laws which merely affected the ease with which the States exercised their constitutional functions, rather than impaired the exercise of those functions. …

It is unnecessary on this occasion to determine whether the Melbourne Corporation doctrine should be developed … to produce the result that the Parliament lacks power, without State legislative approval, to impose upon the holder of a State statutory office a duty, rather than merely a power of an administrative nature. This is because … the Act does not impose a duty of the postulated character. … Section 19, and the other provisions of the [Extradition] Act which involve the exercise of functions by magistrates, must be read with s 4AAA of the Crimes Act 1914 (Cth). … Section 4AAA(3) is important for these cases … [It] states that ‘[t]he person need not accept the function or power conferred’. … [Their Honours held that the Extradition Act 1988 was ‘a law of the Commonwealth relating to criminal matters’ for the purposes of s 4AAA of the Crimes Act.] Much attention in submissions was devoted to examination of the legislation of Western Australia and New South Wales under which magistrates are appointed. It was said by the appellants that this showed an absence of the necessary legislative consent to the imposition of duties upon the State magistrates by federal law, and that the statement in the State legislation of the duties of these office holders was exhaustive and thus not to be supplemented by federal-State executive arrangements. [page 713] It is unnecessary to resolve these issues here. This is because the appellants’ case fails at the earlier stage indicated in

these reasons, the federal law operating to confer powers rather than impose duties …

6.3.12 The decision in O’Donoghue leaves other apparently longstanding forms of intergovernmental co-operation — for example, agreements for the enforcement of, or investigation or prosecution of offences under, both Commonwealth and state criminal laws by state law enforcement authorities — constitutionally intact, provided that they involve no element of Commonwealth coercion of state officers. This can be achieved by appropriate ‘discretionary’ drafting of the relevant Commonwealth empowering provisions, or by putting in place suitable interpretive ‘rules’ in a more general provision like s 4AAA of the Crimes Act. The constitutional questions of whether Commonwealth law may impose on a state official a duty, and the appropriate role in any such scheme for state executive or legislative consent, remain open after O’Donoghue. However, it is clear that any Australian analogue of the rule established by the United States Supreme Court in Printz will necessarily be more limited than its categorical United States cousin: if the Commonwealth is prevented from ‘commandeering’ state officials, such a limitation is likely to be expressed as a question of degree, arising out of the principle of state immunity from Commonwealth laws: see Moorehead, 2007.

EXPRESS PROHIBITIONS ON COMMONWEALTH DISCRIMINATION AGAINST THE STATES

6.4.1 Finance is crucial for government. At the basic level, governments need money with which to establish and maintain public facilities (roads, schools, transport and hospitals) and employ the human resources that do the government’s work: public servants, police officers, magistrates, judges and ministers. In order to accumulate the money for this basic expenditure, governments resort to taxation and to borrowing (although of these two sources of revenue, taxation makes by far the greater contribution). Thus one objective of a government’s fiscal policies is to accumulate, largely through taxation, sufficient money to provide those facilities and services which the community demands of government. But that is only one objective, for government taxing and spending programs may have a wide variety of purposes and effects. 6.4.2 Given the importance of fiscal powers and policies to contemporary governments, the sharing of that power and the distribution of the capacity to implement those policies is crucial to any federal system. What is the extent of the fiscal power assigned to the Commonwealth under the Commonwealth Constitution? And what powers to tax and to spend are allotted to the states? By answering these questions, we can begin to construct a picture of the distribution of power within the Australian federation. The Constitution makes an attempt to divide various aspects of fiscal power between the Commonwealth and states. The states are, for example, denied the power to levy customs and excise duties: s 90. The Commonwealth may not, when it legislates with respect to taxation, discriminate between states or parts of states (s 51(ii)), nor give preference to [page 714]

states or parts of states in any revenue law: s 99. The Commonwealth’s power to raise capital funds through public borrowings is controlled under s 105A; and its power to spend money may be restricted to expenditure either on certain topics or through the agency of the state governments: ss 81, 96. These provisions, laying the basis for a distribution of fiscal power, have been exploited and manipulated by various governments, and interpreted and developed by the High Court, over the lifetime of the Federation. That manipulation and interpretation has brought us to the point where fiscal power is effectively centralised. The Commonwealth Parliament may use its taxing power to achieve a wide range of objectives; it may evade the prohibitions against regional discrimination or preference; the states are excluded from the two significant areas of growth taxes — taxes on income and on commodities; and the Commonwealth can control the borrowing programs of the states. Further, the Commonwealth has various confirmed means of channelling funds to almost any projects of its choosing. We examined the taxation power in Chapter 5. We now turn to consider the Constitution’s prohibitions against discrimination and preferences in this context. 6.4.3E

Commonwealth Constitution

51 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: … (ii) taxation; but so as not to discriminate between States or parts of States: …

99 The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.

6.4.4 The proviso to s 51(ii) and the prohibition contained in s 99 are two elements in a complex series of sections which appear to be designed to promote integration of the national economy. Among that series of sections are: s 51(iii), which insists that Commonwealth bounties on the production of goods shall be uniform throughout the Commonwealth; s 88, which obliged the Commonwealth to impose ‘uniform duties of customs’ within 2 years of federation; s 90, which precludes the states from imposing customs and excise duties and paying bounties on production; s 92, which declares that interstate trade is to be ‘absolutely free’; and s 102, which gives the Commonwealth Parliament a limited power to forbid preferential or discriminatory operations by state railways. The material that follows considers the impact of the s 51(ii) proviso and the s 99 prohibition upon the taxation power of the Commonwealth. The effect of s 90 on the taxation powers of the states is reviewed at 5.2.1–5.2.51, and the potential difficulties posed by s 92 for taxation and other laws is examined at 9.4.1E–9.4.41.

6.4.5 The restrictions laid down by ss 51(ii) and 99 are similar but not identical. The former prohibits discrimination, the latter preference. Yet one might expect, in the context of taxation [page 715] law, to find little practical difference between the prohibitions, and that they might be regarded as two sides of a single coin. Indeed, in the recent High Court decision of Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 6.4.20C, Kiefel J described the s 51(ii) proviso and s 99 as involving an inquiry that was ‘essentially the same’: 250 CLR at 625. That tendency to perceive a functional equivalence is not new. In Elliott v Commonwealth (1936) 54 CLR 657 6.4.9C, Latham CJ recognised the basic similarity of the impacts of s 51(ii) and s 99 (54 CLR at 668): The sections operate independently, but they overlap to some extent. Laws of taxation, including laws with respect to customs duties, fall under s 51(ii) and as laws of revenue they fall under s 99. Laws with respect to bounties on the export of goods fall under s 51(iii) and also, as laws of trade and commerce, under s 99. A preference in relation to any of these subjects which infringed s 99 would also be a prohibited discrimination or a prohibited lack of uniformity under one of the other sections. Preference necessarily involves discrimination or lack of uniformity, but discrimination or lack of uniformity does not necessarily involve preference.

Latham CJ’s final point, that discrimination does not necessarily involve preference, should be read in the context of the issue before the court in Elliott: a claim that a Commonwealth trade and

commerce law gave preference to some states over others. The court was eager to emphasise that the Commonwealth’s taxation power is subject to both restrictions and the possibility that one restriction is more far-reaching than the other cannot have any liberating effect on that power. 6.4.6 Similarly, the different form of words used in ss 51(ii) and 99 to identify the areas or localities which must not be treated in a discriminatory fashion or preferentially is of no practical significance. Even if it is true that s 51(ii) would strike down a taxation law which discriminated between parts of the same state while s 99 does not prohibit a revenue law preferring part of one state over another part of the same state (Lane, 1987, p 73; Rose, 1977, pp 202–3), the Commonwealth’s taxation power is subject to both the narrower restriction against preference and the broader restriction against discrimination. (Close attention to the language in the two provisions might, however, suggest that this distinction is illusory; for example, to give preference to one part of Victoria over another part of Victoria will inevitably involve a preference to part of one state over another, or vice versa.) 6.4.7 Two main issues have played out in the High Court’s interpretation of the s 51(ii) proviso and the s 99 prohibition. The first concerns the way in which considerations of geography have governed the application of these limitations on power; that is, the meaning of ‘between States’ in s 51(ii) and equivalent language in s 99. The second enduring issue has been the way in which the concepts of discrimination and preference have been understood — whether by reference to legal form alone or in a way that takes account of a law’s substantive effect. Each of these sets of concerns will be addressed separately below.

‘Between States’ 6.4.8 The first recurring issue in the interpretation of ss 51(ii) and 99 involves the extent to which those limitations are confined by reference to considerations of geography. The constitutional text makes explicit that it is discrimination or preference between states or parts [page 716] of states, not between activities or between different classes of taxpayers, which is prohibited. Two questions have arisen in the interpretation of these provisions: when can we say that a law which clearly discriminates or gives preference discriminates or prefers between states? When can we say that such a law discriminates or prefers on some basis other than that of state locality? This problem emerges clearly in contrasting the majority and minority reasons in R v Barger (1908) 6 CLR 41. The majority decided that the Excise Tariff Act 1906 (Cth) was not a law with respect to taxation 5.1.39C. That Act taxed the producers of farm machinery but gave an exemption to those producers who employed their workers on reasonable employment conditions. However, the majority went on to say that, if the Act was a law with respect to taxation, it infringed the limitations contained in ss 51(ii) and 99. Chief Justice Griffith, Barton and O’Connor JJ held that the Act authorised a discriminatory tax. They proceeded to reject an argument that, if there was any discrimination, it operated

by reference to the employment and economic characteristics of different localities, not their state characteristics (6 CLR at 78): The words ‘States or parts of States’ must be read as synonymous with ‘parts of the Commonwealth’ or ‘different localities within the Commonwealth’. The existing limits of the States are arbitrary and it would be a strange thing if the Commonwealth Parliament could discriminate in a taxing Act between one locality and another, merely because such localities were not coterminous with States or parts of States.

Isaacs and Higgins JJ dissented, for essentially shared reasons on this point. Referring to both ss 51(ii) and 99, Isaacs J said (6 CLR at 107–8): [The] treatment that is forbidden is in relation to the localities considered as parts of States, and not as mere Australian localities, or parts of the Commonwealth considered as a single country … It does not include a differentiation based on other considerations which are dependent on natural or business circumstances, and may operate with more or less force in different localities; and there is nothing, in my opinion, to prevent the Australian Parliament, charged with the welfare of the people as a whole, from doing what every State in the Commonwealth has power to do for its own citizens, that is to say, from basing its taxation measures on considerations of fairness and justice, always observing the constitutional injunction not to prefer States or parts of States.

6.4.9C

Elliott v Commonwealth (1936) 54 CLR 657

[The Transport Workers (Seamen) Regulations 1935 (Cth) were part of a scheme for regulating interstate and overseas commerce. They established a system for licensing seamen and provided that unlicensed

persons should not be engaged as seamen at ‘prescribed ports’. Regulation 5 authorised the minister to specify the ‘prescribed ports … in respect of which licensing officers shall be appointed for the purposes of those Regulations’. The minister specified the ports of Sydney, Melbourne, Brisbane, Newcastle and Port Adelaide as the ‘prescribed ports’. Elliott was a seaman who lived in Sydney. He brought an action in the High Court of Australia against the Commonwealth claiming a declaration that the regulations were invalid in their application to seamen and an injunction to restrain the Commonwealth [page 717] from enforcing the regulations against the plaintiff and other seamen. Elliott’s application for an interlocutory injunction to restrain the Commonwealth from enforcing the licensing system pending the decision of the case was heard by the Full Court of the High Court and treated, by consent, as the trial of the action. Latham CJ said that, before a law could be described as giving preference within s 99, the court would have to be satisfied that the law gave a tangible commercial advantage. This could not be said of the licensing system. The Chief Justice went on to consider whether the regulations, if they had involved a preference, would have infringed s 99.] Latham CJ: If it had been intended to provide by s 99 that there should be no preference in laws of trade, commerce or revenue based upon locality it would have been very easy to say so. This has been done very definitely in the case of bounties (s 51(iii)). The words there used are ‘uniform throughout the Commonwealth’. There is no reference to ‘States or parts of States’. The difference between this provision and those contained in s 51(ii) and s 99 is a striking and conspicuous distinction, and it is emphasised by the close association of s

51(ii) and s 51(iii). Prima facie, words which relate to a similar subject matter and which are so different should receive a different interpretation … Any absence of ‘geographical uniformity’ (which includes the presence of any discrimination or preference based upon locality) would constitute a breach of s 51(iii). The marked difference in language between the words of this section and those used in s 99 cannot, in my opinion, be ignored. In the case of s 51(iii) it is sufficient, in order to invalidate, to find any differentiation based upon locality in the widest sense. In the case of s 99 it is necessary to show that a preference is to one State or part of a State over another State or part of a State. [Latham CJ referred to two decisions which, he said, supported Isaacs J’s view of the treatment forbidden by ss 51(ii) and 99: Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 and James v Commonwealth (1928) 41 CLR 442. His Honour continued:] These authorities make it, in my opinion, proper to hold that the discrimen which s 99 forbids the Commonwealth to select is not merely locality as such, but localities which for the purpose of applying the discrimen are taken as States or parts of States. In the regulations in question the application of the regulations depends upon the selection of ports as ports and not of States or parts of States as such. In my opinion, s 99 does not prohibit such differentiation. Section 99 expressly distinguishes between preferences to States and preferences to parts of States. It may be that a preference to Sydney and Newcastle in relation to trade and commerce may have a large effect in giving preference to the State of New South Wales as a whole, but I think that a law giving such preference must nevertheless be construed, according to its terms, as giving a preference to Sydney and Newcastle and not to the whole State. As a matter of construction this seems to me to be proper, and, if it is allowable to look at the actual facts, it is a

matter of common knowledge that some trade to and from southern New South Wales passes through Melbourne, and that some trade from the north of New South Wales passes through Brisbane. I do not agree that, for the purposes of s 99, which so definitely distinguishes between States and parts of States, a State can be regarded as identified with its capital city or its principal port or ports. [page 718] Dixon J: The case does not, in my view, depend upon the expression ‘part of a State’. For even if, in prescribing a port in one State, the Minister cannot be considered to have adopted ‘part of a State’ within the sense of s 99 as the basis of his differentiation, I think that in specifying the chief ports in each of four States a course was taken which must be considered as affecting each of those States as a whole. We are concerned only with sea-borne trade of each State with other States and countries. For the most part that trade is done from the ports prescribed, namely, from the ports of the capital cities of each of these four States, and, in the case of New South Wales, the port second in importance, Newcastle. Whatever relates to carriage by sea from those ports relates to the international and interstate sea commerce of the States themselves. [Dixon J proceeded to hold that the regulations gave a commercial advantage to those states where the prescribed ports were located and that this was a preference contrary to s 99. Evatt J reviewed R v Barger (1908) 6 CLR 41 5.1.39C, Cameron v Deputy Federal Commissioner of Taxation (1923) 32 CLR 68 and James v Commonwealth (1928) 41 CLR 442. He could find no support, in the last two cases, for the approach of Isaacs J to ‘States or parts of States’ in ss 51(ii) or 99. His Honour continued:]

Evatt J: [T]here was a very solid foundation for the conclusion reached in Barger’s case (1908) 6 CLR 41 by the majority of the Court — that s 99 forbids all preferences which arise solely as a legal consequence of association with or reference to any locality in ‘Australia’, ie, ‘one or more of the States of Australia’. The opposing view of Isaacs J (105–11) — that the only preference forbidden by s 99 is preference to a State or a part of a State ‘considered as’ such — involves the proposition that s 99 is not infringed if (say) a Commonwealth enactment exempts from taxation ‘all persons carrying on business or resident at Brisbane.’ On Isaacs J’s view, presumably, such an enactment would not give a preference to a part of Queensland ‘considered as’ a part of Queensland. But it is indisputable that such an enactment would give a preference to Brisbane, and, as Brisbane is part of the State of Queensland, the enactment would give a preference to a part of a State over the five remaining States of the Commonwealth … In his able argument, Mr Paterson gave a further illustration of a law of revenue which offends against s 99. He supposed that a Commonwealth law provided that persons resident in, and carrying on business at, Sydney, Newcastle, Melbourne, Brisbane, Port Adelaide and Townsville (the six places specified in the present regulations) should be exempt from taxation if their incomes exceeded £500. In such a case, he said, first, that there would be an infringement of s 51(ii) because the law of taxation would ‘discriminate between States or parts of States’. This view is obviously sound, because it is preposterous to suggest that, before the prohibitions of s 51(ii) or s 99 of the Constitution can apply, the name of one or more States must be branded upon the face of the offending legislation … The illustration given by counsel should be followed a little further. Does such an Act as he envisaged confer a preference contrary to s 99 as well as to s 51(ii)? He contended, and his contention has not, and I think cannot, be answered, that such a law would give preference to those residing or carrying on

business in any of the six localities specified over all persons residing or carrying on business in any locality within Western Australia and Tasmania, as well as over all such persons in all localities in the four States except the localities preferred … The logical result of the above discussion of principle and authority is that … … [s] 99 may apply although the legislation or regulations contain no mention of a [page 719] State eo nomine, for example, the section may be infringed if preference is given to part of a State (for example, that part of New South Wales which is represented by the port of Sydney) over another State (for example, Western Australia) or any part of another State (for example, Fremantle or Brisbane).

6.4.10 In the result, the view preferred by Latham CJ in Elliott v Commonwealth prevailed over the alternative that had been favoured by Dixon J and Evatt J. This view, which had also been favoured by Isaacs and Higgins JJ in R v Barger (1908) 6 CLR 41, has some attractions. Let us assume that the policy behind ss 51(ii) and 99 (and ss 51(iii), 90 and 92) is the promotion of a national economy by preventing the Commonwealth playing fiscal and commercial favouritism with certain states at the expense of other states and so retarding the development of an integrated national economy. Even on that assumption, fiscal and commercial policies which involve regional differentiation may assist in developing a national economy. For example, tax concessions to individuals or businesses in arid or remote areas of Australia may be quite

consistent with the development of a national economy. The Latham and Isaacs-Higgins approach would uphold such concessions if the localities to which they extended were identified or defined by reference to their climatic characteristics rather than by reference to the fact that they were states or parts of states. On the other hand, the approach may be vulnerable to two criticisms. The approach is inexact and involves some complex and essentially vague judgments. How does a court distinguish between a law discriminating between Australian localities by reason of such characteristics as climate or isolation and a law discriminating between Australian localities by reason of their identity as states or parts of states? Second, the Latham and Isaacs-Higgins approach might well permit the Commonwealth to avoid, through careful drafting of legislation, the impact of the limitations expressed in ss 51(ii) and 99. Further, the approach preferred by Dixon J and Evatt J does not preclude differentiation designed to promote a national economy. What it precludes is differentiation which uses locality as its criterion. If, for example, a Commonwealth law allowed taxpayers an income tax rebate for their expenditure on petrol if purchased at an above-average price, the law could not be attacked as contravening ss 51(ii) or 99 simply because the benefit of the rebate went to those people who purchased petrol outside capital cities. The differentiation between localities would flow from the application of a uniform rule to different facts, not from the specification of different rules for different localities: see James v Commonwealth (1928) 41 CLR 442 at 462. 6.4.11 In Commissioner of Taxation v Clyne (1958) 100 CLR 246, the validity of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth) was challenged by a

taxpayer against whom the Commissioner of Taxation was seeking to recover unpaid provisional income tax. The taxpayer argued that s 79A (inserted into the Act in 1945) discriminated between states or parts of states contrary to s 51(ii) and gave preference to a state or part thereof contrary to s 99; and that, as a consequence of the invalidity of s 79A, the whole Act was invalid. The section allowed residents of prescribed areas to deduct from their taxable income certain allowances. A resident of Zone A was allowed a deduction of £30 per year. Zone A covered the northern area of Australia, including parts of Western Australia, the Northern Territory and Queensland; Zone B included parts of all states except Victoria, as well as parts of the Northern Territory. The taxpayer lived in neither of these zones. [page 720] Chief Justice Dixon, with whose reasons Williams, Kitto and Taylor JJ agreed, said that Elliott v Commonwealth (1936) 54 CLR 657 6.4.9C had been the decision ‘most discussed during the argument’, and continued (54 CLR at 265–6): In that case the majority of the Court gave to the words ‘one State or any part thereof over another State or any part thereof ‘a restricted meaning. If legislation is attacked as violating that portion of s 99 it would appear that according to that interpretation the legislation will be good unless in some way the parts of the State are selected in virtue of their character as parts of a State. This view seems to accord with that expressed by Isaacs J in relation to s 51(ii) in R v Barger, a view, however, contrary to that taken by the majority of the Court in that case. See further WR Moran Pty Ltd v Deputy Federal Commissioner of Taxation (NSW) [1940] AC at 849, 854. It is a view that was attacked

by Evatt J in his dissenting judgment in Moran’s case. For myself I have the greatest difficulty in grasping what exactly is the requirement that the selection of an area shall be as part of the State. No doubt it may be expressed in various ways, for example, ‘in virtue of its character as part of the State’ or ‘qua part of the State’ or ‘because it is part of a State’ or ‘as such’. However it may be expressed, I find myself unable to appreciate the distinction between the selection by an enactment of an area in fact forming part of a State for the bestowal of a preference upon the area and the selection of the same area for the same purpose ‘as part of the State’.

There was, it transpired, no need for a definitive finding on this issue in Commissioner of Taxation v Clyne (1958) 100 CLR 246. The plaintiff’s argument had been that the addition of the (invalid) amending provision s 79A voided the Commonwealth’s income tax legislation in its entirety. The court held that this consequence would not follow even if s 79A was found to be invalid; hence, s 79A’s validity did not need to be determined. 6.4.12 The debate that played out in Elliott v Commonwealth, though perhaps never resolved in its own terms, has likely been overtaken by more recent developments in the High Court’s approach to the limitations contained in ss 51(ii) and 99. The shift to a substance-based approach to questions of preference arising under s 99, heralded in Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 6.4.18C and extracted below, would seem to render the issue of how to identify ‘parts’ of states defunct. That question will undoubtedly now be subsumed into the overarching question of whether a Commonwealth law differentiates on a rational and relevant basis. As to whether a similar manoeuvre will be possible in the context of s 51(ii)’s proviso, and its reference to ‘between States’, Fortescue

Metals Group Ltd v Commonwealth (2013) 250 CLR 548 6.4.20C is, unfortunately, much less conclusive.

The meaning of discrimination and preference 6.4.13 Until recently, the principles governing the interpretation and application of the s 51(ii) proviso and the s 99 prohibition had developed along a single shared trajectory. Judges, counsel and commentators alike were comfortable discussing the two provisions as though they were functional equivalents, subject to the same tests and considerations. However, in two recent decisions — Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 6.4.18C and Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 6.4.20C — that comfortable assumption has been undermined. In order to comprehend fully the significance of these recent decisions, it is necessary to have some understanding of the position that had prevailed for the better part of a century before the cases were decided. [page 721] Prior to Permanent Trustee, it was understood that a law could not discriminate or give preference unless it established different rules for different parts of Australia. A law which contained a uniform rule, even where that rule’s operation and effect differed throughout Australia, was never seen as having the potential to discriminate or give preference. To borrow the terminology

adopted in rights-focused discrimination jurisprudence, this understanding turned on a distinction between formal (or direct) discrimination and substantive (or indirect) discrimination. The case law on the limitations in ss 51(ii) and 99 considered only the former — differentiations that could be regarded as formal or direct — to be constitutionally suspect. Justice Higgins underscored this narrow understanding of discrimination in James v Commonwealth (1928) 41 CLR 442 at 462: Where the rule laid down is general, applicable to all States alike, but is found to operate unequally in the several States not from anything done by the Commonwealth Parliament but from the inequality of the conditions existing in, or the law imposed by, the States themselves, the Commonwealth has not been guilty of discrimination or preference between States.

In that case, the High Court considered a challenge to the Dried Fruits Act 1928 (Cth), which set up a licensing system for the interstate trade in dried fruits. This was part of an attempt to rationalise the dried fruits industry, in which the supply considerably exceeded demand. A grower was forbidden to deliver his or her dried fruit for interstate carriage except under a licence issued by a prescribed authority in the grower’s state. Licensing authorities were prescribed for the states of New South Wales, South Australia, Victoria and Western Australia, the only states where dried fruits were produced in commercial quantities for interstate trade. The court held that the legislation (‘a law … of trade, commerce’) gave a preference to the four states because a grower in Queensland and Tasmania could not obtain a licence. It did not matter that there were no growers in either of those states who required licences; what was critical was the legal form of the legislation. On its face, the legislation gave preference to one state

over another; and, of course, it could not be said that there would never be interest in producing dried fruit in Queensland or Tasmania. 6.4.14 Similarly, in Cameron v Federal Commissioner of Taxation (1923) 32 CLR 68, the High Court held invalid Commonwealth income tax regulations which prescribed the value to be assigned to livestock in different states of Australia when calculating the profit made on the sale of that stock. The values assigned differed between the states. An argument that the prescribed values represented the fair value of each type in each state was rejected as irrelevant. Isaacs J said (32 CLR at 76–7): It does not matter whether those standards are arbitrary or measured, whether dictated by a desire to benefit or to injure, the simple fact is they are ‘different’, and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden by the Constitution.

6.4.15 On the other hand, in Colonial Sugar Refining Co Ltd v Irving [1906] AC 360, the Privy Council held valid a provision of the Excise Tariff Act 1902 (Cth) which exempted from duties of excise goods on which customs or excise duties had been paid under state legislation before 8 October 1901. Lord Davey said (AC 360 at 367–8): The rule laid down by the Act is a general one, applicable to all States alike, and the fact that it operates unequally in the several States arises not from anything done by the Parliament,

[page 722]

but from the inequality of the duties imposed by the States themselves. The exemption from the excise duties on the ground of the previous payment of customs duties seems justifiable and right in establishing a system based on the absolute freedom of trade among the States and the substitution of a uniform excise for all interstate duties on goods as well as what are strictly called excise duties.

6.4.16 This understanding of ‘discrimination’ and ‘preference’, focused as it was on legal form, went undisturbed in the context of ss 51(ii) and 99, even as it was being progressively uprooted in other parts of the Constitution. In a series of decisions beginning with Street v Queensland Bar Association (1989) 168 CLR 461 9.8.5C, the court began ‘to promote a universal conception of discrimination that transcends the constitutional context and yet has particular purchase there’: Simpson, 2007, at 269. Within a few short years, the court had recast its understanding of discrimination so as to place the focus firmly upon the substantive operation of an impugned law. This modernised approach was stated succinctly by Gaudron, Gummow and Hayne JJ in Austin v Commonwealth (2003) 215 CLR 185 6.2.45C at 247: The essence of the notion of discrimination is said to lie in the unequal treatment of equals or the equal treatment of those who are not equals, where the differential treatment and unequal outcome is not the product of a distinction which is appropriate and adapted to the attainment of a proper objective.

6.4.17 Eventually, the new constitutional understanding of discrimination, as a concept requiring substance-focused analysis, found its way into the relative backwaters of ss 51(ii) and 99 of the Constitution. That arrival was declared in Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388.

The appellant challenged provisions of the Commonwealth Places (Mirror Taxes) Act 1998 (the Mirror Taxes Act), asserting that these gave a ‘preference’ as between states or parts of states, contrary to s 99 of the Constitution. The legislation subjected Commonwealth land within states, over which the Commonwealth has ‘exclusive’ law making power (s 52(i)), to equivalent types and rates of taxation as were applied elsewhere in those states pursuant to state law. In other words, the Commonwealth’s legislation ‘picked up’ and applied different tax rates depending upon the state in which a Commonwealth place was located. The appellant’s case turned on the significant disparities in the applicable tax rate from one state to another; in particular, the court was told that certain transactions concerning Commonwealth places in Victoria triggered a tax liability that was considerably higher than would have been the case for a similar transaction in New South Wales. The respondent commissioner submitted that the Act imposed a uniform rule — taxation of Commonwealth places at the same rate as surrounding non-Commonwealth places — with different outcomes reflecting a variable controlled by the states. Given that control, the commissioner argued, resulting differences should not be understood as ‘giv[ing] preference’ in the s 99 sense. By a majority of 5:2 the High Court rejected that analysis, finding a different rationale for dismissing the appeal.

6.4.18C

Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388

[The joint majority judgment of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ confirmed that the Commonwealth’s legislative power over Commonwealth places (s 52(i)) could support laws with respect to taxation, and that that power was subject to the prohibition in s 99. Their Honours then considered the meaning of ‘preference’:] [page 723] Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ: The second submission by the appellant on this head of argument concerns the existence and nature of the prohibited preference. The appellant accepts that there would be no infringement of s 99 by the imposition by federal law of a stamp duty which applied to all Commonwealth places whatever their location, even though the result could be that within the one State different rates would apply depending on the situation of a locality inside or outside a Commonwealth place in that State. What the appellant does assert is that the Mirror Taxes Act has an effect of preferring one State over another State because different rates of taxation and exemptions from taxation apply depending solely on whether the relevant Commonwealth place is in one State rather than another. The rates of taxation and, indeed, the types of taxes that are imposed by federal law differ from State to State. These submissions should not be accepted. Several points should be made. First, this is not the occasion to seek to disentangle the reasoning in all the disparate authorities in the

first 50 years of the Court which concern s 99 in its operation upon ‘any law or regulation of trade, commerce …’. Secondly, the critical phrase in s 99, ‘give preference … over’, expresses, as Dixon J put it in Elliott v The Commonwealth, ‘a conception necessarily indefinite’. As a consequence, in a given case, much will depend upon the level of abstraction at which debate enters upon the particular issue. Hence the statement by Latham CJ in Elliott that the words ‘give preference to A over B’ are not to be construed as meaning ‘make a distinction or differentiation between A and B’. Elliott itself held, by majority, that the specification by the regulations challenged by the plaintiff of ports in some States only where unlicensed persons were not to be engaged as seamen did not give preference to any State or part thereof over another State or part thereof. Thirdly, in Elliott, Latham CJ (one of the majority) remarked that, while preference necessarily involves discrimination or lack of uniformity, the latter does not necessarily involve the former. In the same case, Dixon J (one of the minority) expressed the same idea, saying: To give preference to one State over another State discrimination or differentiation is necessary. Without discrimination between States or parts of respective States, it is difficult to see how one could be given preference over the other. But I agree that it does not follow that every discrimination between States is a preference of one over the other. The expressions are not identical in meaning. More nearly, if not exactly, the same in meaning, is the expression ‘discrimination against’. Later, speaking of the term ‘discrimination’ in s 117 of the Constitution, Gaudron J declared in Street v Queensland Bar Association: Although in its primary sense ‘discrimination’ refers to the

process of differentiating between persons or things possessing different properties, in legal usage it signifies the process by which different treatment is accorded to persons or things by reference to considerations which are irrelevant to the object to be attained. The primary sense of the word is ‘discrimination between’; the legal sense is ‘discrimination against’. This notion of discrimination as manifested in the text and interpretation of the Constitution was further considered in Austin v Commonwealth. There, Gaudron, Gummow and Hayne JJ observed, with reference to recent authority: [page 724] The essence of the notion of discrimination is said to lie in the unequal treatment of equals or the equal treatment of those who are not equals, where the differential treatment and unequal outcome is not the product of a distinction which is appropriate and adapted to the attainment of a proper objective. In Elliott itself, some anticipation of this reasoning may be seen in the judgments of Rich J and Starke J (both members of the majority). Rich J said that the imposition of a licensing system at a particular port was conditioned upon a view of the necessity of executive action to maintain order and regularity at particular localities where those conditions did not exist or were imperilled. Starke J declared: Special legislation may be required for some localities and special rules for various occupations. Such discriminations are often desirable, but they are by no means preferences prohibited by s 99. A licensing system applied to some ports in Australia and not to others is but an illustration of this

kind of discrimination. In some ports the conditions may be such as to require some local regulation of labour whilst in others regulation may be wholly unnecessary. But this is not a preference of one locality over another, or of one State or part of a State over another: it is a regulation required for the circumstances of particular ports and the labour conditions of those ports. Where then in the Mirror Taxes Act is there to be found the necessary element of discrimination between one State or any part thereof and another State or any part thereof? The scheme of the Mirror Taxes Act is to treat as relevantly of the same character the whole of the geographic area of each State, including those portions which are Commonwealth places; the taxation laws applying in the Commonwealth places are assimilated with those laws in the surrounding State. The scheme of the Mirror Taxes Act may produce differences in revenue outcomes between States, but that mirrors the differences that exist between the different taxation regimes from State to State. The differential treatment and unequal outcome that is involved here is the product of distinctions that are appropriate and adapted to a proper objective. There is no benefit or advantage enjoyed in or in relation to a Commonwealth place that is not shared by the remainder of the State in which it is located. The nature of the power of modification conferred by s 8 of the Mirror Taxes Act is a significant pointer in the direction of the conclusions just stated. Modifications may be made for the purpose of enabling an applied law to operate so that the combined tax liability of a taxpayer under the applied law and the corresponding State taxing law is ‘as nearly as possible the same as the taxpayer’s liability would be under the corresponding State taxing law alone if the Commonwealth places in the State were not Commonwealth places’ (s 8(4)). The appellant resisted these conclusions by reliance in particular upon Cameron v Deputy Federal Commissioner of

Taxation. In that case, the valuation placed by regulations made under the Income Tax Assessment Act 1915 (Cth) upon livestock differed according to the particular State in which the livestock was found and regardless of any other circumstances. The effect was held to discriminate between States or parts of States within the meaning of s 51(ii) of the Constitution. The appellant submits that, as with the regulations under challenge in Cameron, the criterion which gives rise to differential treatment here is location of the proposed hotel at Tullamarine Airport. That involves several oversimplifications. The application of the Mirror Taxes Act produces the same revenue outcome as if the site were elsewhere in the State of Victoria. It is true that if the site were a Commonwealth place in another state the Mirror Taxes Act could produce a [page 725] result differing from that obtained at Tullarmarine Airport. However, this would be a product of the assimilation of the other Commonwealth place to the situation of other localities in the other state in question. The differential outcome would reflect the policy expressed and implemented by s 8(4) of the Mirror Taxes Act. Even if all Commonwealth places, whatever their State location, are to be considered as relevantly ‘equal’, their differential treatment to assimilate them in this way is a proper objective in the sense of the authorities. The result is that there is no infringement of the prohibition in s 99 of the Constitution. McHugh J: Questions of preference under s 99 of the Constitution are not synonymous with the legal notion of discrimination although no doubt preference involves discrimination in one sense in treating one State or part differently from another State or part. The correct meaning and

application of s 99 is not informed by the jurisprudence that has developed in respect of discrimination in equal opportunity law in the last 50 years. In s 99, ‘give preference’ means no more than give advantage or priority. It is not concerned with the objective or motive of the giver. The differential treatment of States or parts of States cannot be justified by saying that the difference is the product of a distinction which is appropriate and adapted to the attainment of some proper objective of the Parliament of the Commonwealth. The mischief to which s 99 is directed is not the fairness or unfairness of the effect of any preference given in a particular case. The section is contravened by the mere giving of a preference referable to the State or part of a State to which the law applies. Under the Mirror Taxes Act, two identical transactions, occurring in Commonwealth places, may be assessed for different amounts of stamp duty, solely by reference to the State in which the Commonwealth place is located. The relevant ‘equals’ to compare for the purpose of identifying a preference in this case are those transacting in Commonwealth places, not those transacting in each State. That is because s 99 is concerned with preferences given by the federal Parliament. The federal law cannot prefer one Commonwealth place over another by reference to the State in which it is located. And yet that is what the Mirror Taxes Act purports to do. Consistently with s 99, the Parliament of the Commonwealth cannot levy an income tax of 65 cents in the dollar on all residents of Australia except those residing in the Kimberley or Cape York regions although the law has the worthy objective of encouraging development in remote areas of Australia. What s 99 says is that the Commonwealth ‘shall not … give preference’. It must not prefer one State or part of a State over another State or any part thereof. Those who made the Constitution were well aware of the distinction between preference and discrimination, as they made plain in enacting s 102. They were also well aware that, in some cases, preference or discrimination might operate unduly, unreasonably or unjustly. That is why in s 102 the Parliament was

empowered to make laws forbidding any preference or discrimination as to railways that was ‘undue and unreasonable, or unjust to any State; due regard being had to the financial responsibilities incurred by any State in connexion with the construction and maintenance of its railways’. They made no such qualification in s 99. Nor is the application of s 99 determined by reference to whether any benefit or advantage enjoyed in relation to a Commonwealth place is not shared by the remainder of the State in which it is located. According to four Justices of this Court in Morgan v The Commonwealth [(1947) 74 CLR 421 at 452], s 99 ‘does not purport to deal with preferences within a single State’. The issue is not whether the Mirror Taxes Act produces the same revenue outcome as would be the case if the Commonwealth place was not a Commonwealth place. It is whether a law of the Parliament lays down a rule for Victoria that is different from the rule that it lays down in the same Act for other States and that rule benefits Victoria or the other States. If it does, it is invalid whatever its objectives or motives. Section 99 is concerned with [page 726] the character of the law or regulation raising revenue and not with the objects of that law. As Isaacs J pointed out in Cameron [(1923) 32 CLR 68 at 76–77]: It does not matter whether those legal standards are arbitrary or measured, whether dictated by a desire to benefit or to injure, the simple fact is they are ‘different’, and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden by the Constitution.

Regardless of the legislative objective, if, from a federal perspective, the application of those different legal standards results in a preference, as it does in this case, the Constitution forbids the federal law. [Kirby J gave a separate dissenting judgment. Like McHugh J, his Honour reasoned that the federal purpose of s 99 required that it be applied solely by reference to the form of Commonwealth laws, meaning that substance-focused discrimination analysis had no place in this context. For a critique of the decision, see Simpson, 2007.]

6.4.19 One might have assumed that, following Permanent Trustee, the court would in due course bring the same modernised discrimination analysis to bear upon the s 51(ii) proviso. When the opportunity to take that step finally arrived, almost 10 years later, the expected forgone conclusion did not eventuate. In Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 (introduced at 6.2.52), the court was asked to apply both the s 51(ii) proviso and s 99. While the decision was unanimous, there were significant differences of approach among the judgments. The question of whether the impugned Commonwealth provisions infringed the s 99 prohibition on giving preference was not given a full airing in the judgments. Only French CJ applied Permanent Trustee directly to the facts to yield a conclusion — of no ‘preference’ — in regard to s 99: 250 CLR at 585–6. The other judgments circumvented the need to apply Permanent Trustee, by invoking the plaintiff’s apparent concession in argument that if there was no finding of s 51(ii) discrimination then there could be no finding of s 99 preference: 250 CLR at 607 per Hayne, Bell and Keane JJ; 623 per Crennan J; 625 per Kiefel J.

In relation to the s 51(ii) proviso, while all judgments agreed that the impugned provisions did not ‘discriminate between States’, there was disagreement as to which test should be applied. The plurality of Hayne, Bell and Keane JJ resisted the introduction of modern discrimination analysis. 6.4.20C Fortescue Metals Group Ltd v Commonwealth (2013) 250 CLR 548 Hayne, Bell and Keane JJ: [T]he plaintiffs and Queensland took as their premise that the [Minerals Resource Rent Tax (MRRT) legislation] treated equals unequally and, on that account, was discriminatory. More particularly, those submissions proceeded from the premise that s 51(ii) should be read as preventing the enactment of a law with respect to taxation which has different economic or other consequences in different States. And the plaintiffs [page 727] argued that the MRRT Legislation discriminates against those States which wished to consider lowering their State royalty rates. None of these propositions is consistent with any of the cases that have been decided about s 51(ii), and that is reason enough to reject each of them. … It is, however, desirable to say more about why bare demonstration of different consequences in different States does not show that a law with respect to taxation discriminates between States or parts of States. Different consequences in different States

As already noted, the limiting words of s 51(ii) do not speak of a law that discriminates against States or parts of States and should be read as referring to geographic differentiation, not to the effect of the relevant law on a State as a polity. To discriminate against someone or something is ‘to make an adverse distinction with regard to; to distinguish unfavourably from others’. And, of course, there has evolved a developed body of thinking about how the notions of ‘adverse’ or ‘unfavourable’ discrimination are to be understood and applied. Discrimination connotes comparison. It directs attention to whether like cases are treated alike and different cases differently. But there may be two distinct questions that must be answered. First, are the cases that are being compared alike or different? Second, are the two cases treated alike or differently? It is particularly in the context of questions of ‘adverse’ or ‘unfavourable’ discrimination (or their converse cases of ‘preference’ or ‘advantage’) that comparison is central to identifying discrimination. In undertaking the task of comparison, it is often necessary to exercise great care when identifying the relevant comparator; for it is necessary to identify a comparator that will enable identification of some relevant difference in treatment of cases that are alike, or some relevant identity of treatment of cases that are different. And it is in that same kind of context that it may be necessary to examine ‘the relevance, appropriateness, or permissibility of some distinction by reference to which such treatment occurs, or by reference to which it is sought to be explained or justified’: Bayside City Council v Telstra Corporation Ltd (2004) 216 CLR 595, 629–630. In applying the limitation contained in s 51(ii), there is no question about selecting an appropriate comparator. Section 51(ii) expressly provides for the comparison that must be made. Does the impugned law discriminate between States or parts of States? Section 51(ii) thus provides that, whatever differences may be observed between States or parts of States, a law of the

Parliament with respect to taxation may itself neither create nor draw any distinction between States or parts of States. In that sense, at least, the prohibition which the qualifying words of s 51(ii) provide is cast in absolute terms. The power to make a law with respect to taxation may not be exercised so as to discriminate. By contrast, as noted earlier, s 102 gives power to the Parliament, by any law with respect to trade or commerce, to forbid, as to railways, ‘any preference or discrimination by any State, or by any authority constituted under a State, if such preference or discrimination is undue and unreasonable, or unjust to any State’ (emphasis added), when ‘due regard’ is had to certain matters. Section 51(ii) uses no qualifying words like ‘undue’, ‘unreasonable’ or ‘unjust’. It erects a rule expressed simply as ‘so as not to discriminate’ (emphasis added). In its terms, then, s 51(ii) may be read as assuming that there are no differences between States (or parts of States) which could warrant a law with respect to taxation distinguishing between them. An assumption of that kind would fit comfortably with the limiting words of s 51(ii) fulfilling a fundamental federal purpose: that laws with respect to taxation enacted [page 728] by the federal Parliament treat all States and parts of States alike. If this is the assumption that underpins s 51(ii), it would follow that, if a law with respect to taxation does discriminate between States (or parts of States), no further question could arise about whether the distinction that the law created or drew might none the less be explained or justified in a way that would take the challenged law outside the qualifying words of the provision. And if no further question of that kind need be answered, there would be no occasion to identify or consider the relationship that the law may have with some object or end which is identified as ‘proper’ or ‘legitimate’, because there could be no

object or end that could constitute or reflect some difference between States (or parts of States) which would justify distinguishing between them. … The Commonwealth submitted that if, contrary to its principal submission, the MRRT Legislation ‘somehow had a relevant differential treatment or unequal outcome, it does not follow that the legislation is discriminatory between States’. In support of that submission, the Commonwealth referred to the plurality’s reasons in [Austin v Commonwealth (2003) 215 CLR 185 [6.2.45C] at 247] which noted that ‘[t]he essence of the notion of discrimination is said to lie in the unequal treatment of equals or the equal treatment of those who are not equals, where the differential treatment and unequal outcome is not the product of a distinction which is appropriate and adapted to the attainment of a proper objective’. Whether, or how, this proposition was to be applied to a law with respect to taxation did not have to be, and was not, explored in Austin. And although the proposition was repeated in Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388, 424, it was again unnecessary to explore its application to a law with respect to taxation. Nor is it necessary to undertake that task in this matter. The MRRT Legislation does not discriminate between States or parts of States. It has no different application between States. Observing that a miner would pay a different amount of MRRT if that miner conducted identical operations in a different State does not demonstrate discrimination. It may be accepted that consideration of whether a law discriminates between States or parts of States is not to be resolved by consideration only of the form of the law. The legal and practical operation of the law will bear upon the question. It by no means follows, however, that the law is shown to discriminate by demonstrating only that the law will have different effects on different taxpayers according to the State in which the taxpayer conducts the relevant activity or receives the relevant income or profit. In particular, a law is not shown to discriminate

between States by demonstrating only that it will have a different practical operation in different States because those States have created different circumstances to which the federal Act will apply by enacting different State legislation. [Via this route, the plurality arrived at its conclusion that the MRRT regime did not discriminate between states in a way that engaged the s 51(ii) proviso: 250 CLR at 607. Kiefel J adopted similar reasoning: 250 CLR at 629–30, 635–6. Crennan J specifically left for another day the question of a modernised approach to the s 51(ii) proviso: 250 CLR at 623. The only member of the court to endorse the modernisation of discrimination analysis in the s 51(ii) context was French CJ.] French CJ: Reasonable differences The Commonwealth submitted that even if the MRRT Act gave rise to differential treatment or unequal outcomes as between States, it did not follow that it was a law made ‘so as to [page 729] discriminate between States or parts of States’. Relying upon [Austin v Commonwealth and Permanent Trustee] the Commonwealth submitted that: the MRRT being a tax on profits, not on revenue, Parliament was entitled to conclude that profits could not accurately be identified without regard to costs and outgoings incurred in the course of deriving revenue — one such class of costs and outgoings being royalty payments made to the relevant State Government; the MRRT being a tax on above normal profits or economic rents, the Act proceeds on the basis that royalties may

indirectly and at least in part constitute charges on the economic rents which the Act makes subject to taxation. To ignore State royalties in the calculation of the MRRT liability would be to risk imposing a tax on economic rents at a higher rate than intended or on profits that were merely necessary to preserve the economic viability of a mining project. On that basis, the Commonwealth submitted that any differential treatment or unequal outcome under the MRRT Act was the product of a distinction which was appropriate and adapted to the attainment of the objectives identified, each of which was a proper objective of the Parliament. The plaintiffs submitted, in effect, that such reasoning had no place in the characterisation of the MRRT Act as discriminatory or otherwise. If the law were unequally imposed it was prohibited by s 51(ii) regardless of the objectives. … As explained earlier in these reasons, the constraints imposed by ss 51(ii) and 99 of the Constitution serve a federal purpose — the economic unity of the Commonwealth and the formal equality in the Federation of the States inter se and their people. Those high purposes are not defeated by uniform Commonwealth laws with respect to taxation or laws of trade, commerce or revenue which have different effects between one State and another because of their application to different circumstances or their interactions with different State legal regimes. Nor are those purposes defeated merely because a Commonwealth law includes provisions of general application allowing for different outcomes according to the existence or operation of a particular class of State law. A criterion for determining whether that category of Commonwealth law discriminates or gives a preference in the sense used in ss 51(ii) and 99 is whether the distinctions it makes are appropriate and adapted to a proper objective. … The objective of the impugned provision in [Permanent Trustee] was non-discriminatory. So too are the objectives

of the impugned provisions of the MRRT Act. In general terms, they are those set out in the stated objectives of the Act referred to at the commencement of these reasons. The differences in the operation of the MRRT Act which arise out of its interaction with different royalty regimes serve those objectives. They are proper objectives, to which the impugned provisions are appropriate and adapted. The text, history, purpose and judicial exegesis of s 51(ii) require that the question whether the MRRT Act discriminates impermissibly be answered in the negative.

6.4.21 Commenting on the reasoning in Fortescue Metals Group Ltd v Commonwealth, Amelia Simpson made the following observation (Simpson, 2014, at 95–6): [The case] … is anomalous among constitutional discrimination cases decided over the last quarter century. For a High Court majority to say, in effect, ‘this law applies a uniform rule to all States, therefore we do not need to scrutinise it with a substance-focused test’ seems, without more, inadequate — given the trajectory of constitutional nondiscrimination jurisprudence in recent decades. A reasoned objection to modernising the s 51(ii) proviso

[page 730] would have been easy enough to construct — the dissents in Permanent Trustee represent two persuasive variations on such a position. The extension of modern substance-focused non-discrimination jurisprudence to a new context could be resisted by reference to constitutional policy — including modern and historical perspectives on federalism — or considerations of judicial policy, such as the appropriate scope of discretion and deference. Alas, with the exception of French

CJ’s judgment, none of that explication is present in [Fortescue Metals Group Ltd v Commonwealth].

6.4.22 At the time of writing, the most recent word from the High Court on the correct approach to the s 51(ii) proviso and s 99 is that offered in Queensland Nickel Pty Ltd v Commonwealth (2015) 255 CLR 252. In that case, a unanimous court rejected a s 99 challenge to provisions in the Commonwealth’s Clean Energy Regulations 2011. The impugned regulations provided for the granting of ‘free carbon units’ — a form of tax credit — to nickel producers, among others, under the auspices of a scheme known as the Jobs and Competitiveness Program (JCP). In the context of the (since repealed) federal carbon tax established by the Clean Energy Act 2011 (Cth), the distribution of free carbon units to heavy emitters of greenhouse gases was intended to compensate them for the potential damage to their international competitiveness as a result of their tax liability. The units could be offset against a recipient’s tax liability to reduce the tax payable. The plaintiff, which owned and operated a nickel refinery in Queensland, was assessed for carbon tax and also benefited from the distribution of free carbon units under the JCP. Its claim of s 99 preference hinged on the fact that the free carbon units were awarded by reference to the amount of nickel produced, rather than by reference to the amount of greenhouse gas emitted (and hence the magnitude of the carbon tax liability). Queensland Nickel’s refinery was established decades earlier than those of its major competitors located in Western Australia and its processes were considerably less efficient. It was accepted in argument that it would have been economically untenable for Queensland Nickel to alter its refinery processes in an effort to minimise carbon tax

liability. The plaintiff sought to draw a causal link between the refinery’s comparatively inefficient processes and its geographic location, in order to make its case that the Commonwealth’s regulations gave preference to miners in Western Australia over those in Queensland. Justice Nettle, with whom all other members of the court agreed, found nothing in the decided s 99 cases to suggest that the JCP infringed the prohibition on preference (255 CLR at 265–7): In some earlier judgments in this Court, it was considered that the question of whether a law or regulation discriminates in the relevant sense was to be determined solely by reference to the legal form of the law or regulation or perhaps by reference to whether the law or regulation had a discriminatory purpose as well as drawing a formal legal distinction. Later, it came to be accepted that, generally speaking, the practical effect of the law or regulation may also bear on the question. Nonetheless, the view consistently taken in relation to taxation laws has been that it is not enough, in order to demonstrate discrimination in the relevant sense, to show only that a taxation law may have different effects in different States because of differences between circumstances in those States. … Construed accordingly, it is apparent that the JCP did not discriminate between States. In terms, it applied equally to eligible persons carrying on the production of nickel regardless of the State of production and, in terms of practical effect, the plaintiff did not suggest that

[page 731] the differences in inputs, production processes and outputs were due to anything other than differences in natural, business and other circumstances as between the States of production.

6.4.23 The plaintiff’s case, however, had a twist. It contended that, unlike all earlier cases raising the s 99 prohibition, this case concerned the application of a uniform rule to legal subjects whose situations were, in important respects, not ‘alike’. Specifically, the nickel refining processes undertaken in Queensland were, as to the methods employed, significantly different from those undertaken in Western Australia, so that the application of a uniform rule to both kinds of operation worked a preference that was rooted in geographic location. The plaintiff attempted to convince the court that the nickel ore that was once mined close to its refinery site required a particular extractive process; accordingly, it submitted, the choice of process, made in the 1970s, had been dictated by geography. 6.4.24 Justice Nettle chose to sidestep the issue of whether a uniform rule could ever infringe the s 99 prohibition. His Honour said that that was unnecessary to consider, because the facts here did not make out the plaintiff’s assertion of a geographic basis for its selection of extractive technology (255 CLR at 267–9): [E]ven allowing that there might be cases in which s 99 is attracted to a Commonwealth taxing Act because it produces different consequences in different States as the result of differences between States in natural, business or other circumstances, in this case it does not appear that any of the differences between the plaintiff’s and the Western Australian nickel producers’ inputs, production processes or outputs were due to differences between Queensland and Western Australia in natural, business or other circumstances. … … [T]he plaintiff’s technological disadvantages relative to [Western Australian competitors] … were due to the plaintiff having made its choice of processing system when the available technology was not as advanced ….

6.4.25 Queensland Nickel was resolved in a way that was strangely non-committal about the significant revision of s 99 principle in Permanent Trustee Australia Ltd v Commissioner of State Revenue (2004) 220 CLR 388 6.4.18C. Remarkably, Permanent Trustee was not even cited, let alone discussed, in the reasons of Nettle J in Queensland Nickel, endorsed by the entire court. One might wonder whether this downplaying of Permanent Trustee signals a change of heart by the court on whether modern nondiscrimination reasoning has any place in the application of federal fiscal provisions such as s 99. (For further discussion of that question, see Simpson, 2014.) 6.4.26 Some of the barriers presented to the Commonwealth by ss 51(ii) and 99 may be overcome through the use of the grants power contained in s 96. In WR Moran Pty Ltd v Deputy Federal Commissioner of Taxation (1940) 63 CLR 338, the Privy Council upheld a decision of the High Court in which challenges to several Commonwealth Acts had been rejected. One of the Acts imposed a tax on flour millers throughout Australia, and another provided for a payment to the Tasmanian Government of a sum equivalent to the money raised from Tasmanian taxpayers. It was understood that the Tasmanian Government would transfer this money to the Tasmanian taxpayers. An argument that, viewed together, the Acts gave preference to Tasmania, or discriminated between states, contrary to ss 51(ii) and 99, was rejected by both the High Court and the Privy Council on the ground that Commonwealth grants to states under s 96 were not subject to the rule against discrimination or preference: see 5.3.17–5.3.18. [page 732]

Chapter references Articles and book chapters Aroney, ‘Constitutional Choices in the Work Choices Case, or What Exactly is Wrong with the Reserved Powers Doctrine?’ (2008) 32(1) Melbourne University Law Review 1–43 Bellia, ‘State Courts and the Making of Federal Common Law’ (2005) 153 University of Pennsylvania Law Review 825 Dixon, ‘Two Constitutions Compared’ in Woinarski (ed), Jesting Pilate, Law Book Company, Sydney, 1965, p 101 Hill, ‘Will the High Court “Wakim” Chapter II of the Constitution?’ (2003) 31(3) Federal Law Review 445–93 Hill and Beech, ‘Picking up State and Territory Laws under s 79 of the Judiciary Act: Three Questions’ (2005) 27(1) Australian Bar Review 25–55 Latham, ‘The Law of the Commonwealth’ in Hancock, Survey of British Commonwealth Affairs: Problems of Nationality 1918–1936, Oxford University Press, London, 1937 Lindell, ‘Grappling with Inconsistency Between Commonwealth and State Legislation and the Link with Statutory Interpretation’ (2005) 8(2) Constitutional Law and Policy Review 25–44 Moorhead, ‘Prohibiting the Conscription of State Officers for Commonwealth Purposes: An American Future for the State Immunity Doctrine’ (2007) 35(3) Federal Law Review 399–430

Rose, ‘The Commonwealth Places (Application of Laws) Act 1970’ (1971) 4 Federal Law Review 263 Rose, ‘Discrimination, Uniformity and Preference — Some Aspects of the Express Constitutional Provisions’ in Zines (ed), Commentaries on the Australian Constitution, Butterworths, Sydney, 1977, pp 191, 200 Rumble, ‘Manufacturing and Avoiding Constitution Section 109 Inconsistency: Law and Practice’ (2010) 38 Federal Law Review 3 at 445–66 Ryan and Hiller, ‘Recent Litigation and Legislation on Commonwealth Places’ (1971) 2 Australian Company Law Review 163 Simpson, ‘State Immunity from Commonwealth Laws: Austin v Commonwealth and Dilemmas of Doctrinal Design’ (2004) 32(1) University of Western Australia Law Review 44–62 Simpson, ‘The High Court’s Conception of Discrimination: Origins, Applications and Implications’ (2007) 29(2) Sydney Law Review 263–95 Simpson, ‘Fortescue Metals Group Ltd v Commonwealth: Discrimination and Fiscal Federalism’ (2014) 25 Public Law Review 83 [page 733] Twomey, ‘Federal Limitations on the Legislative Power of the States and the Commonwealth to Bind One Another’ (2003) 31 Federal Law Review 507 Twomey, ‘Inconsistency between Commonwealth and

Territory Laws’ (2014) 42 Federal Law Review 421 Books and texts Aroney, Gerangelos, Murray and Stellios, The Constitution of the Commonwealth of Australia: History, Principle and Interpretation, Cambridge University Press, Port Melbourne, Vic, 2015 Lane, A Manual of Australian Constitutional Law, Law Book Co, Sydney, 1987, pp 61–79 (s 51(ii)); pp 355–74 (s 90); pp 411–18 (s 96) Leeming, Resolving Conflicts of Laws, Federation Press, Sydney, 2012 Sawer, Australian Federalism in the Courts, Melbourne University Press, Melbourne, 1967 Stellios, The Federal Judicature: Chapter III of the Constitution, LexisNexis Butterworths, Sydney, 2010 Stellios, Zines’s The High Court and the Constitution, 6th ed, Federation Press, Sydney, 2015 Wheare, Federal Government, 4th ed, Oxford University Press, London, 1963 Papers and reports Crommelin, ‘Governance of Oil and Gas Resources in the Australian Federation’, University of Melbourne Legal Studies Research Paper No 432, 17 November 2009 Speeches and presentations Gans, ‘Concurrent Criminal Offences after Dickson v R’, presentation delivered at Gilbert and Tobin Constitutional Law Conference, Sydney, 2011

[page 735]

The Executive

CHAPTER 7

INTRODUCTION 7.1.1 This chapter focuses on the executive government and executive power. It will commence by considering the place, role and power of the Queen and her representatives within the constitutional structures of the Commonwealth and states. In the British constitutional tradition, any examination of the executive must commence with, and be informed by, the concept of the ‘Crown’. Modern conceptions of the executive arm of government and executive power have their origins in, and are partly defined by reference to, the historical place of the Crown within the constitutional system. As Professor Cheryl Saunders has observed, the continuing currency and usage of the concept of the Crown in the United Kingdom can be explained by the course of British constitutional development: Reliance on the concept [of the Crown] in the United Kingdom has been made both possible and, arguably, necessary by the course of the long, evolutionary history of the British Constitution. There has been no abrupt, lasting revolutionary break with the past and no formal, lasting, written constitution. Instead, a process of transition from relatively authoritarian monarchical rule to a parliamentary democracy in which the Monarch plays a largely formal role has occurred gradually through

political practice explicated by constitutional theories, only occasionally assisted by legal change or institutional redesign (Saunders, 2015, p 876).

7.1.2 The Crown has been accommodated within Australian constitutional arrangements through the inherited institution of responsible government and constitutional conventions. This chapter will explore the way in which the Crown finds its place within the Australian constitutional system. The chapter will then turn to the modern conception of the executive arm of government and its institutional forms; the executive powers, rights and privileges that it possesses; and the mechanisms for its control and accountability.

The law and convention of ‘the Crown’ 7.1.3 There are two elements to any constitutional monarchy: the (usually) prior institution of monarchy itself, and the subsequent limitations imposed on it by overriding constitutional arrangements. In the United Kingdom and its former colonies, as in most other constitutional monarchies, these limits on formerly absolute power have stemmed from adoption of a [page 736] parliamentary form of government. As discussed in Chapter 1, these limits developed over a long period of British history, some as principles of the common law, others as charters forced on the monarch or Acts of Parliament, and still others as unwritten ‘conventions’ enforced politically rather than in the courts.

Important conventional changes to the role of the Queen and her Australian representatives in the 20th century stemmed from agreements struck at conferences of the former British Empire, later British Commonwealth of Nations, predecessors of today’s Commonwealth Heads of Government Meetings (CHOGMs): see 1.3.7–1.3.9C. Australia’s written constitutions have not repealed or revised comprehensively the pre-existing law and convention of ‘the Crown’, but rather largely assumed its existence. This means that many important principles of Australian executive government are rules of the common law, conventions or originally Imperial statutes. The status of these rules can sometimes be ambiguous, particularly considering that common law and convention can be overridden, and most Imperial legislation repealed, by written constitutional instruments or other inconsistent Australian legislation.

‘The Crown’: a term with many meanings 7.1.4 Around the time of Australian federation, the English legal historian Frederic Maitland wrote: [T]here is one term against which I want to warn you, and that term is ‘the crown’. You will … read that the crown does this and the crown does that. As a matter of fact we know that the crown does nothing but lie in the Tower of London to be gazed at by sight-seers. No, the crown is a convenient cover for ignorance: it saves us from asking difficult questions … If you are told that the Crown has this power or that power, do not be content until you know who legally has the power — is it the king, is it one of his secretaries: is this power a prerogative power or is it the outcome of statute? (Maitland, 1908, p 418.)

The abstract term ‘the Crown’ is rarely used in the Commonwealth Constitution. However, in the Anglo-Australian constitutional tradition, it is used in several distinct, and sometimes confusing, senses. 7.1.5C

Sue v Hill (1999) 199 CLR 462

Gleeson CJ, Gummow and Hayne JJ: The meaning of ‘the Crown’ in constitutional theory … [I]t is necessary to say a little as to the senses in which the expression ‘the Crown’ is used in constitutional theory derived from the United Kingdom. In its oldest and most specific meaning, ‘the Crown’ is part of the regalia … ‘necessary to support the splendour and dignity of the Sovereign for the time being’, is not devisable and descends from one sovereign to the next. The writings of constitutional lawyers at the time show that it was well understood in 1900 … that the term ‘the Crown’ was used in several metaphorical senses The first use of the expression … was to identify the body politic. Writing in 1903, Professor Pitt Cobbett identified this as involving a ‘defective conception’ which was ‘the outcome of an attempt on the part of English law to dispense with the recognition of the State as a juristic person, and to make the Crown do service in its stead’. The Constitution, in identifying the new body politic which it established, did not use the term ‘the Crown’ in this way … [page 737] The second usage of ‘the Crown’ is related to the first and

identifies that office, the holder of which for the time being is the incarnation of the international personality of a body politic, by whom and to whom diplomatic representatives are accredited and by whom and with whom treaties are concluded. The Commonwealth of Australia, as such, had assumed international personality at some date well before the enactment of the Australia Act … Since 1987, the Executive branch of the Australian Government has applied s 61 of the Constitution (which extends to the maintenance of the Constitution) consistently with the views of Inglis Clark expressed over eighty years before and the Governor-General has exercised the prerogative powers of the Queen in regard to the appointment and acceptance, or recall, of diplomatic representatives and the execution of all instruments relating thereto. [Instrument dated 1 December 1987, Commonwealth of Australia Gazette, S270, 9 September 1988 …] Thirdly, the term ‘the Crown’ identifies … ‘the Government’, being the executive as distinct from the legislative branch …, represented by the Ministry and the administrative bureaucracy which attends to its business … [U]nder the Constitution the executive functions bestowed upon ‘the Queen’ are exercised upon Australian advice. The fourth use of the term … arose during the course of colonial development in the nineteenth century. It identified the paramount powers of the United Kingdom, the parent state, in relation to its dependencies [— as] explained [in 1904] by Professor Pitt Cobbett …: In England the prerogative powers of the Crown were [once] personal powers of the Sovereign; and it was only by slow degrees that they were converted to the use of the real executive body, and so brought under control of Parliament. In Australia, however, these powers were never personal powers of the King; they were even imported at a time when they had already to a great extent passed out of the hands of

the King; and yet they loom here larger than in the country of their origin. The explanation would seem to be that, in the scheme of colonial government, the powers of the Crown and the Prerogative really represent … those paramount powers which would naturally belong to a parent State in relation to […] its dependencies; although owing to the failure of the common law to recognise the personality of the British ‘State’ these powers had to be asserted in the name and through the medium of the Crown. This, too, may serve to explain the distinction … between the ‘general’ prerogative of the Crown, which is still wielded by Ministers who represent the British State, […] responsible to the British Parliament, — and what we may call the ‘colonial’ prerogative of the Crown, which, although consisting originally of powers reserved to the parent State, has with the evolution of responsible government, been gradually converted to the use of the local executive, and so brought under the control of the local Legislature, except … where the Governor is still required to act not as a local constitutional Sovereign but as an imperial officer … [responsible] to his imperial masters. What Isaacs J called the ‘Home Government’ ceased before 1850 to contribute to the expenses of the colonial government of New South Wales. On the grant of responsible government, certain prerogatives of the Crown in the colony, even those of a proprietary nature, became vested ‘in the Crown in right of the colony’, as Jacobs J put it in New South Wales v The Commonwealth [(1975) 135 CLR 337 at 494] … … The expression ‘the Crown in right of …’ the government in question was used to identify these newly created and evolving political units. With the formation of federations in Canada and Australia it became more difficult to continue to press ‘the Crown’ into service to describe complex political structures. Harrison Moore identified ‘the doctrine of unity and indivisibility

[page 738] of the Crown’ as something ‘not persisted in to the extent of ignoring that the several parts of the Empire are distinct entities’. He pointed to the ‘inconvenience and mischief’ which would follow from rigid adherence to any such doctrine where there were federal structures and continued [‘The Crown as Corporation’ (1904) 20 Law Quarterly Review 351 at 359]: … Both the British North America Act and the Commonwealth of Australia Constitution Act recognize that ‘Canada’ and the ‘Provinces’ in the first case, the ‘Commonwealth’ and the ‘States’ in the second, are capable of the ownership of property, of enjoying rights and incurring obligations, of suing and being sued; and this not merely as between the government and private persons, but by each government as distinguished from and as against the other … [The Imperial] Parliament has unquestionably treated these entities as distinct persons, and it is only by going behind the Constitution that any confusion of personalities arises. … [E]mployment of the term ‘the Crown’ to describe the relationships inter se between the United Kingdom, the Commonwealth and the States was described by Latham CJ in 1944 as involving ‘verbally impressive mysticism’ … Nearly a century ago, Harrison Moore said that it was likely that Australian draftsmen would be likely to avoid use of the term ‘Crown’ and use instead the terms ‘Commonwealth’ and ‘State’. Such optimism has proved misplaced. That difficulties can arise from continued use of the term ‘the Crown’ in State legislation is illustrated by The Commonwealth v Western Australia (1999) 196 CLR 392. However, no such difficulties need arise in the construction of the Constitution. The phrases ‘under the Crown’ in the preamble to the Constitution Act and ‘heirs and successors in the sovereignty of

the United Kingdom’ in covering cl 2 involve the use of the expression ‘the Crown’ and cognate terms in what is the fifth sense. This identifies the term ‘the Queen’ used in the provisions of the Constitution itself … as the person occupying the hereditary office of Sovereign of the United Kingdom under rules of succession established in the United Kingdom. The law of the United Kingdom in that respect might be changed by statute. But without Australian legislation, the effect of s 1 of the Australia Act 1.3.20E would be to deny the extension of the United Kingdom law to the Commonwealth, the States and the Territories.

7.1.6 As Gleeson CJ, Gummow and Hayne JJ pointed out, the Commonwealth Constitution does not employ the term ‘the Crown’, in the first sense identified, to refer to the bodies politic that it establishes. Rather, it calls them ‘the Commonwealth’ and ‘the States’. Similarly, state constitutions tend to refer simply to ‘the State’, although some of their clauses (for example, those establishing a legislature, a Governor or Supreme Court) may use the state’s name. The other meanings of ‘the Crown’ identified by the judges in Sue v Hill are explored, in turn, below.

THE SOVEREIGN AND HER AUSTRALIAN REPRESENTATIVES The Queen and Commonwealth of Australia Sovereign, sovereignty and citizenship 7.2.1

‘The Crown’ in the fifth sense identified by the judges in

Sue v Hill means either the regal office or (when the term ‘the King’ or ‘the Queen’ is employed) the actual person occupying [page 739] it. At the Commonwealth level, it is more accurate to refer to this office or its occupant simply as ‘the Sovereign’: Carney, 2006b, pp 262–5. Early English kings exercised their powers personally. Allegiance of a ‘subject of the King (or Queen)’—‘the tie, or ligamen, which binds the subject to the king, in return for that protection which the king affords the subject’ (Blackstone, 1765, book 1, Ch 10, p 354) — is still owed to the person who is the monarch. Thus ‘Her Majesty is the personal sovereign of the peoples inhabiting … Commonwealth [realms]’: R v Secretary of State for Foreign and Commonwealth Affairs; Ex Parte Indian Association of Alberta [1982] AC 894 per Kerr LJ at 920–1. However, a distinction between the Sovereign’s person and his or her office was articulated 400 years ago by means of bodily metaphor (Calvin’s Case (1609) 77 ER 377 at 388): [T]he King hath two capacities in him: one a natural body, being descended of the blood Royal of the realm; and this body is of the creation of Almighty God, and is subject to death, infirmity, and such like; the other is a politic body or capacity, so called, because it is framed by the policy of man … and in this capacity the King is esteemed to be immortal, invisible, not subject to death, infirmity, infancy, nonage, &c.

7.2.2 Imperialism complicated the ‘two bodies’ dualism, at least once colonies acquired an element of self-government ‘under the

Crown’. Clearly it is not possible to divide the Sovereign’s ‘natural body’ among the various ‘politic bodies’ of his or her territorial possessions. However, in the 19th century, the courts insisted that the office of the Sovereign was also ‘indivisible’ throughout the empire. The Australian courts were still describing ‘the Crown’ in this way in the first half of the 20th century: Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers’ case) (1920) 28 CLR 129 at 152. 7.2.3 As the comments of Professor Pitt Cobbett, quoted by Gleeson, Gummow and Hayne JJ in Sue v Hill suggest, the theory of indivisibility of ‘the Crown’ functioned to prevent colonial parliaments from legislating so as to affect the Imperial government’s powers and to ensure that certain ‘prerogative’ (common law) powers of the Crown — for example, the power to declare war — were exercisable centrally: by the Sovereign on British ministers’ advice. The theory also once supported a common status of ‘British subject’ throughout the empire, as the High Court explained in Nolan v Minister for Immigration & Ethnic Affairs (1988) 165 CLR 178 at 183–4: [In 1900], no subject of the British Crown was an alien within any part of the British Empire. Even after Federation, Australia did not immediately enjoy the international status of an independent nation. The terms ‘British subject’ and ‘subject of the Queen’ were essentially synonymous. The British Empire continued to consist of one sovereign State and its colonial and other dependencies with the result there was no need to modify either the perception of an indivisible Imperial Crown or the doctrine that, under the common law, no subject of the Queen was an alien in any part of Her Majesty’s dominions … The transition from Empire to Commonwealth and the emergence of Australia and other Dominions as independent sovereign nations within the Commonwealth inevitably changed the nature of the relationship

between the United Kingdom and its former Colonies and rendered obsolete notions of an indivisible Crown … It became accepted as a ‘truism’ that, although ‘there is only one person who is the Sovereign … in matters of law and government the Queen of the United Kingdom … is entirely independent and distinct from’ the Queen of (for example) Canada or Australia (per May LJ, Reg v Foreign Sec, Ex p Indian Assocn [1982] QB 892 at p 928).

[page 740] 7.2.4 In Singh v Commonwealth (2004) 222 CLR 322, the High Court ruled by majority that s 51(xix) of the Constitution, which confers on parliament power to make laws with respect to ‘naturalisation and aliens’, supports legislation inconsistent with the common law rule, established in Calvin’s case (1608) 7 Co Rep 1a; 77 ER 377, that a person born in the territories of the Crown is a ‘subject’ and a person not so ‘subjected’ to the dominion or laws of the monarch by birth is an alien. 7.2.5 The gulf between the ‘regal capacities’ of the Queen of Australia and Her Majesty’s role in other realms was emphasised by the High Court’s rejection, in Sue v Hill (1999) 199 CLR 462, of an argument that United Kingdom citizens were exempt from the requirement of s 44(i) of the Constitution that they relinquish foreign citizenship before standing for the Australian Parliament: see 2.4.8.

Elizabeth the Second, Queen of Australia 7.2.6

The monarch who assented to the Commonwealth of

Australia Constitution Act 1900 (UK), the present Queen’s greatgreat-grandmother, was known in both Australia and the United Kingdom as ‘Victoria by the Grace of God of the United Kingdom of Great Britain and Ireland, Queen, Defender of the Faith, Empress of India’. However, references to the Queen in Australian constitutions must be read in the light of subsequent changes in the constitutional circumstances of the United Kingdom (for example, not just a change of monarch, but loss of territory): Sue v Hill (1999) 199 CLR 462 at 489. The present Queen’s formal Australian title is ‘Elizabeth the Second, By the Grace of God Queen of Australia and Her other Realms and Territories, Head of the Commonwealth’: Royal Style and Titles Act 1973 (Cth) s 2. Reference to Her Majesty as ‘Queen of Australia’ was first introduced by the Royal Style and Titles Act 1953 (Cth), after Britain’s newly-designated realms agreed to act in concert to adopt locally distinctive titles for their new sovereign. The phrase ‘by the Grace of God’ is still used, despite efforts by former Prime Minister Whitlam to persuade the Queen to agree to Australia abandoning it, along with references to Her Majesty as ‘the Second’ Queen Elizabeth, Elizabeth I having never ruled Australia. However, the Queen of Australia has not been formally known by her United Kingdom title, or as ‘Defender of the [established Church of England] faith’, since 1973. This is consistent with the fact that the Anglican Church is not established in Australia: see 9.7.13C–9.7.15. See generally Twomey, 2004, pp 591–5.

The law of royal succession 7.2.7E Commonwealth of Australia Constitution Act 1900 (UK)

(Covering Clauses) 2 The provisions of this Act referring to the Queen shall extend to Her Majesty’s heirs and successors in the sovereignty of the United Kingdom.

7.2.8 Succession to the Crown, as Queen or King of Australia, is determined by common law and statutory rules governing succession to the Crown of the United Kingdom and Northern Ireland. The common law had long prescribed male primogeniture, although a woman could inherit in the absence of an eligible male. Illegitimate children are ineligible and there is no scope for a monarch to choose a successor inconsistently with the rules. However, [page 741] parliament has intervened several times in British history to modify or displace the common law rules or buttress or defeat claims based on them, most famously by installing William and Mary on the throne in 1688: see 1.5.6. In the Act of Settlement 1701, the British Parliament limited possible heirs to lineal Protestant descendants of Sophia, Electress of Hanover at the end of the 17th century, disbarring those among them who adopted, or married an adherent of, the Catholic faith. (This 300-year-old prohibition on ‘papists’ did not similarly disqualify those who converted to, or married an adherent of, a non-Christian faith). Although the present Queen and her descendants were born in the United Kingdom, there seems to be no requirement that a royal heir be, or

marry, a British national. Sophia and her descendants (including people born as late as the 1940s) were naturalised by Act of Parliament in 1705: Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436. 7.2.9 Following numerous attempts since 1979 to reform the law of succession in the United Kingdom (see Twomey, 2011), in 2011 at a CHOGM meeting in Perth, heads of Commonwealth realms agreed to a United Kingdom proposal that the royal succession rules be amended to permit gender-equal primogeniture and to remove the prohibition on marrying Catholics. To give effect to this agreement, the United Kingdom Parliament enacted the Succession to the Crown Act 2013 providing that, in determining succession, ‘the gender of a person born after 28 October 2011 does not give that person, or that person’s descendants, precedence over any other person (whenever born)’: s 1. The Act also removed disqualification arising from marriage to a Roman Catholic: s 2. Consequential amendments removed the prohibition from the Act of Settlement. Because of s 1 of the Australia Act 1986 (Cth) 1.3.20E, no unilateral United Kingdom amendment could extent to Australia. Accordingly, each Australian state parliament enacted legislation for the purpose of s 51(xxxviii) of the Constitution requesting the Commonwealth Parliament to enact legislation in the same terms: see Succession to the Crown (Request) Act 2013 (NSW); Succession to the Crown Act 2013 (Qld); Succession to the Crown (Request) Act 2014 (SA); Succession to the Crown (Request) Act 2013 (Tas); Succession to the Crown (Request) Act 2013 (Vic); Succession to the Crown Act 2015 (WA). The Commonwealth Parliament enacted the equivalent provisions in the Succession to the Crown Act 2015 (Cth) which commenced operation in March 2015.

7.2.10 A more complex set of questions concerns whether, in light of covering cl 2 of the Constitution, Australian legislatures have power to alter the rules of succession unilaterally (for example, by prescribing that the next King of Australia be Prince William, Duke of Cambridge, even if his father, Prince Charles, the Prince of Wales, ascends to United Kingdom throne). Covering cl 2 is sometimes said to entrench an Australian role for the United Kingdom monarch or to prescribe the application in Australia of the existing United Kingdom royal succession rules. The 1988 Constitutional Commission proposed that the Commonwealth Parliament has power, under its ‘implied nationhood’ power (see 7.5.54–7.5.59C) to alter unilaterally the rules of succession to the Crown of Australia, but recommended that it be given the necessary express power by constitutional amendment: Constitutional Commission, 1988, pp 81–2. See the discussion by Professor Leslie Zines in Stellios, 2015, pp 469–74.

‘Demise of the Crown’ 7.2.11 The common law maxim ‘the King never dies’ alluded to the immortality of the monarch’s office. A new monarch succeeds to the throne immediately upon the death of his or her predecessor. Proclamation of accession, coronation and investiture merely recognise that [page 742] the Crown has already passed (Selway, 1997, 26); the present Queen ascended to the throne in 1952 but was crowned the

following year. However, at common law, the natural monarch’s death did have legal consequences. (The term ‘demise’ is used in this context to refer to the deceased King’s separation from the Crown and kingdom and its transmission to another.) A demise of the Crown affected powers exercisable by the monarch personally, for example, appointments ‘at Her Majesty’s pleasure’, which ‘caused particular difficulty, it being argued that the sovereign’s pleasure could not continue when he was dead’: Law Reform Committee of South Australia, 1984, p 4. In Queen Victoria’s time, such powers were still sufficiently important to prompt enactment of the Demise of the Crown Act 1901 (UK) (which extended to Australia) to overcome automatic vacation of offices by her death and those of her successors. Other common law consequences — for example, the automatic dissolution of parliament or the termination of Crown suits — were overcome by their placement on a statutory basis by Australian constitutions (see, for example, Commonwealth Constitution ss 5 and 57, discussed at 2.3.12 and 2.10.20E–2.10.37) or enactment of Australian ‘Crown proceedings’ legislation: see 7.5.88. ‘Demise of the Crown’ provisions are found in some state constitutions (especially that of Tasmania). Provisions like s 4 of the Commonwealth Constitution 7.2.14E, which states that references to the Governor-General mean the holder of that office for the time being, or an administrator during the Governor-General’s absence, also overcome any hiatus caused by the common law rules. 7.2.12 The common law does not appear to have developed rules about abdication of the throne. In 1936, King Edward VIII abdicated in order to marry a divorcee, unacceptable to the Government of the United Kingdom and its dominions. His

Majesty’s declaration of abdication was given effect by legislation (extending to Australia, which was then yet to ratify retrospectively the Statute of Westminster 1931: see 1.3.11E–1.3.13E). His Majesty’s Declaration of Abdication Act 1936 (UK) also provided for Edward VIII’s younger brother to succeed him as George VI, and altered the royal succession rules to deprive Edward VIII and his descendants of claims on the throne.

The Queen, the Commonwealth and the GovernorGeneral 7.2.13 In the Commonwealth of Australia, the Sovereign is represented, as she is in other realms, by a Governor-General. The Commonwealth Constitution refers in several places to ‘the Queen’, and more often to the Governor-General. On their face, these provisions appear to give both considerable power.

Constitutional provisions and letters patent 7.2.14E

Commonwealth Constitution Act Chapter I — The Parliament Part I — General …

2 Governor-General A Governor-General appointed by the Queen shall be Her Majesty’s representative in the Commonwealth, and shall have and may exercise in the Commonwealth during the Queen’s

[page 743] pleasure, but subject to this Constitution, such powers and functions of the Queen as Her Majesty may be pleased to assign to him. 3 Salary of Governor-General There shall be payable to the Queen out of the Consolidated Revenue fund of the Commonwealth, for the salary of the Governor-General, an annual sum which, until the Parliament otherwise provides, shall be ten thousand pounds. The salary of a Governor-General shall not be altered during his continuance in office. 4 Provisions relating to Governor-General The provisions of this Constitution relating to the GovernorGeneral extend and apply to the Governor-General for the time being, or such person as the Queen may appoint to administer the Government of the Commonwealth … Chapter II—The Executive Government 61 Executive power The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen’s representative, and extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth … 68 Command of naval and military forces The command in chief of the naval and military forces of the Commonwealth is vested in the Governor-General as the Queen’s representative … Chapter VII—Miscellaneous 126 Power to Her Majesty to authorise Governor-General to appoint deputies

The Queen may authorise the Governor-General to appoint any person … [or] persons … to be his deputy or deputies …

7.2.15 Letters Patent Relating to the Office of GovernorGeneral were issued by the Queen under s 2 of the Constitution on 21 August 2008: see . These revoked a 1984 version, which in turn replaced the detailed Letters Patent of 29 October 1900. In 1900, the Queen also issued the Governor-General with instructions (which were not legally binding). The present Letters Patent incorporate amendments made in 2003 to permit the then Governor-General, Dr Peter Hollingworth, to stand aside. They were re-issued in 2008 in gender-neutral language appropriate to the commissioning of the first female Governor-General, Her Excellency Ms Quentin Bryce. The Letters Patent declare that (Commonwealth of Australia Gazette S179, Tuesday 9 September 2008): appointment of a person as Governor-General (under s 2 of the Constitution) or as Administrator of the Commonwealth (under s 4) ‘shall be during Our pleasure by Commission under Our Sign Manual and the Great Seal of Australia’, and that these officers are to take their Oaths or Affirmations of Office and Allegiance before the Chief Justice of the High Court (cls I and II); a person appointed as Administrator is to assume the administration of the Government of the Commonwealth in certain circumstances at the request of the GovernorGeneral or the Prime Minister (cl III).

[page 744] State Governors hold dormant commissions as Commonwealth Administrators, with the role being filled when required by the longest-serving state Governor. The Letters Patent also provide the Governor-General with authority to appoint a deputy under s 126 of the Constitution: cl IV. 7.2.16 As discussed in Chapter 2, the Queen is also the third element of the Commonwealth Parliament constituted, and invested with legislative power by, s 1 of the Constitution. Section 122 of the Constitution contemplates the Queen placing additional territory under Commonwealth authority. A number of provisions invest power in the ‘Governor-General in Council’, an institution discussed further below. 7.2.17 None of the constitutional provisions relating to the Queen or the Governor-General has been amended since federation, although the exercise of their powers has changed considerably as a result of developments in constitutional convention resulting from early 20th century Imperial conferences: see 1.3.7–1.3.9C. Even in 1901, it appears that executive power was vested in the Governor-General rather than the Queen as a way of maximising the potential for its local exercise on Australian, rather than British, advice.

Australia’s ‘head of state’ and international affairs 7.2.18 The second usage of the term ‘the Crown’ identified by Gleeson CJ, Gummow and Hayne JJ in Sue v Hill 7.1.5C

‘identifies that office, the holder of which for the time being is the incarnation of the international personality of a body politic, by whom and to whom diplomatic representatives are accredited and by whom and with whom treaties are concluded’. As discussed below (see 7.5.10–7.5.20 and 7.5.48–7.5.53), in Australian constitutional law, the executive powers of entering into treaties and receiving and accrediting ambassadors are, like the power to declare war, prerogative powers — powers recognised by the common law — which the High Court treats as having been incorporated into the grant of executive power to the Queen and Governor-General by s 61 of the Constitution. 7.2.19 There has been much controversy, in the context of the Australian republican debate, about the identity of Australia’s ‘head of state’. Republicans assert that this person is the Queen, but argue that the office should be held by an Australian. Monarchists argue that the Governor-General is, for all practical purposes, Australia’s ‘head of state’, and that republicans can draw comfort from the fact that all Governors-General since 1965 have been Australian (although there is no legal requirement that they hold Australian citizenship, and members of the royal family are still sometimes mooted as candidates). Being an international law term, ‘head of state’ is not used in the Constitution. For a nation to have a ‘head of state’, it needs to be recognised as an independent nation in international law. Australia’s ‘head of state’ before its independence was the Queen. The dominions were given power, at an Imperial Conference in 1923, to enter into treaties with no implications for the empire, but it was not until the Balfour Declaration 1926 that they and the United Kingdom were declared ‘equal in status, in no way subordinate one to another in any aspect of their domestic or

external affairs’, and their Governors-General ‘holding in all essential respects the same position in relation to the administration of public affairs in the Dominion as is held by His Majesty the King in Great Britain’: see 1.3.9C. Once this status was achieved, the Governor-General was able to exercise all of the Sovereign’s executive powers under s 61 [page 745] of the Constitution, including the ‘external’ prerogatives of entering treaties and accrediting Australian, and receiving foreign, diplomatic representatives. 7.2.20 As Barwick CJ explained in New South Wales v Commonwealth (Seas and Submerged Lands case) (1975) 135 CLR 337 at 373, s 61 of the Constitution was designed to permit the Governor-General to take on this role at the appropriate point in Australia’s development: Whilst the new Commonwealth was upon its creation the Australian colony within the Empire, the grant of the power with respect to external affairs was a clear recognition … that it was the Commonwealth which would in due course become the nation state, internationally recognized as such and independent. The progression from colony to independent nation was … inevitable …, clearly adumbrated by the grant of such powers as [those] with respect to defence and external affairs. Section 61, in enabling the Governor-General as in truth a Viceroy to exercise the executive power of the Commonwealth, underlines the prospect of independent nationhood which the enactment of the Constitution provided. That prospect in due course

matured, aided in that behalf by the Balfour Declaration and the Statute of Westminster and its adoption …

His Honour had also emphasised the importance of s 61 in according this role to the Governor-General in Victoria v Commonwealth (Payroll Tax case) (1971) 122 CLR 353 at 379: Lord Haldane in Bonanza Creek Gold Mining Co v The King (1916) 1 AC 566 was at pains to point to the radical distinction in relation to the prerogative of the Crown between the situation under the Canadian Constitution and that which arises under the Australian Constitution. He said: There is no provision in the British North America Act corresponding even to s 61 of the Australian Commonwealth Act, which … provides that the executive power, though declared to be in the Sovereign, is yet to be exercisable by the Governor-General: [1916] 1 AC at pp 586, 587.

7.2.21 However, s 2 of the Constitution 7.2.14E caused the Governor-General’s role in international affairs to be downplayed for 61 years. Before 1987, the Governor-General did exercise ‘external’ prerogative powers, but only where the Queen had purported to delegate them to him under s 2. These delegations ultimately proved unnecessary after Australia’s international maturation, as Zines explains (Stellios, 2015, pp 370–1): In the early years of federation it was assumed that a number of powers given to the Queen by common law, that is, prerogative powers, were not included within s 61, such as the power to declare war, to enter into treaties or to acquire territory. Such powers were, it was thought, exercisable only by the Queen, which in constitutional practice meant … on the advice of her Imperial ministers. … On four occasions powers were … assigned to the Governor-General

by the Sovereign under s 2 of the Constitution … In 1941 a special power was issued by the King empowering the Governor-General to declare war on Finland, Hungary, Romania and Japan … [In] 1954 the Queen, acting on [Australian] advice …, assigned additional powers … [including] the power to appoint certain diplomatic officers and consuls and to [recognise] … a foreign consular representative … [In] 1973 the Queen, acting on … [Australian] advice …, assigned further

[page 746] powers and functions … in respect of the appointment and withdrawal of ambassadors and high commissioners. An assignment dated 8 December 1987 related to charters of incorporation. On 1 December 1987, the Queen, acting on the advice of … Prime Minister [Hawke], revoked the assignments of 1954 and 1973 … because it was accepted that the powers assigned came within the powers of the GovernorGeneral granted by s 61 of the Constitution.

Prime Minister Hawke was acting on the view of the Constitutional Commission, which had reported that ‘the second part of section 2 of the Constitution has been obsolete since around 1926’: Constitutional Commission, 1988, p 57.

The roles of the Queen and the Governor-General in an independent Australia 7.2.22 The Queen does not normally exercise the executive power of the Commonwealth, although Commonwealth legislation (the Royal Powers Act 1953) allows Her Majesty to exercise powers conferred on the Governor-General by statute when

personally present in Australia. The Queen’s role in the government of the Commonwealth is essentially limited to appointing the Governor-General: Constitutional Commission, 1988, pp 311–12. As Winterton explained, considerable controversy attended early efforts by the Australian Government to have the Queen exercise this function on Australian advice. 7.2.23E George Winterton, Parliament, the Executive and the Governor-General, 1983, p 17 … The theoretical framework … established [by the Constitution] might suggest that the Queen is the principal and the GovernorGeneral her agent in the exercise of executive powers, and that she could, if she wished, herself exercise any power vested in the Governor-General … But, in fact, the position is not so simple. … Appointment of the Governor-General … [I]t was universally accepted in 1901 that the GovernorGeneral, like all colonial Governors, was both the de facto local Head of State in domestic matters and an agent of the British Government in Imperial affairs. This dichotomy rested on ‘convention’ only, for the British government had always rejected colonial attempts to entrench it legislatively … As the British government’s representative in the Commonwealth, the Governor-General served as the conduit for communications … [with] Australian governments, and also acted, in effect, as the British ambassador to Australia … … [T]he power to appoint the Governor-General was vested in the Monarch and, until 1931, he always acted on the advice of British Ministers in doing so, although the Australian government was consulted. But with the growth of Australian nationhood … the traditional role of the Governor-General was called in question. It was [no longer appropriate] … for the de facto Head

of State to be the agent of a ‘foreign’ government, even the British government, and this was recognized at the Imperial Conference of 1926, which declared that the Governor-General occupied ‘in all essential respects the same position in relation to the administration of public affairs in the Dominion as is held by His Majesty the King in Great Britain, and that he is [page 747] not the representative of agent of His Majesty’s Government in Great Britain or of any Department of that Government’. It became necessary, therefore, to devise a different means of communication between the British and the Dominion governments, and … British High Commissions were … established … [T]he Scullin Labor government had decided, in 1930, to appoint as the next Governor-General Sir Isaac Isaacs, then Chief Justice of the High Court … It was … the first time Australian Ministers had exercised their right, impliedly recognized in 1926, to advise the King directly … [I]t was thought advisable to prescribe the proper procedures … at the Imperial Conference of 1930. Henceforth, the King in appointing the Governor-General of a Dominion was to act only on the advice of the Ministers of that Dominion; they would tender formal advice only after informal consultations with the King, and their channel of communication with the King was a matter solely concerning them and him — not the British government … … [T]he [Governor-General’s] powers, other than those under s 61 … unlike the powers conferred by covering clause 3 and ss 2, 59 and 126 … were to be exercised only by the GovernorGeneral, acting on the advice of Australian ministers. Accordingly, in 1901, the Queen could not exercise them herself; nor could she give the Governor-General instructions regarding them. Nothing has occurred since then to alter this position.

[Section] 68 of the Constitution, in vesting the ‘command in chief of the naval and military forces of the Commonwealth’ in the Governor-General, ‘as the Queen’s representative’ … indicate[s] that the armed forces are the Queen’s forces … [T]he Queen herself cannot exercise the power given to the Governor-General by s 68 ….

The Queen, the states and their Governors Is there a Queen of Queensland (and of each other state)? 7.2.24 There is some controversy over whether, as well as a regal office known as ‘Queen of Australia’, the Queen is also Sovereign of each state in the fifth sense identified by the judges in Sue v Hill 7.1.5C. (Her Majesty cannot be ‘head of state’ in the second sense because the states lack international personality: New South Wales v Commonwealth (1975) 135 CLR 337.) The language of the preamble to the Commonwealth Constitution — which recites that ‘the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania … have agreed to unite in one indissoluble Federal Commonwealth under the Crown’ — seems to suggest that there is a single Australian regal office. The question of whether there are separate ‘state Crowns’ has at least four dimensions. First, we might ask whether the Queen really does hold such an office at the state level, or whether the states participate in a single ‘federal Crown’. Second, if there is a Queen of New South Wales and a Queen of Tasmania etc, does the Royal Style and Titles Act 1973 (Cth) bind the states to refer to her as ‘Queen of Australia’, or could they give her a local style and titles,

at least if they could obtain Her Majesty’s and CHOGM’s consent to do so? Third, there is the question of whether a state parliament could amend unilaterally the law of royal succession as it applies to that state’s ‘Crown’ (for example, to install Prince William as King of Queensland, even if his father was King of Australia). And fourth, there is the question, raised during the republic debate, as to whether it would be possible to retain state monarchies as elements of a [page 748] republican Commonwealth (which is what the defeated 1999 republican referendum proposal (see 7.2.44) would have allowed). For competing arguments on these questions, see (on the one hand) Twomey, 2010, pp 456–7 and (on the other) Carney, 2006b, p 319; Taylor, 2006, pp 67–8 and 71–4. Twomey has argued that, before 1986, the Queen of the United Kingdom was Queen of each Australian state, while the Queen of Australia was head of the Commonwealth. 7.2.25EAnne Twomey, The Australia Acts: Australia’s Statutes of Independence, 2010, pp 456–77 (footnotes omitted) The Imperial Conferences of 1926 and 1930 … only addressed the relationship between governments at the national level … The effect, however, was to recognise the divisibility of the Crown within the federation by the establishment of a separate Crown in relation to the Commonwealth … and the retention of the States as dependencies of the British Crown. This was the consequence

of the fact that the monarch was advised on [Commonwealth] matters … by Commonwealth Ministers but at the State level was advised by British Ministers. From 1930 to 1986 the federation accommodated different Crowns. There was a separate Crown in relation to the Commonwealth of Australia, but the States remained under the Crown of the [United Kingdom]. This was the view firmly taken by the British Government and the position taken in practice in constitutional dealings between the Queen and the States. Each constitutional act of the Queen in relation to a State was undertaken by the Queen in the name of the Queen of the United Kingdom and pursuant to the advice of [United Kingdom] Ministers. … British Ministers, in advising Her Majesty on State matters, did not consider themselves bound to accede to the wishes of the States. Their legal advisers also took the view that they were not so bound … While British Ministers took into account State and Commonwealth wishes when preparing advice to Her Majesty on State matters, they also took into account (and gave a higher priority to) … [United Kingdom] political interests … on the ground that they were responsible to the [United Kingdom] Parliament for their advice. They did not accept that Commonwealth Ministers had the exclusive right to advise Her Majesty on Australian matters. In relation to State matters, the Queen continued to act in her capacity as Queen of the [United Kingdom] (rather than Queen of Australia) until 3 March 1986 … While nationality and the ‘allegiance’ … associated with it fall within [Commonwealth] legislative and executive powers …, resulting in the allegiance of Australians being held to the ‘Queen of Australia’, this does not, of itself, demand that the Queen of Australia be the constitutional monarch of a State … [B]efore 1986, Australians … owed allegiance to the Queen of Australia and … were Australian citizens, yet it was the Queen of the

[United Kingdom] who was the monarch … [of] the Australian States …

7.2.26 In his second reading speech on the Royal Style and Titles Act 1973 (Cth), Prime Minister Whitlam claimed that the Act would bind the states (although the 1953 Act had not purported to do this). However, two states (Western Australia and South Australia) already had their own ‘royal style and titles’ legislation, which they subsequently amended to bring into line with the Commonwealth Act: see generally Twomey, 2010, pp 451–4. Had the state Acts remained different from the Commonwealth one, s 109 of the Constitution [page 749] might not have resolved any inconsistency because, ‘although the Commonwealth Parliament had legislated to approve the adoption of a new Royal style and title by the Queen, it was by a prerogative act of the Queen that the title “Queen of Australia” was actually adopted’: Ibid p 452. Section 109 of the Constitution (see 6.1.1–6.1.93) is concerned with inconsistency of Commonwealth and state laws, not inconsistency between non-legislative prerogative acts. In 1973, the Queensland Parliament enacted legislation purporting to allow all manner of questions arising under ‘the law in force in Queensland’ (including Commonwealth law) to be referred to the Privy Council for its ‘advice’, and tried to have referred a number of questions relating to the effect of the Royal Style and Titles Act 1973 (Cth), including whether Queensland

could style the Queen ‘Elizabeth the Second, by the Grace of God Queen of the United Kingdom, Australia, Queensland and Her other Realms and Territories’. However, the High Court held the Appeals and Special Reference Act 1973 (Qld) invalid on the basis that it contravened Ch III of the Constitution: Commonwealth v Queensland (Queen of Queensland case) (1975) 134 CLR 298. 7.2.27 If each state has its own Queen, whether or not its legislature could amend the royal succession rules unilaterally may depend on whether either covering cl 2 of the Constitution 7.2.7E or the Australia Acts (for example, s 7 7.2.37E) require the same person to occupy the office of Queen of Australia and Queen of a state. If they do, a state amendment installing Prince William or (for argument’s sake) the Malaysian King as monarch, or abolishing the office altogether, would be invalid for repugnancy with the United Kingdom Acts or inconsistency with the Australian one: Twomey, 2010, p 443.

The office of Governor since colonial times 7.2.28 Until 1986, when the United Kingdom and Commonwealth Parliaments both legislated that ‘Her Majesty’s Government in the United Kingdom shall have no responsibility for the government of any State’ (see s 10 of the Australia Acts 7.2.37E), the office of State Governor still bore some of the marks of its colonial ancestry, just as the office of Governor-General had done before 1930. The direct appointment by Her Majesty of Governors as her representatives in the Australian states has also long differed from the position in the other federated Commonwealth realm, Canada,

where provincial Lieutenant-Governors are appointed by the Dominion (federal) Governor-General: Boyce, 2008, Chs 5 and 7.

State constitutions 7.2.29 The Sovereign enjoys less prominence in most state constitutions than she does in the Commonwealth one. Most allude to Her Majesty indirectly when establishing or defining the office of Governor. 7.2.30E

Constitution Act 1975 (Vic)

6 The Governor (1) There shall be a Governor of the State of Victoria. (2) The appointment of a person as Governor shall be during Her Majesty’s pleasure by Commission under Her Majesty’s Sign Manual and the Public Seal of the State …

[page 750] 7.2.31 Section 9A of the Constitution Act 1902 (NSW) is in almost identical terms, with s 9I providing for the Governor’s salary and s 9H providing for the Governor to ‘provide, keep and use the Public Seal of the State’. The Constitution Act 1934 (Tas) mentions the Queen in its preamble and ‘royal assent’ provisions only, and provides for appointment of gubernatorial deputies but

not that of the Governor. There are similar gaps in the Constitution Act 1934 (SA), although it makes provision for payment of the Governor’s salary and official costs from the Consolidated Account: ss 73–73B. The two constitutions that make the Queen’s role explicit are those of Western Australia and Queensland, both of which purport to entrench the role of the Queen’s representative. 7.2.32E

Constitution Act 1889 (WA)

50 Office of Governor (1) The Queen’s representative in Western Australia is the Governor who shall hold office during Her Majesty’s pleasure. (2) Abolition of or alteration in the office of Governor shall not be effected by an Act of the Parliament except in accordance with section 73(2) [which requires that the relevant bill be passed by an absolute majority of the whole number of members of each house of state parliament and approved by the electors at a referendum] …

7.2.33 Section 11A of the Constitution Act 1867 (Qld) is in virtually identical terms, except that the ‘manner and form’ restriction imposed on bills to alter the Governor’s office requires a referendum of electors only. On state parliaments’ powers to restrict future exercises of legislative power, see 2.11.1–2.11.40.

7.2.34 The most recent constitutional legislation in Queensland reiterates that there must be a state Governor. 7.2.35E

Constitution of Queensland 2001

29 Governor (1) There must be a Governor of Queensland. (2) The Governor must be appointed by commission under the Royal Sign Manual. … 32 Termination of appointment as Governor (1) The appointment of a person as Governor may be terminated only by instrument under the Royal Sign Manual. (2) The instrument takes effect on its publication in the gazette or at a later time stated in the instrument. 33 General power of Governor The Governor is authorised and required to do all things that belong to the Governor’s office under any law. … [page 751] 39 Statutory powers when Sovereign personally in State (1) When the Sovereign is personally present in the State, any power under an Act exercisable by the Governor may be exercised by the Sovereign. (2) The Governor has the same powers in relation to an act done, or an instrument made, by the Sovereign under

this section as the Governor has in relation to an act done, or an instrument made, by the Governor himself or herself. (3) This section does not affect or prevent the exercise of any power under an Act by the Governor. …

The Australia Acts and 1986 Letters Patent 7.2.36 The relationship between the Queen and state Governors is now governed by the Australia Acts, which constitute the Governor as a full viceroy, at least when it comes to ‘powers and functions of Her Majesty in respect of a State’. (The Queen may still be able to exercise in the states powers that know no geographical limits; for example, the prerogative powers to grant honours or royal charters: see 7.5.12 and 7.5.30. 7.2.37E

Australia Act 1986 (Cth)

7 Powers and functions of Her Majesty and Governors in respect of States (1) Her Majesty’s representative in each State shall be the Governor. (2) Subject to subsections (3) and (4) below, all powers and functions of Her Majesty in respect of a State are exercisable only by the Governor of the State. (3) Subsection (2) above does not apply in relation to the power to appoint, and the power to terminate the appointment of, the Governor of a State. (4) While Her Majesty is personally present in a State, Her

Majesty is not precluded from exercising any of Her powers and functions in respect of the State that are the subject of subsection (2) above. (5) The advice to Her Majesty in relation to the exercise of the powers and functions of Her Majesty in respect of a State shall be tendered by the Premier of the State … 10 Termination of responsibility of United Kingdom Government in relation to State matters After the commencement of this Act Her Majesty’s Government in the United Kingdom shall have no responsibility for the Government of any State.

7.2.38 Considering that the Australia Acts may be amended only by Commonwealth legislation enacted ‘at the request or with the concurrence of the Parliaments of all the States’, or possibly at the request of some of them under s 51(xxxviii) of the Constitution (see the discussion of these amendment procedures at 1.3.26), ss 7 and 10 seem to have the effect of: entrenching the role of a state Governor as Her Majesty’s representative in a state (if not the role of Governor more generally); ensuring that the Queen’s only role in state government, except if Her Majesty is present in the state, is that of appointing or removing the Governor; [page 752]

ensuring that, in appointing or terminating the Commission of a Governor, the Queen acts on local, not British, advice; and preventing United Kingdom ministers from playing any other role in advising the Queen in relation to state governments, even if asked to do so by a state. 7.2.39 In those states in which the Constitution Act does not define the role of Governor (that is, South Australia and Tasmania), the Governor’s office remains defined by Letters Patent issued to coincide with the commencement of the Australia Acts. These Letters Patent were issued under the Queen’s United Kingdom style and titles and countersigned by the head of the United Kingdom Crown office at the time, Sir Derek Oulton. However, in recognition of the Australian character of the office, the original Letters Patent expressly permitted their amendment by the Governor, rather than the Queen. 7.2.40E Letters Patent relating to the Office of the Governor of South Australia, 14 February 1986 ELIZABETH THE SECOND, by the Grace of God of the United Kingdom of Great Britain and Northern Ireland and of Our other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith. TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING! Whereas by Letters Patent dated the 29th October, 1900 provision was made in relation to the office of the Governor of … South Australia:

And whereas by the Australia Act 1986 of the Commonwealth of Australia provision is made in relation to the office of the Governor of … South Australia and corresponding provision will also be made in the … United Kingdom [Act] (… hereinafter together referred to as ‘the Australia Acts’): And whereas We desire to make new provisions relating to the office of Governor of … South Australia and for persons appointed to administer the government of the State: Now Know Ye that We do hereby declare Our Will and Pleasure, and direct and ordain as follows:— I.

II. III.

Revocation of existing Letters Patent and Instructions — The Letters Patent dated the 29th October 1900 (as amended) … and Our Instructions to the Governor [of the same date] are revoked. Constitution of Office of Governor — There shall be a Governor of … South Australia. Appointment of Governor — The appointment of a person to the office of Governor shall be during Our Pleasure by Commission under Our Sign Manual.

[Clauses IV–VIII relate to the Executive Council: see 7.4.26E.] IX. X.

Constitution of Office of Lieutenant-Governor — There may be a Lieutenant-Governor of … South Australia. Administration of government during vacancy, etc.— In the event of— (a) a vacancy in the office of Governor; (b) the assumption by the Governor of the administration of the government of the Commonwealth …; or (c) the Governor being on leave, absent from the State or incapacitated (not having appointed a deputy under Clause XVII);

[page 753] the Lieutenant-Governor shall assume the administration of the State as Administrator but if there is no Lieutenant-Governor or if [s/he] is unable to act … or is incapacitated then the Chief Justice of South Australia or the next most senior Judge present in the State and able to do so shall act as Administrator. XI.

XII.

XIII.

XIV.

… XVI.

Interpretation of Clause X — For the purposes of Clause X, there shall be a vacancy in the office of Governor if the Governor vacates the office. Administrator to act upon request — No person shall act as Administrator except at the request in writing of — (a) the Premier …; or (b) if the Premier is not available … — the Minister of the Crown … next in order of seniority …. Oaths to be taken by Administrator — A person may not act as Administrator without having taken the Oath of Allegiance and the Official Oath in the presence of the Chief Justice … or another [Supreme Court] Judge. … Powers and functions of Administrator — While administering the government of the State an Administrator shall have and may exercise and perform the powers and functions of the Governor.

Appointment of Lieutenant-Governor and Administrator — The appointment of a LieutenantGovernor and of an Administrator shall be during Our Pleasure by Commission under Our Sign Manual. XVII. Appointment of deputy of the Governor — In the event that — (a) the Governor is absent from the State … or … the

seat of government … or is suffering from illness; and (b) the Governor has reason to believe that the duration of the absence or illness will not exceed 4 weeks; the Governor may, by instrument in writing, appoint the Lieutenant-Governor or another suitable person to be the Governor’s deputy. … XVIII. Governor’s deputy to act with concurrence — The Governor shall not appoint a deputy except with the concurrence of — (a) the Premier …; or (b) if the Premier is not available … — the Minister of the Crown … next in order of seniority. … … XXI. Existing Commissions to continue — All existing Commissions in relation to the office of Governor, Lieutenant-Governor and Administrator and all existing appointments to the Executive Council shall continue in force subject to these Our Letters Patent until revoked. XXII. Publication of Letters Patent, etc. — These Our Letters Patent and every Commission or appointment given or made pursuant to [them] shall be published in the Government Gazette of South Australia. XXIII. Reservation of power to revoke, alter or amend — The power to revoke, alter or amend these Our Letters Patent is reserved. XXIV. Commencement of Letters Patent — These Our Letters Patent shall come into operation at the same time as the Australia Acts. …

[page 754] In Witness whereof We have caused these Our Letters to be made Patent. Witness Ourself at Westminster the fourteenth day of February in the Thirty-fifth year of Our Reign. By Warrant under The Queen’s Sign Manual. (L.S.) OULTON

7.2.41 Although cl XIII of the Letters Patent states that ‘[t]he appointment of a Lieutenant-Governor and of an Administrator shall be during Our Pleasure by Commission under Our Sign Manual’, appointment of these officers by the Queen appears to be inconsistent with s 7(2) of the Australia Acts (read in light of s 7(3)), which vests ‘all powers and functions of Her Majesty [other than ‘the power to appoint, and the power to terminate the appointment of, the Governor’] in the Governor of a State. In 2001, the provisions of the Letters Patent dealing with the appointment of the Lieutenant-Governor were amended by Orderin-Council by the Governor. 7.2.42E Order in Council by the Governor of the State of South Australia, 25 October 2001 … WHEREAS Her Most Gracious Majesty Queen Elizabeth … made Letters Patent dated 14 February 1986, which made provision in relation to the office of the Governor of the State of South Australia and other matters:

AND WHEREAS by the Australia Act 1986 of the Commonwealth provision is made in relation to the office of the Governor of the State of South Australia: AND WHEREAS it is desirable to make new provisions in relation to the office of Lieutenant-Governor of the State of South Australia and for persons appointed to administer the government of the State: NOW, pursuant to the powers conferred on me by section 7(2) of the Australia Act 1986 of the Commonwealth and by Clause XXIII of the Letters Patent dated 14 February 1986 … I, Sir Eric James Neal, … Governor …, with the advice and consent of the Executive Council, DO HEREBY DECLARE, DIRECT AND ORDAIN as follows: I. Alteration of existing Letters Patent and Instructions — The provisions of the Letters Patent dated 14 February 1986 and, in particular, Clauses IX, XIII and XVI of those Letters Patent, to the extent to which they are inconsistent with the terms of this Order in Council, are hereby altered and replaced except that nothing herein will be taken or construed as varying Clauses II to VIII of those Letters Patent. II. Constitution of Office of Lieutenant-Governor — There may be a Lieutenant-Governor of the State of South Australia. III. Oaths to be taken by Lieutenant-Governor — A person appointed as Lieutenant-Governor will as soon as convenient after appointment to that office take the Oath of Allegiance and the Official Oath in the presence of the Chief Justice of South Australia or another [Supreme Court] Judge …. IV. Appointment of Lieutenant-Governor — The appointment of a Lieutenant-Governor will be during the Governor’s Pleasure by Commission under the Public

Seal of South Australia. …

[page 755] 7.2.43 In recognition of the overriding effect of s 7(2) of the Australia Acts, some states whose Lieutenants-Governor had been appointed after 1986 by the Queen (other than when Her Majesty was present in the state) have enacted additional legislation validating those appointments retrospectively. See Constitution (Appointments) Act 2009 (SA), Constitution (Doubts Removal) Act 2009 (Tas) and, in the case of states that have now replaced the Letters Patent with constitutional provisions, Constitution (Appointments) Act 2009 (Vic) and Constitution Act 1902 (NSW) s 9B(6).

The 1999 proposed ‘republic’ amendment of s 7 7.2.44 Section 5(b) of the Australia Acts 1.3.20E prevents state parliaments from enacting their own laws ‘repugnant to this Act’; for example, an amendment to a state Constitution Act that provided for the Queen to be represented in the state by someone other than the Governor, or for the Governor to take on a republican role, at least while the Queen still exercised functions in relation to the Commonwealth. When the Howard Government put to the electorate a proposal, endorsed by the 1998 Australian Constitutional Convention, to amend the Constitution to establish the Commonwealth of Australia as a republic, the Constitution Alteration (Establishment

of Republic) Bill 1999 (Cth) included a provision stating that ‘[a] State that has not altered its laws to sever its links with the Crown by the time the office of Governor-General ceases to exist retains its links with the Crown until it has so altered its laws’: Sch 2, cl 5. However, the states were concerned that, even if this provision were approved by the necessary majorities of electors at a referendum so as to amend the Commonwealth Constitution, it might not be effective to amend s 7 of the Australia Acts in light of the state requests required by s 15 of those Acts in order to amend them: for the text of s 15, see 1.3.20E. The states agreed instead to enact legislation requesting that both the Commonwealth and the United Kingdom Parliaments amend s 7 of their respective Australia Acts by adding the following paragraphs at the end: (6) The Parliament of a State may make a law providing that the preceding sub-sections do not apply to the State. (7) Upon the coming into effect in a State of a law referred to in subsection (6), this section ceases to apply to the State as provided by that law.

See the various states’ Australia Acts (Request) Acts 1999. These Acts were expressed to take effect upon commencement of the Commonwealth legislation to amend the Constitution, which included a transitional provision permitting the Commonwealth Parliament to disapply s 7 of either Australia Act to a particular state: see Constitution Alteration (Establishment of Republic) Bill 1999 (Cth). However, the Commonwealth bill did not take effect because the s 128 referendum proposal was defeated. See generally Twomey, 2004, Ch 14. [page 756]

RESPONSIBLE GOVERNMENT AND THE ‘RESERVE POWERS’ Responsible government Responsibility, mandate and representation 7.3.1 Like ‘the Crown’, the term ‘responsible government’ can bear slightly different meanings, depending on context. It has sometimes been used simply to designate the point in history at which British colonies became ‘responsible’ for their own government (that is, self-governing). However, its more specific meaning refers to a set of principles, originally developed as conventions, which (in theory at least) hold executive governments accountable to their legislative arms. It is important not to confuse principles of responsible government, in the sense of executive accountability to parliament, with an almost antithetical political concept: what governments sometimes call their ‘responsibility to govern’ or electoral ‘mandate’. On this view of government accountability (to the electorate), parliament is sometimes cast as an impediment to implementation of the voters’ choice of legislative agenda. The idea that ‘the electors have spoken’ on policy is reflected in s 16A of the Constitution Act 1975 (Vic): 16A The principle of government mandate (1) It is the intention of the Parliament that regard should be given to the following principle — The Council as a House of Review will exercise its powers in recognition of the right and obligation of the current Government to implement — (a) the Government’s specific mandate — the policies, promises

and initiatives which were publicly released by or on behalf of the Government during the last election campaign; and (b) the Government’s general mandate — to govern for and on behalf of the people of Victoria. (2) The principle in subsection (1) is not to be construed as limiting the powers of the Council, the Assembly or the Parliament.

This mandate is claimed on behalf of Victorian Governments in their dealings with an upper house of parliament — it was inserted as part of broader reforms of that state’s formerly powerful Legislative Council under the Bracks Labor Government. Being non-binding, s 16A operates in the manner of a constitutional convention: Killey, 2009, pp 19–20. However, in the absence of legislation like s 16A, it is not clear that the concept of government mandate is supported by convention in other Australian jurisdictions. 7.3.2 The dynamic of controversies over government mandates points to another distinctly Australian aspect of principles of responsible government: the question of whether governments ought to be held ‘responsible’ to the lower house of parliament alone, or to both houses. This question does not arise in jurisdictions (like the United Kingdom, Canada, or New South Wales before 1934) in which upper house members are appointed by the government. While it might be argued that a government should be held accountable only to the elected house which ‘makes’ it (that is, the lower house), some uniquely Australian principles of responsible government concern accountability to both houses: see 7.3.25–7.3.32. 7.3.3

Finally, like other constitutional conventions, and like the

‘representative government’ that the Commonwealth Constitution requires (see 2.2.16E–2.2.18 and 2.6.10C–2.6.18), [page 757] ‘responsible government’ appears to be a concept that moves with the times. This is because responsible government is fundamentally a mechanism for ensuring that government is representative.

Principles of responsible government and their limitations 7.3.4 There are three core principles of responsible government as it developed historically, and one distinctly Australian variation on it as outlined in the following paragraphs.

The Sovereign acts only on ‘constitutional’ advice … 7.3.5 The Sovereign or Her representative acts on the advice of ministers who enjoy the ‘confidence’ of the lower house of parliament. As a minimum, this means that ministers have majority support in the house on key issues like ‘supply’ (the budget) and no-confidence motions. A key justification for executive responsibility to parliament is that it is parliament that approves the finance necessary for government to operate. The convention that the Sovereign acts only on the advice of the elected government applies regardless of the kind of executive

power being exercised, that is, whether it is conferred by constitutional instrument, legislation or the common law, involves royal assent to legislation or a vice-regal budget message. The only exceptions to this principle are where the Sovereign exercises a ‘reserve’ power: see 7.3.47–7.3.59E. Because of its status, ministerial advice to Governors(-General) is sometimes called ‘constitutional’ advice. This advice differs from ordinary expressions of opinion by ministers, MPs or anyone else which might be freely given and received but does not bind the vice-regal representative.

… From ministers who command the ‘confidence’ of parliament’s lower house 7.3.6 Historically, most Australian governments have commanded the confidence of the lower house as majority governments; that is, with the support of a majority of members of the house, all of whom belong to the same political party. However, minority governments are increasingly common. An example is the Commonwealth Labor Government of Julia Gillard elected in 2010. Gillard’s political party (Labor) held the largest number (albeit a minority) of seats in the house, relying in forming government on the support of other members on votes of noconfidence and supply. A government’s term of office depends on retaining the confidence of the lower house. A ministry that cannot command the confidence of the lower house must resign to allow the Sovereign’s representative to obtain different advisors by: inviting the Leader of the Opposition (or some other candidate who appears to command the necessary support)

to test his or her support on the floor of the house; or, if that fails installing a caretaker government while dissolving parliament to give the voters a chance to elect a new lower house which will repose confidence in a new set of ministers.

… Ministers are individually and collectively ‘responsible’ to, parliament … 7.3.7 Obviously, commanding the ‘confidence’ of parliament is not easy from outside that institution. But there is another reason why principles of responsible government require that [page 758] ministers be members of parliament: so that they are answerable to it for government policy. Ministers are ‘responsible’ to parliament in this sense: collectively for their advice, through Cabinet and the Executive Council, to the Sovereign; and individually for the actions of officials in departments and statutory bodies within their ministerial portfolios in implementing that advice. This principle was demonstrated in the lead-up to the 2012 Queensland election. Former Lord Mayor of Brisbane, Campbell Newman, was elected Liberal National Party leader in April 2011,

but did not obtain a seat in the Legislative Assembly (the sole house of the Queensland Parliament) until the election the following March. (In the interim, the parliamentary party elected an acting leader.) Had Mr Newman not won his seat, he could not have achieved his ambition to become Queensland Premier. 7.3.8 Collective ministerial responsibility, in the context of Cabinet, is discussed at 7.3.17–7.3.24E. Individual ministerial responsibility in theory means that parliaments can censure ministers for inappropriate behaviour, whether it is a deviation from accepted morality, alleged or actual illegality or impropriety, or deliberately misleading parliament: Killey, 2007, Ch 5; see also Lindell, 1998. However, the party system normally protects ministers from demands for their resignation, an outcome demonstrated by the continuation in another ministry of the Gillard Government’s former Environment Minister, Peter Garrett, after fatal defects were revealed in a home insulation program run by his department. In 2011, the Canadian Government issued a statement of what is expected of its ministers, which seems to reflect the present Australian position. 7.3.9E

Government of Canada, Accountable Government: A Guide for Ministers and Ministers of State, 2011, pp 2–3

I.3. Ministerial Accountability Ministers are accountable to Parliament for the exercise of the powers, duties and functions vested in them by statute or otherwise. Ministers must be present in Parliament to respond to questions on the discharge of their responsibilities, including the manner in which public monies were spent, as well as to account

for that use. Whether a Minister has discharged responsibilities appropriately is a matter of political judgment by Parliament. The Prime Minister has the prerogative to reaffirm support for that Minister or to ask for his or her resignation. … A Minister is accountable to Parliament for the proper functioning of his or her department and all other organizations within his or her portfolio. Ministers fulfill their accountability with respect to [government] organizations by demonstrating appropriate diligence and competence in the discharge of their responsibilities. What constitutes appropriate ministerial oversight will depend on the nature of the organization and the Minister’s role. In some cases, where arm’s-length bodies are concerned and most powers, duties and functions are vested in a … governing body, the Minister’s engagement will be at a systemic level — for example, making or recommending appropriate appointments, approving corporate plans, or examining the need for changes to … framework legislation. [page 759] Ministerial accountability to Parliament does not mean that a Minister is presumed to have knowledge of every matter that occurs within his or her department or portfolio, nor that the Minister is necessarily required to accept blame for every matter. It does require that the Minister attend to all matters in Parliament that concern any organizations for which he or she is responsible, including responding to questions. It further requires that the Minister take appropriate corrective action to address any problems that may have arisen, consistent with the Minister’s role with respect to the organization in question …

7.3.10 The operation of the three principles of responsible government identified above was outlined by Mason J (as he then was) in the following judgment. 7.3.11C

FAI Insurances v Winneke (1982) 151 CLR 342 at 364–5 (footnotes omitted)

Mason J: … [M]inisterial responsibility means (1) the individual responsibility of Ministers to Parliament for the administration of their departments, and (2) the collective responsibility of Cabinet to Parliament (and the public) for the whole conduct of administration … The principle that in general the Governor defers to, or acts upon, the advice of his Ministers, though it forms a vital element in the concept of responsible government, is not in itself an instance of the doctrine of ministerial responsibility. It is a convention, compliance with which enables the doctrine of ministerial responsibility to come into play so that a Minister or Ministers become responsible to Parliament for the decision made by the Governor in Council, thereby contributing to the concept of responsible government. ‘The principal convention of the British constitution’, says de Smith in his Constitutional and Administrative Law, 3rd ed (1977), p 99, ‘is that the Queen shall exercise her formal legal powers only upon and in accordance with the advice of her Ministers, save in a few exceptional situations’. Conformity with this principle there is a convention that in general the Governor-General or the Governor of a State acts in accordance with the advice tendered to him by his Ministers and not otherwise … He does this by acting in conformity with the advice given by the Executive Council on consideration of the recommendation by the responsible Minister which may in some cases reflect Government policy as settled by Cabinet or determined by the Minister. The Royal Instructions to the Governor of Victoria [which were then still in force] expressly

allow him to disregard advice (cl VI). This does not affect the convention that he will act on advice. But [h]istory and practice provide many instances in which the Queen or her Australian representatives have called in question the advice which has been tendered, … suggested modifications to it and … asked the Ministry to reconsider it even though in the last resort the advice tendered must be accepted …

… Ministerial responsibility extends to scrutiny by parliament’s upper house 7.3.12 A fourth, distinctly Australian, refinement of responsible government holds that both houses of parliament have a legitimate role in scrutinising government conduct. Governments are answerable to their upper houses in this sense, although not ‘responsible’ to them in the sense of being required to hold their ‘confidence’. This issue is taken up at 7.3.25–7.3.32. [page 760] So much for the theory. In practice, executive accountability to parliament is affected significantly by the existence of organised political parties, particularly given the dominance of two main parties in Australia. Party discipline normally requires all MPs who belong to the governing party to vote with the government, making it difficult for parliaments to hold ministers (and Cabinets) to account. This has led many commentators (for example, Weller, 2005) to argue that the chief line of accountability of Australian governments is to their parties, not to their legislative arms, and to

describe Australian government as a system of ‘party’, rather than ‘parliamentary’, democracy. The result is executive domination of the legislature, rather than legislative control of the executive. All four principles of responsible government, and their limitations, are explored further in the case extracts below. First, however, it is necessary to introduce some of the dramatis personae of responsible government.

Conventional actors and institutions of responsible government 7.3.13 Constitutional conventions do not simply control the behaviour of existing actors or institutions. The conventions of responsible government acknowledge the existence and activities of three important political actors or institutions about which constitutional law is silent: the First Minister, the Opposition and Cabinet.

The First Minister 7.3.14 The Prime Minister or Premier is the person whom the Sovereign’s representative ‘commissions’ to form a government. Strictly speaking, in doing so, the Governor(-General) acts without ‘constitutional’ advice because, before a government has been formed, there are no ‘constitutional’ advisors to provide it: Twomey, 2012, pp 339–43. In that limited sense, the vice-regal representative exercises a ‘reserve power’ derived from the prerogative: see 7.3.47–7.3.59E. In a two-party political system, however, the Sovereign’s representative normally has no discretion in exercising this power, because it is clear who holds the

confidence of the lower house — the leader of the political party that holds a majority of seats in it — and in such situations convention requires the Governor(-General) to commission that person as First Minister. When it comes to those advising the Sovereign’s representative, the Prime Minister or Premier is, as his or her title suggests, the ‘first among equals’. Although some other ministers appointed on his or her advice may be members of the upper house, by convention, the First Minister is always drawn from the lower house. Senator John Gorton did become Prime Minister for a month in January 1968 after the presumed drowning of Prime Minister Harold Holt. However, Gorton resigned his Senate seat (as s 43 of the Constitution requires) to contest the by-election for Holt’s House of Representatives seat, which he won and continued to hold even after losing government in 1972: National Museum of Australia. 7.3.15 In the unusual circumstance of a change in leadership of an incumbent First Minister’s party (which occurred at the Commonwealth level in 2010 (Kevin Rudd to Julia Gillard), 2013 (Julia Gillard to Kevin Rudd) and 2015 (Tony Abbott to Malcolm Turnbull)), by convention the defeated incumbent resigns the Prime Ministership so that his or her successor as party leader may be sworn in as Prime Minister: Twomey, 2012. Interesting questions may arise [page 761] where the defeated incumbent had led a minority government and it is unclear if the incoming party leader would enjoy the

confidence of the lower house. This occurred in 2013 when Prime Minister Julia Gillard was replaced as leader of the federal Labor Party by Kevin Rudd: see Twomey, 2013.

The Opposition 7.3.16

The Opposition is:

… the political part[y] or parties out of office, whose primary function is to criticize and attack the party or parties in power … The[ir] immediate purpose … is to check, prevent and rectify any abuses of which government may be guilty. The[ir] ultimate purpose is to replace the party or parties in power …, either as the result of a shift of parliamentary opinion or as a result of a general election which gives the Opposition a majority … The Opposition … employs none but … peaceful means to achieve power. It operates wholly within the laws and conventions of the state, to which it is completely loyal. The Opposition is … obliged to take office should its activities make government by those in power unfeasible or impossible. (Foord, His Majesty’s Opposition 1714–1830, 1964, quoted in Killey, 2009, pp 58–9.)

Cabinet 7.3.17 Cabinet, as its name suggests, developed out of a secret committee of the King’s Privy Council — the English equivalent of Australian Executive Councils: see 7.4.9–7.4.11E. The monarch initially presided over these meetings but, as Spigelman CJ explained in Egan v Chadwick (1999) 46 NSWLR 563 7.3.31C, was eventually excluded by a language barrier: Killey, 2009, pp 49– 50. Cabinet has been likened to ‘a hyphen which joins, a buckle which fastens, the legislative part of the state to [its] executive part …’: Bagehot, 1887, p 82. It is a decision-making body but, because

it lacks formal status, its decisions are executed (that is, given effect) by other constitutional actors; for example, by the vice-regal representative on the advice of the Executive Council. Cabinet’s political nature and lack of legal status allow the First Minister considerable flexibility in its structure and operations. Recent innovations have included scheduling ‘community Cabinet meetings’ outside capital cities and allocating Cabinet posts to cross-bench MPs. Perhaps most controversially, in 2005 one of the governments that had experimented with cross-bench Cabinet positions, the South Australian Rann Labor Government, allocated two positions on a core Cabinet committee to a Catholic monsignor and a mining magnate, neither of whom was a member of parliament eligible to be appointed a Minister or member of the Executive Council. Although extra-parliamentary appointments are motivated by a desire to import into Cabinet particular expertise or perspective, they present problems for the theory of responsible government. Parliament cannot hold unelected officials ‘responsible’ for ‘constitutional’ advice given by a government, through Cabinet, to the Sovereign’s representative — the only people who must answer to the legislature, and ultimately the people, for this advice are ministers. Because Cabinet is a political, not a legal, institution, its decisions are not justiciable — although their implementation by another part of the executive may be. [page 762]

7.3.18C Minister of Arts Heritage and Environment; Attorney-General (Commonwealth) and the

Commonwealth v Peko-Wallsend Ltd (1987) 15 FCR 274 Bowen CJ (who agreed with Sheppard and Wilcox JJ): … Cabinet … Cabinet is not mentioned in the [Commonwealth] Constitution. It … functions according to convention … Until 1956 it was the practice for all Members of the Ministry, including Ministers without portfolio, to sit as members of Cabinet. Beginning with the Menzies Ministry sworn in on 11 January 1956 the practice was introduced of a Cabinet comprising some but not all Members of the Ministry … Since then this inner circle of Ministers has generally been referred to as the Cabinet. When Cabinet meets it is customary for particular members of the outer Ministry to attend when matters concerning or affecting their particular departments are before Cabinet for discussion … It is to Cabinet that the highest decisions of policy affecting Australia are brought. Often the questions arising involve intense conflict of interests or of opinion in the community. In Cabinet these conflicts have to be resolved. Decisions have to be taken in the public interest, notwithstanding that the lives, interests and rights of some individual citizens may be adversely affected by the decision. This is not to say that Cabinet should decide matters without considering all relevant material. But there are recognised channels for communicating arguments or submissions. Each Minister has the support and advice of a department of State. Representations may be made to the relevant department or in appropriate cases to the Minister. Every citizen has access to a local Member of Parliament or a Senator …, who can assist in [advancing] the … citizen’s point of view. The prospect of Cabinet itself, even by delegation, having to accord a hearing to individuals who may be adversely affected by its decisions, is a daunting one …

After a decision of Cabinet is made it may require for its implementation an Act of the Parliament or a decision of a particular Minister or of the Governor-General in Council. There is generally further scope for submissions or representations at some stage even after a Cabinet decision and always scope for political action … [In a similar vein, see South Australia v O’Shea (1987) 163 CLR 378.]

7.3.19 Cabinet secrecy requires ministers to keep its deliberations confidential. There was a time when Cabinet’s deliberations were not recorded, so as to avoid ‘leaks’. Disclosures do still occur, and Commonwealth legislation permits release of ‘Cabinet notebooks’ (records of proceedings) 50 years after their compilation, and other Cabinet documents within 20 years. However, the courts still refuse to permit public scrutiny of more recent deliberations. 7.3.20C

Commonwealth v Northern Land Council (1993) 176 CLR 604

Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ: … … [I]t is in the public interest that the deliberations of Cabinet should remain confidential in order that the members of Cabinet may exchange differing views and at the same time maintain the principle of collective responsibility for any decision which may be made. Although Cabinet [page 763] deliberations are sometimes disclosed in political memoirs and in unofficial reports on Cabinet meetings, the view has generally

been taken that collective responsibility could not survive in practical terms if Cabinet deliberations were not kept confidential … Despite the pressures which modern society places upon the principle of collective responsibility, it remains an important element in our system of government. Moreover, the disclosure of the deliberations of the body responsible for the creation of state policy at the highest level, whether under the Westminster system or otherwise, is liable to subject the members of that body to criticism of a premature, ill-informed or misdirected nature and to divert the process from its proper course [Conway v Rimmer [1968] AC per Lord Reid at 952; Sankey v Whitlam (1978) 142 CLR per Mason J at 97–98 …]. The mere threat of disclosure is likely to be sufficient to impede those deliberations by muting a free and vigorous exchange of views or by encouraging lengthy discourse engaged in with an eye to subsequent public scrutiny. Whilst there is increasing public insistence upon the concept of open government, we do not think that it has yet been suggested that members of Cabinet would not be severely hampered in the performance of the function expected of them if they had constantly to look over their shoulders at those who would seek to criticize and publicize their participation in discussions in the Cabinet room. It is not so much a matter of encouraging candour or frankness as of ensuring that decision-making and policy development by Cabinet is uninhibited. [For further discussion of Cabinet secrecy, see Egan v Chadwick (1999) 46 NSWLR 563 7.3.31C and State of New South Wales v Public Transport Ticketing Corporation [2011] NSWCA 60.]

7.3.21 In theory, Cabinet solidarity is a vehicle for collective ministerial accountability to parliament. By convention, Cabinet Ministers are required to support Cabinet decisions (including by voting for them in parliament), even if they disagree with them.

7.3.22E

Killey, Constitutional Conventions in Australia, 2009, pp 77–9

… [U]ntil the late [19th] century … it was not unknown for the Sovereign to seek separate answers from individual Ministers … [In] 1885 … the current position was established when Gladstone refused to give details of different opinions of the Ministers in his Cabinet letter to the Queen. The current understanding … was explained in 1986, by Forsey and Eglington, in a report to the Canadian House of Commons …: 1.

2.

Government advice to the Crown must be unanimous, even if arrived at after consideration of strongly held but opposed views. A minister — i. must loyally support and defend any cabinet decisions and not quaver by suggesting he was compromised or was reluctantly persuaded; ii. must be prepared not only to refrain from publicly criticising other ministers but also to defend them publicly; iii. must not announce a new [or changed] policy … without prior cabinet consent … iv. must not express private views on government policies; [page 764] v.

must not speak about, or otherwise become involved in, a colleague’s portfolio without first consulting him and gaining his approval and probably that of the prime minister;

vi. must not make speeches or do acts which may appear to implicate the government, and must not express personal opinions about future policy except after consultation; vii. must carry out the policy decided upon by cabinet so far as it affects his own portfolio; viii. must vote with the government, whether it is in danger or not; ix. must speak in defence of the government and any of its policies if the prime minister insists. … [Sometimes Cabinet solidarity is] suspended and it is agreed that Ministers can ‘agree to differ’ on specific matters. This is not a new device … The issue of Catholic Emancipation was regarded as an ‘open question’ by the British Cabinet between 1812 and 1829, as was women’s suffrage in 1884 and between 1906 and 1914 and tariff reform between 1903 and 1905 and in 1932 … … There have been open questions recently in Australia in relation to the republic referendum and stem cell research legislation … These issues arise due to the strong issues of conscience concerning particular subject matters that cross party lines … [but t]here is … probably no consistent principle to justify the use of the ‘open question’ device …

7.3.23 In the past decade, minority governments in the Australian Capital Territory, South Australia and Tasmania have experimented with inclusion of cross-bench MPs in Cabinet, as has the Western Australian ‘Liberal/National Government’, which is also established ‘as a partnership’ and not these parties’ traditional

coalition, necessitating special provision for National Party ministers. These experiments have relaxed Cabinet solidarity. The reality of Cabinet practice lies some distance from the theory. 7.3.24E Weller, ‘Parliamentary Accountability for Non-statutory Executive Power: Impossible Dream or Realistic Aspiration?’ (2005) 16 Public Law Review 314 at 320–1 Cabinets have solidarity in a cohesion more seeking to head

sought to interpret the notion of collective way that makes the maintenance of political viable. Chifley gave the most lax ruling when off revolt on Bretton Woods:

When a Cabinet decision is reached it should be supported by Ministers but there is no inflexible rule in this regard. The action of ministers is left to their own personal honour, ie a technical right exists for the Minister to disagree […]. No other Prime Minister would accept that flexibility. But in the 1984 Labor Government Stewart West opposed a Cabinet decision to export uranium and wanted to resign from Cabinet but not the ministry. The words defining ‘collective responsibility’ were redrafted so as to [page 765] allow this unusual act, and in doing so, the traditional concept was changed allowing non-Cabinet Ministers to debate Cabinet policy in caucus, meaning they could maintain a ‘stand’, at least semi-publicly. The political truth, when it comes to the question

of the regulation or implementation of collective government, is that the definition of collective responsibility depends solely on what the Prime Minister decides it to be …

Parliament’s ‘scrutiny function’ 7.3.25 The nature of conventions limits occasions for their judicial consideration to situations where a convention is relevant to questions of law or fact that a court may determine. Such an occasion arose in the 1990s, when the Carr Labor Government did not control the New South Wales Legislative Council, presided over by the Hon Max Willis. Under the influence of the house opposition leader, John Hannaford, the council began to flex powers to demand disclosure of government documents which it had not used regularly since the 19th century: Carney, 2006a, pp 300, 313. Treasurer and government leader in the council, Michael Egan, resisted production of the documents, on advice from the New South Wales Crown law department that the government was accountable to the Legislative Assembly only. The events described in the joint judgment of Gaudron, Gummow and Hayne JJ led Egan to sue Willis and the council’s ‘Usher of the Black Rod’ — the officer responsible for council formalities and security, Warren Cahill — seeking declarations that they had committed a trespass against him. In determining whether Willis and Cahill had a defence of lawful authority, the New South Wales Court of Appeal considered whether the council had power to order Egan’s suspension for contempt for failure to produce the documents sought. The council’s power to order production of documents had never been challenged in, or considered by, a court. While the tort claim raised a justiciable

controversy, the High Court cautioned that it would not normally issue declarations concerning the validity of parliamentary orders, which do not concern ‘rights, liabilities and interests of a kind which are protected or enforced in the courts’: (1998) 195 CLR 424 at 438–9. McHugh J had ‘real difficulty in seeing how the Court of Appeal had jurisdiction’ because ‘[i]t was for the Council … alone, to determine the facts of the case and whether they fell within the privilege or power to suspend for obstruction’: (1998) 195 CLR 424 at 466. See further Carney, 2006b, 313–16, and compare Barber v State of Victoria [2012] VSC 166. 7.3.26 As discussed in Chapter 2, because New South Wales does not have legislation or a constitutional provision setting out powers and privileges of the houses of parliament, whether or not the council had power to suspend Egan for contempt depended on whether such action was ‘necessary to the proper exercise’ of its functions: see 2.7.11–2.7.13. 7.3.27C

Egan v Willis and Cahill (1998) 195 CLR 424 (most footnotes omitted)

Gaudron, Gummow and Hayne JJ: On 1 May 1996, the Legislative Council … [‘the Council’] passed a resolution calling on the appellant … to table certain papers in the House or deliver them to the Clerk. The appellant did not do so, the Cabinet having earlier agreed that Ministers should decline to comply with any orders from either House of Parliament to table documents. [page 766]

On 2 May 1996, the … Council passed a resolution adjudging the appellant guilty of a contempt of the House (par 2) [and] suspending him from the … House for the remainder of the day’s sitting (par 3(a)) … The appellant did not leave … The Usher of the Black Rod … was directed by the … President … to escort [Egan] from the chamber and the parliamentary precincts. Black Rod did this, taking [Egan] … out on to the footpath of Macquarie Street. The appellant brought an action … seeking declarations that (i) pars 2 and 3 of the resolution … were invalid and (ii) his removal into the street constituted a trespass … … The functions of the … Council In identifying the functions of the … Council … and what is ‘necessary’ to [their] ‘proper exercise’ …, it is … desirable to make some reference to history. As Gleeson CJ said in … the Court of Appeal [(1996) 40 NSWLR 650 at 659]: At the present time New South Wales has a responsible and representative system of government, with a legislature comprising the Queen, the Legislative Council, and the Legislative Assembly. The members of both Houses are popularly elected, although the methods of election, and terms of office of the members, are different. However, his Honour … point[ed] out that many aspects of responsible government, as it presently exists in the State, are not identified in the Constitution Act and depend upon … convention …: The Constitution Act makes no reference to Cabinet. It does not refer to the conventional requirement[s] that ministers be chosen from amongst the members of one or other of the Houses of Parliament … [or] that the Governor may only appoint as Premier a person who commands the confidence

of the Legislative Assembly, or that the ministry must have the confidence of that House. No reference of any kind is made to the party system … The contemporary operation of a system of responsible government reflects the significant role of modern political parties, one of which, or a coalition of which, in the ordinary course ‘controls’ the legislative chamber or, in a bicameral system, at least the lower House. Modern political parties did not exist in [NSW] when the bicameral legislature was first established [in] 1855 … Indeed, until the end of the last century, no Australian colony had a developed system of political parties. The Imperial legislation of the [1850s] by which bicameral legislatures were established in [NSW] and Victoria contained no express declaration [that] responsible government [was established] … [I]n … Victoria, provisions required that only a certain number of the officers of the government need be members of the legislature. In [NSW], provisions were made … with respect to money Bills and the parliamentary appropriation of the Consolidated Fund. Further, s 37 … replace[d] the system [of] … appoint[ing] officers in the [colonial] public service … [from] England with a system conferring on the new colonial government power to make such appointments … [This is now provided for by] s 47 of the Constitution Act. Both sections excepted from their scope the appointments of officers ‘liable to retire from office on political grounds …’ [, who] … were said by Higinbotham CJ to be ‘clearly responsible officers or Ministers’; and the upshot was to give, ‘though indirectly’, what was an ‘adequate expression’ to an intention that ‘the principle of responsible government should be established by law’ [Toy v Musgrove (1888) 14 VLR 349 at 392– 393]. [page 767]

It should not be assumed that the characteristics of a system of responsible government are fixed or that the principles of ministerial responsibility which developed in [NSW] after 1855 necessarily reflected closely those … accepted at Westminster. Moreover, what are now federal and State co-operative legislative schemes involve the enactment of legislation by one Parliament which is administered and enforced by Ministers and officials at another level of government, not responsible to the enacting legislature. A system of responsible government traditionally has been considered … ‘the means by which Parliament brings the Executive to account’ so that ‘the Executive’s primary responsibility in its prosecution of government is owed to Parliament’. … Mill, writing in 1861, … spoke of the task of the legislature ‘to watch and control the government: to throw the light of publicity on its acts’. It has been said of the contemporary position in Australia that, whilst ‘the primary role of Parliament is to pass laws, it also has important functions to question and criticise government on behalf of the people’ and that ‘to secure accountability of government activity is the very essence of responsible government’. In Lange v Australian Broadcasting Corporation [(1997) 189 CLR 520 7.3.36C at 561], reference was made to those provisions of the Commonwealth Constitution which prescribe the system of responsible government as necessarily implying ‘a limitation on legislative and executive power to deny the electors and their representatives information concerning the conduct of the executive branch … throughout the life of a federal Parliament’ … In Australia, s 75(v) of the Constitution and judicial review of administrative action under federal and State law, together with freedom of information legislation, supplement the operation of responsible government in this respect … One aspect of responsible government is that Ministers may be members of either House of a bicameral legislature and

liable to the scrutiny of that chamber in respect of the conduct of the executive branch. … Another aspect … is that the ministry must command the support of the lower House of a bicameral legislature upon confidence motions. The circumstance that Ministers are not members of a chamber in which the fate of administration is determined in this way does not have the consequence that the first aspect of responsible government mentioned above does not apply to them. Nor is it a determinative consideration that the political party or parties, from members of which the administration has been formed, ‘controls’ the lower but not the upper chamber. Rather, [arguably] … it is such a state of affairs which assists the attainment of the object of responsible government of which Mill spoke in 1861. Conclusions The arrangements made for [NSW from] … 1855 provided the elements of what now should be identified as a system of responsible government. There was an assumption of a measure of examination of the executive by the legislature as well as legislative control over taxation and appropriation of money. The consideration that the government of the day must retain the confidence of the lower House and that it is there that governments are made and unmade does not deny what follows from the assumption [for the first time] in 1856 by the … Council of a measure of superintendence of the conduct of the executive government by the production to it of State papers. It is not necessary to consider … the limits involved in that superintendence. What is presently significant is the immediate interrelation between that superintendence and the law-making function in which the … Council participates, together with the Legislative Assembly and the Crown … … [O]n no view of the authorities did the action taken in passing and implementing pars 2 and 3(a) of the resolution go beyond the boundary of what is permissible. …

[page 768] 7.3.28 In the decision appealed from, despite declining to declare the council resolutions invalid, the Court of Appeal had declared that taking Egan out of the parliamentary building constituted a trespass. However, although Egan challenged the first declaration in the High Court, Willis and Cahill did not crossappeal on the ‘footpath point’. The High Court therefore did not need to decide it.

Reconciliation of competing conventions 7.3.29 While the 1996 ‘production of documents’ controversy was before the High Court, the New South Wales Legislative Council continued to press the Carr Government for information. Former Liberal Minister the Hon Virginia Chadwick replaced Willis as President of the Council in mid-1998 after Willis was filmed drunk in the president’s chair during an historic vote on removal of a Supreme Court judge. In October and November 1998, the council passed further resolutions requiring Egan to table documents with the Clerk of the Council (John Evans) but permitting identification of documents (including Cabinet documents) over which the government claimed legal professional privilege or public interest immunity. These claims would be the subject of independent assessment. When Egan withheld some documents (including Cabinet documents), the council again judged him guilty of contempt and suspended him, which caused the Black Rod to approach him to remove him from the chamber.

Once again, in order to attract the jurisdiction of the courts, Egan sued the President, the Clerk and the Black Rod in tort, this time for assault. 7.3.30 In determining whether the council’s orders provided a defence to assault, the New South Wales Court of Appeal considered whether those powers extended to demanding production of Cabinet documents. This question presented the court with a clash of ‘responsible government’ conventions. 7.3.31C

Egan v Chadwick, Evans and Cahill (1999) 46 NSWLR 563

Spigelman CJ (with whom Meagher JA agreed): … … The [origins of the] incidents of responsible government … are to be found, as is much of English constitutional practice, in historical accident. To give one example, George I and George II spoke no, or little, English. For this reason, and also because of their preoccupation with the affairs of the Electorate of Hanover, they did not, unlike their predecessors, attend Cabinet meetings. By the time George III took the throne, the convention was firmly established, by almost half a century of practice, that the monarch did not attend Cabinet … … There is a body of opinion that the formal ‘responsibility’ [to parliament] is only to the Lower House … … [F]or [NSW], this approach cannot stand with the reasoning in Lange and Egan v Willis. In Lange the court referred to ‘the means for enforcing the responsibility of the Executive to the organs of representative government’ (559, emphasis added) … Ministerial responsibility has always been understood to have

two dimensions: … In the present case only collective responsibility has been raised … [page 769] In his [internationally renowned] 1867 work, W E Hearne described the Cabinet as ‘the cornerstone of our modern system of government’ (p 180) …. The Cabinet has remained the ‘cornerstone’ of the system of government in [NSW]. Collective responsibility to Parliament, even if sometimes honoured in the breach, has remained a distinctive characteristic of that system … usually referred to as a constitutional convention. … A ‘convention’ in this sense is no less such because it is not rigorously observed. Nor … does a law lose its character … because it is sometimes breached. Such conventions, as Maitland said, are found ‘of every degree of stringency and of definiteness’: Maitland [supra] p 398 … Insofar as the function of the Legislative Council to review Executive conduct is derived from the system of responsible government, collective responsibility must be accepted as part of that system. This is of significance in determining whether a power, said to be ‘reasonably necessary’ for the performance of this very function, extends to Cabinet documents. All the documents said to be privileged on the grounds of public interest immunity in the present proceedings, were ‘Cabinet documents’. The issue is not one of the enforcement of collective responsibility. The issue is whether, and if so how, that principle should be recognised in the application of a rule of the common law of the constitution upon which it impinges … [Spigelman CJ refused to make orders in the case, on the basis that the council’s resolutions were ‘spent’, the House having since been

reconstituted by elections. However, his Honour would not have compelled production to the council of Cabinet documents.] … The high constitutional functions of the Legislative Council encompass both legislating, and the enforcement of the accountability of the Executive. Performance of these functions may require access to information the disclosure of which may harm the public interest … However … it is not reasonably necessary for the proper exercise of the functions of the Legislative Council to call for documents the production of which would conflict with the doctrine of ministerial responsibility, either in its individual or collective dimension. The power is itself, in significant degree, derived from that doctrine. When the issue of access to Cabinet documents has arisen in the context of claims for public interest immunity in the course of litigation, the Courts have recognised the significance of Cabinet confidentiality as an application of the princip[le] of collective responsibility. However, a distinction has been made between documents which disclose the actual deliberations within Cabinet and … reports or submissions prepared for the assistance of Cabinet. [His Honour referred to Commonwealth v Northern Land Council (1993) 176 CLR 604.] The documents in issue in that case were … documents which recorded the actual deliberations of Cabinet. The revelation of such material is inconsistent with the doctrine of collective responsibility. Documents prepared outside Cabinet for submission to Cabinet may, or may not, depending on their content, manifest a similar inconsistency … [Priestley JA agreed that the council’s powers extended to compelling production of documents subject to public interest immunity or legal professional privilege claims, but would also have upheld a power to compel production of Cabinet documents.]

[page 770] 7.3.32 The Court of Appeal heard Egan v Chadwick in November and December 1998, but did not deliver judgment until the following June. Meanwhile, the Carr Government improved its position in the upper house at an election in March 1999, removing the basis for the dispute.

Constitutional acknowledgment of responsible government 7.3.33 Some provisions of the Commonwealth Constitution, and of most state Constitution Acts, allude indirectly to responsible government, while others are more direct. Where principles of responsible government are spelled out in a constitution — for example, as the requirement that ministers be members of parliament is spelled out at the Commonwealth level and in Victoria, South Australia and Tasmania — there is debate about the effect of such provisions. The courts in the Egan cases and Lange v ABC (1997) 189 CLR 520 took account of principles of responsible government in determining other legal issues (powers of the Legislative Council and the common law of defamation respectively), but were not asked to enforce those principles directly. Arguably, even when incorporated into a written constitution, such a requirement concerns the relationship of the Executive to parliament, and for separation of powers reasons is non-justiciable. For an argument that these cases convert convention into legal rule, see Lindell, 2004. 7.3.34E

Commonwealth Constitution

Chapter II — The Executive Government 64 Ministers of State [For the first two clauses, see 7.4.17E.] Ministers to sit in Parliament After the first general election no Minister of State shall hold office for a longer period than three months unless he is or becomes a senator or a member of the House of Representatives.

7.3.35 The High Court has confirmed the role of s 64 in providing for a system of responsible government: see the following case. 7.3.36C Lange v Australian Broadcasting Corporation (1997) 189 CLR 520

The Court: … Representative and responsible government … That the Constitution intended to provide for the institutions of representative and responsible government is made clear both by the Convention Debates and by the terms of the Constitution itself … Sections 1, 7, 8, 13, 24, 25, 28 and 30 of the Constitution give effect to the purpose of self-government by providing for the fundamental features of representative government. Section 1 … vests the legislative power of the Commonwealth in a Parliament ‘which shall consist of the Queen, a Senate, and a House of Representatives’ …

[page 771] Other sections of the Constitution establish a formal relationship between the Executive Government and the Parliament and provide for a system of responsible ministerial government, a system of government … Thus, s 6 … requires that there be a session of the Parliament at least once in every year, so that 12 months shall not intervene between the last sitting in one session and the first sitting in the next. Section 83 ensures that the legislature controls supply. It does so by requiring parliamentary authority for the expenditure by the Executive Government of any fund or sum of money standing to the credit of the Crown in right of the Commonwealth, irrespective of source. Sections 62 and 64 … combine to provide for the executive power of the Commonwealth, which is vested in the Queen and exercisable by the Governor-General, to be exercised ‘on the initiative and advice’ [Theodore v Duncan [1919] AC 696 at 706] of Ministers and limit to three months the period in which a Minister of State may hold office without being or becoming a senator or member of the House of Representatives. Section 49 … in dealing with the powers, privileges and immunities of the Senate and of the House of Representatives, secures the freedom of speech in debate which, in England, historically was a potent instrument by which the House of Commons defended its right to consider and express opinions on the conduct of affairs of State by the Sovereign and the Ministers, advisers and servants of the Crown. Section 49 also provides the source of coercive authority for each chamber of the Parliament to summon witnesses, or to require the production of documents, under pain of punishment for contempt. The requirement [of the Commonwealth Constitution] that the Parliament meet at least annually, the provision for control of supply by the legislature, the requirement that Ministers be members of the legislature, the privilege of freedom of speech in [parliamentary] debate, and [parliament’s] power to coerce the

provision of information [by the Executive] provide the means for enforcing the responsibility of the Executive to the organs of representative government. In his Notes on Australian Federation: Its Nature and Probable Effects [(1896) at 17], Sir Samuel Griffith pointed out that the effect of responsible government ‘is that the actual government of the State is conducted by officers who enjoy the confidence of the people’. That confidence is ultimately expressed or denied by the operation of the electoral process, and the attitudes of electors to the conduct of the Executive may be a significant determinant of the contemporary practice of responsible government [Reid and Forrest, Australia’s Commonwealth Parliament, (1989) at p 319, 337–9]

7.3.37 The central role played by responsible government in this constitutional arrangement was again emphasised by Gageler J in the following passages. 7.3.38C

McCloy v New South Wales (2015) 89 ALJR 857; [2015] HCA 34

Gageler J: [Having identified key provisions in Ch I of the Constitution establishing and sustaining the Parliament of the Commonwealth, his Honour continued:] [105] Chapter II of the Constitution establishes and sustains the Executive Government of the Commonwealth. Section 61 vests the executive power of the Commonwealth in the Queen, and makes that executive power ‘exercisable by the Governor-General as the Queen’s representative’. Section 64 empowers the Governor-General to appoint officers to administer departments of State for the Commonwealth, who are to be Ministers of State for

[page 772] the Commonwealth. Tying the structure of the Executive Government to the structure of the Parliament, s 64 adds the centrally important qualification that ‘no Minister of State shall hold office for a longer period than three months unless he is or becomes a senator or a member of the House of Representatives’. [106] The link made in that qualification in s 64 — between the structure of the Parliament established and sustained by Ch I and the structure of the Executive Government established and sustained by Ch II — makes plain the design of those chapters to facilitate the application of the particular system of representative government, known as ‘responsible government’, to the ‘indissoluble Federal Commonwealth’ established by the Constitution. That system had developed in the second half of the nineteenth century in each of the six colonies which, on federation, became the Australian States. Evatt J was not inaccurate in stating that ‘prior to the establishment of the Commonwealth of Australia in 1901, responsible government had become one of the central characteristics of our polity’ (Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73, 114). And Isaacs J did not exaggerate in proclaiming that ‘the Constitution is for the advancement of representative government’ (Federal Commissioner of Taxation v Munro; British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1926) 38 CLR 153, 178) and that responsible government ‘is part of the fabric on which the written words of the Constitution are superimposed’ (The Commonwealth v Kreglinger & Fernau Ltd and Bardsley (1926) 37 CLR 393, 413). [107] The theory and practical operation of responsible government, as it had come to be understood in the Australian colonies by the end of the nineteenth century, were encapsulated in the explanation given by Sir Samuel Griffith in notes he

prepared on the 1891 draft of the Constitution. Sir Samuel wrote (Griffith, Notes on Australian Federation: Its Nature and Probable Effects, (1896) at 17, quoted in Quick and Garran, The Annotated Constitution of the Australian Commonwealth, (1901) at 704): The system called Responsible Government is based on the notion that the head of the State can himself do no wrong, that he does not do any act of State of his own motion, but follows the advice of his ministers, on whom the responsibility for acts done, in order to give effect to their volition, naturally falls. They are therefore called Responsible Ministers. If they do wrong, they can be punished or dismissed from office without effecting any change in the Headship of the State. Revolution is therefore no longer a necessary possibility; for a change of Ministers effects peacefully the desired result. The system is in practice so intimately connected with Parliamentary Government and Party Government that the terms are often used as convertible. The present form of development of Responsible Government is that, when the branch of the Legislature which more immediately represents the people disapproves of the actions of Ministers, or ceases to have confidence in them, the head of the State dismisses them, or accepts their resignation, and appoints new ones. The effect is that the actual government of the State is conducted by officers who enjoy the confidence of the people. [108] Brennan J drew on that explanation in Nationwide News [Ltd v Wills] ((1992) 177 CLR 1, 47) to identify responsible government as amongst the ‘constitutional imperatives which are intended — albeit the intention is imperfectly effected — to make both the legislative and executive branches of the government of the Commonwealth ultimately answerable to the Australian people’. The entire Court drew again on that explanation in Lange to make the

[page 773] pivotal point that the confidence of the Australian people which the legislative and executive branches of the government of the Commonwealth are to enjoy ‘is ultimately expressed or denied by the operation of the electoral process’ ((1997) 189 CLR 520, 559). [109] Within the structure of representative and responsible government established by Chs I and II of the Constitution, ‘the Australian people’ are more precisely identified as the electors, who are to vote at least once every three years, in an election for at least one half of the Senate and in a general election for the House of Representatives. Although that structure could be changed by a constitutional alteration under s 128 of the Constitution, the method of constitutional alteration for which that section provides is an extension of the legislative process established by Ch I of the Constitution, which relies directly on the participation of the same electors. They are to vote on a proposed law for the alteration of the Constitution within six months of the passage of the proposed law by an absolute majority of each of the House of Representatives and the Senate. The proposed law is then to be presented to the Governor-General for assent only if approved by a majority of all electors as well as a majority of electors in each State.

7.3.39E

Constitution Act 1902 (NSW) Part 4 — The Executive

38A Powers of Ministers to speak in Legislative Council (1) Notwithstanding anything contained in this Act, any

Minister of the Crown who is a member of the Legislative Assembly may at any time, with the consent of the Legislative Council, sit in the Legislative Council for the purpose only of explaining the provisions of any Bill relating to or connected with any department administered by him, and may take part in any debate or discussion in the Legislative Council on such Bill, but he shall not vote in the Legislative Council … Part 6 — Officers and Departments 47 Appointment of officers (1) The appointment of all public offices under the Government … is vested in the Governor with the advice of the Executive Council or in a person authorised by legislation to make the appointment. (2) This section does not apply to the appointment of: (a) members of the Executive Council or the holder of any other political office … [Prior to its amendment in 2013, s 47 provided: ‘[T]he appointment of all public offices under the Government … shall be vested in the Governor with the advice of the Executive Council, with the exception of the appointments of the officers liable to retire from office on political grounds, which appointments shall be vested in the Governor alone …’.]

7.3.40 The Egan cases focused on the above provisions of the New South Wales Constitution. In Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 69–70, McHugh, Gummow [page 774]

and Hayne JJ described the power conferred by s 47 (in its earlier form) as ‘obsolete or at least obsolescent’, the appointment of Australian public servants having long proceeded pursuant to statute. According to Taylor, 2006, no one other than a member of parliament has ever been appointed a Victorian Minister: p 153. However, for historical reasons (ministers were once required to resign and re-contest their seats, a position addressed by s 53) that state’s Constitution Act would still permit multiple ministers to govern from outside parliament for short periods: ibid. 7.3.41E

Constitution Act 1975 (Vic) Part II — THE PARLIAMENT Division 8 — Offices and places of profit

50 Salaried officers in Parliament (1) The Governor may from time to time appoint any number of officers so that the entire number shall not at any one time exceed 22 who shall be entitled to be elected members of either House of the Parliament and to sit and vote therein. (2) Such officers shall be responsible Ministers of the Crown and members of the Executive Council, and ten at least … shall be members of the Council or the Assembly. (3) Not more than six of such officers shall at any one time be members of the Council and not more than 17 … shall at any one time be members of the Assembly. 51 Ministers to be in Council or Assembly A responsible Minister of the Crown shall not hold office for a

longer period than three months unless he is or becomes a member of the Council or the Assembly. [Section 52 is in similar terms to s 38A of the Constitution Act 1902 (NSW), except that it allows a ‘responsible Minister’ who is a member of either House to sit in the other House to explain a bill.] 53 Responsible Minister not required to vacate seat on appointment to office (1) Notwithstanding anything in this Act where a person is appointed by the Governor to be a responsible Minister of the Crown the acceptance by him of the appointment shall not prevent him from becoming a member of the Council or the Assembly or from sitting and voting as a member or if he is a member shall not vacate his seat … PART IV — THE EXECUTIVE 87E Advice to Governor Where the Governor is bound by law or established constitutional convention to act in accordance with advice — (a) the Executive Council shall advise the Governor on the occasions when the Governor is permitted or required by any statute or other instrument to act in Council; and (b) the Premier (or, in the absence of the Premier, the Acting Premier) shall tender advice to the Governor in relation to the exercise of the other powers and functions of Governor. [page 775] 88 Appointment to public offices … [T]he appointment to public offices under the Government of

Victoria … shall be vested in the Governor in Council with the exception of the appointments of the officers liable to retire from office on political grounds which appointments shall be vested in the Governor alone.

7.3.42E

Constitution of Queensland 2001

CHAPTER 3 — GOVERNOR AND EXECUTIVE GOVERNMENT Part 2 — Governor 34 Power of Governor — Ministers Ministers hold office at the pleasure of the Governor who, in the exercise of the Governor’s power to appoint and dismiss the Ministers, is not subject to direction by any person and is not limited as to the Governor’s sources of advice. Part 3 — Cabinet and Ministers of the State 42 Cabinet (1) There must be a Cabinet consisting of the Premier and a number of other Ministers appointed under section 43. (2) The Cabinet is collectively responsible to the Parliament …

7.3.43E

Constitution Act 1934 (SA) Part 3 — The Executive

66 Ministerial offices

(1) No person shall hold office as a Minister of the Crown for more than three calendar months unless the person is a member of Parliament. … 68 Appointment of officers The appointment to all public offices under the Government of the State, whether such offices be salaried or not, shall be vested in the Governor, with the advice and consent of the Executive Council, except the appointment of the officers required by this Act to be members of Parliament, the appointment and dismissal of which officers shall be vested in the Governor alone: Provided that this section shall not extend to minor appointments, which by statute or by order of the Governor in Council are vested in Heads of Departments, or other officers or persons within the State.

[page 776]

7.3.44E

Constitution Act 1934 (Tas) Part II — The Crown

8B Appointment and tenure of office of Ministers of the Crown (1) No person shall be appointed a Minister of the Crown unless he is a member of the Council or the Assembly, and, subject to the following provisions of this section, a Minister of the Crown ceases to hold office as such on ceasing to be a member of the Council or the Assembly. [Subsections (2) and (3) provide 7 days’ grace after return of the writs

for an election of either House, and subs (4) requires reappointment of ministers after an election.] 8F Appointment of Secretary to Cabinet (1) The Governor may, from time to time, appoint a Member of the Council or the Assembly to hold office as Secretary to Cabinet … [Subsection (2) provides that this office may not be held by a minister.]

7.3.45 The Queensland provisions are unique in their express recognition of the existence of Cabinet and its collective responsibility to parliament. In Western Australia, s 74 of the Constitution Act 1899 is in terms similar to the pre-2013 form of s 47 of the Constitution Act 1902 (NSW), s 88 of the Constitution Act 1975 (Vic) and s 68 of the Constitution Act 1934 (SA): it amounts to an indirect acknowledgment of responsible government. As discussed at 7.2.37–7.2.39, s 7(5) of the Australia Act provides that ‘[t]he advice to Her Majesty in relation to the exercise of the powers and functions of Her Majesty in respect of a State’ — which sub-sections (2) and (3) make clear means appointment of the Governor — ‘shall be tendered by the Premier of the State’.

‘Caretaker conventions’ 7.3.46E Australian Government, Department of Prime Minister and Cabinet (2013), Guidance on Caretaker Conventions, 1.1 … [D]uring the period preceding an election for the House of Representatives, the government assumes a ‘caretaker role’. … [W]ith the dissolution of the House, the Executive cannot be held accountable for its decisions in the normal manner … 1.2 The caretaker period begins [when] the House of Representatives is dissolved and continues until the election result is clear or, if there is a change of government, until the new government is appointed. 1.3 During the caretaker period, … successive governments have followed a series of practices, known as the ‘caretaker conventions’, which aim to ensure that their [page 777] actions do not bind an incoming government and limit its freedom of action. … [T]he government avoids: making major policy decisions that are likely to commit an incoming government; making significant appointments; and entering major contracts or undertakings. 1.4 There are also established practices … directed at protecting the apolitical nature of the public service and avoiding the use of Commonwealth resources in a manner to advantage a particular party … [or] distract … attention from the substantive issues in the election campaign. [For a detailed examination of caretaker conventions, see Killey, 2009,

Ch 10.]

Reserve powers of the Queen’s representatives 7.3.47 The fact that the Sovereign’s representative must, by convention, act only on the advice of the Prime Minister or Cabinet leaves the Governor or Governor-General with what Bagehot famously referred to as ‘three rights — the right to be consulted, the right to encourage, the right to warn’: Bagehot, 1887, p 143. In the hands of a skilled vice-regal representative, these ‘rights’ are normally adequate to ensure that the constitutional system functions smoothly. However, it is generally recognised that there are a small number of situations in which the Sovereign’s representative may act without ‘constitutional’ advice (because there is no one to provide it), or contrary to that advice in order to protect the constitutional system itself, including its ‘responsible government’ dimensions. In the Court of Appeal in Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 at 146, Gleeson CJ (as he then was) said of a reserve power: [T]he standards … are vague and uncertain, and the relevant concepts are elastic. However, as in other areas where there is no clearly stated code, precedent is an important guide.

Fortunately for the public (if not for constitutional scholars), there are not many Australian precedents for the exercise of reserve powers. It is important to distinguish between past examples of their proper exercise that are consistent with constitutional

principle and those that are not and should not be treated as precedents. For example, several commentators have argued that, in forming governments from ‘hung’ parliaments in 1989 and 2010, Tasmanian Governors acted in an unduly interventionist manner: Castles, 1990; Twomey, 2011.

Formation of a government where there is a ‘hung’ parliament 7.3.48 The Sovereign’s representative must act without ‘constitutional’ advice where: there is no one to provide it (for example, because the First Minister has died or lost the leadership of his or her party); or the ministers who have been providing advice have lost their responsibility to parliament (and therefore their ability to guarantee ‘supply’), by losing the confidence of the House, or their seats in it, or both. The most common situation arises after an election that has not produced a clear parliamentary majority for one party but instead a ‘hung parliament’. The old government will [page 778] still be in office, but only in ‘caretaker’ mode, and the Sovereign’s representative must decide whom to invite to form the next government. Neither the caretaker First Minister nor the leader of

the Opposition may provide ‘constitutional’ advice on this question, as neither of them has the confidence of the lower house. In identifying the next First Minister, the Governor(-General) must keep in mind the separation of executive from legislative power. It is for the house itself to decide who holds its confidence, not for the Governor(-General) to make his or her own assessment of how the house will or should vote (for example, by reference to the percentage of the popular vote polled by each party or the existence of agreements between parties, or by seeking additional information about whether a particular government is likely to be stable). Where an election result is unclear, an incumbent First Minister (followed, if necessary, by the leader of the Opposition) is entitled to test his or her support on the floor of the house. Although waiting until this political process identifies the person who has the confidence of the house may cause delay, it avoids any suggestion of partisanship on the Governor(-General)’s part. See generally Twomey, 2011. In 2013, the federal Labor Party voted to replace Prime Minister Julia Gillard with Kevin Rudd as the leader of the party. As Anne Twomey has explained, ‘[t]his raised interesting constitutional issues, because the Prime Minister led a minority government and her leadership was sustained by agreements made with independents and minor parties, which were made personally with her’: Twomey, 2013, p 289. In her letter of resignation, Julia Gillard had recommended the appointment of Kevin Rudd as Prime Minister; however, it was unclear whether Rudd would enjoy the confidence of the lower house, particularly in light of the fact that key cross-benchers had indicated that their support for the government might not necessarily continue under a different leader. Having sought advice from the Acting SolicitorGeneral, the Governor-General then commissioned Rudd as Prime Minister.

Dismissing a First Minister who has lost the confidence of the house 7.3.49 Where a First Minister who has lost the confidence of the lower house refuses to resign, the vice-regal representative is entitled to dismiss him or her. Since the First Minister can no longer guarantee ‘supply’, the Governor(-General) is entitled to replace him or her and the government with new advisors who will vote the necessary finance for government (as either a new government or a caretaker one that has undertaken to pass supply pending an election). This situation is distinct from one where a First Minister holds the confidence of the lower house but is unable to secure passage of the budget through the upper house, and the dismissal in 1975 of the Whitlam Government in such circumstances was controversial.

Refusing a dissolution of parliament 7.3.50 The second situation in which a vice-regal representative may act contrary to advice is where a First Minister seeks a dissolution — or perhaps even a prorogation (termination, rather than adjournment) — of parliament (see 2.3.12–2.3.16), in inappropriate circumstances (meaning circumstances tending to undermine responsible government). For example, if an election has only just been held, a First Minister faced with a likely loss of confidence in the house might seek to avoid resigning by advising the Governor(-General) to dissolve parliament again, hoping that the voters will give him or her a majority the second time around. [page 779]

The vice-regal representative may be justified in refusing the dissolution, on the basis that election results should be respected, unless there is no prospect of an alternative government being formed. Similarly, where an incumbent Prime Minister advises a dissolution following, or for the purpose of preventing, a vote of ‘no confidence’ that is anticipated to benefit the Opposition leader, the Sovereign’s representative may decline the request. For some historical examples of such refusals, see Hanks, Gordon and Hill, 2012, pp 244–5; Markwell, 1999.

Dismissing a government that acts illegally? 7.3.51 Finally, it is sometimes argued that the Sovereign’s representative may dismiss a government that acts illegally, particularly unconstitutionally. This was Governor Phillip Game’s justification for dismissing the New South Wales Government of Premier Jack Lang: see Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 at 147 per Gleeson CJ. 7.3.52 In Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125, Gleeson CJ observed (28 NSWLR at 141, 146 (emphasis added)): The exercise by a State Governor of a reserve power to dismiss a Premier or a Minister is, indeed, one which is likely to occur ‘only in the most extreme circumstances’. On the very rare occasions when it has occurred, it has involved, or been followed by, a constitutional crisis. There are some who would deny the continued existence of such a reserve power, but, even accepting it exists, the circumstances which would be likely to give rise to its exercise would have to be extraordinary … I have the gravest difficulty in understanding how conduct that has not been found to be unlawful, that was believed to be in all respects

lawful, and that would not be seen by a notional jury as being contrary to known and recognised standards of honesty and integrity, could reasonably be regarded by a Governor or an Executive Council as grounds for dismissal of a Premier or a Minister.

Sources of advice for a sovereign’s representative contemplating exercise of a ‘reserve power’ 7.3.53 Before the enactment of the Australia Acts 1986, the United Kingdom Government was one possible source of alternative advice for vice-regal representatives considering the need to exercise their ‘reserve’ powers. However, that source has now dried up. Historically, state Governors have frequently resorted to the judiciary to provide the necessary advice, probably because their deputies (Lieutenant-Governors) were often also chief justices of the state Supreme Courts: French, 2009. This arrangement needs to be understood in the context of the lack of formal separation of judicial power at the state level. In the early 20th century, it was also not uncommon for Governors-General to consult High Court judges for constitutional advice, including on questions such as their power to refuse requests for dissolutions of parliament: French, 2009; Markwell, 1999. The controversial example of High Court Chief Justice Sir Garfield Barwick and Justice Anthony Mason advising the Governor-General on his powers to dismiss the Whitlam Government was not the only occasion on which Sir Garfield provided such advice; he also advised 1960s GovernorGeneral Lord Casey on appointment of an acting Prime Minister after the disappearance of Harold Holt: French, 2009.

[page 780]

7.3.54E French, ‘The Chief Justice and the GovernorGeneral’ (2009) 33(3) Melbourne University Law Review 647 … There is nothing in the Constitution, the Judiciary Act 1903 or the High Court of Australia Act 1979 (Cth) to support the proposition that it is an incident of the office of Chief Justice that he or she can be called upon to provide independent legal advice to the Governor-General relating to the discharge … of [the Governor-General’s] … powers. Such advice, if provided, would have no constitutional standing to distinguish it from legal advice received from a senior barrister or a constitutional law expert, or a retired Chief Justice of the High Court or any other court. And it is difficult to see any basis upon which there could be erected a constitutional convention that would entitle a Governor-General to seek such advice, with or without the consent of the Prime Minister … [T]he nature and circumstances of [historical] precedents are not such as to provide any sound foundation for the existence of a convention … This is not an occasion to theorise upon the limits of the justiciability of the acts of the Governor-General, whether in the exercise of reserve powers or otherwise. It is sufficient to say that even the most confident judgement that a matter upon which advice is sought is not justiciable or unlikely to come before the court may be confounded by events … … [I]t is difficult to conceive of circumstances today in which it would be necessary or appropriate for the Chief Justice to provide legal advice to the Governor-General on any course of action being contemplated by the holder of that office, whether such advice were tendered with the prior consent of the

government of the day or otherwise. If, in some constitutional crisis requiring consideration of the possible exercise of reserve powers, the Governor-General felt the need to seek independent legal advice, there are plainly sources other than the Chief Justice to whom he or she could resort … In a eulogy in honour of Sir Garfield Barwick … Sir Gerard Brennan, then Chief Justice, referred to Sir Garfield’s tendering of advice to Sir John Kerr and said of that event: It was, and remains, a controversial matter but, if only on that account, will not happen again. I agree with that sentiment.

7.3.55 Other sources of legal advice appear to include Attorneys-General, Solicitors-General and other Crown law officers: see Twomey, 2015, p 193. In 2010, for example, the Governor-General sought and obtained the advice of the Commonwealth Solicitor-General on whether there was any legal impediment to the exercise of her powers because of her daughter’s marriage to former Labor Parliamentary Secretary Bill Shorten, who was likely to be re-elected to a ‘hung’ parliament. In 2013, the Governor-General sought the advice of the Acting SolicitorGeneral on the appointment of Kevin Rudd as Prime Minister following the replacement of Prime Minister Julia Gillard by Rudd as the leader of the federal Labor Party: Twomey, 2015, pp 208–9.

Constitutional provisions relating to the ‘reserve’ powers 7.3.56

The nature of ‘reserve’ powers means that written

constitutions are normally silent as to their existence, scope and exercise. However, the New South Wales Constitution contains [page 781] provisions, inserted by 1987 amendments imposing 4-year terms for the Legislative Assembly, which permit the Governor to dissolve the assembly early upon a no-confidence vote or its failure to enact ‘supply’ — or in other circumstances that accord with ‘established constitutional conventions’. Subject to minor modifications, the ‘reserve powers’ are expressly preserved. 7.3.57E

Constitution Act 1902 (NSW)

24B Dissolution of Legislative Assembly during 4 year term (1) The … Assembly may be dissolved by the Governor by proclamation, but only in the circumstances authorised by this section. (2) The … Assembly may be dissolved if: (a) a motion of no confidence in the Government is passed by [it] (being a motion of which not less than 3 clear days’ notice has been given in the … Assembly), and (b) … [within] 8 clear days thereafter, the … Assembly has not passed a motion of confidence in the then Government. After the motion of no confidence is passed, the … Assembly may not be prorogued before the end of that 8-day period and may not be adjourned for a period extending beyond [it], unless the motion of confidence has been passed.

(3) The … Assembly may be dissolved if it: (a) rejects a Bill which appropriates revenue or moneys for the ordinary annual services of the Government, or (b) fails to pass such a Bill before the time that the Governor considers that the appropriation is required. This subsection does not apply to a Bill which appropriates revenue or moneys for the Legislature only. … (5) This section does not prevent the Governor from dissolving the … Assembly in circumstances other than those specified in subsections (2)–(4), despite any advice of the Premier or Executive Council, if the Governor could do so in accordance with established constitutional conventions. (6) When deciding whether the … Assembly should be dissolved in accordance with this section, the Governor is to consider whether a viable alternative Government can be formed without a dissolution[, having] regard to any motion passed by the … Assembly expressing confidence in an alternative Government in which a named person would be Premier. … Preservation of certain conventions etc relating to advice to Governor 35A The enactment of the Constitution (Amendment) Act 1987 does not affect any law or established constitutional convention relating to the exercise or performance of the functions of the Governor otherwise than on the advice of the Executive Council.

7.3.58 The Queensland Constitution also expressly preserves the ‘reserve power’ to dismiss a ministry, and allows the Governor in doing so to seek outside advice.

[page 782]

7.3.59E

Constitution of Queensland 2001

34 Power of Governor — Ministers Ministers hold office at the pleasure of the Governor who, in the exercise of the Governor’s power to appoint and dismiss the Ministers, is not subject to direction by any person and is not limited as to the Governor’s sources of advice.

THE EXECUTIVE ARM OF GOVERNMENT What kind of legal creature is a government? 7.4.1 A ‘government’ in the 21st century sense is a very different creature from ‘the Crown’ which the common law began to recognise, in the 16th century, as an institution existing separately from its incumbent. ‘The Crown’ in that sense was a ‘corporation sole’ — a concept, borrowed from ecclesiastical law, which Maitland described (because of its contradictory nature) as ‘a juristic abortion’. Maitland said of a corporation sole that ‘we ought to marvel at its incompetence’; for example, when applied to ‘the Crown’, this fiction should have removed Crown immunity from suit and overcome the consequences of a demise of the Crown, but in fact both of these elements required statutory correction: see 7.2.11 and 7.5.88–7.5.96; Maitland, 1900 and 1904. A more promising analogy for ‘the Crown’, in Maitland’s view, was the ‘corporation aggregate of many’. His view seems to have

been that ‘during the late 19th century the courts were treating “the Crown” as a corporation aggregate comprising the whole of government’ — that is, that its members were the various Ministers and departments, rather than citizens: Selway, 2005. This view was accepted by the House of Lords in Town Investments Ltd v Department of Environment [1978] AC 359. 7.4.2 This characterisation is not without foundation; for example, departments or authorities of the same government do not oppose one another, or seek judicial review of one another’s decisions, in legal proceedings. However, there are at least three problems with corporate analogies for the Crown. First, as Selway has pointed out, these analogies accommodate ministers and departments more easily than they do the plethora of statutory authorities which have been a feature of the Australian landscape since colonial times: ibid. Statutory authorities typically have their own legal personality and may not be accountable to ministers in the same way as departments are. Second, as McLean writes of the United Kingdom, how the courts perceive ‘the Crown’ and its relationships with other arms of government varies with the area of law being applied: 7.4.3E

McLean, ‘The Crown in Contract and Administrative Law’ (2004) 24 Oxford Journal of Legal Studies 129

… Administrative law tends to disaggregate the different parts and components of government. Its focus is on the conduct of a particular Minister, tribunal or official. It maintains a temporally contingent account of the Government mandate, power and will. Power is reposed

[page 783] in a particular Government, Minister or office-holder only for the ‘time being’. There are constitutional limits on the ability of office-holders to bind their successors. … [W]hen contract law has been applied to government [after removal of Crown immunity from suit: see 7.5.88–7.5.96], it has tended to unify or aggregate the different parts of Government in the executive. It is the ‘Government as a whole’ that enters into and is liable under a contract. Contract law tends to construct the state as unified over time. The Government legal person who enters into a contract is treated as the same Government legal person who may later wish to breach it, regardless of the changes to its membership and ideology. The formal separation of powers is observed in both administrative and contract law. Parliament is formally at the apex of the constitutional hierarchy, creating law for the executive to follow. Administrative law, however, conceives of the separation of powers in functional as well as formal terms. According to conventional administrative law understandings, the insistence that the executive should obey the legislature is an institutional expression of the demand that the law should be supreme. It assumes that Parliament, as opposed to the executive, should have a monopoly of law-making power, and that the executive, as opposed to the judiciary, should have a monopoly of the policymaking function. When, however, the executive enters into legally enforceable contracts, it is effectively creating law between the Government and the citizen. In so doing, the executive becomes a rival law-maker to Parliament … [and] the law-policy distinction is dissolved: everything becomes a legal question that the judges can consider … This fundamental shift in [conception of] the separation of powers … means that the rule of law can be strongly invoked when the executive breaches a contract, but not when it changes a policy.

7.4.4 Australian constitutions sometimes do adopt a consolidated view of governments: the Commonwealth Constitution expressly acknowledges the existence of ‘the Commonwealth’ and ‘the States’ (Municipal Council of Sydney v Commonwealth (1904) 1 CLR 208; Deputy Federal Commissioner of Taxation v State Bank of NSW (1992) 174 CLR 219), although these terms may encompass legislative and judicial as well as executive arms. However, the deployment of different conceptions of ‘the Crown’ in public and private law can cause different answers to be given to related questions about executive ‘capacity’ to enter, and liability under, contracts: compare 7.5.21–7.5.24E and 7.5.65C. 7.4.5 Third, it is not always clear what incidents of corporate personality are being sought for ‘the Crown’ by the application to it of corporate analogies. Some features of 21st century company law — for example, shareholders’ limited liability — are statutory. Perpetual succession of governments (that is, immortality of the institution despite the demise of its members) is to a large extent achieved by mechanisms other than corporate status, such as the continuity in office of the Sovereign or her representatives despite more regular changes in their ‘advisors’. However, other corporate characteristics — for example, the ability to enter contracts or hold property — are also important to government. Perhaps because of the ‘the Crown’s’ historical immunity from suit, the courts have sometimes struggled to settle on which of these incidents of corporate personality properly belong to which parts of ‘the Crown’, and on whether statute is required to support those characteristics: see Selway, 2005.

For further critique of the ‘corporatist’ view of government, see 7.4.32E. [page 784]

The legal institutions of the executive 7.4.6 ‘The Crown’ in the third sense identified by Gleeson CJ, Gummow and Hayne JJ in Sue v Hill 7.1.5C refers to ‘“the Government” … — the executive as distinct from the legislative branch …, represented by the ministry and the administrative bureaucracy which attends to its business’: Selway, 2005, p 499. In Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561, the court recognised the broad range of entities that make up that branch or carry out this work: … [T]he conduct of the executive branch is not confined to Ministers and the public service. It includes the affairs of statutory authorities and public utilities which are obliged to report to the legislature or to a Minister who is responsible to the legislature. In British Steel v Granada Television, Lord Wilberforce said that it was by these reports that effect was given to ‘[t]he legitimate interest of the public’ in knowing about the affairs of such bodies.

The comments of Lord Wilberforce quoted by the court reflect the responsibility of the executive branch to parliament — an issue explored at 7.3.1–7.3.2. 7.4.7

In Re Residential Tenancies Tribunal of New South Wales

and Henderson; Ex parte Defence Housing Authority (1997) 190 CLR 410 at 438, Dawson, Toohey and Gaudron JJ observed: The activities of the Commonwealth government are conducted formally on behalf of the Crown through the Governor-General acting on the advice of the Federal Executive Council. The Federal Executive Council consists of the Crown’s Ministers of State drawn … from the House of Representatives and the Senate. In reality, the Crown acts in its day to day activities through the agency of its public service and through other institutions or instrumentalities created for the purpose. The Crown’s functions nowadays extend beyond the traditional, or clearly regal, functions of government to activities of an entrepreneurial or commercial kind which, in general, were previously engaged in only by subjects of the Crown.

Much executive business is now carried out under statute in the names of individual ministers, departments, officials or statutory authorities. Thus Directors of Public Prosecutions conduct criminal trials and the Defence Housing Authority rents private dwellings to sublet to services personnel, Ministers for Immigration or Resources allocate visas or mining tenements (and defend those decisions in administrative law proceedings), and Departments of Defence or Children’s Services procure services or equipment by contract. Unlike in the United Kingdom (Bropho v Western Australia (1990) 171 CLR 1 at 19 per Mason CJ, Deane, Dawson, Toohey, Gaudron McHugh JJ; Brennan J agreeing): … in this country … the activities of the executive government reach into almost all aspects of commercial, industrial and developmental endeavour and … it is a commonplace for governmental commercial, industrial and developmental instrumentalities and their servants and agents … to compete and have commercial dealings on the same basis as private enterprise.

Core executive institutions 7.4.8 Besides the Sovereign’s representative, the key executive institutions established by constitutional instruments in each Australian jurisdiction are: (a) an Executive Council; and (b) Ministers of the Crown.

[page 785] Some constitutions also establish offices of ‘Assistant Ministers’ or ‘Parliamentary Secretaries’ — ‘a fairly recent innovation in Westminster systems’: Carney, 2006b, p 301.

Executive Councils 7.4.9 An Executive Council is the Australian equivalent of the Privy Council: a formal body that advises the Sovereign by reference to the views of Cabinet. The ‘Governor-General-inCouncil’ or ‘Governor-in-Council’ means the Sovereign’s representative acting on the advice of the Executive Council. Decisions made by the Governor(-General)-in-Council do not necessarily concern important matters: in the 1980s ‘[i]n Victorian legislation it [wa]s the merest commonplace to assign to the Governor-in-Council the making of a host of routine administrative decisions, involving neither matters of high government policy nor any nice exercises of policy-oriented discretion’: FAI Insurances Ltd v Winneke (1982) 151 CLR 342 at 353 per Stephen J. Leaving aside the ‘reserve powers’ discussed at

7.3.47–7.3.59E, distinctions made in constitutions or legislation between powers exercisable by the Governor(-General) alone and those exercisable by the Governor(-General)-in-Council appear to be of no constitutional significance (although those exercisable by the Sovereign’s representative alone may sometimes reflect advice given by a single minister rather than Cabinet). To a large extent the distinction between the vice-regal representative acting in, and without, council has been overcome by provisions of statutory interpretation legislation which direct that powers conferred on the Governor(-General) should be treated as exercisable by the Governor(-General)-in-Council: see, for example, Acts Interpretation Act 1901 (Cth) s 16A. As Aickin J pointed out in the extract below, at the Commonwealth level and in some states, the Executive Council is composed of former ministers as well as current ones, although only current ones play an active role. State constitutions do not always explicitly require that the Executive Council be made up of ministers; the Constitution Act 1975 (Vic) appears to contemplate the possibility of people other than ministers being members: see 7.4.20E. 7.4.10C

FAI Insurances Ltd v Winneke (1982) 151 CLR 342

Aickin J: … [T]he Governor in Council … is the body which gives the force of law to, and thus makes effective, decisions of the executive government, ie the Cabinet and individual Ministers. [I]t is the body in which executive power is vested by the constitutional system although the mode of … carrying into effect … decisions of executive government differs according to the circumstances. Some executive acts may be wholly performed

by Ministers or delegated to heads of government departments or to statutory authorities and some may be a formal order of the Governor in Council. Under the present legislation the Governor in Council is the body which gives legal operation to a decision made by a particular Minister who is responsible for the administration of the relevant legislation. It is necessary to observe and to apply what Kitto J said in Australian Communist Party v The Commonwealth (1951) 83 CLR 1, at p 280, viz: [… T]he satisfaction with which alone the section is concerned is the satisfaction of the Governor-General acting with the advice of the Executive Council. So acting he [page 786] has not to consider for himself either questions of fact or questions of law, but will be satisfied as he may be advised. That observation is equally true of the Governor of … Victoria when acting with the consent and advice of the Executive Council. It is true that the [Victorian] Executive Council … is an oddly-constituted body comprising all present and former Ministers … which never meets as constituted, but to which individual Ministers are summoned from time to time to make up the required quorum of two. We would be closing our eyes to wellknown and thoroughly-understood facts about the manner in which the [Victorian] Constitution … operates if we were to suppose that the Governor in Council is a deliberative body which makes an independent investigation or judgment as to the merits of particular proposals which are placed before it. It is the traditional legal means by which operative force is given to decisions made by the Cabinet or individual Ministers of the Crown authorized by statute, perhaps also in some cases the common law, to make particular administrative and political

decisions to which legal effect can be given pursuant to statute only by a formal decision of the Governor in Council. It … may be … that the Governor personally may make suggestions or ask that particular measures be given further consideration before being brought into operation. Even if that were so the deciding mind would be that of the Minister who recommends the particular measure or action or, in the case of a decision by the Cabinet, the members of the Cabinet.

7.4.11E Australian Government, Department of Prime Minister and Cabinet (2015), Federal Executive Council Handbook, What is the Federal Executive Council? … 2.1.3 Members of the Executive Council are chosen, summoned and sworn in by the Governor-General and hold office at the Governor-General’s pleasure … [T]he power to appoint and dismiss [them] is exercised on … the advice of the Prime Minister. 2.1.4 In accordance with section 64 of the Constitution, all ministers of state (ministers and parliamentary secretaries) must be members of the Executive Council. The title ‘The Honourable’ may be used by all members for the duration of their appointment, both while they hold the office of Minister or Parliamentary Secretary, and subsequently to leaving that office. Only those executive councillors who are members of the current ministry are summoned to advise the Governor-General at meetings of the Council. 2.1.5 While the Governor-General presides over meetings of the

Executive Council, he or she is not a member of the Council … 2.1.6 The Vice-President of the Federal Executive Council is appointed by the Governor-General [under s 126 Constitution] on the advice of the Prime Minister. The Vice-President is usually a senior minister; he or she may only summon executive councillors and preside at a Council meeting only with the agreement of the GovernorGeneral. … [page 787] 2.1.8 Powers exercisable by the Governor-General in Council under the Constitution or, more commonly under Acts of Parliament, include: (a) the making of proclamations (notices given under an Act by the Governor-General of a particular matter such as the commencement of the Act on a specified day); (b) the making of regulations and ordinances (under delegated authority under an Act); (c) the making and terminating of appointments to statutory offices, boards, commissions, courts and tribunals and diplomatic posts; (d) changes to the Administrative Arrangements Order, including the creation and abolition of government departments (the Constitution, section 64); (e) the issuing of writs for the election of members of the House of Representatives (the Constitution, sections 32 and 33), and [Territory] senators …; (f) the approval of compulsory land acquisitions; (g) the authorisation of Australia’s entry into international

treaties; (h) the commissioning of officers in the Australian Defence Force; (i) the authorisation of government borrowings overseas; (j) grants of land to Indigenous Australians; and (k) authorising the issue of Treasury Notes and Commonwealth Inscribed Stock. 2.2 Meetings of the Federal Executive Council 2.2.1 The Executive Council generally meets every two weeks. The meetings are normally held at Government House, Canberra. 2.2.2 The express permission of the Governor-General is required for all meetings of the Council regardless of whether the Governor-General will be in attendance. … Where an urgent and unexpected matter requiring early Executive Council consideration arises, a councillor may request a special (urgent) meeting of the Executive Council … 2.2.5 A quorum for an Executive Council meeting consists of the Governor-General and two executive councillors. The majority of meetings take place with two councillors. 2.2.6 If the Governor-General is in Australia but unavailable … he or she may agree to a special meeting. This would normally occur only in exceptional circumstances. A quorum at a meeting held in the Governor-General’s absence would consist of either: (a) the Vice-President of the Executive Council and two other executive councillors; or (b) in the Vice-President’s absence, three other executive councillors, one of whom is a senior minister authorised by the Governor-General to preside (a ‘three minister’ meeting). ‘Three minister’ meetings are held at a time and place

agreed by the Vice-President of the Council or the senior minister presiding … most often at Parliament House, Canberra …

Ministers 7.4.12 Ministers are appointed by the Governor-General or Governor from among the ranks of members of parliament who belong to the political party that constitutes, or whose leader commands, a majority in the lower house, on the advice of the person who commands such a majority (the Prime Minister, Premier or Chief Minister). [page 788] The formal constitutional instruments set out below (see 7.4.17E–7.4.26E), however, only sometimes recognise this, and often allow the Sovereign’s representative to appoint these ‘officers’ ‘at pleasure’. Most require that ministers be members of the relevant Executive Council. The fact that ministers are appointed ‘at pleasure’ means that the Governor appoints and dismisses them on the advice of the Prime Minister or Premier; a ‘Minister has no right to be heard before he or she is dismissed; no reasons are needed; the office is terminable for good or bad or no reasons’: Stewart v Ronalds (2009) 76 NSWLR 99 at 113. Lying as it does at ‘the heart of the political process’, a Premier’s decision to dismiss a minister is not amenable to judicial review: 76 NSWLR at 112. By convention, a minister resigns at the First Minister’s request: Twomey, 2012, p 330. Sometimes an entire ministry resigns its

portfolios to facilitate a ‘Cabinet reshuffle’, before being sworn into new ministries. 7.4.13 At the Commonwealth level, the Governor-General-inCouncil promulgates under s 64 of the Constitution an Administrative Arrangements Order that reflects the Prime Minister’s advice on allocation of portfolios by setting out the matters dealt with by each department and the legislation administered by each minister. Section 19A of the Acts Interpretation Act 1901 indicates that references to ministers in legislation are to portfolio ministers from time to time. Similar arrangements operate at the state level: see, for example, Constitution of Queensland 2001 s 44.

7.4.14 Because, under the principles of responsible government, ministers are appointed and removed on the advice of the First Minister, a Prime Minister’s or Premier’s death or resignation (for example, after losing an election, the party’s leadership or a vote of confidence in the lower house) should imply the resignation of his or her entire ministry: Twomey, 2012, pp 330–3. In the words of the Canadian Privy Council office, ‘[t]he Government is identified with the Prime Minister and cannot exist without him’: ibid, p 331. Although Australian practice is inconsistent: … [a]s a matter of principle, when the person who has been commissioned by the Governor to form a government dies or resigns, his or her commission ceases, as do the appointments of Ministers made pursuant to that commission, subject to the fulfillment of caretaker obligations until a new government is formed under a new Premier (even if the ministry and the allocation of portfolios remain the same). The practice should reflect this principle. (Twomey, 2012, p 339.)

Departments and public servants 7.4.15 Also central to the executive are the departments of state for which each minister is responsible. These are not always mentioned in constitutions, although s 64 of the Commonwealth Constitution allows the Governor-General to establish them and ss 69, 84 and 85 (read with ss 70 and 86) provided for the transfer of state departments to the Commonwealth at federation. 7.4.16 Some state constitutions (for example, New South Wales s 47, Victoria s 88, South Australia s 68 and Western Australia s 74) provide for the Governor to appoint ‘public officers’ ‘at pleasure’. Public servants are still appointed under the prerogative

(rather than legislation) in the United Kingdom. However, the Australian practice has long been to appoint such officers under legislation: Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 64–8 per McHugh, Gummow and Hayne JJ. [page 789] As discussed at 7.5.97–7.5.98C, for some purposes, the individual ‘Crown servants’ (public servants) who perform the work of these departments may be considered legal persons distinct from the Crown. However, if a public servant exercises a power of a minister on the minister’s behalf, that action may be treated as the action of the minister. Many statutes permit delegation of ministerial powers to public servants, in which case those powers are treated as having been exercised by the delegate officers. Even in the absence of express delegations, the courts also recognise that ‘when a Minister [or other high-ranking official] is entrusted with administrative functions he may, in general, act through a duly authorized officer of his department’: O’Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1 at 11 per Gibbs CJ, with whose decision Mason, Murphy and Wilson JJ agreed. In such cases, the officer’s decision is treated as the minister’s: Carltona Ltd v Commissioners of Works [1943] 2 All ER 560. However, these principles may not apply where a statute conferring the power requires that a decision be taken by the minister personally: Ozmanian v Minister for Immigration, Local Government and Ethnic Affairs (1996) 137 ALR 103.

Constitutional provisions and Letters Patent

Commonwealth 7.4.17E

Commonwealth Constitution CHAPTER I — The Parliament Part V — Powers of the Parliament

52 Exclusive powers of the Parliament The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to: … (ii) matters relating to any department of the public service the control of which is by this Constitution transferred to the Executive Government of the Commonwealth; … CHAPTER II — The Executive Government 62 Federal Executive Council There shall be a Federal Executive Council to advise the GovernorGeneral in the government of the Commonwealth, and the members of the Council shall be chosen and summoned by the Governor-General and sworn as Executive Councillors, and shall hold office during his pleasure. 63 Provisions referring to Governor-General The provisions of this Constitution referring to the GovernorGeneral in Council shall be construed as referring to the GovernorGeneral acting with the advice of the Federal Executive Council. 64 Ministers of State The Governor-General may appoint officers to administer such departments of State of the Commonwealth as the GovernorGeneral in Council may establish. Such officers shall hold office during the pleasure of the

Governor-General. They shall be members of the Federal Executive Council, and shall be the Queen’s Ministers of State for the Commonwealth … [For the balance of s 64, see 7.3.34E.] [page 790] 65 Number of Ministers Until the Parliament otherwise provides, the Ministers of State shall not exceed seven in number, and shall hold such offices as the Parliament prescribes, or, in the absence of provision, as the Governor-General directs. 66 Salaries of Ministers There shall be payable to the Queen, out of the Consolidated Revenue Fund of the Commonwealth, for the salaries of the Ministers of State, an annual sum which, until the Parliament otherwise provides, shall not exceed twelve thousand pounds a year. 67 Appointment of civil servant Until the Parliament otherwise provides, the appointment and removal of all other officers of the Executive Government of the Commonwealth shall be vested in the Governor-General in Council, unless the appointment is delegated by the GovernorGeneral in Council or by a law of the Commonwealth to some other authority.

7.4.18 Sections 65 and 67, like many other provisions of the Constitution — for example, s 3 on the Governor-General’s salary, s 30 on qualification of Commonwealth electors or s 7 on the

number of Senators for each state — invoke the power conferred on parliament to make laws with respect to ‘matters in respect of which this Constitution makes provision until the Parliament otherwise provides’ by s 51 (xxxvi) of the Constitution. Parliament has ‘otherwise provided’ for the number and offices of ministers under the Ministers of State Act 1952 (Cth), s 4 of which permits appointment of up to 30 ministers and a further 12 parliamentary secretaries. The practice of appointing parliamentary secretaries was upheld in Re Patterson; Ex parte Taylor (2001) 207 CLR 391 (in the words of Gleeson CJ, ‘[t]here is nothing inconsistent with s 64 in the appointment of two persons to administer a Department’: 207 CLR at 403). Section 5 and regulations adjust the s 66 Constitution appropriation to $5 million per annum, although actual salaries paid are less than that amount and calculated by reference to a base salary for members of parliament, originally set by s 48 of the Constitution. Parliament has ‘otherwise provided’ for appointment and removal of civil servants under the Public Service Act 1999 (Cth).

States 7.4.19E

Constitution Act 1902 (NSW) PART 4 — THE EXECUTIVE … Division 2 —The Executive Council

35B Continuation of Executive Council There shall … be an Executive Council to advise the Governor in the government of the State.

35C Members of the Executive Council (1) The Executive Council shall consist of such persons as may be appointed by the Governor, from time to time, as members of the Executive Council. (2) [M]embers of the Executive Council shall hold office during the Governor’s pleasure. [page 791] (3) The Governor may appoint one of the members of the Executive Council as Vice-President of the Executive Council …. 35D Meetings of the Executive Council (1) The Governor shall preside at meetings of the Executive Council … (3) The quorum for a meeting of the Executive Council is 2 members … Division 3 — Appointment of Ministers of the Crown 35E Appointment of Ministers (1) The Premier and other Ministers of the Crown for the State shall be appointed by the Governor from among the members of the Executive Council. (2) … [and] shall hold office during the Governor’s pleasure …. PART 4A — PARLIAMENTARY SECRETARIES 38B Appointment of Parliamentary Secretaries (1) The Premier may … appoint a Member or Members of either House of Parliament to hold office as Parliamentary Secretary. (2) Section 47 does not apply to or in respect of the office

of Parliamentary Secretary. 38C Functions of Parliamentary Secretary (1) A Parliamentary Secretary shall have and may perform such functions as the Premier may, from time to time, determine in respect of him. (2) Nothing in this section authorises a Parliamentary Secretary to perform any functions that may, by the terms (express or implied) of an Act or instrument under an Act, or by or under any other law, only be performed by some other person. [Section 38D provides that a parliamentary secretary loses office upon death, resignation, a change of Premier, removal by the Premier, vacation of his or her seat or an election.] 38E Restrictions relating to Parliamentary Secretaries (1) A person shall not be appointed to hold office as Parliamentary Secretary if he is a Minister of the Crown or a member of the Executive Council. (2) A person shall not be appointed as a Minister of the Crown or a member of the Executive Council if he is a Parliamentary Secretary.

[page 792]

7.4.20E

Constitution Act 1975 (Vic) Part IV — The Executive

87A Executive Council

There shall be an Executive Council of the State of Victoria. 87B Members of Executive Council (1) The Executive Council consists of– (a) … (b) persons who may, at any time, be members of the Executive Council in accordance with any Act; and (c) such other persons as the Governor, from time to time in the name and on behalf of Her Majesty and subject to any Act, appoints under the Public Seal of the State to be members of the Executive Council– until resignation or removal from membership by the Governor. (2) A member of the Executive Council may attend a meeting of the Executive Council or exercise the powers of such a member only if he or she is a Minister. 87C Meetings of Executive Council (1) The Governor shall preside at meetings of the Executive Council. (2) If the Governor is absent from a meeting of the Executive Council … the Lieutenant-Governor or Administrator (as the case requires) shall preside. (3) The quorum for a meeting of the Executive Council is 2 members of the Executive Council. (4) The Executive Council shall not proceed to dispatch of business unless it has been duly summoned by authority of the Governor. … [In Pt VI, s 95 bans Victorian public servants from commenting publicly on state administration, and from using information obtained from official duties for other purposes or to attempt to obtain influence.

In Pt VII, s 97 purports to entrench the role of public water authorities ‘accountable to a responsible Minister of the Crown for ensuring the delivery of [water] service[s]’.]

7.4.21E

Constitution of Queensland 2001 CHAPTER 2 — PARLIAMENT Part 4 — Members

Division 2 — Members who are Ministers or Parliamentary Secretaries 24 Appointment of Assistant Ministers (1) The Governor in Council may appoint members of the Legislative Assembly as Assistant Ministers. [page 793] (2) However, a Minister or member of Executive Council may not be appointed as an Assistant Minister. (3) To remove any doubt, it is declared that an Assistant Minister is not a Minister of the State. 25 Functions of Assistant Minister An Assistant Minister has the functions decided by the Premier. [Section 26 concerns Assistant Ministers’ loss of office and is in terms similar to s 38D of the Constitution Act 1902 (NSW).] CHAPTER 3 — GOVERNOR AND EXECUTIVE GOVERNMENT Part 1 — Interpretation

27 Governor in Council The Governor in Council is the Governor acting with the advice of Executive Council. … 34 Power of Governor — Ministers Ministers hold office at the pleasure of the Governor who, in the exercise of the Governor’s power to appoint and dismiss the Ministers, is not subject to direction by any person and is not limited as to the Governor’s sources of advice. 35 Power of Governor — removal or suspension of officer (1) This section does not limit the power of the Governor under another provision of this Act or another Act. (2) To the extent that it is within the Governor’s power and if the Governor considers there is sufficient reason, the Governor may remove or suspend a person holding an office or place under an appointment made … under the authority of the Sovereign. Part 3 — Cabinet and Ministers of the State … 43 Appointment of Ministers of the State (1) The Governor, by proclamation, may declare the offices to which persons may be appointed as Ministers of the State. (2) The Governor, by commission, may appoint a person as a Minister of the State. (3) To remove any doubt, it is declared that the AttorneyGeneral is a Minister. (4) The maximum number of Ministers at any time is 19 … [Section 44 allows the Governor-in-Council to ‘make administrative arrangements … distributing the public business … among the

Ministers’ and declaring which administrative units and Acts are to be administered by each minister.] Part 4 — Executive Council 48 Executive Council (1) There must be an Executive Council for the State. (2) Executive Council consists of the persons appointed as members of the Executive Council by the Governor by instrument under the Public Seal of the State … [page 794] 49 Length of appointment as member of Executive Council The appointment of a person as a member of Executive Council ends only on the happening of either … (a) … resignation as a member of Executive Council … [or (b)] removal as a member of Executive Council by the Governor. 50 Meetings of Executive Council (1) The Governor must preside over a meeting of Executive Council …. (3) Executive Council must not deal with any business at a meeting unless — (a) it has been summoned to meet by the Governor’s authority; and (b) at least 2 members, other than any presiding member, are present for the entire meeting.

7.4.22E

Constitution Act 1934 (SA)

Part 3 — The Executive 65 Number of Ministers of the Crown (1) The number of Ministers of the Crown shall not exceed fifteen. (2) The Ministers of the Crown shall respectively bear such titles and fill such ministerial offices as the Governor from time to time appoints. 66 Ministerial offices … (2) Every Minister of the Crown is, ex officio, a member of the Executive Council. 67A Parliamentary Secretaries (1) The Governor may appoint— (a) a member of Parliament as Parliamentary Secretary to the Premier; (b) a member of Parliament as Parliamentary Secretary to a Minister (including the Premier in his or her capacity as another Minister). (2) The number of Parliamentary Secretaries must not exceed two ….

7.4.23E Constitution Acts Amendment Act 1899 (WA) Part II — The Executive 43 Principal executive offices (1) There may be 17 principal executive offices of the Government liable to be vacated on political grounds,

and no more. (2) The offices shall be such 17 offices as shall be designated and declared by the Governor in Council, from time to time … (3) One at least of such executive offices shall always be held by a member of the Legislative Council …

[page 795]

7.4.24E

Constitution Act 1934 (Tas) Part II: The Crown

8A Limit on number of Ministers of the Crown No more than 9 … persons shall hold office as Ministers of the Crown at any one time. 8C Special provisions as to Attorney-General (1) Except as provided in this section, no office, power, duty, authority, obligation, or discretion that is by law conferred or imposed upon the Attorney-General shall be allocated to, or exercised or discharged by, any other Minister of the Crown or the Secretary to Cabinet. (2) In any case in which he considers it expedient so to do, the Governor may appoint another Minister of the Crown to be Acting Attorney-General … [Section 8F allows a member of parliament who is not a minister to be appointed Cabinet Secretary.] 8G Functions of Secretary to Cabinet

(1) The Secretary to Cabinet shall have and may perform such functions with respect to the affairs of the State as the Premier may, from time to time, determine … (2) Nothing in this section authorizes the Secretary to Cabinet to perform any functions that may, by the terms (express or implied) of an Act or instrument under an Act, or by or under any other law, only be performed by some other person. [Section 8H is similar to s 38D of the Constitution Act 1902 (NSW) and s 26 of the Constitution of Queensland 2001 in providing for the Secretary’s loss of office. The Governor may remove the Secretary for ‘any cause which appears to him to be sufficient’.]

7.4.25 In South Australia, Western Australia and Tasmania, where the Constitutions do not establish Executive Councils, instruments in the following terms remain in effect. 7.4.26E Letters Patent under the Australia Acts 1986 Now Know Ye that We do hereby declare Our Will and Pleasure, and direct and ordain as follows:— … IV. Executive Council — There shall be an Executive Council to advise the Governor in the government of the State. V. Appointment of Executive Council — The membership of the Executive Council shall be determined in accordance with the laws of the State. VI. Governor to preside over Executive Council — The Governor shall preside at meetings of the Executive Council but if the Governor is unable to preside the member appointed by the Governor to preside, or in the

absence of that member, the senior member in order of appointment actually present, shall preside. [page 796] VII. Quorum for Executive Council — A meeting of the Executive Council shall not proceed unless it has been convened by the Governor and at least two members other than the Governor or any member presiding are present. VIII. Governor to convene meetings of Executive Council — The Governor shall convene a meeting of the Executive Council if so advised by the Premier or Acting Premier.

Statutory authorities and government-owned or controlled companies 7.4.27 Entities that discharge executive functions, but may or may not be treated as part of ‘the Crown’, include: statutory office-holders, authorities or corporations; and government-owned companies (for example, those formed under the Corporations Act 2001 (Cth)). The powers of parliaments to establish these types of new limbs of the executive have long been recognised. 7.4.28C

Bank of NSW v Commonwealth (Bank Nationalisation case) (1948) 76 CLR 1

Latham CJ: … The Commonwealth Bank was created as a corporation without corporators — Heiner v Scott (1914) 19 CLR 381; Butterworth v Commonwealth Bank (1916) 22 CLR 206. This is impossible at common law, but I do not see why it should be beyond statutory power … The Commonwealth Parliament has declared that the bank is a corporation and the Court must … accept that the bank (though it has no corporators) exists as a new kind of juristic person. The Parliament has gone out of its way to declare the continued existence of the bank as a corporation … The bank is treated as a separate person … Dixon J: … Although the Commonwealth Bank is declared to be a body corporate there are no corporators. I see no reason to doubt the constitutional power of the Federal parliament, for a purpose within its competence, to create a juristic person without identifying an individual or a group of natural persons with it … In other legal systems an abstraction or even an inanimate physical thing has been made an artificial person as the object of rights and duties. The legislative powers of the Commonwealth, while limited in point of subject matter, do not confine the legislature to the use of existing or customary legal concepts or devices … Here the attributes of the Commonwealth Bank …, though unusual, are clear enough … [I]t is an organized service of government given a separate legal personality, in virtue of which it owns property, incurs duties and obligations and enjoys rights … placed under the administrative direction and authority of its chief officer, to whom is given a greater degree of independence than the permanent head of a department, but who is bound ultimately to carry out the policy prescribed by his responsible Minister …

[See also Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29. The question of whether governments can establish companies without legislation is considered at 7.5.21–7.5.24E.]

[page 797] 7.4.29 See also Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Queensland Rail (2015) 89 ALJR 434, esp at [55]–[60] per Gageler J. There are about 160 statutory authorities at the Commonwealth level alone (Commonwealth of Australia, Flipchart of Commonwealth Entities and Companies, 30 September 2015, ), and hundreds more (including local government councils) at the state level. As discussed at 7.5.85–7.5.86C, because most have their own legal personality or many operate under limited ministerial direction, such bodies may not be treated as part of ‘the Crown’ for the purposes of private law or the application of statutory regimes. On the other hand, their actions may be subject to judicial review on constitutional and administrative law grounds. Government-owned companies are normally subject to the Corporations Act 2001 (Cth) rather than administrative law, although whether or not a government has power to be involved in a particular company can be a constitutional question: Kathleen Investments (Aust) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117.

Outsourcing of government functions 7.4.30

In the 1990s, an estimated 15 per cent of

Commonwealth budget expenditure was spent on ‘outsourced’ (contract) services, including contracting other persons to provide government services to citizens. This figure did not include departmental or agency expenditure on purchased goods or construction services (for example, new government buildings), expenditure by ‘government business enterprises’ (which are, in theory at least, self-funding), or grants to charities or community groups that also provide community services. The parallel estimate for states for which figures were available was 4–7.5 per cent of expenditure, although this figure did not include local government contract contracting, which may have been around 20 per cent of those entities’ budgets: Industry Commission, 1996. ‘Outsourced’ Commonwealth Government services include management of immigration detention centres (Behrooz v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 219 CLR 486) and even assessment and review of refugee claims: see Plaintiffs M61/2010E and M69/2010 v Commonwealth of Australia (2010) 243 CLR 319. Those at the state level include roads, public transport, hospitals and prisons. 7.4.31 ‘Outsourcing’ presents particular challenges for public law. Most Australian constitutional provisions governing conduct of the executive do not bind private individuals or corporations in the same way. Indeed, those actors may be bound by other constitutional standards (for example, those based on corporations law). Judicial scrutiny of their conduct by reference to public law standards must necessarily focus on the point of their engagement with government; for example, through the role prescribed for them in any legislative scheme or by reference to the scope of executive power to engage them by contract. This has been shown by cases that attempt to apply to private sector entities

administrative law standards: see NEAT Domestic Trading v AWB Ltd (2003) 216 CLR 277; compare R v Panel on Take-overs and Mergers, Ex parte Datafin [1987] QB 815. There is also scope for governments to avoid entrenched judicial scrutiny of administrative action by outsourcing. The jurisdiction to grant ‘constitutional writs’ directed to ‘officers of the Commonwealth’ entrenched by s 75(v) of the Constitution seems unlikely to reach contractors (the High Court avoided deciding this issue in Plaintiffs M61/2010E and M69/2010 v Commonwealth of Australia (2010) 243 CLR 319; see Groves, 2011; see also Broadbent v Medical Board of Queensland (2011) 282 ALR 96 at 117–18). Similarly, although the supervisory [page 798] jurisdiction of state Supreme Courts over state executive organs is also now treated as entrenched by the Commonwealth Constitution (see Kirk v Industrial Court (NSW) (2010) 239 CLR 531), that jurisdiction seems unlikely to permit scrutiny of ‘government work’ done by private bodies. Further, as McLean 7.4.3E suggested, there is potential for standards laid down in executive contracts (for example, pursuant to operating procedures for Victorian private prisons or Commonwealth manuals for contractors undertaking or reviewing refugee assessments) to undermine parliament’s law-making powers. As Saunders and Yam point out, justification for use of contract as a regulatory tool often appeals to yet another flawed application of an analogy between government and a corporation.

7.4.32E Saunders and Yam ‘Government Regulation by Contract: Implications for the Rule of Law’ (2004) 15 Public Law Review 51 (footnotes omitted) … In the course of a contracting process, governments may impose conditions of a regulatory or public policy nature on private parties in a manner that simulates the effect of a legal rule … [S]uch a condition is one that … encourage[s] certain forms of behaviour, or certain actions, on the part of the contractors, which are not strictly necessary for the economically efficient fulfilment of the contract … The use of contract as a regulatory tool … has implications for the principles and practice of public law … Thus in … administrative law, questions have emerged about the justiciability of the contracting process and about the grounds of review that might apply … … [M]onitoring [of contracts by parliamentary bodies] may be difficult …, particularly in the face of claims of confidentiality by government agencies in relation to particular contracts. It can also be costly … Regulation by contract may help conceal the true reach of government influence in the society … [and provide] a means by which governments can conceal potentially controversial measures from … Parliament and the public. The greater difficulty of invoking administrative review procedures in relation to decisions about contract, by contrast with decisions taken under legislation, may be another attraction … REGULATION BY CONTRACT AND CONSTITUTIONAL PRINCIPLE … A traditional/historical view

The constitutional principles most obviously challenged by significant regulation through contract are parliamentary government and the rule of law … Underlying [these] … are considerations of legitimacy, accountability and openness … Governments draw their legitimacy from [the] people … [As] the only elected institution is … Parliament … legitimacy is most directly obtained through [its] approval … By contrast, [the] executive … enjoys indirect legitimacy, from the support of the lower House … Legitimacy … [C]ontract [allows] public policy [to] be put in place as a form of law without … Parliament[’s authorisation] and possibly [its] knowledge … [C]itizens become mere recipients of public services, with no … involvement in the formulation of ideas about the bases on which services are provided. [P]olicies implemented through contract may remain in place long after the government leaves office, in circumstances that limit the capacity of future governments and voters to change them …. An extreme example … was the decision of the South Australia[n [page 799] government] in 1999 to enter into a 200-year contract with a Hong Kong … company for the provision of electricity … Potentially, this use of contract undermines the rule of law …, by imposing rules and policies other than in the ‘ordinary legal manner’ … Accountability … Parliament is accountable directly [to the people], through its public procedures and … the electoral process. Governments are accountable to Parliaments between elections. [G]overnment [accountability] is most readily enforced when … [Parliament’s]

… consent, through legislation, [is required] for decisions … [and made more difficult by] … involvement of statutory authorities or government companies, rather than … departments and by reliance on … inherent executive, rather than legislative, power. … Parliaments find it difficult to obtain information about financial commitments of governments pursuant to contract. Auditors-General, … have also found that … task … constrained by the refusal of government agencies to allow access to relevant government contracts …. Openness [L]ack of information detracts from the capacity of both citizens and Parliaments to make informed decisions, in a manner that arguably is inconsistent with the Australian constitutional requirements for representative government. … [G]overnment contracting … offers … [as a] reason for keeping non-legislative regulatory or policy measures from Parliament … that the contracts are subject to commercial confidentiality … Freedom of Information legislation is often inadequate to deal with this problem … A[n] example of the manner in which contract may inhibit public understanding of and debate on public policy is provided by the Victorian prison contracts, … [c]lauses [of which] required the private contractors to comply with a government policy, which was not to be revealed without the permission of the government … Corporatisation, free markets and the rule of law … The principal challenge to the traditional public law framework preconceives the nature of relations between citizens and the state and the framework through which they are given effect. Citizens are equated with consumers, albeit of public services, whose needs are met through government in a form of optimal social contract. The model for accountability draws on the corporation. Citizens are shareholders. Government is akin to a

board of directors, chosen positively or negatively every few years, by reference to performance. … … The analogy … is untenable … Shareholders who are concerned about lack of transparency in a corporation’s strategic direction, or anticipate that a corporation will continue to suffer from bad decisions made by a previous board, can cut their losses and sell their shares. Citizens have no such option, short of migrating to another jurisdiction … … [S]hareholders who are oppressed by the directors, or have suffered from bad [board] decisions … may be able to obtain more effective redress from the courts … against directors … Citizens have no such recourse against ministers or ex-ministers … Directors have faced increasing levels of accountability in recent years … [but,] over the same time, governments have begun to act more like corporations but … become less accountable … … In most common law jurisdictions, important corporate transactions require some form of shareholder approval in a general meeting before … contracts can be finalised. Traditionally, in the public sector, this has been … Parliament’s role. The use of contract to bypass policy making by Parliament weakens both the legitimacy of the decision and the accountability for it …

[page 800]

EXECUTIVE POWERS, RIGHTS AND PRIVILEGES

7.5.1 The characterisation and classification of executive power has created conceptual and terminological confusion. In 1924, Dr H V Evatt (as he then was) classified ‘the Prerogatives of the King’ as ‘divided into executive powers, certain immunities and preferences, and proprietary rights’: Evatt, 1987, p 31. As will be seen, other layers of classification add to the terminological confusion. There has been uncertainty over the territory covered by the word ‘prerogative’. Furthermore, some powers are described as executive ‘capacities’ rather than ‘powers’, and attempts have been made to imbue executive governments with the capacities of ordinary persons. Additionally, the power, capacity, right or privilege may stem from the common law, legislation or constitutional instruments and, in relation to Commonwealth executive power in s 61 of the Constitution, the content of that constitutional power is informed by the common law. The task is also complicated by the federal character of the constitutional arrangement for the exercise of executive power. The executive power of the Commonwealth in s 61 of the Constitution is necessarily limited within the federal arrangement (although those limitations are not spelt out), and the very existence of a national executive power has consequences for the reach of both Commonwealth and state executive power. With these various dimensions in mind, it is helpful in understanding the material to identify the source, character and scope of the executive power, right or privilege in question.

Sources (or origins) Legislation 7.5.2

Hundreds of specific powers are conferred on executive

governments by Acts and delegated legislation. Delegated legislation means regulations and other statutory rules, although sometimes (particularly at the Commonwealth level) other nomenclature (for example, ‘standards’, ‘statements of principles’ or, because delegated legislation is required to be registered under the Legislation Act 2003 (Cth) to take effect, ‘legislative instruments’) is used. Some powers conferred by Commonwealth or state parliaments on the executive are actually delegated legislative powers. But the bulk of powers granted to executive governments are executive in nature: they permit the implementation and enforcement of laws that the parliaments have enacted. As discussed at 7.4.27–7.4.29, parliaments can also create and empower new limbs of the executive; legislation establishing statutory authorities often treats them as corporations and expressly confers on them associated capacities under the general law. 7.5.3E

Air Services Act 1995 (Cth)

7 Establishment of AA (1) A body called Airservices Australia [AA] is established by this subsection. (2) AA: (a) is a body corporate; and (b) must have a seal; and (c) may sue and be sued in its corporate name. [page 801]

Note: The Public Governance, Performance and Accountability Act 2013 applies to AA. That Act deals with matters relating to corporate Commonwealth entities, including reporting and the use and management of public resources. (3) All courts, judges and persons acting judicially must take judicial notice of the imprint of AA’s seal on a document and must presume that the document was duly sealed. … 11 AA’s general powers (1) In addition to any other powers conferred on it by this Act, AA has, subject to this Act, power to do all things necessary or convenient to be done for or in connection with the performance of its functions. (2) Without limiting subsection (1), AA has the power to do any of the following: (a) enter into contracts; (b) acquire, hold and dispose of real and personal property; (c) form, or participate in the formation of, companies; (d) enter into partnerships; (e) let on hire its plant, machinery, equipment or goods not immediately required by it; (f) raise money, by borrowing or otherwise; (g) anything incidental to any of its powers. (3) Where AA may provide a facility or service, it may do so: (a) itself; or (b) in cooperation with another person (including the Commonwealth); or (c) by arranging for another person (including the Commonwealth) to do so on its behalf. (4) AA may appoint one or more bodies to advise it about the performance of its functions.

7.5.4 These provisions are typical of those found across Commonwealth legislation establishing and empowering Commonwealth authorities. Historically, however, it has not been considered necessary for parliaments to make similar provision for the powers of core executive institutions: the Governor or Governor-General, ministers and departments of state. 7.5.5 Legislation also sometimes confers on executive institutions immunities from particular laws. For example, the former Federal Airports Regulations considered in Botany Municipal Council v Federal Airports Corporation (Third Runway case) (1992) 175 CLR 453 immunised the Federal Airports Corporation from state environmental laws for dredging works in Botany Bay, and national parks legislation sometimes provides for the vesting of ‘Crown’ title to land in parks authorities.

Common law 7.5.6 There is debate about the proper terminology for the powers conferred by the common law on the executive. Many judges and commentators, notably Dicey, have used the term ‘prerogative’ to refer to the entire residue of once-absolute powers conferred on the Crown by the common law: … The ‘prerogative’ appears to be both historically and as a matter of actual fact nothing else than the residue of discretionary or arbitrary authority, which at any given time is legally left

[page 802]

in the hands of the Crown …. The King was originally in truth what he still is in name, ‘the sovereign’, or, if not strictly the ‘sovereign’ in the sense in which jurists use that word, at any rate by far the most powerful part of the sovereign power … The power of the Crown was in truth anterior to that of the House of Commons. From the time of the Norman Conquest down to the Revolution of 1688, the Crown possessed in reality many of the attributes of sovereignty. The prerogative is the name for the remaining portion of the Crown’s original authority … whether such power, be in fact exercised by the King himself or by his Ministers. Every act which the executive government can lawfully do without the authority of the Act of Parliament is done in virtue of this prerogative … (Dicey, 1959.)

7.5.7 Dicey’s formulation undoubtedly reflected his faith in ‘the rule of law’ — the principle that government is subject to the same law as the citizenry, not a special ‘administrative law’ as in Europe — as a defining feature of the British legal system. However, Blackstone’s earlier definition was probably more accurate: BY the word prerogative we usually understand that special preeminence, which the king hath, over and above all other persons, and out of the ordinary course of the common law, in right of his regal dignity. It signifies … something that is required or demanded before, or in preference to, all others. And hence it follows, that it must be in its nature singular and eccentrical; that it can only be applied to those rights and capacities which the king enjoys alone, in contradistinction to others, and not to those which he enjoys in common with any of his subjects: for if once any one prerogative of the crown could be held in common with the subject, it would cease to be prerogative any longer. (Blackstone, 1765, Book 1, Ch 7, p 232.)

7.5.8 In Williams v Commonwealth (Williams (No1)) (2012) 248 CLR 156 7.5.65C at 186, French CJ preferred Blackstone’s

conceptualisation despite a shift toward Dicey in the United Kingdom: In the United Kingdom that view has been said to be reflected in ‘the prevalence of judicial references to Dicey’s definition of the prerogative and the relative marginalization of Blackstone’s indicating ‘a preference for the modern over the archaic, as Dicey’s definition is read as functional and modern in emphasizing residuality and parliamentary supremacy.’ [Cohn, ‘Medieval Chains, Invisible Inks: On Non-Statutory Powers of the Executive’ (2005) 25 Oxford Journal of Legal Studies 97 at 104]. There is, nevertheless, a point to Blackstone’s distinction in this case. It avoids the temptation to stretch the prerogative beyond its proper historical bounds.

Crennan J expressed a similar view (at 344). See also Gageler J in Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1 7.5.73C at [134]. 7.5.9 Blackstone’s taxonomy is preferred here. Regardless of which classification is adopted, however, the Crown enjoys both powers unique to itself and powers in common with its subjects. As the discussion of governmental powers to conduct inquiries and spend public money below indicates, even the case law is not always clear as to which class a particular power comes from: see 7.5.33C–7.5.36 and 7.5.60–7.5.69C. This uncertainty over nomenclature does not seem to extend to executive immunities (which are acknowledged to be distinctive to ‘the Crown’) or proprietary rights (‘prerogative’ rights are those unique to ‘the Crown’, but governments can and do own property in the ordinary way, including under Torrens system certificates of title). [page 803]

Prerogative 7.5.10 Principles recognising prerogative powers, rights and immunities were received into Australia at its ‘settlement’, along with the rest of the common law: Liquidators of Maritime Bank of Canada v Receiver-General (New Brunswick) [1892] AC 437 at 441; Commonwealth v New South Wales (1923) 33 CLR 1; McPherson, 2007, pp 78–80. Some prerogatives (for example, the power to nominate bishops in the Church of England) do not seem to have journeyed to Australia, while others (for example, the right to nominate hereditary and life peers to the House of Lords) have rarely been exercised here. 7.5.11 It is still possible to glimpse the prerogative’s basis in arbitrary power. Australia owes its existence as a non-Aboriginal nation to three exercises of the prerogative power to colonise new territory — evidence that prerogative powers were exercisable extra-territorially. Courts were first established in Britain (and New South Wales) under the prerogative. The Imperial appellate court known as the Judicial Committee of the Privy Council (JCPC) — or, in Australia, rather misleadingly simply as ‘the Privy Council’ — originated (as its name suggests) as an arm of the monarch’s executive advisory body. Although JCPC decisions are regarded as binding, they are still formally referred to as ‘advice’ to Her Majesty. The ‘reserve’ powers of the Crown are also prerogative in origin, although some may now be governed by constitutions: see 7.3.47–7.3.59E. 7.5.12 The antiquity of the prerogative is evident from the odd collection of powers, rights and immunities it once conferred. These included important economic powers now placed on a

statutory basis: powers to grant franchises for the taking of wild game and royal ‘fish’ (sturgeon, dolphins and beached whales) and patents to monopolise inventions or publish the Bible. Prerogative power to grant indefinite charters to corporations is evident in the ‘Royal’ or ‘Chartered’ appellations of charities and professional bodies. The Crown was once guardian of idiots and orphans. It could grant sailors protection from being impressed into the navy, and ships’ captains letters of marque and reprisal legalising acts of piracy on enemy vessels. The Crown was entitled to land and personalty when their owners died without heirs. It was also entitled to gunpowder, saltpetre, gold, silver, contraband, wrecks and treasure: see Chitty, 1820; Selway, 1997, pp 94–104. Section 8A of the Copyright Act 1968 (Cth) still recognises indefinite Crown copyright in law reports and Hansard. 7.5.13 The residual nature of the prerogative means that the courts, whose job it is to determine whether or not a prerogative exists, cannot expand it to recognise new powers, rights or immunities. When asked to treat the British Broadcasting Commission as a Crown-granted media monopoly, Lord Diplock responded (BBC v Johns [1965] Ch 32 at 79): This contention involves adopting what [counsel] describes as a modern, and I as a seventeenth century, view, of the scope of the prerogative. But it is 350 years and a civil war too late for the Queen’s Courts to broaden the prerogative. The limits within which the executive government may impose obligations or restraints upon citizens … without any statutory authority are now well settled and incapable of extension … [T]he Crown’s claim to a general prerogative right to the monopoly of any activity was denied and circumscribed by the Statute of Monopolies of 1623. Today, … the executive government has no constitutional right either itself to exercise through its agents or to confer upon other persons a monopoly of any form of activity.

[page 804] 7.5.14 In R (on the application of Bancoult) v Secretary of State for Foreign and Commonwealth Affairs [2009] 1 AC 453, Lord Bingham of Cornhill observed: When the existence or effect of the royal prerogative is in question the courts must conduct an historical inquiry to ascertain whether there is any precedent for the exercise of the power in the given circumstances … Such an inquiry was carried out by the Court of Appeal ([1919] 2 Ch 197) and the House ([1920] AC 508 …) in Attorney-General v De Keyser’s Royal Hotel Limited. In Burmah Oil Company (Burma Trading) Limited v Lord Advocate [1965] AC 75, 101, Lord Reid said: The prerogative is really a relic of a past age, not lost by disuse, but only available for a case not covered by statute. So I would think the proper approach is a historical one: how was it used in former times and how has it been used in modern times?

7.5.15 Being powers, immunities and properties recognised by the common law, prerogatives are (or rather, their common law acknowledgment is) susceptible to legislative override, including where a parliament decides to regulate comprehensively a field previously covered by the prerogative, even if that regulation is not entirely inconsistent with the earlier common law. Examples of Commonwealth prerogatives that have survived being surrounded by legislative controls are the power to request extradition to Australia of a person from a foreign state with which Australia has no extradition treaty (extradition from Australia being limited to situations where a treaty exists and entirely governed by legislation: Barton v Commonwealth (1974) 131 CLR 477) and the power to expel aliens and the prerogative of mercy.

7.5.16 Given their residual nature, once restricted by legislation, prerogatives cannot be revived. Contrary to the view expressed by Lord Reid in De Keyser’s Hotel, there is authority for the proposition that prerogative powers can also be lost by disuse. A special vocabulary is sometimes used to describe these events: a prerogative may be said to have been ‘curtailed’ or ‘abrogated’ by legislation, or as having fallen into ‘desuetude’. 7.5.17 As discussed at 7.2.18–7.2.20, in colonial times, ‘external’ prerogatives (powers to acquire new territory, declare war, enter treaties and send and receive ambassadors) were regarded as exercisable by the Imperial Crown, while others (for example, power to pardon convicted offenders) were exercisable by colonial Governors. 7.5.18 In Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195, the court considered the liability of mining companies to pay royalties under the Mining Act 1992 (NSW) in relation to mixed gold and copper mines. The court noted the way in which federation affected the exercise of prerogatives in Australia and seemed to suggest that the prerogative in mines of gold and silver might, contrary to common assumption, have been vested in the Commonwealth. [page 805]

7.5.19C Cadia Holdings Pty Ltd v State of New South Wales (2010) 242 CLR 195

French CJ: … The effect of Federation upon the prerogative … No distribution of prerogative powers and rights between the Commonwealth and the States is spelt out in the Constitution. Indeed the word ‘distribution’ may mislead. Prerogative powers and rights enjoyed by the Crown in the colonies before Federation may be seen as informing, or forming part of, the content of the executive powers of the Commonwealth [under s 61 Constitution] and the States according to their proper functions. In some cases, the location of particular prerogative powers and rights in, or as an incident of, the executive power of the Commonwealth or of the States is straightforward. As … Zines has observed, there is no difficulty in determining the repository of the prerogative power relating to a subject matter within the exclusive legislative competence of the Commonwealth or a State: Clearly only the Commonwealth can declare war, or enter into treaties. Similarly where a prerogative power, or a particular exercise of it, is concerned with a subject that is not within Commonwealth legislative power, it is exercisable only by [a State] Governor …, such as the incorporation by royal charter of a school or the dissolution of State Parliament. [Zines, ‘Commentary’, in Evatt, The Royal Prerogative, (1987) at C13] A prerogative power or right concerned with a subject within the area of concurrent legislative power of the Commonwealth and the States may become an element of concurrent power or rights in both polities. This was the case with the Crown’s priority in respect of debts, held in Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd to be enjoyed concurrently by the Commonwealth and the States [(1940) 63 CLR 278]. In Farley, Evatt J referred to the prerogative right in relation to

royal metals, classified it as a proprietary right of the King and said [(1940) 63 CLR 278 at 321–2]: It seems plain that, as a general rule, those prerogatives which, prior to federation, were exercisable through the King’s representative in the area of a colony, are, so far as they partake of the nature of proprietary rights, still exercisable by the executives of the various States and for the benefit thereof. The original justification for the prerogative in mines of gold and silver as ancillary to prerogative powers with respect to coinage and the raising of military forces [the Case of Mines [(1568) 1 Plowden 310, 75 ER 472] might suggest, having regard to the exclusive nature of Commonwealth powers in these two areas, that it could logically have found its place as an element or incident of Commonwealth executive power [Constitution, ss 51(xii) and 115; ss 51(vi) and 114. See AG for NSW v Butterworth & Co (Australia) Ltd (1938) 38 SR (NSW) 195]. On the other hand, the prerogative right appears to have subsisted at Federation independently of th[os]e original justifications …. Moreover, the constitutional powers of the States to dispose of waste lands of the Crown and the proprietary character of the prerogative weigh in favour of the view that it remained with the States after Federation … [page 806] Gummow, Hayne, Heydon and Crennan JJ: Justice Field, when Chief Justice of California during the gold-rush period, wrote in Moore v Smaw [17 Cal 199 at 222 (1861)]: The right of the Crown, whatever may be the reasons assigned for its maintenance, had in truth its origin in an arbitrary exercise of power by the King, which was at the time

justified on the ground that the mines were required as a source of revenue. He also observed that in modern times it is taxation which furnishes the means for the expenses of government, and while the right of coinage does pertain to sovereignty, the exercise of the right does not require ownership of the precious metals by a State. In any event, the right of coinage in the United States was that of the federal government. On the establishment of federation in Australia, while s 91 of the Constitution permitted States to grant aid to and bounty on mining for gold, silver and other metals, s 115 forbad the States to coin money. Further, insofar as the reasoning in the Case of Mines [(1568) 1 Plowden 310, 75 ER 472] supported the prerogative of ownership as necessary to provide for national defence, s 114 of the Constitution forbids a State, without the consent of the federal Parliament, to raise or maintain any naval or military force. The executive power of the Commonwealth of which s 61 of the Constitution speaks enables the Commonwealth to undertake executive action appropriate to its position under the Constitution and to that end includes the prerogative powers accorded the Crown by the common law. Dixon J spoke of common law prerogatives of the Crown in England, specifically the prerogative respecting Crown debts, as having been ‘carried into the executive authority of the Commonwealth’ [Farley (1940) 63 CLR 278 at 304]. However, the creation of the federation presented issues still not fully resolved of the allocation between the Commonwealth and States of prerogatives which pre-federation had been divided between the Imperial and colonial governments, and of their adaptation to the division of executive authority in the federal system established by the Constitution. If regard be had to the treatment by Justice Field of the rationale for the Case of Mines, it might well have been thought that if the prerogative respecting royal metals survives at all today

under the common law of Australia it accrues to the executive authority of the Commonwealth. The reasons of Isaacs J in The Commonwealth v New South Wales [(1923) 33 CLR 1 at 46–7] suggest that he was alive to these questions but did not need to pursue them. That case assumed the vesting at federation of royal metals in the States …. Thereafter, Evatt J said that ‘as a general rule’ prerogatives which partook of the nature of proprietary rights and which before federation had been exercisable by the executive governments of the colonies were exercisable by the executives of the various States [Farley (1940) 63 CLR 278 at 322]. The present litigation was conducted on the same assumption, identifying the State as the repository of the relevant prerogative; the dispute was as to the scope of the prerogative with respect to the copper mined by Cadia. Accordingly, it is inappropriate to consider the matter further here.

7.5.20 The most obvious drawback of governments exercising powers under the common law, besides the relative obscurity of those powers, is that they are not conferred by elected legislatures. While executive governments are answerable to parliaments for the exercise of prerogative powers, they are not ‘responsible’ for those powers’ existence, only for their legislative abrogation (where that occurs). These accountability limitations were demonstrated by Ruddock v Vadarlis (2001) 110 FCR 491 (MV Tampa case) 7.5.49C. [page 807]

Freedom to act as an ordinary person may act?

7.5.21 Despite — or perhaps because of — debate over whether prerogative powers are exclusive to ‘the Crown’, the question has arisen whether there is a ‘third source’ of executive government ‘powers’: those of an ordinary legal person that is a corporation: Harris, 1992 and 2003. Governments buy, sell, lease and hold title to property; enter into contracts; form corporations or other legal entities; appoint staff, agents or commissioners of inquiry; make grants and ex gratia payments and otherwise spend money; give legal indemnities to those who carry out their work and publicise their activities in the media. Many of these actions are not supported by legislation. Upon what powers do they rely? 7.5.22 Despite the ‘rule of law’ principle that governments exercise only those powers that the law has positively conferred on them, the traditional answer has been that ‘the Crown’, being a legal person, shares the freedom of its subjects to take advantage of facilities like the law of contract and to do what is not legally prohibited. In Australia, this possibility seems to have been recognised soon after federation in relation to the New South Wales Government’s power to commission inquiries (see 7.5.33C–7.5.36) and enter contracts ‘in the ordinary or necessary course of Government administration’: see 7.5.37–7.5.38C. 7.5.23 However, there clearly are situations where it is inappropriate to translate individual freedoms to executive government scale: the English courts have been criticised for comparing government telephone-tapping and employee blacklisting with similar actions by citizens: see Malone v Metropolitan Police Commissioner [1979] Ch 344; R v Secretary of State for Health; Ex parte C [2000] 1 FLR 627; All ER D 215. Further, such comparisons are only appropriate if it is

acknowledged that, in exercising these freedoms, governments (like citizens) may not interfere with the rights or freedoms of others: ‘Citizens are always free to ignore without legal consequence that which the government attempts to do under the third source’: Harris, 2007, p 232. Even then, the practical impact on other people (for example, recipients of services delivered under government contracts) of ‘ordinary’ activities, when engaged in by a government, can be much more substantial than the doctrine of privity of contract might suggest. Exercise of these powers also presents problems for democratic accountability. 7.5.24E Harris, ‘The “Third Source” of Authority for Government Action Revisited’ (2007) 123 Law Quarterly Review 225 … The main argument in favour of the government being free to do that which does not conflict with other legal rights, or is not prohibited by positive law, is that this legal position meets the practical day-to-day needs of government. The government is able to respond quickly, flexibly and relatively unhindered with the action it considers appropriate to meet, sometimes unexpected, societal needs. The government does not have to find existing positive law authority in statute or the prerogative, or request Parliament to create at short notice new statutory authority. Cynics may suggest that governments value the freedom from preaction scrutiny which both the third source and the prerogative provide … A requirement of pre-action legislative authority would allow the democratically-elected Parliament to enact the power it believes the government should have and, at the time that the powers are created, ensure that justified and clear limits are put in place in

respect of the government’s exercise of the powers. In contrast the third source leaves constraint to the [page 808] random eclectic collection of laws protecting legal persons from the interference of others, and the different generic post-action accountability mechanisms that are available in respect of executive action …

7.5.25 In recognition of these democratic difficulties, the High Court in Williams v Commonwealth (Williams (No 1)) (2012) 248 CLR 156 7.5.65C indicated that these executive capacities, at least in relation to the power to enter into contracts and spend money, must be viewed ‘through different spectacles’: 248 CLR at 236 per Gummow and Bell JJ, adopting Mason J’s expression in Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 51. The transformative effect of Williams (No 1) on the Commonwealth executive’s power to contract and spend will be considered below.

Constitutional instruments 7.5.26 Although most Australian constitutions make provision for the institutions of executive government, they say little explicitly on the subject of executive power, privileges or immunities. It has been argued that these meagre descriptions of executive power reflect an international trend made necessary by the nature of the power, which changes to reflect changes in the definition of the

state itself: see the discussion by French, 2010, pp 17–20. However, as discussed in Chapter 6, the constitutional immunity of state executive arms from Commonwealth laws is also an implication based on Australia’s federal system of government. 7.5.27 At the Commonwealth level, the contrast between the cursory allocation of executive power by s 61 and the detailed elaboration of legislative power by s 51 could not be greater. Similarly, ‘patriation’ of the Queen’s prerogative powers to the states has been achieved by the brief statement in s 7(2) of the Australia Acts that ‘all powers and functions of Her Majesty in respect of a State are exercisable only by the Governor of the State’, the associated requirement of s 7(5) that advice on those functions be provided by the Premier and the corresponding withdrawal of the United Kingdom Government from responsibility for that advice under s 10: see 7.2.37E. And the only state constitution to refer explicitly to executive power, the Constitution of Queensland 2001, states merely that ‘[t]he Governor is authorised and required to do all things that belong to the Governor’s office under any law’: see 7.2.35E. As Zines has pointed out, it is necessary to go to the same principles of the general law to identify both state and Commonwealth prerogative powers and freedoms to act, and in this regard at least, provisions such as ‘s 61 [seem] to make no difference’: Zines, 2005, p 280. Nonetheless, as discussed below (see 7.5.54–7.5.59C), the High Court has emphasised the centrality of s 61 to Commonwealth executive power, treating it as conferring some additional ‘inherent’ power. Powers, privileges or immunities derived from the common law may always be altered by statute. A key question posed by provisions that ‘constitutionalise’ executive powers, privileges or

immunities — at least under an entrenched Constitution like the Commonwealth’s — concerns whether the legislature can also amend them and, if not, what the consequences are for the relationship between the executive and the legislature. Consistently with the principles of parliamentary supremacy, the rule of law and responsible government, it seems to be the case, as Professor Zines suggested, that no part of executive power is immune from parliamentary control. [page 809]

7.5.28E

Stellios, Zines’s The High Court and the Constitution, 6th ed, 2015, pp 402–3

It might be argued that, in so far as the Constitution confers Executive power on the Governor-General in Council, Parliament cannot remove or diminish that power any more than it can repeal, say, the High Court’s jurisdiction under s 75 of the Constitution. On this reasoning, as the Constitution by s 61 grants to the Governor-General the prerogative power of entering into treaties or declaring war, an Act of Parliament made under s 51(xxix) or (vi) … could not control those prerogative powers. It seems clear, however, that basic British constitutional principles are applicable and these, generally speaking, ensure that, despite the terms of s 61, ‘[t]he Parliament is sovereign over the executive and whatever is within the competence of the executive under s 61, including or as well as the exercise of the prerogative[s] … attached to the government of Australia, may be the subject of legislation by the Australian Parliament’ [Victoria v Commonwealth and Hayden (AAP case) (1975) 134 CLR 338 at 406 per Jacobs J]. In Brown v West [(1990) 169 CLR 195 at

202] the High Court said: ‘Whatever the scope of the executive power of the Commonwealth might otherwise be, it is susceptible of control by statute’. Many cases have assumed the power of Parliament to control prerogative or other executive power. In Barton v Commonwealth [(1974) 131 CLR 377], for example, the Court considered whether a prerogative of the Crown had been superseded by the Extradition (Foreign States) Act 1966 (Cth) …

7.5.29 However, the present Chief Justice of the High Court has written extra-judicially that ‘it is still an open question whether the grant of executive power under s 61, if it extends beyond the prerogative powers, could be subject to legislative control’: French, 2010, p 26.

Executive powers State 7.5.30 Like their legislative powers, the prerogative powers of the states tend to be territorially-based and residual in nature. They include powers relevant to state constitutional arrangements (for example, the ‘reserve power’ to form government), and state versions of powers exercisable by both levels of government. A cluster of the latter concern law and justice: the prerogative of mercy (which allows pardons or remissions of criminal sentences, including for royal visits: Kelleher v Parole Board (NSW) (1984) 156 CLR 364), the power of Attorneys-General to permit commencement of public law litigation by relator action, and power to appoint senior (or Queen’s) counsel. However, legislation has eroded or qualified these powers; for

example, by surrounding the prerogative of mercy with statutory arrangements for referral of a petition for its exercise to a court. Taylor has argued that ‘ignoring exotica [like treasure and wrecks], only four prerogative powers remain with the State [of Victoria]’, these being the prerogative of mercy, the power to establish a royal commission, the power to appoint senior counsel (all of which are recognised or adjusted by statute) and the power to grant honours (as Canadian provinces now do, but Victoria does not): Taylor, 2006, p 103. For a discussion of the process by, and advice on which, the prerogative of mercy is exercised in Victoria, see Osland v Secretary to the Department of [page 810] Justice (2008) 234 CLR 275 at 282–3. In Queensland, the prerogative of mercy has been put on a statutory basis: see Constitution of Queensland Act 2001 s 36. 7.5.31 In R v Secretary of State for the Home Department, Ex parte Northumbria Police Authority [1989] QB 26, the English Court of Appeal recognised a prerogative power in the Home Secretary to maintain the Queen’s peace and to keep law and order (even where disorder had not broken out), unless such action would be incompatible with statute. This power allowed the central government to supply tear gas and plastic batons to police for use in circumstances of serious public disorder, without the need for police authorities’ approval. Legislation establishing police forces or providing for the maintenance of law and order by police and local authorities did not abrogate the prerogative power. No such

prerogative has been recognised in Australia, and such a power is likely to have been supplanted by legislation. 7.5.32 The idea that state governments are free to act as other legal persons seems to have been recognised early in Australia, although by a High Court that mistook prerogative action for a government exercising an ordinary freedom. In Clough v Leahy (1904) 2 CLR 139, the High Court upheld the validity of the appointment of a royal commission by the New South Wales Government to inquire into the formation and working of certain trade unions. 7.5.33C

Clough v Leahy (1904) 2 CLR 139

Griffith CJ (with whom Barton and O’Connor JJ agreed): … … [T]here is a great deal of difference between a thing which is prohibited by law and a thing as to which there is not in existence any positive law authorising it … I propose to deal first of all with, not the ‘legality,’ whatever that means, but the lawfulness of such a Commission of inquiry, apart altogether from any statute; that is to say, to inquire whether there is any statute law or rule of common law that makes it unlawful for the Crown to issue Commissions of inquiry … It is clear that the Executive Government cannot by its Commission make lawful the doing of an unlawful act. If an act is unlawful — forbidden by law — a person who does it can claim no protection by saying that he acted under the authority of the Crown. Nor can the Crown enforce the answering of a question by an individual, unless some law confers the authority to do so. Nor can the Crown justify the publication of defamatory matter merely by its authority. If, in the course of an inquiry made by the Crown, defamatory matter is published, it is actionable, and may be perhaps punishable

criminally, unless it is protected by the general law … Nor can the Crown interfere with the administration of the course of justice … [I]f persons acting under a Commission from the Crown were to do acts which, if done by private persons, would amount to an unlawful interference with the course of justice, the act would be unlawful, and would be punishable. So that in this respect the powers of the Crown are practically no greater than the powers of a private individual. It is quite unnecessary … to call in aid … the ‘prerogative’ powers of the Crown …. [T]he power of inquiry is not a prerogative right … [It] is a power which every individual citizen possesses, and, provided that in asking these questions he does not violate any law, what Court can prohibit him from asking them? He cannot compel an answer … We start, then, with the principle that every man is free to do any act that does not unlawfully interfere with the liberty or reputation of his neighbour or … with the course of justice … The liberty of another can only be interfered with according to law, but, subject to [page 811] that limitation, every person is free to make any inquiry he chooses; and that which is lawful to an individual can surely not be denied to the Crown, when the advisers of the Crown think it desirable in the public interest to get information on any topic … … [I]t is said [that] persons who go abroad publicly collecting information on matters thought by the Executive Government to be of public interest, for which special duty they have been appointed, are also guilty of acts done to the terror of peaceful subjects. We look in vain, however, for any authority for such a proposition. The only case quoted in support of it — Entick v

Carrington … — is … to a very different effect, that acts in invasion of the liberty of the subject, or in interference with his property, are unlawful, unless they are justified by some statute or known principle of law …

7.5.34 As will be discussed at 7.5.65C, the High Court’s decision in Williams (No 1) has highlighted the need to differentiate the ordinary capacities of the executive government and those of the ordinary person, at least when dealing with the Commonwealth’s executive capacity to contract and spend public money. It may well be that other executive capacities (perhaps even state executive capacities) now have to ‘run through the new prism created by Williams’: Lindell, 2013, p 373. 7.5.35 The idea that ‘persons who go abroad publicly collecting information’ for the executive do ‘terror of peaceful subjects’ dates back to abolition of the irregular, executive-dominated Court of Star Chamber in 1640, during the reign of Charles I. As Blackstone put it: [I]t is declared in the statute 16 Car I c 10 … that neither his majesty, nor his privy council, have any jurisdiction, power, or authority by English bill, petition, articles, libel … or by any other arbitrary way whatsoever, to examine, or draw into question, determine or dispose of the lands or goods of any subjects of this kingdom; but that the same ought to be tried and determined in the ordinary courts of justice, and by course of law. (Blackstone, 1765, Bk 1, 137–8.)

However, the 1640 statute did not prevent executive inquiries with no legal consequences: THE power of the privy council is to inquire into all offenses against the

government, and to commit the offenders into custody, in order to take their trial in some of the courts of law. But their jurisdiction is only to inquire, and not to punish: and the persons committed by them are entitled to their habeas corpus by statute 16 Car I c 10. …

7.5.36 Such inquiries are common today, even in relation to matters that have been, or might be, the subject of court proceedings. In Victoria v Australian Building Construction Employees’ & Builders Labourers’ Federation (1982) 152 CLR 25, the High Court upheld the validity of a royal commission established by letters patent (that is, prerogative instrument) by the Victorian Governor to inquire into whether the Federation (a trade union) or its members had engaged in any ‘illegal, improper or corrupt activities’. Brennan J said (152 CLR at 156): [W]hat distinguishes a prerogative commission from an inquiry which any person is at liberty to make is that it is an inquiry on behalf of the executive government for a purpose of government.

[page 812] Unlike inquiries conducted by citizens out of ‘idle curiosity’, those set up by prerogative attracted privilege against defamation: see also McGuinness v Attorney-General (Vic) (1940) 63 CLR 73. Legislation now allows royal commissioners to compel witnesses, as well as protecting those involved in proceedings before them against defamation suits. Many executive inquiries are conducted under other legislation conferring similar protections. However, governments also frequently establish inquiries that lack such protections and that depend on witnesses’ co-operation. Being no different from inquiries conducted by ‘subjects’, these types of

inquiries (at least in so far as they do not concern government matters) seem to rely on no more than the ordinary freedom to make inquiries. In Victoria, powers to establish commissions and boards of inquiry are now found in the Inquiries Act 2014 (Vic). 7.5.37 In 1932, after the New South Wales Governor sacked Premier Jack Lang, the new state government under Premier Bertram Stevens sought to avoid a contract entered into at Lang’s insistence to place tourist advertisements in the South Australian Labor Weekly, owned by Mr Bardolph. New South Wales argued that the contract was not binding on it because state parliament had not authorised or ratified it or appropriated the money to pay for the ‘ads’. The High Court dismissed this argument. The judgment of Dixon J justified entry into contracts by the Crown by reference to responsible government principles, and also canvassed the requirement that ‘Crown servants’ be properly authorised to bind their masters. 7.5.38C

New South Wales v Bardolph (1934) 52 CLR 455

Dixon J: … In considering whether the Crown was affected with responsibility for the agreement made on its behalf … that is, whether, independently of parliamentary provision of funds, it became the contract of the Crown, it is a matter of primary importance that the subject matter of the contract, notwithstanding its commercial character, concerned a recognized and regular activity of Government in New South Wales. Not only has the conduct of a Tourist Bureau been long practised by the Executive. It has been recognized by Parliament in the appropriation of funds … Again, it is a matter of no small importance that the contract was made by an officer appointed

for the regular discharge of duties which included the making of contracts in reference to advertisements of the Tourist Bureau. His independent authority would probably be enough to support the contract, but the intervention of the Premier … puts beyond question the authority of the contract as a transaction of the Crown. In [NSW] the Premier is a Minister of the Crown known to the law. The Premiership itself is an office mentioned in the Constitution Act … In his capacity of Premier he administers [the] Department [responsible for government advertising] … No statutory power to make a contract in the ordinary course of administering a recognized part of the government of the State appears to me to be necessary in order that, if made by the appropriate servant of the Crown, it should become the contract of the Crown, and, subject to the provision of funds to answer it, binding upon the Crown … It remains to deal with the contention that the contract is unenforceable because no sufficient appropriation of moneys has been made by Parliament to answer the contract. ‘The general doctrine is that all obligations to pay money undertaken by the Crown are subject to the implied condition that the funds necessary to satisfy the obligation shall be appropriated by Parliament’ (New South Wales v The Commonwealth [No 1] [(1932) 46 CLR at 176]. But … that general doctrine does not mean that no contract exposes the Crown to a liability to [page 813] suit … unless and until an appropriation of funds to answer the contract has been made by the Parliament concerned, or unless some statutory authorization or recognition of the contract can be found … … It is left to Parliament, if no money is applicable to the liquidation of those damages, to determine whether the judgment obtained on that decision should be satisfied or not … In this manner the principle that Parliament

shall control the expenditure of public moneys is preserved, but the subject is given a means of establishing the existence and validity of his claim against the Executive Government). The principles of responsible government impose upon the administration a responsibility to Parliament, or rather to the House which deals with finance, for what the Administration has done. It is a function of the Executive, not of Parliament, to make contracts on behalf of the Crown. The Crown’s advisers are answerable politically to Parliament for their acts in making contracts. Parliament is considered to retain the power of enforcing the responsibility of the Administration by means of its control over the expenditure of public moneys. But the principles of responsible government do not disable the Executive from acting without the prior approval of Parliament, nor from contracting for the expenditure of moneys conditionally upon appropriation by Parliament and doing so before funds to answer the expenditure have actually been made legally available …

7.5.39 The latter part of this extract emphasises the political control of executive contracting and spending by parliament. The executive enters into contracts and is answerable to parliament for those actions. This conception of responsible government leaves it to parliament to effect executive responsibility for contracting and spending. On the other hand, the opening passage seems to assume the validity of the contracting because it concerned a recognised and regular activity of government. As will be seen at 7.5.65C, the court in Williams v The Commonwealth (Williams (No 1)) (2012) 248 CLR 156 has transformed the constitutional principles applicable to Commonwealth executive contracting and spending. As a general proposition, Commonwealth contracting and spending requires prior statutory approval. However, there are some exceptions, including contracting and spending in the

administration of government departments. The effect of those principles on state government contracting and spending remains unclear: see Bateman, 2015.

Commonwealth Constitution 7.5.40

Section 61 of the Commonwealth Constitution states:

61 Executive power The executive power of the Commonwealth is vested in the Queen and is exercisable by the Governor-General as the Queen’s representative, and extends to the execution and maintenance of this Constitution and of the laws of the Commonwealth.

7.5.41 A useful starting point for a consideration of the scope of s 61 is the judgment of Gageler J in Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1. His Honour explains the importance of history in understanding s 61 and its place within Ch II of the Constitution and, in considering the extent of power in s 61, navigates many of the terminological and conceptual distinctions. [page 814]

7.5.42C

Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1

Gageler J: Executive Government in the Constitution [115] The framers of the Australian Constitution engaged in what was fairly described in informed contemporary commentary as an endeavour of ‘constructive statesmanship’, in which they ‘used the experience of the mother country and of their predecessors in the work of federation-making … in no slavish spirit, choosing from the doctrines of England and from the rules of America, Switzerland, and Canada those which seemed best fitted to the special conditions of their own country’[Bryce, Studies in History and Jurisprudence (1901), vol 1 at 476, 482]. Nowhere was their careful appropriation and adaptation of constitutional precedent to local circumstances more apparent than in their framing of what is described in Ch II of the Constitution as ‘The Executive Government’ and of its relationship with what are described in Chs I and III of the Constitution as ‘The Parliament’ and ‘The Judicature’. [116] The second half of the nineteenth century had seen the development of systems of responsible government in each of the colonies which were to become Australian States. Professor Finn (later to become Justice Finn of the Federal Court of Australia) observed of that development [Finn, Law and Government in Colonial Australia (1987) at 4 (footnotes omitted)]: Responsible government left unsevered the many constitutional links with the Queen. Even the royal power of veto of colonial legislation remained. And in each colony the Queen’s representative, the Governor, persisted as a fixture on the local stage. But so also did the Executive Council, a body hitherto formed of official appointees to advise the Governor in the exercise of the majority of his powers. Now for the first time composed of the elected ministry of the day, the Executive Council became the institutional symbol of an

elected ministry — of ‘the government’. Behind it … the cabinet system developed. Through it the colonists expressed a very practical view of the proper allocation of responsibilities in the new order. [117] Professor Finn commented [at 4]: Untroubled by concerns as to the juristic nature of ‘the Crown’ the colonists appear to have adopted both a personalized and functionalized view of the Queen (the Crown) and of her constitutional powers and responsibilities. And if the Queen had her place, her province, in the imperial scheme of things, so too in the local arena did ‘the Government’, of whom a similarly personalized and functionalized view was taken. [118] The practical setting within which that peculiarly functionalised Australian conception of ‘the Government’ took root was acknowledged by the Privy Council in 1887, when it commented in advice given on an appeal from the Supreme Court of New South Wales [Farnell v Bowman (1887) 12 App Cas 643 at 649]: It must be borne in mind that the local Governments in the Colonies, as pioneers of improvements, are frequently obliged to embark in undertakings which in other countries are left to private enterprise, such, for instance, as the construction of railways, canals, and other works for the construction of which it is necessary to employ many inferior officers and workmen. If, therefore, the maxim that ‘the king can [page 815] do no wrong’ were applied to Colonial Governments in the

[same] way … it would work much greater hardship than it does in England. [119] Chapter II of the Constitution was framed against that political and practical background. The Executive Government of the Commonwealth was established to take from its inception the form of a responsible government which was to have its own distinct national identity and its own distinctly national sphere of governmental responsibility. The executive power of the Commonwealth, although vested in the monarch as the formal head of State, was to be exercisable by the Governor-General as the monarch’s representative in the Commonwealth [ss 61 and 62]. There was to be a Federal Executive Council ‘to advise the Governor-General in the government of the Commonwealth’ [s 62], which was to be made up of ‘Ministers of State for the Commonwealth’ whom the Governor-General was to appoint to ‘administer such departments of State of the Commonwealth as the Governor-General in Council may establish’ [s 64]. [120] After the first general election, Ministers of State were not to hold office for longer than three months unless they were or became senators or members of the House of Representatives [s 64]. Until the Parliament otherwise provided, as the Parliament was specifically empowered to do under s 51(xxxvi), the GovernorGeneral was to have power to appoint and remove ‘all other officers of the Executive Government of the Commonwealth’ [s 67]. Transitional provision was made for the transfer to the Commonwealth of ‘departments of the public service in each State’ [s 69]. The departments to be transferred were specified to include not only ‘departments of customs and of excise’, ‘naval and military defence’ and ‘quarantine’, but two which were at the time of the establishment of the Commonwealth involved in the ongoing practical delivery of government services: ‘posts, telegraphs, and telephones’, and ‘lighthouses, lightships, beacons, and buoys’ [s 69].

[His Honour then discussed at [121]–[128] the constitutional mechanisms for holding the executive to account (as to which see 7.5.75C), and continued:] [129] The nature of Commonwealth executive power can only be understood within that historical and structural constitutional context. It is described — not defined — in s 61 of the Constitution, in that it is extended — not confined — by that section to the ‘execution and maintenance’ of the Constitution and of laws of the Commonwealth. It is therefore ‘barren ground for any analytical approach’ [Zines, ‘The Inherent Executive Power of The Commonwealth’ (2005) 16 Public Law Review 279, 279]. Alfred Deakin said of it in a profound opinion which he gave as Attorney-General in 1902 that ‘it would be dangerous, if not impossible, to define’, emphasising that it ‘is administrative, as well as in the strict sense executive; that is to say, it must obviously include the power not only to execute laws, but also to effectively administer the whole Government’ [Deakin, ‘Channel of Communication with Imperial Government: Position of Consuls: Executive Power of Commonwealth’ in Brazil and Mitchell (eds), Opinions of Attorneys-General of the Commonwealth of Australia, Volume 1: 1901–14, (1981) 129 at 130, 131]. [130] Without attempting to define Commonwealth executive power, Professor Winterton usefully drew attention to its dimensions when he distinguished its ‘breadth’ from its ‘depth’: ‘breadth’ referring to the subject-matters with respect to which the Executive Government of the Commonwealth is empowered to act having regard to the constraints of the federal system; ‘depth’ referring to the precise actions which the Executive Government is empowered to undertake in relation to those subject-matters [Winterton, Parliament, the Executive and the Governor-General, (1983) at 29, 111]. [page 816]

[131] Put in terms of the nomenclature of Professor Winterton, Mason J referred to the breadth of Commonwealth executive power when, in a frequently cited passage, he said that it ‘enables 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’ [Barton v The Commonwealth (1974) 131 CLR 477, 498]. He referred to its depth when he immediately added that it ‘includes the prerogative powers of the Crown, that is, the powers accorded to the Crown by the common law’ [Barton at 498]. [132] Put in terms of the same nomenclature, Brennan J referred exclusively to the depth of Commonwealth executive power when he noted that ‘an act done in execution of an executive power of the Commonwealth is done in execution of one of three categories of powers or capacities: a statutory (non-prerogative) power or capacity, a prerogative (non-statutory) power or capacity, or a capacity which is neither a statutory nor a prerogative capacity’ [Davis v The Commonwealth (1988) 166 CLR 79, 108]. [133] In framing those categories of actions which the Executive Government is empowered to undertake in relation to subjectmatters with respect to which the Executive Government is empowered to act, Brennan J used the term ‘prerogative’ in the strict and narrow sense in which it had been used by Sir William Blackstone in the middle of the eighteenth century: to refer only to ‘those rights and capacities which the King enjoys alone, in contradistinction to others, and not to those which he enjoys in common with any of his subjects’ [Davis, 108]. He framed the second and third categories of permissible acts so as together to cover the wider sense in which Professor Dicey had used the same term in the late nineteenth century, after the emergence of responsible government in the United Kingdom: to refer to ‘the residue of discretionary or arbitrary authority, which at any given time is legally left in the hands of the Crown’ [Davis, 108] and

thereby to encompass ‘[e]very act which the executive government can lawfully do without the authority of [an] Act of Parliament’. [134] The tripartite categorisation posited by Brennan J has utility in highlighting, in relation to acts done in the exercise of a nonstatutory power or capacity, the essential difference between an act done in the execution of a prerogative executive power and an act done in the execution of a non-prerogative executive capacity. [135] An act done in the execution of a prerogative executive power is an act which is capable of interfering with legal rights of others. An act done in the execution of a non-prerogative executive capacity, in contrast, involves nothing more than the utilisation of a bare capacity or permission, which can also be described as ability to act or as a ‘faculty’. Such effects as the act might have on legal rights or juridical relations result not from the act being uniquely that of the Executive Government but from the application to the act of the same substantive law as would be applicable in respect of the act had it been done by any other actor. In this respect, the Executive Government ‘is affected by the condition of the general law’ [Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410, 439, quoting Federal Commissioner of Taxation v Official Liquidator of E O Farley Ltd (1940) 63 CLR 278, 308]. Subject to statute, and to the limited extent to which the operation of the common law accommodates to the continued existence of ‘those rights and capacities which the King enjoys alone’ and which are therefore properly to be categorised as prerogative, the Executive Government must take the civil and criminal law as the Executive Government finds it, and must suffer the civil and criminal consequences of any breach [Clough v Leahy (1904) 2 CLR 139, 155–156]. [page 817]

[136] That inherent character of non-prerogative executive capacity is given emphasis by the absence of any prerogative power to dispense with the operation of the general law: a principle which Brennan J noted in A v Hayden [(1984) 156 CLR 532, 580] ‘is fundamental to our law, though it seems sometimes to be forgotten when executive governments or their agencies are fettered or frustrated by laws which affect the fulfilment of their policies’. In that case intelligence officers engaged in a bungled training exercise were unable to rely on the authority of the Executive Government to shield them from the investigation of the criminal consequences of their actions under State law. …

7.5.43 In addition to addressing the ambiguity in the classification of ‘prerogative’ powers, Gageler J also referred to the conceptual distinction, suggested by Professor Winterton, for considering the scope of power under s 61; that is, ‘breadth’ and ‘depth’. The federal context in Australia makes this distinction particularly important as the executive power of the Commonwealth is necessarily limited to a ‘federal’ field of operation. The ‘breadth’ of s 61 is a helpful way of conceptualising that field. Although this distinction has not been adopted by a majority of the court as a framework for analysis, it is now a wellknown analytical tool. 7.5.44 In Williams v Commonwealth of Australia (Williams (No 1)) (2012) 248 CLR 156, French CJ helpfully identified various aspects of the executive power of the Commonwealth vested by s 61 of the Constitution. 7.5.45C

Williams v Commonwealth of Australia (Williams (No 1))

(2012) 248 CLR 156 French CJ: [I]t can be said that the executive power referred to in s 61 extends to: powers necessary or incidental to the execution and maintenance of a law of the Commonwealth; powers conferred by statute; powers defined by reference to such of the prerogatives of the Crown as are properly attributable to the Commonwealth;

powers defined by the capacities of the Commonwealth common to legal persons; inherent authority derived from the character and status of the Commonwealth as the national government.

7.5.46 The first two of these categories fit comfortably within the text of s 61: ‘the execution and maintenance … of the laws of the Commonwealth’. In its terms, the power in s 61 also extends to the ‘execution and maintenance’ of the Constitution: a power to enforce the provisions of the Constitution itself. Thus s 68 of the Constitution is ‘executed’, for example, if the Governor-General gives a formal order to the armed forces, even if many other legal and practical steps are necessary to ensure that his or her order is carried out. Similarly, s 72 is ‘executed’ if Her Excellency makes an appointment to the High Court. (Of course, as discussed at 7.3.5–7.3.8, the Governor-General would take neither step except on Cabinet advice provided through the Federal Executive Council.)

[page 818] 7.5.47 Debate over the meaning of s 61 has focused on the extent to which it confers power additional to that covered by the two ‘execution and maintenance’ limbs. It has long been accepted that s 61 contains the Commonwealth’s share of prerogative powers, and recent debate about the extent of Commonwealth ‘capacities’ also attributes them to s 61. Thus it is more accurate to describe the common law as the origin, rather than the source, of Commonwealth executive power. As French CJ recognised in Williams (No 1), in addition to these aspects of s 61, it has also been recognised that s 61 extends to the ‘inherent authority derived from the character and status of the Commonwealth as the national government’, a dimension of s 61 often loosely referred to as the ‘nationhood’ power. These other dimensions of s 61 — prerogative, nationhood and capacities — will now be further explored.

Power deriving from the prerogative 7.5.48 Commonwealth powers deriving from the prerogative (and, it follows, exercisable without parliamentary authorisation) include not only the powers to declare war and to enter into treaties, but the power to expel ‘aliens’ considered in Toy v Musgrove (1888) 14 VLR 349. In 2001, a Full Court of the Federal Court recognised the continued existence of the latter prerogative in the context of a dispute over expulsion of 438 Afghan asylumseekers rescued by the Norwegian cargo ship the MV Tampa but refused entry to Australia. By majority (French (as he then was) and Beaumont JJ; Black CJ dissenting), the court treated this s 61 power, derived from the common law, as extant — despite the

existence of extensive provisions governing entry to Australia in the Migration Act 1958 (Cth). 7.5.49C

Ruddock v Vadarlis (2001) 110 FCR 491

Black CJ [after considering Toy v Musgrove and other case law]: … [22] Some of the historical reasons why the prerogative power to exclude aliens came to be viewed as at best doubtful are illuminated by the following passage where, having set out early authorities in support of its existence, Professor Holdsworth said: Nevertheless the influences which were making for a denial of this prerogative were beginning to be felt in the sixteenth century; and they gathered strength in the seventeenth, eighteenth, and early nineteenth centuries … During the greater part of the eighteenth century, there appear to be very few instances in which the Crown used its prerogative to exclude or to expel aliens; and when, at the end of the century, it was thought desirable to exclude aliens, statutory powers were got … These statues were passed to exclude aliens who, it was though, might spread in England the ideas of the French Revolution. They were therefore opposed by the new Whigs who sympathized with these ideas … — Sir William Holdsworth, A History of English Law, Vol X … (1938) at 396–7 … [26] The preponderance of opinion by the text writers supports the view that, by the end of the [19th] century … the power to exclude aliens in times of peace was not considered to be part of the prerogative … [30] … It would be a very strange circumstance if the at best

doubtful and historically long-unused power to exclude or expel should emerge in a strong modern form from s 61 of [page 819] the Constitution by virtue of general conceptions of ‘the national interest’. This is all the more so when … new prerogative powers cannot be created … [31] The Australian cases in which the executive power has had an ‘interest of the nation’ ingredient can be contrasted with those in which such a power has been asserted for coercive purposes … [33] … [T]he relationship between a statute and the prerogative is that where a statute, expressly or by necessary implication, purports to regulate wholly the area of a particular prerogative power or right, the exercise of the power or right is governed by the provisions of the statute, which are to prevail in that respect: Attorney-General v De Keyser’s Royal Hotel Ltd [1920] AC 508 … The principle is one of parliamentary sovereignty. [34] … [T]o determine whether a prerogative power has been displaced by statute[, t]he accepted test is whether the legislation has the same area of operation as the prerogative … [38] Reliance was placed on Barton [v Commonwealth (1974) 131 CLR 477] to show that the courts must be slow to find a statutory intention to abrogate a prerogative power. But in Barton the High Court held that the Extradition (Foreign States) Act 1966 (Cth) simply did not apply to the Executive’s request of Brazil to detain the applicants, pending a request for extradition to Australia … [40] It can readily be conceded that if a power is well used, wellestablished and important to the functioning of the executive

government, a very clear manifestation of an intention to abrogate will be required. But, similarly, where an asserted power is at best doubtful, and where, if it exists at all, it does so in a field that has been the concern of the Parliament for a very long time, a less stringent view of the intention necessary to abrogate such a power is appropriate … [60] … [The Migration Act] provisions provide a comprehensive regime for the control of Australia’s borders and the patrol of the territorial waters in the circumstances such as those that the rescued people were in at the relevant time. The regime could have applied to the rescued people, and as [the Secretary of the Department of Immigration] acknowledged in his evidence, had the government ‘not taken a view’ that it did not wish to apply the Act, it would have done so … [64] … [T]he Act … provides for a very comprehensive regime relating to — in the words of the long title — ‘the entry into, and presence in, Australia of aliens, and the departure or deportation from Australia of aliens.’ By virtue of [its recent amendment to ensure the validity of the Tampa’s expulsion] that regime specifically extends to protection of Australia’s sea borders. The regime is comprehensive in its coverage of powers of apprehension and detention … The conclusion … is that the Parliament intended that in the field of exclusion, entry and expulsion of aliens the Act should operate to the exclusion of any executive power derived otherwise than from powers conferred by the Parliament … French J (with whom Beaumont J agreed): … [179] The use of the ‘prerogative’ to describe [executive] power may properly acknowledge its historical antecedents but not adequately illuminate its origins in s 61 … The Executive Power — The Gatekeeping Function

[186] English courts have long recognised the general proposition of international law that: … the supreme power of every state has a right to make laws for the exclusion or expulsion of a foreigner … — In Re Adam [1837] 1 Moo PC; 12 ER 889 … [page 820] [193] … [T]he executive power of the Commonwealth, absent statutory extinguishment or abridgement, would extend to a power to prevent the entry of non-citizens and to do such things as are necessary to effect such exclusion … The power to determine who may come into Australia is so central to its sovereignty that it is not to be supposed that the Government of the nation would lack under the power conferred upon it directly by the Constitution, the ability to prevent people not part of the Australia community, from entering. [197] … [A]bsent statutory authority, there is … a power at least to prevent entry to Australia. It is not necessary … to consider its full extent. It may be that, like the power to make laws with respect to defence, it will vary according to circumstances. Absent statutory abrogation it would be sufficient to authorise the barring of entry by preventing a vessel from docking at an Australian port and adopting the means necessary to achieve that result[, and] extend to a power to restrain a person or boat from proceeding into Australia or compelling it to leave … Whether the Executive Power to Exclude Aliens is Abrogated by the Migration Act … [201] … There are no express words to that effect. It is necessary then to look to whether by implication it has that effect … It is sufficient to ask whether the Act evinces a clear and

unambiguous intention to deprive the Executive of the power to prevent entry into Australian territorial waters of a vessel carrying non-citizens apparently intending to land on Australian territory and the power to prevent such a vessel from proceeding further towards Australian territory and to prevent non-citizens on it from landing upon Australian territory … [202] … The Act confers power. It does not in the specific area evidence an intention to take it away … Subject to certain specific provisions … its object is not to confer rights upon noncitizens seeking to enter Australia … [203] Australia has obligations under international law by virtue of treaties to which it is a party, including the Refugee Convention of 1951 and [its] 1967 Protocol … It is questionable whether entry by the Executive into a convention thereby fetters the executive power under the Constitution … [T]he question is moot because nothing done by the Executive on the face of it amounts to a breach of Australia’s obligations in respect of nonrefoulement under the Refugee Convention. [204] If Parliament is concerned about the existence of an executive power in this area, deriving from s 61 of the Constitution, it can legislate to exclude it by clear words. The task of the Court is to decide whether the power exists and whether what was done was within that power, not whether it was exercised wisely and well …

7.5.50 Amendments to the Migration Act made to shore up the legality of the Commonwealth’s actions in relation to the Tampa inserted the following provision: 7A Effect on executive power to protect Australia’s borders The existence of statutory powers under this Act does not prevent the

exercise of any executive power of the Commonwealth to protect Australia’s borders, including, where necessary, by ejecting persons who have crossed those borders.

7.5.51 Whether the majority position in Ruddock v Vadarlis would find favour with the High Court is open to some doubt. In CPCF v Minister for Immigration and Broder Protection (2015) 89 ALJR 207; [2015] HCA 1, the court considered claims for wrongful imprisonment by asylum seekers whose boat had been intercepted off the coast of Christmas Island. [page 821] The asylum seekers’ boat had caught fire and they were transferred to a border protection vessel where they remained for 27 days whilst steps were taken to determine where they should be taken. They were eventually transported to Cocos (Keeling) Islands and taken into immigration detention. In response to the unlawful imprisonment claim, the Commonwealth argued that there was statutory authority under the Maritime Powers Act 2013 (Cth) or, alternatively, pursuant to a non-statutory executive power. A majority of the court accepted the Commonwealth’s contention that there was statutory authority for the actions taken and, consequently, it was unnecessary for the non-statutory executive power to be considered. However, differing views were expressed about the existence of such a power. 7.5.52C CPCF v Minister for Immigration and Border Protection (2015) 89 ALJR 207; [2015] HCA 1

French CJ: [42] Any consideration of the non-statutory executive power must bear in mind its character as an element of the grant of executive power contained in s 61 of the Commonwealth Constitution. The history of the prerogative powers in the United Kingdom informs consideration of the content of s 61, but should not be regarded as determinative. The content of the executive power may be said to extend to the prerogative powers, appropriate to the Commonwealth, accorded to the Crown by the common law. It does not follow that the prerogative content comprehensively defines the limits of the aspects of executive power to which it relates. It is not necessary in these proceedings to resolve the important constitutional question whether there was a power under s 61 which, absent the lawful exercise of power under the MPA, would have authorised the actions taken by the Commonwealth in this case. [Keane J favoured the view that French J had expressed in Ruddock v Vadarlis.] Keane J: [478] The plaintiff contended that the Commonwealth lacks nonstatutory executive power to prevent non-citizens entering Australia and to detain them for that purpose. This contention cannot be accepted. [479] It is well-settled that the power of the Executive government under the common law to deny entry into Australia of a noncitizen such as the plaintiff, including by compulsion, is an incident of Australia’s sovereign power as a nation. Shortly after the creation of the Commonwealth, in Robtelmes v Brenan, Griffith CJ said [(1906) 4 CLR 395, 400) that ‘there can be no doubt’ as to the correctness of the following observations of the

Judicial Committee of the Privy Council in Attorney-General for Canada v Cain [[1906] AC 542 at 546]: One of the rights possessed by the supreme power in every State is the right to refuse to permit an alien to enter that State, to annex what conditions it pleases to the permission to enter it, and to expel or deport from the State, at pleasure, even a friendly alien, especially if it considers his presence in the State opposed to its peace, order, and good government, or to its social or material interests. … [481] That the observations of the Privy Council in AttorneyGeneral for Canada v Cain remained an authoritative statement of the law was recognised in the judgment of Brennan, Deane and Dawson JJ in Chu Kheng Lim v Minister for Immigration [(1992) 176 CLR 1, 29–30]. [page 822] [His Honour then quoted with approval the passage from French J in Ruddock v Vadarlis set out in paragraph [193] of the judgment above, and continued:] [483] That power was ‘sufficient to authorise the barring of entry by preventing a vessel from docking at an Australian port and adopting the means necessary to achieve that result.’ That power necessarily includes the power to do all things necessary to exercise the power, including physically restraining non-citizens from entering Australia. That the position is different in relation to non-citizens who are actually within Australia, as stated in Chu Kheng Lim v Minister for Immigration, does not suggest that Ruddock v Vadarlis was wrongly decided.

[484] It is settled that the executive power referred to in s 61 of the Constitution includes powers necessary or incidental to the execution and maintenance of the laws of the Commonwealth. Moreover, it is not in doubt that the executive power referred to in s 61 of the Constitution extends to the making of war and peace and the acceptance of obligations between nations even though these matters may involve extra-territorial action by Australian forces. Given that it is clear that the executive power extends thus far, recognition that it extends to the compulsory removal from Australia’s contiguous zone of non-citizens who would otherwise enter Australia contrary to the Migration Act can hardly be controversial. … Has the power been abrogated? [488] The plaintiff contended that, if the Court were to hold that a non-statutory executive power to prevent persons from entering Australia does exist, then that power was abrogated by the Act and the Migration Act, both of which were said to operate as part of a single statutory scheme, displacing any non-statutory executive power with respect to the exercise of power concerning immigration into Australia. [489] In Ruddock v Vadarlis, the Full Court of the Federal Court of Australia held, by majority, that the Migration Act did not abrogate executive power in this regard. The plaintiff argued that that case was wrongly decided. That argument should be rejected. … [492] …[N]either the Act nor the Migration Act limits the power of the Executive government to prevent the entry into Australia of non-citizens without visas who claim to be refugees, and the consequent engagement of the Migration Act. The continued existence of the power of the Executive under the common law to use compulsion to prevent the unauthorised entry into Australia of non-citizens outside Australia is consistent with the provisions of the Migration Act …

[By contrast, Hayne and Bell JJ rejected the existence of such a nonstatutory power.] Hayne and Bell J: [148] … It is enough to repeat what was said in Chu Kheng Lim v Minister for Immigration [at 19]: Neither public official nor private person can lawfully detain [an alien who is within this country, whether lawfully or unlawfully] or deal with his or her property except under and in accordance with some positive authority conferred by the law. Since the common law knows neither lettre de cachet nor other executive warrant authorizing arbitrary arrest or detention, any officer of the Commonwealth Executive who purports to authorize or enforce the detention in custody of such an alien without judicial mandate will be acting lawfully only to the extent that his or her conduct is justified by valid statutory provision. (emphasis added) [page 823] [149] No later decision of this Court casts any doubt on the accuracy of this statement. There is no basis for limiting the force of what is said there, or treating [cf Ruddock v Vadarlis at [197]] the decision as not dealing with whether, absent statutory authorisation, the Executive has power to detain. No doubt, the passage quoted from Chu Kheng Lim focused upon the exercise of power within Australia. This case concerns actions taken beyond Australia’s borders. But why should some different rule apply there, to provide an answer to a claim made in an Australian court which must be determined according to Australian law?

[150] To adopt and adapt what was said in Chu Kheng Lim, why should an Australian court hold that an officer of the Commonwealth Executive who purports to authorise or enforce the detention in custody of an alien without judicial mandate can do so outside the territorial boundaries of Australia without any statutory authority? Reference to the so-called non-statutory executive power of the Commonwealth provides no answer to that question. Reference to the royal prerogative provides no answer. Reference to ‘the defence and protection of the nation’ is irrelevant, especially if it is intended to evoke echoes of the power to declare war and engage in war-like operations. Reference to an implied executive ‘nationhood power’ to respond to national emergencies is likewise irrelevant. Powers of those kinds are not engaged in this case. To hold that the Executive can act outside Australia’s borders in a way that it cannot lawfully act within Australia would stand legal principle on its head. [Kiefel J expressed a similar view to that of Hayne and Bell JJ, favouring the dissenting view of Black CJ in Ruddock v Vadarlis]. Kiefel J: A non-statutory power of the Executive Government? … [260] As will be discussed, the executive power to which the Commonwealth defendants refer is one which resides in every nation State, as an aspect of its sovereignty. That being the case, it should not be confused with what has sometimes been described as the nationhood power, which arises under the Constitution and has been held capable of responding to events such as a national emergency. This case does not involve such a power, nor those powers relevant to conditions of war or the protection of Australia as a nation. [261] The Commonwealth executive power for which the Commonwealth defendants contend is said to be that discussed by the Privy Council in Attorney-General for Canada v Cain

[[1906] AC 542]. The Commonwealth defendants rely upon the following statement by Lord Atkinson in Cain [at 546], and upon its acceptance by this Court, as supporting the existence of the power contended for: One of the rights possessed by the supreme power in every State is the right to refuse to permit an alien to enter that State, to annex what conditions it pleases to the permission to enter it, and to expel or deport from the State, at pleasure, even a friendly alien. So much was apparently conceded in Cain. It necessarily followed, his Lordship said: that the State has the power to do those things which must be done in the very act of expulsion, if the right to expel is to be exercised effectively at all. The right therefore necessarily carried with it the right to detain, even on the high seas. [262] These statements need to be understood in the context of the issue in Cain. What was said in that case has little relevance to this matter. The issue in Cain was whether the [page 824] ‘Alien Labour Act’, which provided that the Attorney-General of Canada could take an illegal immigrant into custody and return him to the country from which he came, was ultra vires the Dominion Parliament. The essential question was whether the delegation of the British Crown’s powers to the Dominion Parliament by Imperial statute was sufficient authority for extraterritorial action.

[263] Lord Atkinson reasoned that the Crown of Great Britain became possessed of all executive and legislative powers within Canada and its dependencies when the country was ceded to Great Britain in 1763. The supreme power in every State includes the right to expel aliens and that right necessarily carries with it the right to detain an alien outside the State’s territories in order to effect expulsion. The Imperial Parliament had delegated those powers to the Dominion Parliament by statute. The Dominion Parliament was therefore clothed with all the necessary authority and the challenged provision of the Alien Labour Act was valid. [264] Lord Atkinson was speaking of a sovereign right of a nation State, which is recognised by international law. This is what was conceded in that case. It was in this sense that Griffith CJ, in Robtelmes v Brenan [(1906) 4 CLR 395, 400, 404–405], referred to Cain. … In Chu Kheng Lim v Minister for Immigration, it was observed, by reference to the first passage from Cain set out above, that ‘[t]he power to exclude or expel even a friendly alien is recognized by international law as an incident of sovereignty over territory.’ [265] The judgment in Cain says nothing about the distribution of powers as between the arms of the Dominion Government. It says nothing about whether the Executive of the Dominion Government could exercise the power of detention and expulsion without statutory authority. There was no suggestion in Cain that the Alien Labour Act was unnecessary. [266] In so far as Lord Atkinson may be taken to have assumed that the prerogative to expel, deport and detain existed at the time of the decision in Cain, or that the Executive Government of the United Kingdom exercised it, there is a good body of case law and writings which suggests to the contrary, as the detailed analysis undertaken by Black CJ in Ruddock v Vadarlis demonstrates. …

[270] … Although a view persisted until the 19th century that there was a prerogative power to arrest and surrender aliens to foreign states, that view has long since been rejected. … [273] Lim stands for the proposition that the authority given by the Migration Act to the Commonwealth Executive to detain a person in custody, that authority being limited to the purpose of effectuating the person’s expulsion and deportation, does not infringe Ch III of the Constitution, because it is neither punitive nor part of the judicial power of the Commonwealth. Lim also holds that a statute is required to authorise and enforce the detention by the Commonwealth Executive of aliens for the purpose of expulsion. Where conferred by statute, the power of the Commonwealth Executive to detain takes its character from the legislative powers to exclude and deport aliens, of which it is an incident. [276] What was said in Lim is not limited to actions of the Commonwealth Executive within Australia. The actions of officers of the Commonwealth extra-territorially, on the high seas, remain subject to this Court’s jurisdiction given by s 75(v) of the Constitution … [277] Even if one assumes, for present purposes, that a Commonwealth executive power of the kind contended for existed at Federation, statutes have for a long time provided for powers of expulsion and detention. As a matter of principle any Commonwealth executive power may in those circumstances be considered lost or displaced. … [page 825] [279] … [A]ny prerogative power is to be regarded as displaced, or abrogated, where the Parliament has legislated on the same topic. When a matter is directly regulated by statute, the

Executive Government derives its authority from the Parliament and can no longer rely on a prerogative power. Where the Executive Government exercises such authority, it is bound to observe the restrictions which the Parliament has imposed. [280] It is not necessary to survey each statute which has dealt with the powers of expulsion and detention of aliens since Federation. It is sufficient to observe, by reference to the discussion of the [Maritime Powers Act] above, that the [the] Act authorises the use of the coercive powers of expulsion and detention for which the Commonwealth defendants contend and provides for their exercise in a detailed way. The Commonwealth defendants do not point to any relevant deficiency in [the] Act. It would be difficult for them to do so. [281] The Commonwealth defendants submit that s 5 of [the] Act makes plain a legislative intention that the Act is to operate in addition to, and not in derogation of, the claimed non-statutory executive power. Section 5 provides: ‘[t]his Act does not limit the executive power of the Commonwealth.’ [282] The relevant ‘intention’ of a statute is that which is revealed to the court by ordinary processes of statutory construction. … [283] It can hardly be said that a statute such as [the] Act, which authorises a decision that the relevant powers be exercised in a particular way and details the manner and conditions of their exercise, and in respect of which the role of the Commonwealth Executive is discernible, supports an intention that the Commonwealth Executive is to retain a complete discretion as to how such powers are to be exercised. Section 5 is better understood as preserving such other Commonwealth executive powers as may be exercised conformably with the MP Act provisions. Such a construction would be consistent with s 3 of [the] Act, which provides that the Act binds the Crown in each of its capacities.

[284] The result of the construction for which the Commonwealth defendants contend confirms that this construction is unlikely to have been intended. In Attorney-General v De Keyser’s Royal Hotel Ltd [[1920] AC 508], it was argued that the prerogative power was maintained despite a statute dealing with the same subject matter. Lord Dunedin described [at 526] as ‘unanswerable’ the response of Swinfen Eady MR in the Court of Appeal [In re De Keyser’s Royal Hotel Ltd; De Keyser’s Royal Hotel Ltd v The King [1919] 2 Ch 197, 216]: ‘what use would there be in imposing limitations, if the Crown could at its pleasure disregard them and fall back on prerogative?’ An intention to this effect, on the part of the legislature, is not readily inferred.

7.5.53 In Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1, the High Court considered a challenge to provisions of the Migration Act 1958 (Cth) establishing a regime whereby unlawful non-citizens who are ‘unauthorised maritime arrivals’ must be detained and taken to a processing centre in Nauru. The background to the case is set out in further detail at 7.5.70–7.5.71. A majority of the court (Gordon J dissenting) upheld the validity of the relevant statutory provisions authorising the Commonwealth executive’s involvement in the regime. Because there was valid legislation authorising executive action, it was unnecessary for the majority to consider the scope of non-statutory executive power to detain. However, Gageler J considered (at [147]–[175]) [page 826]

that, in the absence of statutory authority, there was no executive power to detain a person. In dissent, Gordon J (at [368]–[373]) reached the same conclusion. These conclusions may further undermine the majority position in Ruddock v Vadarlis.

Inherent authority derived from the character and status of the Commonwealth as the national government 7.5.54 As French CJ said in Williams (No 1) 7.4.45C, it is now accepted that s 61 includes ‘inherent authority derived from the character and status of the Commonwealth as the national government’: at 184. The contours of this ‘inherent’ executive power have been the subject of uncertainty and debate. Early case law on ‘inherent’ Commonwealth executive power concerned not just s 61, but parliament’s ancillary power to legislate, under s 51(xxxix), to protect or maintain the integrity of institutions established by the Constitution, including the executive itself. 7.5.55C

R v Sharkey (1949) 79 CLR 121

[Australian Communist Party General Secretary Lance Sharkey was convicted under the Crimes Act 1914 (Cth) of uttering seditious words — those inciting disaffection against the Sovereign, the Commonwealth or any government of the King’s Dominions — for telling a Daily Telegraph journalist, in a prepared statement, that if ‘Soviet Forces in pursuit of aggressors entered Australia, Australian workers would welcome them’. Sharkey challenged the Commonwealth’s power to enact such a law, but the High Court upheld its validity.]

Dixon J: … [T]he legislative power of the Commonwealth extends to making punishable any utterance or publication which arouses resistance to the law or excites insurrection against the Commonwealth Government or is reasonably likely to cause discontent with and opposition to the enforcement of Federal law or to the operations of Federal government. The power is not expressly given but it arises out of the very nature and existence of the Commonwealth as a political institution, because the likelihood or tendency of resistance or opposition to the execution of the functions of government is a matter that is incidental to the exercise of all its powers. But the legislative power is in my opinion still wider. The common law of seditious libel recognizes that the law cannot suffer publications the purpose of which is to arouse disaffection against the Crown, the Government or the established institutions of the country, although they stop short of counselling or inciting actual opposition, whether active or passive, to the exercise of the functions of government … … The prevention of attempts to excite hostility where obedience is necessary for the effective working of government appears to be recognized as a proper purpose of the legislation of the Government concerned … [I]t [i]s clearly within power to penalize utterances and publications expressing a purpose of exciting disaffection against the Sovereign, the Government or Constitution of the Commonwealth or either House of the Parliament of the Commonwealth. The validity is more doubtful of … [prohibiting utterances with] a purpose to excite disaffection against the Government or Constitution of the United Kingdom or … either House of the Parliament of the United Kingdom … But even so the constitutional relations of Australia as part of the British Commonwealth with the established government of the [page 827]

United Kingdom are such that it may be considered that a law to safeguard the Constitution and Parliament of the United Kingdom from disaffection is a law upon a matter incidental to the protection and maintenance of the Australian Federal policy itself …. In any case there is the power to make laws with respect to external affairs … [See also Australian Communist Party v Commonwealth (Communist Party case) (1951) 83 CLR 1.]

7.5.56 The existence of the Commonwealth — as a ‘nation’, not just a body politic — was next to become a central factor in High Court reasoning about Commonwealth executive power. The background to Victoria v Commonwealth and Hayden (Australian Assistance Plan case) (1975) 134 CLR 338 is set out at 5.4.17C. As indicated there, this case concerned the purposes for which the Commonwealth Parliament could appropriate the Consolidated Revenue Fund. However, the money so appropriated was to be spent on the Australian Assistance Plan (AAP), under which the Commonwealth would establish regional councils. Jacobs J considered the scope of Commonwealth executive (what he described as prerogative) power to spend appropriated monies. In doing so, his Honour commented on the relationship between Commonwealth prerogatives and Commonwealth legislation. Jacobs J and Mason J considered the scope of Commonwealth executive power to be involved in the AAP. Mason J’s comments, in particular, on the scope of this inherent executive power have been influential. 7.5.57C

Victoria v Commonwealth and Hayden (Australian Assistance Plan case)

(1975) 134 CLR 338 Jacobs J: … [There is a] wide area in which moneys may be expended by the Executive Government, that is to say, by the Queen exercising her prerogative through the Governor-General on the advice of the Executive Council. When moneys are voted to the Queen by Parliament for the purposes declared by the Parliament, it falls within the prerogative to determine whether or not those moneys will be expended for that purpose and how, within the expression of the purpose to which the moneys have been appropriated, the expenditure will be made. Legislation is only needed when Parliament chooses to replace or affect the prerogative powers by legislation which either extends or limits or simply reproduces in the form of executive or other authority the powers previously comprehended within the prerogative. The exercise of the prerogative of expending moneys voted by Parliament does not depend on the existence of legislation on the subject by the Australian Parliament other than the appropriation itself. This exercise of the prerogative is in no different case from other exercises of the prerogative which fall within the powers of the Executive Government of the Commonwealth under s 61 of the Constitution. If legislation were a prerequisite it would follow that the Queen would [not be exercising a prerogative power]; she would always exercise executive power by authority of the Parliament. This cannot be suggested. It would, if correct, result in an inability of Australia to declare war, make treaties, appoint officers of State and members of the public service of the Commonwealth and do all the multitude of things which still fall within the prerogative, unless there was a general or special sanction of an Act of Parliament. [page 828] … Except so far as the Constitution makes particular

provision in respect of matters otherwise within the prerogative, the prerogative remains unaffected. It was always intended that, subject to the Constitution and its expression of the subject matters of Commonwealth power, to a large extent the prerogative would be exercised on all matters of Australian concern by the Crown on the advice of Australian Ministers … The area of its exercise on the advice of Australian Ministers is limited … [p]rimarily … to those areas which are expressly made the subject matters of Commonwealth legislative power. But it cannot be strictly limited to those subject matters. The prerogative is now exercisable by the Queen through the Governor-General acting on the advice of the Executive Council on all matters which are the concern of Australia as a nation … It does not follow that any subject matter of the exercise of the prerogative which is properly exercisable through the GovernorGeneral on the advice of the Executive Council cannot be the subject of legislation of the Parliament which may deny or limit or replace the prerogative … The same is true of any executive power expressly conferred by the Constitution, though of course the exercise of either executive or legislative power is subject to the provisions of the Constitution. The power to legislate in respect of matters falling within the prerogative arises under s 51(xxxix) in so far as it does not arise under any other particular head of power. Alternatively the course of power is the inherent sovereignty of the Australian Parliament in all subject matters which lie within the province of the Government of the Commonwealth of Australia. The Parliament is sovereign over the Executive and whatever is within the competence of the Executive under s 61, including … the exercise of the prerogative within the area of [Commonwealth responsibility], may be the subject of [Commonwealth] legislation … However … it does not follow that legislation is necessary before a prerogative power is exercised … [Note Jacobs J’s characterisation of the power to spend public money as one deriving from the prerogative.]

Mason J: … An appropriation … does not supply legal authority for the Commonwealth’s engagement in the activities in connexion with which the moneys are to be spent … Here, no legislation having been enacted to give effect to the Australian Assistance Plan, we must look to the executive power … Although the ambit of [s 61] is not otherwise defined by Ch II it is evident that in scope it is not unlimited and that its content does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution, responsibilities which are ascertainable from the distribution of powers, more particularly the distribution of legislative powers, effected by the Constitution itself and the character and status of the Commonwealth as a national government. The provisions of s 61 taken in conjunction with the federal character of the Constitution and the distribution of powers between the Commonwealth and the States make any other conclusion unacceptable. Moreover, it is a view of the executive power which is confirmed by the past decisions of this Court (see The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd (the Wooltops case) (1922) 31 CLR 421 at p 432; The Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1 at 10). However, in ascertaining the potential scope of the power there are several important considerations which need to be kept steadily in mind. First, the incidental power contained in s 51 (xxxix) taken in conjunction with other powers, notably s 61 itself, adds a further dimension to what may be achieved by the Commonwealth … Secondly, the Commonwealth enjoys, apart from its specific and enumerated powers, certain implied powers which stem from its existence and its character as a polity (Australian Communist Party v The Commonwealth (1951) 83 CLR 1, at pp 187–188). So far it has not been suggested that the implied powers [page 829]

extend beyond the area of internal security and protection of the State against disaffection and subversion. But in my opinion there is to be deduced from the existence and character of the Commonwealth as a national government and from the presence of ss 51 (xxxix) and 61 a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation. It is in the exercise of this capacity that the Commonwealth has established the Commonwealth Scientific and Industrial Research Organization to undertake scientific research on behalf of the nation. The Science and Research Act 1951, as amended, is an exercise of the power conferred by s 51 (xxxix) and s 61 or perhaps of implied power. So also the Commonwealth may expend money on inquiries, investigation and advocacy in relation to matters affecting public health, notwithstanding the absence of a specific legislative power other than quarantine — see the Pharmaceutical Benefits Case (1945) 71 CLR at 257. No doubt there are other enterprises and activities appropriate to a national government which may be undertaken by the Commonwealth on behalf of the nation. The functions appropriate and adapted to a national government will vary from time to time … However, the executive power to engage in activities appropriate to a national government, arising as it does from an implication drawn from the Constitution and having no counterpart, apart from the incidental power, in the expressed heads of legislative power, is limited in scope. It would be inconsistent with the broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers to concede to this aspect of the executive power a wide operation effecting a radical transformation in what has hitherto been thought to be the Commonwealth’s area of responsibility under the Constitution, thereby enabling the Commonwealth to carry out within Australia programmes standing

outside the acknowledged heads of legislative power merely because [they] can be conveniently formulated and administered by the national government. In this respect s 96 has a dual significance. On the one hand it indicates that the executive power, like the appropriation power, extends to the investigation and formulation of policies to be expressed in conditions … attached to grants made to the States. On the other hand its presence confirms what is otherwise deducible from the Constitution[:] … that the executive power is not unlimited and that there is a very large area of activity which lies outside [it] which may become the subject of [grant] conditions … under s 96.

7.5.58

Mason J’s description of s 61 of the Constitution as: conferring ‘a capacity to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation’ (which capacity could, if necessary, be supported by laws made under s 51(xxxix)), but otherwise limited by reference to ‘the broad division of responsibilities between the Commonwealth and the States achieved by the distribution of legislative powers’,

was to become significant in later decisions on Commonwealth executive power. Mason J also appeared to adopt for the Commonwealth (a government of limited powers) the Clough v Leahy (1904) 2 CLR 139 7.5.33C and New South Wales v Bardolph (1934) 52 CLR 455 7.5.38C view of state executive power: that, provided governments remain within their spheres of constitutional responsibility, they may conduct inquiries, hold property, spend

money, make contracts, incorporate companies or appoint agents and staff, just as other legal persons may. These issues — the extent to which s 61 confers power to act as a national government and [page 830] provides the Commonwealth with the ‘capacities’ associated with legal personality — were considered in three subsequent cases: Davis v Commonwealth (1988) 166 CLR 79; Pape v Commissioner of Taxation (2009) 238 CLR 1; and Williams v Commonwealth (Williams (No 1)) (2012) 248 CLR 156. The first of these, Davis v Commonwealth, was (like R v Sharkey) concerned with parliament’s power to legislate under s 51(xxxix) of the Constitution in support of executive action taken under s 61 (in this case, incorporation of a company). 7.5.59C

Davis v Commonwealth (1988) 166 CLR 79

[The Australian Bicentennial Authority was a company limited by guarantee registered under the Companies Ordinance 1962 (ACT), with the primary object of formulating, promoting and co-ordinating a national program of celebrations and activities to commemorate the bicentenary of the first European settlement in Australia. Section 22 of the Australian Bicentennial Authority Act 1980 (Cth) made it an offence to use, without the consent of the Australian Bicentennial Authority, prescribed symbols or expressions in connection with a business. Amongst the prescribed expressions was ‘200 years’, when used in conjunction with ‘1788’, ‘1988’ or ‘88’. Section

23 provided for forfeiture to the Commonwealth of goods involved in such an offence. The Aboriginal plaintiffs sought the consent of the authority to sell t-shirts bearing the figures ‘1788’ and ‘1988’ and the words ‘200 years of suppression and depression’. The authority refused, and the plaintiffs sought a declaration that ss 22 and 23 were invalid.] Mason CJ, Deane and Gaudron JJ: … The scope of the executive power of the Commonwealth has often been discussed but never defined. By s 61 of the Constitution it extends to the execution and maintenance of the Constitution. As Mason J observed in Barton v Commonwealth (1974) 131 CLR 477 at 498, the power: … extends to the execution and maintenance of the Constitution and of the laws of the Commonwealth. It enables 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. These responsibilities derived from the distribution of legislative powers effected by the Constitution itself and from the character and status of the Commonwealth as a national polity: Victoria v Commonwealth & Hayden (the Australian Assistance Plan case) (1975) 134 CLR 338 at 396–7. So it is that the legislative powers of the Commonwealth extend beyond the specific powers conferred upon the Parliament by the Constitution and include such powers as may be deduced from the establishment and nature of the Commonwealth as a polity: see … Dixon J in Australian Communist Party v Commonwealth (the Communist Party case) (1951) 83 CLR 1 at 187–8 … The Constitution distributes the plenitude of executive and legislative powers between the Commonwealth and the States … On this footing, as Isaacs J pointed out in Commonwealth &

Central Wool Committee v Colonial Combing, Spinning and Weaving Co Ltd (the Wooltops case) (1922) 31 CLR 421 at 437– 9, s 61 confers on the Commonwealth all the prerogative powers of the Crown except those that are necessarily exercisable by the States under the allocation of responsibilities made by the Constitution and those denied by the Constitution itself. Thus the existence of Commonwealth executive power in areas beyond the express grants [page 831] of legislative power will ordinarily be clearest where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence. If we ask … whether the commemoration of the Bicentenary is a matter falling within the peculiar province of the Commonwealth in its capacity as the national and federal government, the answer must be in the affirmative. That is not to say that the States have no interest or no part to play in the commemoration. Clearly they have such an interest and such a part to play … But the interests of the States in the commemoration of the Bicentenary is of a more limited character. It cannot be allowed to obscure the plain fact that the commemoration of the Bicentenary is pre-eminently the business and the concern of the Commonwealth as the national government and as such falls fairly and squarely within the federal executive power. Implicit in what we have just said is a rejection of any notion that the character and status of the Commonwealth as the government of the nation is relevant only in the ascertainment of the scope of the executive power in the area of Australia’s external relations. In the legislative sphere the nature and status of the Commonwealth as a polity has sustained legislation against subversive or seditious conduct: Burns v Ransley (1949) 79 CLR 101 at 116; R v Sharkey (1949) 79 CLR 121 at 148–9; see the

Communist Party case, at 187–8. And there was no suggestion in the judgments in [the AAP case] that the character and status of the Commonwealth as a national government was not relevant in ascertaining the scope of the executive power in its application domestically. Indeed, the judgments in that case contradict the suggestion … From the conclusion that the commemoration of the Bicentenary falls squarely within Commonwealth executive power other consequences follow. The first is that the executive power extends to the incorporation of a company as a means for carrying out and implementing a plan or programme for the commemoration. There is no constitutional bar to the setting up of a corporate authority to achieve this object or purpose in preference to executive action through a Ministry of the Crown. Certainly there is no such bar to the incorporation of a company in the [ACT] … Section 51(xxxix) of the Constitution enables the Parliament to legislate in aid of an exercise of the executive power. So, once it is accepted that the executive power extends to the incorporation of the Authority with th[is] object … s 51(xxxix) authorizes legislation regulating the administration and procedures of the Authority and conferring on it such powers and protection as may be appropriate to such an authority … … [T]he federal executive power authorizes the commemoration of the Bicentenary and what is incidental to it. Likewise … federal legislative power extends to the same extent. In exercising that power the Parliament may protect the name of the Authority, authorize the prescription of appropriate official symbols for use by the Authority and prohibit unauthorized use by others of the Authority’s name or of those symbols, or likenesses of them, for the purpose of protecting their integrity. The … incidental power (s 51(xxxix)), enables Parliament to enact coercive laws: see Burns v Ransley. Consequently, if the provisions of ss 22 and 23

relating to the use of the Authority’s name and prescribed symbols stood on their own we would uphold their validity. [However, their Honours concluded that s 22 gave the authority ‘an extraordinary power to regulate the use of expressions in everyday use in this country, though the circumstances of that use in countless situations could not conceivably prejudice the commemoration of the Bicentenary’. The Act therefore provided ‘for a regime of protection which is grossly disproportionate to the need to protect the commemoration and the Authority’: 166 CLR at 99–100]. [page 832] Here the framework of regulation … reaches far beyond the legitimate objects sought to be achieved and impinges on freedom of expression by enabling the Authority to regulate the use of common expressions and by making unauthorized use a criminal offence. Although the statutory regime may be related to a constitutionally legitimate end, the provisions in question reach too far. This extraordinary intrusion into freedom of expression is not reasonably and appropriately adapted to achieve the ends that lie within the limits of constitutional power. [Their Honours held s 22 invalid to the extent that it referred to the plaintiffs’ proposed use of the expression ‘200 years’.] Brennan J: This court has not settled the questions whether and to what extent it is within the executive power of the Commonwealth for the Executive Government of the Commonwealth to exercise its prerogative powers or to engage in lawful activities or enterprises calculated to advance the national interest. Though the Constitution gives no express answer to these questions, the answer may be derived from what the Constitution was intended to do and has done …. [T]he Constitution did not create a mere aggregation of colonies, redistributing powers

between the government of the Commonwealth and the governments of the States. The Constitution summoned the Australian nation into existence, thereby conferring a new identity on the people who agreed to unite ‘in one indissoluble Federal Commonwealth’, melding their history, embracing their cultures, synthesising their aspirations and their destinies. The reality of the Australian nation is manifest, though the manifestations of its existence cannot be limited by definition. The end and purpose of the Constitution is to sustain the nation. If the executive power of the Commonwealth extends to the protection of the nation against forces which would weaken it, it extends to the advancement of the nation whereby its strength is fostered. There is no reason to restrict the executive power of the Commonwealth to matters within the heads of legislative power. So cramped a construction of the power would deny to the Australian people many of the symbols of nationhood — a flag or anthem, for example — or the benefit of many national initiatives in science, literature and the arts. It does not follow that the Executive Government of the Commonwealth is the arbiter of its own power or that the executive power of the Commonwealth extends to whatever activity or enterprise the Executive Government deems to be in the national interest. But s 61 does confer on [it] power ‘to engage in enterprises and activities peculiarly adapted to the government of a nation and which cannot otherwise be carried on for the benefit of the nation’, to repeat what Mason J said in the AAP case … [T]hat is an appropriate formulation of a criterion to determine whether an enterprise or activity lies within the executive power of the Commonwealth. It invites consideration of the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question and of the need for national action (whether unilateral or in cooperation with the States) to secure the contemplated benefit. The variety of enterprises or activities which might fall for consideration preclude the a priori development of detailed criteria but, as cases are decided, perhaps more precise tests will be developed …

[Wilson, Dawson and Toohey JJ delivered judgments largely concurring in these analyses.]

Capacities of the Commonwealth 7.5.60 Accepting the flexibility of action offered by an expansive reading of s 61, successive Commonwealth Governments came to regard their ‘executive capacities’ as limited, if at all, only by the general distribution of federal responsibilities under s 51 of the Constitution. [page 833] This view, referred to loosely as the ‘common assumption’, appears to have originated in an early opinion of Deakin as AttorneyGeneral: Had it been intended to limit the scope of the executive power to matters on which the Commonwealth Parliament had legislated, nothing would have been easier than to say so. (Brazil and Mitchell, 1981, p 130.)

It was reinforced by the view of former Solicitor-General Robert Garran that, if the power to tax conferred by s 51(ii) was unlimited, so must be the power to spend monies raised by taxation: see Report of the Royal Commission on the Constitution (1929), ‘Minutes of Evidence’, Pt 1, p 71. The view that Commonwealth executive power, at least where the Commonwealth exercises the ‘capacities’ of a legal person, is unconstrained had also been expressed by commentators (notably Professor Enid Campbell, 1970).

7.5.61 The Commonwealth also relied on what was said to constitute the ratio decidendi of the AAP case — that parliamentary appropriation of funds, and therefore expenditure of them, was immune from effective legal challenge — to engage in extensive direct expenditure of Commonwealth funds for all kinds of purposes. The practical benefits of this strategy are said to be that Commonwealth money goes further when it is not channelled through the states as grants made under s 96 of the Constitution. Beneficiaries of billions of dollars of direct Commonwealth spending have included recipients of rent and housing assistance programs (not covered by the Commonwealth’s social welfare power in s 51(xxiiiA) of the Constitution: Kerr, 2009), universities and local government. However, the decisions of the French High Court in Pape v Commissioner of Taxation (2009) 238 CLR1 and Williams v The Commonwealth (Williams (No 1)) (2012) 248 CLR 156 radically transformed our understanding of Commonwealth spending. The court in Pape made it clear that s 81 could not be a source of power for government spending, a narrow majority of the court ultimately upholding the impugned spending on the basis of the nationhood power deriving from ss 61 and 51(xxxix). The decision in Williams (No 1) further narrowed the capacity of the Commonwealth executive to contract and spend without statutory authority, rejecting the ‘common assumption’ about the scope of s 61. 7.5.62 In Pape, the Commonwealth enacted legislation conferring an entitlement on certain taxpayers to a tax bonus payment. The legislation was enacted as part of a stimulus package to ward off the effects of the global financial and economic crisis. Mr Pape, a taxpayer entitled to a bonus payment, challenged the validity of the provisions.

7.5.63C

Pape v Commissioner of Taxation (2009) 238 CLR 1 (footnotes omitted)

French CJ: … Factual background There have been rapid adverse changes in macroeconomic circumstances globally and in Australia in 2008 and 2009 … characterised in the agreed facts as a global [page 834] financial and economic crisis. No country’s economy is expected to avoid its effects. It has already involved the most severe and rapid deterioration in the global economy since the Great Depression. It is the most significant economic crisis since the Second World War … The crisis has triggered a global recession … [causing] deterioration in the Australian economy with almost all of its sectors facing significant weakness over the forecast horizon. Significantly weakened domestic growth and higher unemployment are forecast. On 15 November 2008 the G20 [Finance Ministers and Central Bank Governors of industrialised and developing countries] … issued a declaration which [stated]: … [A] broader policy response is needed, based on closer macroeconomic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries. As immediate steps … we will: … Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability.

In December 2008 … an OECD publication … [referred] … to fiscal stimulus packages[:] … … It is vital that any discretionary action be timely and temporary and designed to ensure maximum effectiveness. Reference was made to the long-term nature of infrastructure investment and: [a]lternatives, such as tax cuts or transfer payments aimed at credit-constrained, poorer households, might prove more effective in boosting demand. [His Honour referred to other, similar developments.] … The decisions taken by the Commonwealth Government by way of response to the macroeconomic circumstances included: (i) To create three substantial fiscal stimulus packages and a range of other interventions in financial markets … (ii) To provide an $8.2 billion tax bonus for working Australians, which was reduced to $7.7 billion as a result of the legislative process … The objective … was that payments of the tax bonus be made as soon as possible on the basis that the earlier the stimulus was delivered the more effective it would be. The [Tax Bonus for Working Australians Act (No 2) 2009 (Cth)] … Section 5 … creates the entitlement to a … payment [for an Australian-resident individual with any tax liability whose taxable income was below $100,000 and who lodged a tax return on time or late with the Tax Commissioner’s permission. Section 6 sets out the amounts … payable ($900 for persons who earned $80,000 or less, and lesser amounts for eligible higher income earners] …

… [Section] 7 … provides …: (1) If the Commissioner to the tax bonus for Commissioner must pay soon as practicable after

is satisfied that a person is entitled the 2007–08 income year, the the person his or her tax bonus as becoming so satisfied …. [page 835]

The constitutional framework … The Commonwealth seeks to support the validity of the provisions of the Tax Bonus Act by reference to the following broad propositions: 1. The Tax Bonus Act read with s 16 of the Taxation Administration Act is supported by ss 81 and 51(xxxix) of the Constitution. 2. In the alternative the Tax Bonus Act is supported by legislative powers identified as: (i) Section 51(xxxix) of the Constitution read with ss 61, 81 and 83 … (iv) The Taxation Power — Constitution, s 51(ii) … [His Honour considered (at 34–66) that the applicant had standing to challenge the tax bonus payment and that s 81 of the Constitution could not support the spending of appropriated money: conclusions reached by the other judges (see 5.4.24C). His Honour then turned to s 61 as a source of power to support the payment of the tax bonus in this case.] The executive power of the Commonwealth … Whereas Ch I provides a detailed account of the distribution of legislative power, Ch II is ‘suggestive rather than expressive’ concerning the distribution of executive power … Professor Michael Crommelin has pointed out that this approach

accorded with colonial constitutional practice … [and that] the sources of executive power in statute and the prerogative were recognised in the [1890s Constitutional] Conventions but it is not clear how they were reflected in the Constitution. The content of [s 61] was not defined nor in terms limited by the drafters of the Constitution. Alfred Deakin … said of s 61: The framers of that clause evidently contemplated the existence of a wide sphere of Commonwealth executive power, which it would be dangerous, if not impossible, to define, flowing naturally and directly from the nature of the Federal Government itself, and from the powers, exercisable at will, with which the Federal Parliament was to be entrusted. … It is not necessary for present purposes to consider the full extent of the powers and capacities of the Executive Government of the Commonwealth. Such powers as may be conferred upon the Executive by statutes made under the Constitution are plainly included. So too are … the prerogatives of the Crown, for example the power to enter into treaties and to declare war. In addition, whatever the source, the Executive possesses what have been described as the ‘capacities’ which may be possessed by persons other than the Crown. The collection of statutory and prerogative powers and nonprerogative capacities form part of, but do not complete, the executive power. They lie within the scope of s 61, which is informed by history and the common law relevant to the relationship between the Crown and the Parliament. That history and common law emerged from what might be called an organic evolution. Section 61 is an important element of a written constitution for the government of an independent nation. While history and the common law inform its content, it is not a locked display cabinet in a constitutional museum. It is not limited to statutory powers and the prerogative. It has to be capable of serving the proper purposes of a national government. On the

other hand, the exigencies of ‘national government’ cannot be invoked to set aside the distribution of powers between Commonwealth and States and between the three branches of government for which this Constitution provides, nor to abrogate constitutional prohibitions … [page 836] [I]t is difficult to see how the payment of moneys to taxpayers, as a short-term measure to meet an urgent national economic problem, is in any way an interference with the constitutional distribution of powers. … Professor Geoffrey Sawer in 1976, referring to the judgment of Mason J in the AAP Case, suggested that s 61 includes ‘an area of inherent authority derived partly from the Royal Prerogative, and probably even more from the necessities of a modern national government’. There has been substantial support in this Court for that proposition … [His Honour then referred (at 61–3) to various statements in previous cases supporting the existence of this power deriving from the character and status of the Commonwealth as a national polity, and to Mason J’s formulation in the AAP case of the scope of that power. His Honour concluded:] … The executive power extends … to short-term fiscal measures to meet adverse economic conditions affecting the nation as a whole, where such measures are on their face peculiarly within the capacity and resources of the Commonwealth Government … In this case the Commonwealth had the resources and the capacity to implement within a short time-frame measures which, on the undisputed facts, were rationally adjudged as adapted to avoiding or mitigating the

adverse effects of global financial circumstances affecting Australia as a whole, along with other countries … Gummow, Crennan and Bell JJ: … … [P]ayment of the tax bonus involves … more than the receipt of a mere gratuity; the payment is the discharge of a legal obligation … There is a concomitant obligation to repay to the Commonwealth overpayments (s 8) … Validity … The Bonus Act is a law with respect to matters incidental to the execution of a power vested by the Constitution ‘in the Government of the Commonwealth’ (s 51(xxxix)), being the executive power of the Commonwealth recognised by s 61 … The Executive Government of the Commonwealth The text of the Constitution in ss 67, 70, 81, 84 and 86 assumes the existence and conduct of activities of government by what it identifies as ‘the Executive Government of the Commonwealth’ … The Constitution assumes also, in s 119, the existence and conduct of activities by ‘the Executive Government of the State’. The conduct of the executive branch of government includes, but involves much more than, enjoyment of the benefit of those preferences, immunities and exceptions which are denied to the citizen and are commonly identified with ‘the prerogative’; the executive power of the Commonwealth enables the undertaking of action appropriate to the position of the Commonwealth as a polity created by the Constitution and having regard to the spheres of responsibility vested in it. With that understanding, the phrase ‘maintenance of this Constitution’ in s 61 imports more than a species of what is identified as ‘the prerogative’ in constitutional theory. It conveys the idea of the protection of the body politic or nation of Australia … … [I]t is as well to recall that references to ‘nationhood’

and the like in the decisions of this Court may be traced to its earliest years … It has also long been recognised that in ascertaining the boundaries of the authority of the Executive Government of the Commonwealth in any given situation there will be a need to deal … with ‘new positions which the Nation in its progress from time to time assumes’. [page 837] Express provision was made in s 109 respecting the exercise of concurrent legislative powers. But what are the respective spheres of exercise of executive power by the Commonwealth and State governments? We have posed the question in that way because it is only by some constraint having its source in the position of the Executive Governments of the States that the government of the Commonwealth is denied the power, after appropriation by the Parliament, of expenditure of moneys raised by taxation imposed by the Parliament … New South Wales submitted that … [t]he executive power, whether of the Commonwealth or the States … ‘continues to be subservient to legislative power irrespective of whether the source of the legislative power is State or Commonwealth’. There are [fundamental] difficulties with that submission … First, [it] gives insufficient acknowledgement to the comparative superiority of the position of the Commonwealth in the federal structure. That superiority informs the doctrine associated with the judgment of Dixon CJ in The Commonwealth v Cigamatic Pty Ltd (In liq), and concerns the placement beyond the reach of the States of rights ‘belonging to the Commonwealth as a government’ and of the ‘legal rights and duties between the Commonwealth and its people’. Secondly, the submission of New South Wales, in speaking in terms of continuation, gives insufficient weight to the

creation by the Constitution of a new body politic which enjoyed capacities superior to that of a mere aggregation of the federating colonies … … [I]n deciding the validity of the Bonus Act it is unnecessary to attempt to determine the outer limits of the executive power. One such settled limit [is] that respecting the need for statutory authority to support extradition from Australia of fugitive offenders … Another concerns the incapacity of the Executive Government [since enactment of the Bill of Rights 1689] to dispense with obedience to the law … [Their Honours adopted Brennan J’s statement Mason J’s AAP formulation of Commonwealth including power ‘to engage in enterprises and adapted to the government of a nation and which carried on for the benefit of the nation’.]

in Davis accepting executive power as activities peculiarly cannot otherwise be

Conclusions respecting s 61 and s 51(xxxix) In determining whether the Bonus Act is supported by s 61 and s 51(xxxix) … it is necessary to ask whether determining that there is the need for an immediate fiscal stimulus to the national economy, in the circumstances set out above, falls within executive power and then to ascertain whether s 51(xxxix) of the Constitution supports the impugned legislation as a law which is incidental to that exercise of executive power. … Determining that there is the need for an immediate fiscal stimulus to the national economy in the circumstances set out above is somewhat analogous to determining a state of emergency in circumstances of a natural disaster. The Executive Government is the arm of government capable of and empowered to respond to a crisis be it war, natural disaster or a financial crisis on the scale here … What … is of immediate, and decisive, importance for the

present case is the notion of national crisis captured by Sir Robert Garran in his evidence to the Royal Commission …: Political and national emergencies are so unknown and unforseeable that the framers of the Constitution decided to give an unlimited power of taxation to the Commonwealth Parliament. After all, when you have once had the power of raising the money, the power of spending it is one with which you may very easily entrust the parliament …. [page 838] … [I]n considering what enterprises and activities are peculiarly adapted to the government of the country and which cannot otherwise be carried on for its benefit, this case may be resolved without going beyond the notions of national emergency and the fiscal means of promptly responding to that situation. It is not to the point to regret the aggregation of fiscal power in the hands of the Commonwealth over the last century. The point is that only the Commonwealth has the resources to meet the emergency which is presented to it as a nation state by responding on the scale of the Bonus Act. That Australia is a federal state does not produce the consequence that the policy determined upon by the Executive Government cannot be put into effect by measures such as the Bonus Act. The present is an example of the engagement by the Executive Government in activities peculiarly adapted to the government of the country and which otherwise could not be carried on for the public benefit. To the extent that the implementation of this policy involves the creation by s 7 of the Bonus Act of a right to receive the tax bonus and the imposition by s 8 of an obligation to restore overpayments, legislation is necessary and the authority to enact it is supplied by s 51(xxxix) of the Constitution.

[Hayne and Kiefel JJ and Heydon J agreed that s 81 could not support Commonwealth executive spending. On the question of whether the nationhood dimension of s 61, when combined with s 51(xxxix), could support the provisions, their Honours dissented.] Hayne and Kiefel JJ: It is not shown that so much of the expenditure as is not supported by a head of legislative power is to be supported as an exercise of executive power identified as derived from the character and status of the Commonwealth as a national polity or as deduced from the existence and character of the Commonwealth as a national government. That proposed expenditure is not shown to fall within this area by demonstrating only that the expenditure in question is directed to an end that is described as a national economic emergency. It is necessary to say something in amplification of this last point. Words like ‘crisis’ or ‘emergency’ do not readily yield criteria of constitutional validity. It may be accepted, for the purposes of argument, both that there is shown to be a national crisis to which a national response is required and that only the Commonwealth has the administrative and financial resources to respond. It does not follow, however, that the Commonwealth’s executive power to respond to such circumstances by spending money is a power that is unbounded. Were it so, the extensive litigation about the ambit of the defence power during World War II was beside the point. Though variously expressed, the argument by reference to national ‘crisis’ or ‘emergency’ can be summed up as being: ‘There is a crisis; if the Commonwealth cannot do this, who can?’ What that and similar forms of rhetorical question obscure is a conflation of distinct questions about ends and means. The questions are conflated because the legislative power to enact the Impugned Act is treated as depending upon the execution of a power, said to be implicitly vested by the Constitution in the Executive, to meet a national crisis (in this case a financial or economic crisis). But if that is the end to which the exercise of

power is to be directed, it by no means follows that any and every means of achieving that end must be within power. To argue from the existence of an emergency to either a general proposition that the Executive may respond to the crisis in any way it sees fit, or to some more limited proposition that the Executive has power to make this particular response, is circular. Describing the expenditure in issue in this matter as a ‘short term fiscal [measure] to meet adverse economic conditions affecting the nation as a whole’ engages no constitutional [page 839] criterion of a kind hitherto enunciated by this Court. It is a description that conflates the distinction between ends and means that this Court must maintain. It is for the political branches of government, not this Court, to fix upon the ends to be sought by legislative or executive action. It is for the Court, not the political branches of government, to decide whether the means chosen to achieve particular political ends are constitutionally valid and it is for the Court to identify the criteria that are to be applied to determine whether those particular means are constitutionally valid. … Reference to notions as protean and imprecise as ‘crisis’ and ‘emergency’ (or ‘adverse effects of circumstances affecting the national economy’) to indicate the boundary of an aspect of executive power carries with it difficulties and dangers that raise fundamental questions about the relationship between the judicial and other branches of government. … The different ways in which a fiscal stimulus can be delivered were described in several documents which were produced by international organisations and upon which the Commonwealth relied as demonstrating both the existence of an international financial crisis and the degree of international agreement about

how it should be met. Those documents show that a fiscal stimulus can be delivered in a number of different ways, including direct government investment as, for example, in capital works and provision of additional disposable income to some or all members of the community, by reduced taxation and taxation instalments, rebates in respect of taxation that has not yet been paid, refunds of taxation that has been paid, increased social security benefits or other direct payments to recipients. Legislative measures with respect to taxation and social security benefits would find ready support in ss 51(ii), (xxiii) and (xxiiiA). Legislation for some other forms of direct payments to recipients may likewise be supported by other heads of power within s 51. The question is whether a direct payment not otherwise supported by legislation made under an enumerated head of power may be made in exercise of the executive power of the Commonwealth. [Hayne and Kiefel JJ would have read the Act down so as to bring it within the Commonwealth’s power to impose taxation under s 51(ii) of the Constitution. Heydon J made similar critical comments on the scope of the executive nationhood power and, indeed, went further than Hayne and Kiefel JJ in doubting the correctness of the Mason J test from AAP. His Honour held that the whole Act was invalid].

7.5.64 In Williams (No 1), the court considered the validity of funding agreements made between the Commonwealth Government and the Scripture Union Queensland for the provision of school chaplaincy services. Money had been appropriated from the Consolidated Revenue Fund for the purposes of the chaplaincy program, but there was no legislative provision authorising the making of the agreement or the spending of moneys on the program. The program had been administered by the

Commonwealth according to administrative guidelines and conditions placed on the funding agreements. Mr Williams, whose children attended the school at which chaplaincy services were provided by the Scripture Union Queensland, challenged the validity of the scheme. A challenge based on s 116 of the Constitution was unsuccessful. However, a majority of the court held that the Commonwealth executive lacked the power under s 61 to enter into the funding agreement and to spend public money on the program. [page 840]

7.5.65C Williams v Commonwealth (Williams (No 1)) (2012) 248 CLR 156 (most footnotes omitted) Gummow and Bell JJ: Introduction The plaintiff challenges … provision by the Commonwealth of funding pursuant to … the National School Chaplaincy Programme (‘the NSCP’) … [T]he … plaintiff’s four children were enrolled at … Darling Heights State Primary School in Queensland … At the time of the [children’s] enrolment … there was in force with respect to their school an agreement for [NSCP] funding … between the Commonwealth … and Scripture Union Queensland (‘SUQ’) … [for] three years from 8 October 2007 … On 13 May 2010 … the Funding Agreement was extended to 31 December 2011. [NSCP] funding … is not provided under any statute … There is no law enacted, for example, in reliance upon the power conferred

by s 51(xxiiiA) of the Constitution … with respect to ‘the provision of … benefits to students’. Nor is the funding provided by the Commonwealth under s 96 of the Constitution … Rather … the Commonwealth relies upon ‘the executive power of the Commonwealth’ … in Ch II of the Constitution, particularly in s 61. … [W]hen ascertaining the limits of [Commonwealth] executive power, attention is to be paid … both to the position of the States in the federal system established by the Constitution and to the powers of the other branches of the federal government established by Ch I (the Parliament) and Ch III (the Judicature) of the Constitution. … [U]nlike … in Pape v Federal Commissioner of Taxation, … here there has been no engagement of the Parliament in supplementation of the exercise of the executive power by a statute supported by s 51(xxxix) of the Constitution. That paragraph confers upon the Parliament power to make laws with respect to ‘matters incidental to the execution of any power vested by this Constitution … in the Government of the Commonwealth … or in any department or officer of the Commonwealth’. There has been no involvement by legislation of the Parliament in the NSCP beyond the passage of appropriation Acts. Hence the significance here of the positions both of the States and of the Parliament. … Nothing in these reasons should be taken as expressing any view upon the scope of s 51(xxiiiA) or any other head of legislative power [to support the NSCP] … Since 2007 [the Queensland government] has operated a funding programme for … chaplaincy services [in schools] … In … 2010, SUQ received $781,000 in ‘chaplaincy funding’ by Queensland; in the same year it received $11,012,000 from the Commonwealth under the NSCP. SUQ employs approximately 500 school chaplains in Queensland. … [T]he NSCP is administered by the … [Commonwealth] Minister for School Education, Early Childhood and Youth … [In] 2007[–9] … SUQ received from the Commonwealth three payments each of $22,000 … for … services under the Funding

Agreement …. [In] 2010, SUQ received … $27,063.01 for the period until 31 December 2011. … The Commonwealth contended that [s 44] of the Financial Management and Accountability Act 1997 (Cth) … conferred upon the [Commonwealth] Department [of Education] power to expend appropriated moneys and … to enter into and make payments under the Funding Agreement. [However] … its provisions are directed … to … prudent conduct of financial administration, not to … conferral of power to spend that which is to be so administered … The Commonwealth executive power This Court has eschewed any attempt to define exhaustively the content of the ‘executive power’ which is identified but not explicated in s 61 of the Constitution … To some [page 841] degree this state of affairs … may reflect the considerations expressed by Professor Crommelin in a passage in his study of the drafting of the sparse provisions of Ch II of the Constitution … quoted in Re Patterson; Ex parte Taylor [Crommelin, ‘The Executive’, in Craven (ed), The Convention Debates 1891–1898: Commentaries, Indices and Guide, (1986), vol 6, 127 at 147, in (2001) 207 CLR 391] …: The reasons were understandable, if not entirely convincing. The executive branch of government was shrouded in mystery, partly attributable to the uncertain scope and status of the prerogative. The task of committing its essential features to writing was daunting indeed. Moreover, the price of undertaking that task would be a loss

of flexibility in the future development of the executive. Politicians who were the beneficiaries of half a century of colonial constitutional development placed a high value upon such flexibility. … [I]n Melbourne Corporation v The Commonwealth [(1947) 74 CLR 31 at 82], Dixon J observed that the framers of the Constitution, chiefly by … ss 51, 52, 107, 108 and 109, had … distribut[ed] power between State and Commonwealth by reference to legislative powers. The … issues in this litigation require … consideration of the relationship between the federal Executive and the legislative powers of the federal Parliament. A distinction is to be made … between the capacity of the Parliament to qualify or abrogate at least some [prerogative] aspects of the executive power, and the scope of the executive power in respect of matters which could be the subject of legislation … … [This] case concerns … [the latter]. The executive power of the Commonwealth with respect to spending As the plaintiff framed his written submissions he accepted the proposition which at that stage had been advanced by the Commonwealth parties that the executive power of the Commonwealth extends at least to engagement in activities or enterprises which could be authorised by or under a law made by the Parliament, even if there be no such statute. That broad proposition … appears to have had a source in the Opinion given on 12 November 1902 by Alfred Deakin as Attorney-General [Reprinted in Brazil and Mitchell (eds), Opinions of AttorneysGeneral of the Commonwealth of Australia, (1981), vol 1, 129 at 131], that: It is impossible to resist the conclusion that the Commonwealth has executive power, independently of

Commonwealth legislation, with respect to every matter to which its legislative power extends. The width of that proposition requires consideration before it could be accepted by this Court … Upon the assumption that the proposition is correct the defendants rely upon the powers of the Parliament with respect to ‘trading … corporations’ (s 51(xx)) and ‘the provision of … benefits to students’ (s 51(xxiiiA)). The [defendants’] argument … appears to involve the proposition that a law authorising entry into and performance of the Funding Agreement would be supported by those heads of power, even if not also by s 51(xxxix) in its operation with respect to matters incidental to the execution of the executive power of the Commonwealth … However, in the course of argument the plaintiff resiled from … the general proposition that … the executive power extends to engagement in activities or enterprises which could be authorised by or under a law made by the Parliament, even though they have not yet been and [page 842] may never be so authorised. Support for that view of s 61 which the plaintiff now disavows was based primarily upon a reading of Victoria v The Commonwealth and Hayden (‘the AAP Case’). But that decision does not provide a sufficient basis for such a broad proposition. The AAP Case The AAP Case was … decided on what, since Pape, can be seen to have been the false assumption that the spending power of the Executive Government of the Commonwealth was to be found in Ch IV of the Constitution, in particular in ss 81 and 83. Hence the attention given in the submissions in the AAP Case and in the

reasons of the Court to the phrase in s 81 ‘the purposes of the Commonwealth’. Barwick CJ reasoned that this phrase was ‘a reasonable synonym’ for the expression in s 51(xxxi) ‘for any purpose in respect of which the Parliament has power to make laws’, and concluded: With exceptions that are not relevant […], the executive may only do that which has been or could be the subject of valid legislation. Consequently, to

describe a Commonwealth purpose as a purpose for or in relation to which the Parliament may make a valid law, is both sufficient and accurate. Gibbs J, after stating that ‘the whole question is whether the purposes of the [Australian Assistance] Plan are “purposes of the Commonwealth”’, said: According to s 61 …, the executive power of the Commonwealth ‘extends to the execution and maintenance of this Constitution, and of the laws of the Commonwealth’. Those words limit the power of the Executive and […] make … clear that the Executive cannot act in respect of a matter which falls entirely outside the legislative competence of the Commonwealth. A … consonant view … has … received acceptance in this Court: see The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd [(1922) 31 CLR 421]; The Commonwealth v The Australian Commonwealth Shipping Board [(1926) 39 CLR 1]. The Constitution effects a distribution between the Commonwealth and the States of all power, not merely of legislative power. We are in no way concerned … [with] the scope of the prerogative or the circumstances in which the Executive may act without statutory sanction. Once it is concluded that the Plan is one in respect of which legislation could not validly be passed, it

follows that public moneys of the Commonwealth may not lawfully be expended for the purposes of the Plan. The last sentence … is expressed in negative terms. Gibbs J did not say that public moneys could lawfully be expended on any purpose for which legislation might be passed. It was sufficient for his Honour’s decision that the … Plan could not have been supported by legislation. Mason J concluded that the phrase ‘for the purposes of the Commonwealth’ had the meaning ‘for such purposes as Parliament may determine’. His Honour, prescient of what was to be decided in Pape, went on to say that an appropriation ‘does not supply legal authority for the Commonwealth’s engagement in the activities in connexion with which the moneys are to be spent’, and added that, no legislation having been enacted with respect to the … Plan, it was necessary to look to the executive power. His Honour then responded to the opposing submissions by the Commonwealth parties (that the devotion of an appropriation to its purpose may be secured by legislation or executive action) and by Victoria (that s 61 of [page 843] the Constitution does not confer executive power beyond the execution of laws made by the Parliament). Mason J did so in these qualified terms: Although the ambit of the power is not otherwise defined by Ch II it is evident that in scope it is not unlimited and that its content does not reach beyond the area of responsibilities allocated to the Commonwealth by the Constitution, responsibilities […] ascertainable from the distribution of […] legislative powers … and the character and status of the Commonwealth as a national government. The provisions of s

61 taken in conjunction with the federal character of the Constitution and the distribution of powers between the Commonwealth and the States make any other conclusion unacceptable. However … Mason J was speaking in general terms and, like Gibbs J … not adopting any broad proposition that moneys may be spent by the Executive Government upon [the subject matter] of any head of legislative power … in s 51 … That this is so is apparent from the earlier rejection by Mason J, along with Barwick CJ, of the application to s 51(ii) of the Constitution of the United States doctrine, exemplified in United States v Butler [297 US 1 (1936)], that because the power of Congress to tax is ‘unlimited’ the power to spend is … ‘unlimited … As the argument on the Special Case proceeded it became apparent that the AAP Case does not support any proposition that the spending power of the executive branch of government is coextensive with those activities which could be the subject of legislation [under] s 51 … First, any such proposition is too broad. Reference has been made to s 51(ii), the taxation power; it is well settled that there can be no taxation except under the authority of statute. Many other of the heads of power in s 51 are quite inapt for exercise by the Executive. Marriage and divorce, and bankruptcy and insolvency by executive decree, are among the more obvious examples. These … and other heads of legislative power in Ch II [sic: I] are complemented by the power given to the Parliament by Ch III to make laws conferring upon courts federal jurisdiction in matters arising under federal laws. Further, while heads of power in s 51 carry with them the power to create offences, the Executive cannot create a new offence, and cannot dispense with the operation of any law. Secondly, such a proposition would undermine the basal assumption of legislative predominance … and … distort the

relationship between Ch[s] I and … II of the Constitution. No doubt the requirement of s 64 of the Constitution that Ministers of State be senators or members of the House of Representatives has the consequence that the Minister whose department administers an executive spending scheme, such as the NSCP, is responsible to account for its administration to the Parliament. This is so whether the responsibility is to the chamber of which the Minister is a member or to the other chamber, in which the Minister is ‘represented’ by another Minister. But there remain considerations of representative as well as of responsible government in cases where an executive spending scheme has no legislative engagement for its creation or operation beyond the appropriation process … [which] requires that the proposed law not originate in the Senate, and that the proposed law appropriating revenue or moneys ‘for the ordinary annual services of the Government’ not be amended by the Senate [Constitution s 53]. Contrary to the Commonwealth’s submissions, [t]he questions on the Special Case are not to be answered through debate as to what legislation could have been passed by the Parliament in reliance upon pars (xx) or (xxiiiA) of s 51 of the Constitution. [page 844] The determinative question The determinative question on this Special Case … [is] whether the executive power is of sufficient scope to support the entry into and making of payments by the Commonwealth to SUQ under the Funding Agreement. For the reasons which follow this question should be answered in the negative. … [T]he plaintiff submitted that the relevant aspect of the executive power was that concerned with the ordinary course of administering a recognised part of the Government of the Commonwealth or with the incidents of the ordinary and well-

recognised functions of that Government [cf New South Wales v Bardolph (1934) 52 CLR 455]. The plaintiff accepted that this aspect of the executive power encompassed expenditure without legislative backing beyond an appropriation … However, the plaintiff contended that expenditure upon the NSCP does not fall within any ordinary and well-recognised functions of the Government of the Commonwealth … The plaintiff agrees that the ordinary and well-recognised functions of the Government of the Commonwealth include … entering into agreements with the States, particularly with reference to … referral by State Parliaments of matters pursuant to s 51(xxxvii), and to the engagement of s 96 of the Constitution. No doubt a range of [inter-governmental] agreements and understandings … recently exemplified in ICM Agriculture, would be supported upon the plaintiff’s thesis. The plaintiff did not support the outcome in Pape as [resting] upon an ordinary and well-recognised activity of the … Commonwealth [Government]. Rather, [he argued that] Pape … [was] decided in a ‘different universe of discourse’ to that of the NSCP because the [Pape] expenditure … was effected with legislative support. Several points should be made in response. First, while the engagement of the legislative branch … marked off Pape from cases where there is, by reason of the absence of such engagement, a deficit in the system of representative government, there remains in common with any assessment of the NSCP the considerations of federalism, stimulated by [Executive] by-passing … of s 96. Secondly, the outcome in Pape indicates that although the plaintiff’s submission is satisfactory as a partial description of the executive power to spend, it does not mark any outer limit of universal application. Thirdly, fuller attention to Pape nevertheless yields support to the conclusion sought by the plaintiff: that the executive power does not … support the entry by the Commonwealth into the Funding Agreement, and … payments [under it] … to SUQ.

In Pape, [majority] approval was given to the statement by Mason CJ, Deane and Gaudron JJ in Davis v The Commonwealth that: ‘the existence of Commonwealth executive power in areas beyond the express grants of legislative power will ordinarily be clearest where Commonwealth executive or legislative action involves no real competition with State executive or legislative competence.’ In Davis, Brennan J invited consideration of ‘the sufficiency of the powers of the States to engage effectively in the enterprise or activity in question’. This consideration reflects concern with the federal structure and the position of the States. Further, as noted above, the NSCP contracts, such as the Funding Agreement, present an example where within the Commonwealth itself there is a limited engagement of the institutions of representative government. The Parliament is engaged only in the appropriation of revenue, where the role of the Senate is limited. It is not engaged in the formulation, amendment or termination of any programme for the spending of those moneys. The present case, unlike Pape, does not involve a natural disaster or national economic or other emergency in which only the Commonwealth has the means to provide a prompt response. In Pape, the short-term, extensive and urgent nature of the payments to be made [page 845] to taxpayers necessitated the use of the federal taxation administration system to implement the proposal, rather than the adoption of a mechanism supported by s 96. However, the States have the legal and practical capacity to provide for a scheme such as the NSCP. The … public school system in Queensland … is the responsibility of that State. Indeed, Queensland maintains its own programme for school chaplains.

… The Commonwealth parties’ ultimate submission With the support of SUQ … the Commonwealth parties … [argued] that because the capacities to contract and to spend moneys lawfully available for expenditure do not ‘involve interference with what would otherwise be the legal rights and duties of others’ which exist under the ordinary law, the Executive Government in this respect possesses these capacities in common with other legal persons. The capacity to contract and to spend then was said to take its legal effect from the general law. A basic difficulty with that proposition is disclosed by the observation by Dixon CJ, Williams, Webb, Fullagar and Kitto JJ in Australian Woollen Mills Pty Ltd v The Commonwealth [(1954) 92 CLR 424 at 461] that: ‘the position is not that of a person proposing to expend moneys of his own. It is public moneys that are involved.’ The law of contract has been fashioned primarily to deal with the interests of private parties, not those of the Executive Government. Where public moneys are involved, questions of contractual capacity are to be regarded ‘through different spectacles [cf The Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 51] … … [T]he Commonwealth parties’ ultimate submission appears to proceed from the assumption that the executive branch has a legal personality distinct from the legislative branch, with the result that the Executive is endowed with the capacities of an individual. The legal personality, however, is that of the Commonwealth of Australia, which is the body politic established under the Commonwealth of Australia Constitution Act 1900 (Imp), and identified in covering cl 6. … [T]he Commonwealth parties’ assimilation submission was said to draw support as constitutionally coherent from (i) the relationship between s 61 and the appropriation provisions in s 81 and s 83, and (ii) the extent of the power to tax. The first consideration understates the significance of the holding in Pape

respecting the relationship between … an appropriation and the spending power. The second shows the tenacity of his successors to the views of Sir Robert Garran … The Commonwealth Solicitor-General also distinguished on the one hand attempts by the Executive to conscript or command individuals and entities such as trading corporations, and on the other hand the conferral of rights or benefits upon parties with the attachment of conditions to be observed by the recipient, such as those imposed upon SUQ by the Funding Agreement. The latter was [said to be] within the executive power but the former was not. But the distinction rests upon what appears to be a false assumption as to the non-coercive nature of the attachment of conditions. Financial dealings with the Commonwealth have long had attached to them the sanctions of the federal criminal law … These submissions by the Commonwealth parties as to the scope of the executive power to contract and to spend should not be accepted … [Their Honours concluded that the entry of the funding agreement with, and the making of payments to, the SUQ were beyond the executive power of the Commonwealth under s 61. French CJ and Crennan J also held that Commonwealth spending required a legislative [page 846] basis (other than an appropriation Act). Hayne and Kiefel JJ held that, even if legislation was not required to support Commonwealth spending, s 61 of the Constitution would not support expenditure on the NSCP, because even a law supporting that expenditure would not be supported by either s 51(xx) or (xxxiiiA) of the Constitution. Thus, all majority judges rejected the broad contention that the Commonwealth has an unlimited power under s 61 to contract and

spend. Four majority judges (French CJ, Gummow and Bell JJ and Crennan J) also rejected the ‘common assumption’ as to the scope of power under s 61. Various reasons were put forward to support those conclusions, including that an unlimited power to spend would by-pass the state consent requirements in the grants power in s 96 and undermine the system of representative and responsible government. Gummow and Bell JJ explained that there would be ‘a deficit in the system of representative government’ (at 234) if the executive government could spend public moneys without prior parliamentary approval. For further analysis of the decisions, see Stellios, 2015, pp 392–401; Lindell, 2013, p 348). Heydon J dissented, accepting the long-standing ‘common assumption’ that Commonwealth executive power mirrored Commonwealth legislative power, and finding that legislation supporting the NSCP would be a valid exercise of power under s 51(xxiiiA) of the Constitution because the NSCP was a form of ‘benefit to students’. An interesting feature of his Honour’s judgment is his account of how such a significant decision turned on a late change of position by an intervening state.] Heydon J: … [T]he plaintiff’s written submissions assumed that the executive power of the Commonwealth included a power to enter contracts without statutory authority as long as the Commonwealth had legislative power to give it statutory authority. Th[at] proposition was not a slip. It was repeated later in his written submissions. It was repeated again in his Outline of Oral Submissions. The written submissions of all other parties and interveners accepted its correctness. Indeed, Queensland specifically submitted that ‘[n]o party disputes’ this … [and] went so far as to submit that the assumed proposition was ‘the orthodox test of the scope of executive power.’ In its written outline of oral argument, the Commonwealth was thus correct to describe the assumed proposition as a ‘common assumption’ — correct at least at the time when that

document was composed before the second day of oral argument commenced … The extent to which the Common Assumption was actually common began to break down when Western Australia began its oral address. It withdrew the relevant part of its written submissions. Victoria and Queensland followed suit. In due course, the plaintiff and most government interveners withdrew their assertion of the Common Assumption and lined up against the defendants. This great renversement des alliances created a new and unexpected hurdle for the defendants … The five parties and the seven interveners were represented by exceptionally capable and experienced constitutional lawyers … includ[ing] seven Solicitors-General and a retired Federal Court judge. Their solemn adherence to the Common Assumption, during the calm and leisured composition of their written submissions, is … significant … Why did this large group of expert constitutional lawyers initially adhere to the Common Assumption? Because they thought it to be correct. And it was correct …

[page 847] 7.5.66 Despite the decision in Williams (No 1), there remain areas of executive contracting and spending that will not need prior legislative authorisation. In Williams (No 1), French CJ identified the following categories (at 180): For the reasons that follow, s 61 does not empower the Commonwealth, in the absence of statutory authority, to contract for or undertake the challenged expenditure on chaplaincy services …. That conclusion

depends upon the text, context and purpose of s 61 informed by its drafting history and the federal character of the Constitution. It does not … involve any question about the power of the Commonwealth to enter into contracts and expend moneys: in the administration of departments of State pursuant to s 64 of the Constitution; in the execution and maintenance of the laws of the Commonwealth; in the exercise of power conferred by or derived from an Act of the Parliament; in the exercise of powers defined by reference to such of the prerogatives of the Crown as are properly attributable to the Commonwealth; in the exercise of inherent authority derived from the character and status of the Commonwealth as the national government. What is rejected in these reasons is the unqualified proposition that, subject to parliamentary appropriation, the executive power of the Commonwealth extends generally to enable it to enter into contracts and undertake expenditure of public moneys relating to any subject matter falling within a head of Commonwealth legislative power

The other majority judges generally accepted these categories. For further discussion, see Twomey, 2014, p 9. 7.5.67 Eight days after judgment was delivered in Williams (No 1), the Commonwealth Parliament enacted the Financial Framework Legislation Amendment Act (No 3) 2012, which amended several Acts, including by inserting into the Financial Management and Accountability Act 1997 a new s 32B, which confers power to spend public money on ‘arrangements or grants’ for which ‘the Commonwealth does [otherwise] not have power’. A

new reg 16 and Sch 2 were also inserted into the Financial Management and Accountability Regulations 1997 specifying hundreds of ‘arrangements or grants’, including the NSCP, to which this provision applied. (These provisions were subsequently included in the Financial Framework (Supplementary Powers) Act 1997 (Cth) and the Financial Framework (Supplementary Powers) Regulations 1997 (Cth)). If Hayne and Kiefel JJ were right and the NSCP would not be supported by a law enacted under s 51 of the Constitution, these amendments could not have saved it from unconstitutionality. 7.5.68 This new legislative authorisation for the spending on the NSCP was challenged again by Mr Williams in Williams v The Commonwealth (Williams (No 2)) (2014) 88 ALJR 701; [2014] HCA 23. A unanimous High Court held that, in its application to the funding of the NSCP, s 32B was not supported by either s 51(xx) or (xxxiiiA) of the Constitution. In response to the Commonwealth’s attempts to revisit the scope of s 61 to support a broader power for executive contracting and spending, the joint judgment of French CJ, Hayne, Kiefel, Bell and Keane JJ emphasised both the historical basis for the executive power in s 61, but also the need to read it consistently with the rest of the Constitution.

[page 848]

7.5.69CWilliams v The Commonwealth (Williams (No 2)) (2014) 88 ALJR 701; [2014] HCA 23 French CJ, Hayne, Kiefel, Bell and Keane JJ: [76] The Commonwealth parties submitted that the content of the executive power to spend and contract should be determined in two steps. It was said to be necessary to ‘commence with an understanding of executive power at common law’. The task was then described as being to identify ‘the precise source of any limitation on Commonwealth executive power’ (emphasis added). [77] The identification of those limitations proceeded from a false assumption about the ambit of the Commonwealth’s executive power. [78] The Commonwealth parties submitted that determining the content of executive power (but not the limitations on its exercise) should proceed from only two premises. First, ‘a polity must possess all the powers that it needs in order to function as a polity’. Second, ‘the executive power is all that power of a polity that is not legislative or judicial power’. Both of those premises may be accepted. But the conclusion the Commonwealth parties sought to draw from those premises about the content of Commonwealth executive power does not follow unless there is a third premise for the argument: that the executive power of the Commonwealth should be assumed to be no less than the executive power of the British Executive. This third premise is false.

[79] What the submissions called ‘executive power at common law’ was executive power as exercised in Britain. Thus the assumption from which the second inquiry (about ‘limitations’) proceeded was that, absent some ‘limitation’, the executive power of the Commonwealth is the same as British executive power. But why the executive power of the new federal entity created by the Constitution should be assumed to have the same ambit, or be exercised in the same way and same circumstances, as the power exercised by the Executive of a unitary state having no written constitution was not demonstrated. To make an assumption of that kind, as the arguments of the Commonwealth parties did, begs the question for decision. [80] The history of British constitutional practice is important to a proper understanding of the executive power of the Commonwealth. That history illuminates such matters as why ss 53–56 of the Constitution make the provisions they do about the powers of the Houses of the Parliament in respect of legislation, appropriation bills, tax bills and recommendation of money votes. It illuminates ss 81–83 and their provisions about the Consolidated Revenue Fund, expenditure charged on the Consolidated Revenue Fund and appropriation. But it says nothing at all about any of the other provisions of Ch IV of the Constitution, such as ss 84 and 85 (about transfer of officers and property), s 86–91 (about customs, excise and bounties), s 92 (about trade, commerce and intercourse among the States), or ss 93–96 (about payments to States). And questions about the ambit of the Executive’s power to spend must be decided in light of all of the relevant provisions of the Constitution, not just those which derive from British constitutional practice. [81] Consideration of the executive power of the Commonwealth will be assisted by reference to British constitutional history. But the determination of the ambit of the executive power of the Commonwealth cannot begin from a premise that the ambit of

that executive power must be the same as the ambit of British executive power. [82] It may be assumed that, as the Commonwealth parties submitted, ‘what might be described as the inherent or traditional limits on executive power, as they emerged from the historical [page 849] relationship between Parliament [at Westminster] and the Executive, have not hitherto been treated [in Australia or, for that matter, in Britain] as the source of any general limitation on the ability of the Executive to spend and contract without legislative authority’. But it by no means follows from this observation that the Commonwealth can be assumed to have an executive power to spend and contract which is the same as the power of the British Executive. [83] This assumption, which underpinned the arguments advanced by the Commonwealth parties about executive power, denies the ‘basal consideration’ [Pharmaceutical Benefits Case (1945 71 CLR 237, 271–272 per Dixon J] that the Constitution effects a distribution of powers and functions between the Commonwealth and the States. The polity which, as the Commonwealth parties rightly submitted, must ‘possess all the powers that it needs in order to function as a polity’ is the central polity of a federation in which independent governments exist in the one area and exercise powers in different fields of action carefully defined by law. It is not a polity organised and operating under a unitary system or under a flexible constitution where the Parliament is supreme. The assumption underpinning the Commonwealth parties’ submissions about executive power is not right and should be rejected.

7.5.70 The limits of Commonwealth executive power were also considered by Gageler J in Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1. Provisions of the Migration Act 1958 (Cth) established a regime whereby unlawful non-citizens who are ‘unauthorised maritime arrivals’ (as defined in the Act) must be detained and taken to a ‘regional processing country’. Nauru was designated as a ‘regional processing country’ on 10 September 2012. Once removed to Nauru, unauthorised maritime arrivals are detained at a regional processing centre. The designation of Nauru under the Migration Act as a regional processing country followed the entry of a memorandum of understanding (MOU) between the Australia and Nauru on 29 August 2012. It was later replaced by a second MOU on 3 August 2013. This second MOU and other administrative arrangements entered between the two countries recorded the agreement to the regional processing arrangement. Pursuant to the MOU, the Commonwealth contracted for the construction and maintenance of the centre. The Commonwealth also engaged a private company, Transfield Services (Australia) Pty Ltd, to provide garrison and welfare services at the centre. With the Commonwealth’s consent, Transfield subcontracted those services to another private company, Wilson Parking Australia 1992 Pty Ltd. There were other oversight and management roles for the Commonwealth, and the Commonwealth was responsible for the costs associated with implementing the MOU. 7.5.71 The plaintiff was a Bangladeshi national. As an ‘unauthorised maritime arrival’, she was detained and taken to Nauru where she lived at a processing centre from 24 March 2014 to 2 August 2014, at which time she was brought to Australia for medical treatment. The plaintiff sought a declaration that her

detention at the centre had been unlawful. After the proceeding had been commenced, but before the hearing, the Commonwealth Parliament enacted s 198AHA of the Migration Act 1958 (Cth). The section applies if the Commonwealth enters into an arrangement with a person or body in relation to the regional processing functions of a country, and authorises the Commonwealth to take any action or make any payments in relation to the arrangement or the regional processing functions, or do anything incidental or conducive to that action or the making of those payments. The provision was to have retrospective effect from 18 August 2012. The court upheld the validity of the Commonwealth’s entry into the MOU [page 850] under s 61 and, by majority (with Gordon J dissenting) upheld the validity of s 198AHA in its application to the Commonwealth conduct associated with the plaintiff’s detention in Nauru. 7.5.72 Because there was valid statutory support for the actions of the Commonwealth executive, it was unnecessary for the majority judges to consider the scope of the executive power in s 61. However, Gageler J and Gordon J (dissenting in the result) considered that the Commonwealth’s executive power did not authorise detention in the absence of statutory authorisation. In the course of doing so, Gageler J offered observations on the limitations on executive power following Pape and the Williams cases. 7.5.73C

Plaintiff M68/2015 v Minister for

Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1 Gageler J: [Having referred to Brennan J’s ‘tripartite categorisation’ of Commonwealth executive power into ‘a statutory (non-prerogative) power or capacity’, ‘a prerogative (non-statutory) power or capacity’ and ‘a capacity which is neither a statutory nor a prerogative capacity’ in Davis v Commonwealth (1988) 166 CLR 79 at 108, his Honour continued:] [137] The tripartite categorisation posited by Brennan J also has utility in highlighting, in relation to acts done by the Executive Government in the exercise of non-statutory power or capacity, the essential similarity between an act done in the execution of a prerogative executive power or capacity and an act done in the execution of a non-prerogative executive capacity. The essential similarity lies in the identity of their provenance. [138] Non-prerogative executive capacities, no less than prerogative executive powers and capacities, are within the nonstatutory executive power of the Commonwealth which is constitutionally conferred by s 61 of the Constitution and which is accordingly constitutionally limited by s 61 of the Constitution. Its constitutional limits are to be understood (as distinct from merely interpreted) in light of the purpose of Ch II being to establish the Executive Government as a national responsible government and in light of constitutional history and the tradition of the common law. [139] Limitations on the executive power of the Commonwealth, rooted in constitutional history and the tradition of the common law, were important to the reasoning of at least two members of the High Court in The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd [(1922) 31 CLR 421] in holding that the Executive Government of the Commonwealth lacked non-

statutory power to make or ratify agreements with a company engaged in the manufacture of wool-tops under which the Commonwealth agreed to consent to the sale of wool-tops by the company in return for a share in the profits of sale. [140] Isaacs J emphasised the impossibility of understanding the executive power referred to in s 61 of the Constitution other than by reference to common law principles bearing on the operation of responsible government [at 437–9]. He referred to s 61 as describing the ‘constitutional domain’ or ‘field on which Commonwealth executive action lawfully operates’, adding that it was ‘plain that the “constitutional domain” does not determine the existence or non-existence of the necessary power in … a given case’ [at 440]. He held the agreements in question to be beyond Commonwealth executive power by reference to the ‘vitiating cause’ that they amounted in substance to a form of taxation forbidden to the Executive Government in the absence of parliamentary warrant [at 433, 443–5]. [page 851] [141] The reasoning of Starke J was to similar effect. He said [459–60]: The question … is whether the King — the Executive Government of the King in the Commonwealth — can, without parliamentary sanction, exact the payment of the moneys mentioned in these agreements, as a condition of or as consideration for giving consent to acts necessary to the conduct of the subject’s business? So stated, the problem recalls many conflicts in the past between the King and the subject as to the right of the King to levy taxes upon, or to exact or extort money from, the subject without the consent of Parliament. But that contest has long since ended; and we may now say, with confidence, that it is illegal for the King

— or the Executive Government of the King — without the authority of Parliament, to levy taxes upon the subject, or to exact, extort or raise moneys from the subject for the use of the King ‘as the price of exercising his control in a particular way’ or as a consideration for permitting the subject to carry on his trade or business. [142] Starke J said of s 61 of the Constitution that it ‘simply marks out the field of the executive power of the Commonwealth, and the validity of any particular act within that field must be determined by reference to the Constitution or the laws of the Commonwealth, or to the prerogative or inherent powers of the King’, concluding that ‘the general principles of the constitutional law of England make it clear … that no prerogative or inherent executive power residing in the King or his Executive Government supports the agreements’ [at 461]. [143] The analysis of the executive power of the Commonwealth to which I have referred is not, I think, affected by recent cases which have focussed on the capacity of the Executive Government of the Commonwealth to expend appropriated funds. [144] Pape v Federal Commissioner of Taxation decided that ss 81 and 83 of the Constitution are not a source of Commonwealth legislative power to authorise executive expenditure, with the result that Executive Government expenditure of appropriated funds involves more than simple execution of the law which has appropriated those funds. There must be executive power to make the expenditure. There is, of course, a difference between spending and doing: ‘[t]he power to make a present to a man is not the power to give him orders’ [Australia, Royal Commission on the Constitution of the Commonwealth, Report of Proceedings and Minutes of Evidence (Canberra), 22 September 1927 at 72 [396] (Sir Robert Garran)]. Even prior to Pape, it had never been thought that an appropriation alone provided statutory authority

for the Executive Government to engage in activities in relation to which it permitted funds to be spent. [145] Williams v The Commonwealth was described in Williams v The Commonwealth [No 2] [at 465] as having been characterised by the Commonwealth parties in that latter case as having held ‘that many, but not all, instances of executive spending and contracting require legislative authorisation’. Whether that characterisation is warranted need not be explored. For present purposes, what is to be taken from the various strands of reasoning in Williams [No 1] is a rejection of any notion that the breadth of Commonwealth executive power is to be measured simply by reference to the reach of Commonwealth legislative power, and a rejection of any notion that the non-statutory and non-prerogative capacity of the Executive Government of the Commonwealth is to be equated for all purposes with the capacity of an individual. [146] The focus in the present case is not on the capacity of the Executive Government of the Commonwealth to spend, but on its capacity to procure or enforce a deprivation of liberty.

[page 852]

Constitutional mechanisms for control and accountability of executive action 7.5.74 The other arms of government — the parliament and the courts — have important roles in controlling the exercise of executive power. It has already been seen that the institution of responsible government operates to ensure that the executive arm

of government is answerable to the parliament and, ultimately, to the people. Furthermore, under s 51(xxxix) of the Constitution, parliament may make laws ‘with respect to matters incidental to the execution of’ executive power. The legislative power conferred by s 51(xxxix) is exercisable in relation to ‘any power vested by this Constitution … in the Government of the Commonwealth’ and, thus, extends to the control of executive power under s 61. Furthermore, s 75(iii) and (v) of the Constitution vest jurisdiction in the High Court of Australia in matters in which ‘the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party’ and ‘a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth’. As Gageler J explained in Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1, this constitutional scheme is designed to provide mechanisms for control and accountability of executive action. 7.5.75C

Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 90 ALJR 297; [2016] HCA 1

Gageler J: [121] ‘[I]t is of the very nature of executive power in a system of responsible government that it is susceptible to control by the exercise of legislative power by Parliament’ [Re Residential Tenancies Tribunal (NSW); Exparte Defence Housing Authority (1997) 190 CLR 410, 441]. That critical aspect of the relationship between the Executive Government of the Commonwealth and the Parliament of the Commonwealth was not left to chance in the design of the Constitution. In addition to giving the Parliament power to legislate for the appointment and removal of all officers of the Executive Government other than the

Governor-General and Ministers, and in addition to enumerating other subject-matters of legislative power under which the Parliament might confer statutory authority on an officer of the Executive Government of the Commonwealth, Ch I of the Constitution conferred on the Parliament by s 51(xxxix) specific power to make laws with respect to matters ‘incidental to the execution’ of power vested by the Constitution ‘in the Government of the Commonwealth’ as well as ‘in any department or officer of the Commonwealth’. [122] Subject to constitutional limitations, including limitations imposed by Ch III of the Constitution, the incidental power conferred by s 51(xxxix) extends not only to legislative facilitation of the execution of the executive power of the Commonwealth, but also to legislative regulation of the manner and circumstances of the execution of the executive power of the Commonwealth. The result is that [Brown v West (1990) 169 CLR 195, 202]: Whatever the scope of the executive power of the Commonwealth might otherwise be, it is susceptible of control by statute. A valid law of the Commonwealth may so limit or impose conditions on the exercise of the executive power that acts which would otherwise be supported by the executive power fall outside its scope. [page 853] [123] The Executive Government having been so subordinated to the Parliament, the relationship between the Executive Government of the Commonwealth and the federal Judicature was then spelt out in Ch III of the Constitution. Section 75(iii) entrenched original jurisdiction in the High Court in all matters ‘in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party’. Section 75(v) went on in

addition to entrench original jurisdiction in the High Court in all matters ‘in which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth’. [124] The purpose of s 75(iii), as Dixon J observed, ‘was to ensure that the political organization called into existence under the name of the Commonwealth and armed with enumerated powers and authorities, limited by definition, fell in every way within a jurisdiction in which it could be impleaded and which it could invoke’ [Bank of New South Wales v The Commonwealth (1948) 76 CLR 1, 363]. The term ‘Commonwealth’, Dixon J pointed out, while ‘[i]t is perhaps strictly correct to say that it means the Crown in right of the Commonwealth’, has in s 75(iii) the meaning of ‘the central Government of the country’ understood in accordance with ‘the conceptions of ordinary life’ [at 362–363]. The term was used in s 75(iii) to encompass the totality of what is established by Ch II as the Executive Government of the Commonwealth, and the jurisdiction conferred by s 75(iii) was ‘expressed so as to cover the enforcement of actionable rights and liabilities of officers and agencies in their official and governmental capacity, when in substance they formed part of or represented the Commonwealth’ [at 367]. [125] The inclusion of s 75(iii) in the Constitution involved a rejection of any notion, which might otherwise have been drawn from the common law principle then still prevailing in England that the monarch could ‘do no wrong’, that the Executive Government of the Commonwealth was to enjoy immunity from suit for its own actions or for the actions of its officers or agents. The inclusion of s 75(iii) had the consequence of exposing the Commonwealth from its inception to common law liability, in contract and in tort, for its own actions and for actions of officers and agents of the Executive Government acting within the scope of their de facto authority. Any exclusion of actions of the Executive Government from common law liability was to result not from the existence of a generalised immunity from jurisdiction but

through the operation of such substantive law as might be enacted by the Parliament under s 51(xxxix) or under another applicable head of Commonwealth legislative power. [126] The purpose of s 75(v), as Dixon J put it, was ‘to make it constitutionally certain that there would be a jurisdiction capable of restraining officers of the Commonwealth from exceeding Federal power’ [Bank of NSW, at 363]. It was, in particular, to safeguard against the possibility of s 75(iii) being read down by reference to United States case law so as to exclude a matter in which a writ of mandamus was sought against an officer of the Executive Government. The purpose was to supplement s 75(iii) so as to ensure that any officer of the Commonwealth acted, and acted only, within the scope of the authority conferred on that officer by the Constitution or by legislation. Its effect was also to ensure that an officer of the Commonwealth could be restrained by injunction from acting inconsistently with any applicable legal constraint even when acting within the scope of the authority conferred on that officer by the Constitution or by legislation. [127] The conception of an officer of the Commonwealth was held at an early stage not to be confined to a person holding executive office under Ch II of the Constitution: so as to encompass judicial and non-judicial officers of courts established by the Parliament under Ch III of the Constitution as well as holders of independent statutory offices established in [page 854] the exercise of legislative power under Ch I of the Constitution. Section 75(v) is nevertheless at its apogee in its application to Ministers and other officers of the Executive Government. [128] The overall constitutional context for any consideration of the nature of Commonwealth executive power is therefore that,

although stated in s 61 of the Constitution to be vested in the monarch and to be exercisable by the Governor-General, the executive power of the Commonwealth is and was always to be permitted to be exercised at a functional level by Ministers and by other officers of the Executive Government acting in their official capacities or through agents. It is and was always to involve broad powers of administration, including in relation to the delivery of government services. Its exercise by the Executive Government and by officers and agents of the Executive Government is and was always to be susceptible of control by Commonwealth statute. And its exercise is and was always to be capable of exposing the Commonwealth to common law liability determined in the exercise of jurisdiction under s 75(iii) and of exposing officers of the Executive Government to writs issued and orders made in the exercise of jurisdiction under s 75(v). In ‘the last resort’ it is necessarily for a court to determine whether a given act is within constitutional limits [Victoria v The Commonwealth and Hayden (1975) 134 CLR 338, 380, quoting Attorney-General (Vict) v The Commonwealth (1935) 52 CLR 533 at 566]. [For the operation of s 75(iii) and (v), see 8.3.23–8.3.25 and 8.3.30–8.3.40.]

Executive rights and privileges 7.5.76 Among the ‘proprietary prerogatives’ conferred on the Crown, the most important (in a geographically small country like the United Kingdom) was its title to ‘waste lands’ — a title that allowed it to grant land to other holders. Australian governments’ ‘radical title’ to land derives from this prerogative, adapted in former British colonies to take account of prior ‘indigenous’ occupation. However, in Australia, radical title has been almost

entirely supplanted by statutory provisions governing the allocation of land. As a result of 19th century struggles between the Imperial and colonial governments over control of the proceeds of land sales, a power that was previously executive in nature was transferred by the Imperial Parliament to the legislatures of the self-governing colonies by provisions like the following. 7.5.77E

Constitution Act 1867 (Qld)

30 Legislature empowered to make laws regulating sale and other disposal of waste lands … [I]t shall be lawful for the legislature of this State to make laws for regulating the sale letting disposal and occupation of the waste lands of the Crown within the said State. 40 The entire management of Crown lands and all revenues thence arising to be vested in the local legislature The entire management and control of the waste lands belonging to the Crown in the said State and also the appropriation of the gross proceeds of the sales of such lands and all other proceeds and revenues of the same from whatever source arising within the said State including all royalties mines and minerals shall be vested in the legislature of the said State.

[page 855] 7.5.78 An associated prerogative was Crown ownership of the foreshore; again, in Australia this has largely been overtaken by statute.

7.5.79 The prerogative right to the ‘royal metals’ of gold and silver, even where they are found in land granted to private owners, was considered by the High Court in Cadia Holdings Pty Ltd v New South Wales (2010) 242 CLR 195 7.5.19C. It remains of some relevance in New South Wales, where some other minerals are privately owned as a result of historical grants to private owners. However, in other jurisdictions it has been overtaken by statutory provisions that vest property in in situ minerals in ‘the Crown’. An example of this can be found in Western Australia’s Mining Act 1978. Section 9 states: 9 Gold, silver and other precious metals property of Crown (1) Subject to this Act — (a) all gold, silver, and any other precious metal existing in its natural condition on or below the surface of any land whether alienated or not alienated from the Crown and if alienated whenever alienated, is the property of the Crown; (b) all other minerals existing in their natural condition on or below the surface of any land that was not alienated in fee simple from the Crown before 1 January 1899 are the property of the Crown.

These provisions underpin state legislative regimes permitting exploration for, and extraction of, minerals, even from privatelyowned land.

Executive ‘immunities’ and ‘the rule of law’ Application of legislation and private law to the executive 7.5.80

In Eastern Trust Co v McKenzie, Mann & Co [1915] AC

750 at 759, the Privy Council said of the common law: It is the duty of the Crown and of every branch of the Executive to abide by and obey the law … it is the duty of the Executive in cases of doubt to ascertain the law, in order to obey it, not to disregard it.

The nature and scope of some laws — for example, the Family Law Act 1975 (Cth) or state and territory animal welfare legislation — means that they are unlikely to bind governments. However, many other common law principles and legislative provisions are framed in such a way that they may cover ‘the Crown’. Obviously the Crown can be bound by statute; otherwise, important legislation reducing its powers, for example, the Bill of Rights 1688 1.5.7E, would be of no effect. Furthermore, as the High Court recognised in Port of Portland Pty Ltd v Victoria (2010) 242 CLR 348 at 358– 60, in Australia, it is ‘an aspect of the rule of law’ that the executive lacks the power of dispensation of statute law. 7.5.81 Not all Acts or rules of private law apply to government as they do to private citizens. Parliaments can legislate to place the executive ‘above the law’. ‘Immunities’ accorded the Crown by the common law are another exception to the ‘rule of law’. In Australia, questions of executive immunity are further complicated by federation: the legislative arm of one level of government might pass an Act purporting to bind the executive [page 856] arm of another. (The unified nature of the Australian legal system means that these questions do not arise in the same way about the

common law, although they can arise about the common law as amended by the parliament of a particular jurisdiction.) Intergovernmental immunity — the constitutional protection of governments (including their legislative and judicial arms) from one another’s laws — is considered in Chapter 6.

Application of statutory regimes to the executive 7.5.82C

Bropho v Western Australia (1990) 171 CLR 1

Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ: … Robert Bropho … instituted proceedings in the Supreme Court of Western Australia against the respondents, the State of Western Australia and the Western Australian Development Corporation … [seeking] a declaration that certain land in Perth … [known] as ‘the Swan Brewery Site’, is ‘situated within an Aboriginal site or sites to which [the] Aboriginal Heritage Act 1972 (WA) applies’ and an injunction restraining the respondents [from redeveloping the site as what is now a functions venue and steakhouse]. The respondents applied for orders … dismissing the action. Master White made such orders on the ground that the … Act did not bind the Crown. The Full Supreme Court … dismissed an appeal [and Bropho appealed to this Court]. … Mr Bropho is a person of Aboriginal descent for whom the alleged … sites are … of special significance [under and protected by] the Act … … Western Australia consists of 93 per cent Crown land and seven per cent private freehold land … Section 17 is the critical section … It provides: A person who —

(a) excavates, destroys, damages, conceals or in any way alters any Aboriginal site; […] commits an offence unless he is acting with the authorization of the Trustees under section 16 or the consent of the Minister under section 18 … [which consent had not been provided in this case] … The rule that statutory provisions worded in general terms are to be construed as prima facie inapplicable to the Crown was initially confined to provisions which would have derogated from … prerogative rights … It has, however, been clearly accepted in more recent cases … that the rule is of general application … Being a judge-made rule of construction, the presumption which the rule embodies may be supplemented, modified or reversed by legislative provision … The rule presents no real problem of principle in so far as it operates to express a presumption that statutory provisions do not apply to the actual person of the Sovereign. The presumption is not, however, confined to the Sovereign herself but extends to confer prima facie immunity in relation to the activities of governmental instrumentalities or agents acting in the course of their functions or duties as such … The problem … lies in judicial statements of its content and operation which have tended to … treat it as if it were an inflexible principle which, in the absence of express reference to the Crown, precludes a statute from binding the Crown unless a test of ‘necessary implication’, which ‘is not easily satisfied’, is applied and satisfied (see, eg, Brisbane City Council v Groups [page 857] Projects Pty Ltd (1979) 145 CLR 143, at p 167; Province of Bombay v Municipal Corporation of Bombay [1947] AC 58, at p 61) [which apply] an ‘eye of the needle’ test …

For so long as ‘the Crown’ encompassed little more than the Sovereign, his or her direct representatives and the basic organs of government, there may well have been convincing reasons for an assumption that a legislative intent that general statutory provisions should bind the Crown and those who represent it would be either stated in express terms or made ‘manifest from the very terms of the statute’. The basis of [that] assumption … lay in a mixture of … regard for the dignity and majesty of the Crown; concern to ensure that any proposed statutory derogation from [its] authority … was made plain in … legislative provisions submitted for the royal assent; and, the general proposition that, since laws are made by rulers for subjects, a general description of those bound by a statute is not to be read as including the Crown … Whatever force such considerations may continue to have in relation to legislative provisions which would deprive the Crown ‘of any part of (the) ancient prerogative, or of those rights which are … essential to (the) regal capacity’ … they would seem to have little relevance, at least in this country, to the question whether a legislative provision worded in general terms should be read down so that it is inapplicable to the activities of any of the employees of the myriad of governmental commercial and industrial instrumentalities … [T]he historical considerations which gave rise to a presumption that the legislature would not have intended that a statute bind the Crown are largely inapplicable to conditions in this country where the activities of the executive government reach into almost all aspects of commercial, industrial and developmental endeavour and where it is a commonplace for governmental commercial, industrial and developmental instrumentalities and their servants and agents … to compete and have commercial dealings on the same basis as private enterprise … … [T]here are not infrequent occasions where it is the legislative intent to bind all persons indifferently but where the

legislature has not adverted to the possible need to single out the Crown or those acting on its behalf for distinct mention. In such cases, the existence of the rule is likely to divert attention from the need to formulate legislative intent … … If … a legislative intent [to bind the Crown or Crown instrumentalities or agents] appears when the relevant legislative provision is construed in a context which includes the presumption against the Crown and its instrumentalities or agents being so bound, that legislative intent must … prevail … … [T]he strength of the presumption that the Crown is not bound by the general words of statutory provisions will depend upon the circumstances, including the content and purpose of the particular provision and the identity of the entity in respect of which the question of the applicability of the provision arises. If, for example, the question in issue is whether the general words of a statute should be construed in a way which would make the Sovereign herself or himself … liable to prosecution and conviction for a criminal offence, the presumption against a legislative intent to that effect would be extraordinarily strong … On the other hand, if the question in issue is of the kind involved in the present case, namely, whether the employees of a governmental corporation engaged in commercial and developmental activities are bound by general provisions designed to safeguard places or objects whose preservation is of vital significance to a particular section of the community, the presumption against the applicability of general words to bind such employees will represent little more than the starting point of the ascertainment of the relevant legislative intent. Implicit in that is acceptance of the propositions that, notwithstanding the absence of express [page 858]

words, an Act may, when construed in context, disclose a legislative intent that one of its provisions will bind the Crown while others do not and that a disclosed legislative intent to bind the Crown may be qualified in that it may, for example, not apply directly to the Sovereign herself or to a Crown instrumentality itself as distinct from employees or agents. Always, the ultimate questions must be whether the presumption against the Crown being bound has, in all the circumstances, been rebutted, and, if it has, the extent to which it was the legislative intent that the particular Act should bind the Crown and/or those covered by the prima facie immunity of the Crown … … [T]here can be discerned in the [Aboriginal Heritage] Act a clear legislative intent that the general words of s 17 should apply to employees and agents of governmental instrumentalities such as the Corporation in the course of their duties as such … … The duty of the Minister to ensure that ‘all places in Western Australia’ that are of Aboriginal significance be recorded was clearly intended to extend to all land, regardless of its ownership [as were the Act’s other protective provisions] … [I]n a context where 93 per cent of Western Australian land is Crown land and approximately 50 per cent … is … ‘Vacant Crown land’, the Act would be extraordinarily ineffective to achieve its stated purpose of preserving Western Australia’s Aboriginal sites … if it applied only in respect of the comparatively small proportion of the State which is not Crown land. … [T]he conclusion that it was the legislative intent that the general words of s 17 should apply indifferently to natural persons in Western Australia, including government employees, is all but inevitable … [C]onsideration of the subject matter and disclosed policy and purpose of the Act seems to us to make it apparent that it was not the legislative intent that the activities of government employees, be they bulldozer drivers, demolition workers or dynamiters, acting in the course of their duties, should be excluded from s 17’s prohibition of destroying or damaging

Aboriginal sites … without the authorization of the Trustees or the consent of the Minister … [A] government employee who engages in conduct of the proscribed kind will be guilty of an offence against the section. It is unnecessary … to consider whether the provisions of s 17 of the Act are directly applicable to the Corporation [to make it] also liable to prosecution and conviction for an offence against the section committed by its employees or agents in the course of their duties … Once the conclusion is reached that the provisions of s 17 are applicable to employees of the Corporation in the course of their duties, it is apparent that the Corporation has no power to authorize its employees or others to carry out activities of the type proscribed by the section. Nor has the Crown in right of the State of Western Australia any such power …

7.5.83 The statutory interpretation legislation of most Australian jurisdictions now provides that legislation enacted by that jurisdiction’s parliament binds ‘the Crown’ at that level of government, and sometimes at the other level of government to the extent constitutionally permissible. The application of general legislation to executive institutions has become of increasing significance with the opening up of service delivery markets formerly the preserve of the public sector (for example, energy or telecommunications) to competition. As discussed in Chapter 6, Commonwealth laws can bind the states provided those laws do not interfere with states’ existence and functions. Provisions of the Competition and Consumer Act 2010 (Cth) (formerly the Trade Practices Act 1974 (Cth)) that operate to secure a ‘level playing field’ for new market entrants can apply to

existing government providers, including those that own core infrastructure: [page 859]

7.5.84E Competition and Consumer Act 2010 (Cth)

2B Application of Act to States and Territories (1) The following provisions of this Act bind the Crown in right of each of the States, of the Northern Territory and of the Australian Capital Territory, so far as the Crown carries on a business, either directly or by an authority of the State or Territory: (a) Part IV [‘Restrictive Trade Practices’]; (a)(a) Part V [‘Carbon Tax Price Reduction Obligation’]; (b) Part XIB [‘The Telecommunications Industry: Anti-Competitive Conduct and Record-Keeping Rules’]; (c) the other provisions of this Act so far as they relate to the above provisions. (2) Nothing in this Act renders the Crown in right of a State or Territory liable to a pecuniary penalty or to be prosecuted for an offence. (3) The protection in subsection (2) does not apply to an authority of a State or Territory.

7.5.85

These provisions have now been adopted as state and

territory laws. Their application to government-owned bodies was considered by the High Court in the following case. 7.5.86C NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90

McHugh AC-J, Gummow, Callinan and Heydon JJ: … Gasgo is a company in which [the NT Power and Water Authority,] PAWA beneficially holds all the issued shares. It has entered a long-term gas purchase contract (‘the Mereenie Agreement’) with certain suppliers (‘the Mereenie Suppliers’). It has habitually sold the gas supplied to NT Gas Pty Ltd (‘NT Gas’), which on-sells to PAWA. Clause 2.26 of the Mereenie Agreement gives Gasgo a pre-emptive right in relation to the sale of gas by the suppliers to customers other than Gasgo, at the price offered to the third party. NT Power required gas from the suppliers for its generator, and requested that Gasgo give an undertaking that it would not insist on its pre-emptive rights. Gasgo declined to give that undertaking, and NT Power contends that that is a breach of s 46 [of the Trade Practices Act] … Is Gasgo part of the Northern Territory Government? … Gasgo relied on the fact that PAWA was its sole beneficial owner; that article 44a of its articles of association provides that a general meeting could be called at any time by the ‘Northern Territory of Australia or any agency thereof or by any shareholder who holds any share on behalf of the Territory or any agency thereof’; and that article 69 provided that the Minister of Mines and Energy had the power to appoint or remove any person as director without the necessity of a general meeting. Gasgo pointed to the fact that, on 27 June 1985, Cabinet directed the [Northern

Territory Electricity Commission,] NTEC to acquire Gasgo; and that on the same day it approved entry by Gasgo into the Mereenie Agreement. Gasgo noted that its payment obligations under the Mereenie Agreement were unconditionally guaranteed by the Northern Territory Government … … [A]s this Court has recently pointed out, the language of the question is ‘inappropriate and potentially misleading when the issue is whether the legislation of one polity in the [page 860] federation applies to another’ [Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 347 per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ]. This Court also said: Where the legislative provisions in question are concerned with the regulation of the conduct of persons or individuals, it will often be more appropriate to ask whether it was intended that they should regulate the conduct of the members, servants and agents of the executive government of the polity concerned, rather than whether they bind the Crown in one or other of its capacities. Can Gasgo then be characterised as part of the Government of the Northern Territory? Although acquired specifically for the purpose of entering the Mereenie Agreement and others like it, Gasgo was a trading corporation. Its articles of association took the form … of standard trading company articles. Its shares were owned by PAWA. It sold gas to NT Gas, the largest shareholder in which was AGL Pipelines (NT) Pty Ltd (‘AGL’). NT Gas, which constructed and has a lease over the relevant gas pipeline from its owners, a bank consortium, in turn sold gas to PAWA. It was not suggested that either AGL or NT Gas could be regarded as ‘emanations of the Crown’ or parts of the Northern

Territory Government … The interpolation of non-governmental entities in this contractual and physical chain of supply undermines the characterisation of … Gasgo as part of the Northern Territory Government. There is nothing to suggest that [its] directors of Gasgo do not have the usual duties and functions of directors … [or] that the directors are under any duty to obey directions from PAWA or the Northern Territory Government, any more than directors of non-governmental companies are under any duty to obey directions from members of those companies. No doubt a failure to respond to indications of the Northern Territory Government’s desires might lead to the removal of directors, whether by the Minister or by a meeting of shareholders, but the same is true of ordinary companies … The giving of guarantees by the Northern Territory Government is not an indication of an intention that Gasgo should have the immunities of the executive government from legislation, and nor is the agreement of Gasgo to exercise certain rights in consultation with NTEC. … [T]he utilisation of a body corporate incorporated under a general enactment for the incorporation of companies as the party contracting with the Mereenie Suppliers, rather than a body established by a particular statute, does not reveal an intention on the part of the Northern Territory Government that that body corporate should have its immunities … Is Gasgo protected by “derivative Crown immunity”? … A more accurate way of putting th[is] issue which Gasgo raises accords with what was said by Kitto J in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) [(1955) 93 CLR 376]. This is to ask whether s 46, in preventing enforcement of a clause in a contract between two parties, neither of whom is the Government, caused ‘some impairment of the existing legal situation of’ the Northern Territory Government in this case. The object, to adapt what was said by Kitto J, is to ascertain whether the application of s 46 to Gasgo ‘would be, for a legal reason, an interference with some right, interest, power,

authority, privilege, immunity or purpose belonging or appertaining’ to the Government. More recently, this Court said that the interference to be looked for is a ‘divesting’ of ‘property, rights, interests or prerogatives’ [Bass v Permanent Trustee Co Ltd at 354] belonging to the Government. The better view is that the principle applies to proprietary, contractual and other legal rights and interests and not otherwise, notwithstanding that it has been said to extend to ‘arrangements or understandings’ … Gasgo advanced two arguments. The first was that Gasgo’s participation in the series of agreements entered into in 1985 was at the express direction of and on behalf of the [page 861] Northern Territory Government … [But] it would be necessary to show a contract, arrangement or understanding to which not just Gasgo, but also PAWA or some other part of the Northern Territory Government, was a party … [T]here was only one contract between Gasgo and the Mereenie Suppliers; another contract between Gasgo and NT Gas; and contracts between NT Gas and PAWA … [T]he trial judge made no finding that there were any understandings between PAWA (or any other part of the NT Government) on the one hand and the Mereenie Suppliers on the other … The second argument … was … that the Government would be prejudiced if cl 2.26 were not enforceable. The prejudice found by the trial judge was that to the extent that gas bought by third parties could not be acquired by Gasgo, less would be sold to NT Gas and thence to PAWA. Gasgo would have to seek to enter further negotiations for replacement quantities. If it failed, or succeeded only by paying a higher price, PAWA would be worse off. But it would be worse off only in an indirect economic sense. No proprietary right or interest or contractual right or prerogative of the Northern Territory Government would be affected, for

neither PAWA nor any other part of the Northern Territory Government have any such rights, interests or prerogatives as against the Mereenie Suppliers under the Mereenie Agreement …

7.5.87 The ‘rule of law’ provision in s 64 of the Judiciary Act 1903 (Cth) (see 7.5.91) may sometimes affect the application of statutes to a government in the context of litigation. For example, s 64 may cause a state Act that amends the common law of tort or contract to bind the Commonwealth executive, even if no such intention is manifest in the state Act — at least where the state Act is not invalid for inconsistency with s 64 itself or with other Commonwealth legislation under s 109 of the Constitution: Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254; Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30; compare Deputy Commissioner of Taxation (Qld) v Moorebank Pty Ltd; Deputy Commissioner of Taxation v DTR Securities Pty Ltd (1988) 165 CLR 56 and Dao v Australian Postal Commission (1987) 162 CLR 317.

Liability of ‘the Crown’ to private law suits and judgment enforcement 7.5.88 Historically, ‘the Crown’ enjoyed a set of litigationrelated ‘immunities’, including immunity from suit in tort and contract, immunity from discovery in proceedings and immunity from enforcement of judgment debts against it. (The question of whether those debts should be paid being one for parliament when presented with an appropriation bill: see New South Wales v

Bardolph (1934) 52 CLR 455 7.5.38C. For a history of Crown immunity from suit, see Commonwealth v Mewett (1997) 191 CLR 471 per Gummow and Kirby JJ.) At the state level, executive immunity from suit was waived in the 19th century: see now the Crown Proceedings Act in each of New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory, the Crown Suits Act 1947 (WA) and the Court Procedures Act 2004 (ACT). Subject to any ‘manner and form’ entrenchment (see 2.11.1–2.11.40), however, these laws can be repealed at any time. (For example, it is not uncommon for legislation authorising large public events to prevent nuisance claims against, or limit compensation payments by, governments: see Olympic Arrangements Act 2000 (NSW) or Australian Grand Prix Act 1994 (Vic).) [page 862] 7.5.89 Similarly, it has been possible since federation to sue the Commonwealth in tort and contract. However, the High Court has struggled to settle on an explanation for this phenomenon. A complicating factor in these cases in federal jurisdiction has been the lack of a distinctive Commonwealth law of tort or contract that could be applied by the courts deciding them. In the face of this deficiency, the Judiciary Act 1903 (Cth) directs courts invested with federal jurisdiction — often state courts — to apply state law or the common law, or at least as much of it as is consistent with Commonwealth law. Sections 79 and 80 of the Judiciary Act 1903 (Cth) — the provisions which ‘pick up’ state law or the common

law and apply them, as Commonwealth laws, to cases in federal jurisdiction — are discussed in Chapter 6. 7.5.90 The Constitution appears to contemplate the prospect of parliament waiving its immunity from suit in s 78: 78 Proceedings against Commonwealth or State The Parliament may make laws conferring rights to proceed against the Commonwealth or a State in respect of matters within the limits of the judicial power.

Section 78 does not limit parliament to conferring ‘rights to proceed’ against its own executive arm. In respect of matters within federal jurisdiction — for example, a tort claim by a person living in one state against the government of another state — s 78 would appear to allow the Commonwealth Parliament to remove state executive immunity from suit as well. 7.5.91 Parliament has legislated in a manner that appears consistent with the power conferred by s 78, but also more generally to regulate suits in federal jurisdiction (for example, by preventing execution of judgments against the Commonwealth or a state but requiring their satisfaction by the relevant treasurer): Judiciary Act 1903 (Cth) Pt IX, ss 56–59, 65–66 and (in the case of the Northern Territory) 67B and 67E. Section 64 also provides: 64 Rights of parties In any suit to which the Commonwealth or a State is a party, the rights of 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.

7.5.92 As discussed at 8.5.1–8.5.6C, ss 38 and 39 of the Judiciary Act provide for some of the High Court’s original jurisdiction to be exercised exclusively by federal courts and most of it to be shared with state courts. Sections 56–59 of the Judiciary Act reflect that jurisdictional background, indicating that, while tort or contract claims by governments against one another should be brought in the High Court, those against governments by other persons should ordinarily be brought in the Supreme Courts of the states in which the claims arose. (However, these suits can be entertained by other courts exercising federal jurisdiction in certain circumstances.) Section 64 is concerned with the situation after a suit is commenced (whether by or against a government), although obviously the parties may take account of its likely impact before that point (for example, in reaching a negotiated settlement). Unlike ss 79 and 80 of the Judiciary Act, s 64 is concerned with levelling the rights of parties to a suit, not with the applicable law (which may confer no relevant rights on a party). It is concerned to maximise ‘the rule of law’ by placing governments in the same position as subjects ‘as nearly as possible’, [page 863] at least where they act like ordinary subjects rather than ‘governmentally’. The ‘rights’ to which s 64 applies are substantive as well as procedural: Maguire v Simpson (1977) 139 CLR 362; Commonwealth v Evans Deakin Industries Ltd (1986) 161 CLR 254. The fact that s 64 works to change the content of state law in this way makes clear that that change is effected as a matter of Commonwealth law.

7.5.93 Because of s 64’s remedial operation, until recently the High Court treated it as having (amongst other effects) an operation equivalent to state Crown proceedings legislation, at least where a government party had acted like an ordinary ‘subject’. However, a series of cases in the 1990s concerning the Commonwealth Parliament’s abolition of causes of action against the Commonwealth executive — Mutual Pools and Staff v Commonwealth (1994) 179 CLR 155, Georgiadis v Australian and Overseas Telecommunication Corporation (1994) 179 CLR 297 and Commonwealth v Mewett (1997) 191 CLR 471 — caused some members of the High Court to rethink the basis of Commonwealth liability to civil suits. Those cases concerned whether legislation terminating the causes of action had effected acquisitions of property otherwise than on just terms (contrary to s 51(xxxi) of the Constitution): see 9.5.1E–9.5.46. In them, the Commonwealth had argued that the causes of action themselves depended on Commonwealth legislation (viz, s 64 of the Judiciary Act), which parliament was free to repeal or amend without s 51(xxxi) being engaged. 7.5.94 In Commonwealth v Mewett (1997) 191 CLR 471, Gummow and Kirby JJ expressed the view that Commonwealth immunity from suit (and some aspects of state immunity from suits in federal jurisdiction) had been waived by the Constitution itself: by s 75(iii) and (iv), which confer on the High Court original jurisdiction over all matters ‘in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party’ and ‘between States, or between residents of different States, or between a State and a resident of another State between States, or between residents of different States, or between a State and a resident of another State’. In those cases, according to Gummow

and Kirby JJ, s 75 entrenched the right to sue the Commonwealth or state executive, and nothing that parliament may do or not do can remove that right. A key reason for their Honours’ approach was the desirability of the court being able to review the constitutionality of executive action, even if that action were challenged in tort ((1997) 191 CLR 471 at 548): [Controversies contemplated by the Constitution but not the common law include] litigation by which an individual or corporation seeks redress for tortious injury to private or individual rights by government action in administration of a law which the plaintiff asserts was not authorised by the Constitution but upon which the defendant relies for justification of the alleged tortious conduct. To deny such a claim on the footing that, in the absence of enabling legislation, the Crown can do no wrong and cannot be sued in its own court would be to cut across the principle in Marbury v Madison. It would mean that the operation of the Constitution itself was crippled by doctrines devised in other circumstances and for a different system of government.

7.5.95 If s 75 of the Constitution operates like state ‘Crown proceedings’ legislation, what is s 78 for? According to Gummow and Kirby JJ, s 78 still had work to do in relation to suits brought in the High Court’s unentrenched jurisdiction, because parliament may legislate in reliance on s 78 to allow suits against the Commonwealth under s 76(ii) (which permits parliament to confer on the court jurisdiction over matters ‘arising under any law made by the Parliament’). [page 864] If the right to sue the Commonwealth (and the states in some

cases) is constitutionally entrenched, is there any point to a provision like s 56 of the Judiciary Act? Gummow and Kirby JJ treated s 56 largely as a form of legislative recognition of the constitutional position. 7.5.96 In British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30, the plurality judgment applied the views of Gummow and Kirby JJ in Mewett (1997) 191 CLR 471 to an action against a state for recovery of unconstitutional taxes. British American Tobacco (BAT) sued Western Australia for almost $7 million in invalid excise duties on tobacco (collected by way of wholesale ‘licence fees’, contrary to s 90 of the Constitution 5.2.43C. Because the state had levied the taxes contrary to the Commonwealth Constitution, the suit involved a matter in federal jurisdiction: one ‘arising under this Constitution’ within s 76(i) of the Constitution, which gives parliament power to confer original jurisdiction over such matters on the High Court. By s 39(2) of the Judiciary Act, under s 77(iii) of the Constitution parliament had also invested that federal jurisdiction in the Western Australia Supreme Court. State laws do not apply directly to cases in federal jurisdiction — they only apply if ‘picked up’ and applied to the proceedings by s 79 of the Judiciary Act 1903 (Cth). Western Australia argued that, because BAT had failed to give the early notice required by (then) s 6 of the Crown Suits Act 1947 (WA) for an action against the Crown, that state law operated to deny BAT its cause of action. However, the majority treated the state Crown proceedings legislation as irrelevant. Rather, McHugh, Gummow and Hayne JJ (with whom Callinan J agreed) held that BAT’s right to proceed against Western Australia stemmed from the Commonwealth Parliament’s conferral of federal jurisdiction on the Supreme Court by s 39(2) of the Judiciary Act, underpinned

by s 78 of the Constitution. Gleeson CJ (with whom Kirby J, rather surprisingly given his judgment in Mewett (1997) 191 CLR 471, agreed) took the view that the right to bring a constitutional case against a state in federal jurisdiction stemmed not from the grant of jurisdiction over such matters to a court but from the provision of the Constitution alleged to have been infringed. For a critique of this jurisprudence, see Hill, 2007.

Crown servants, agents, contractors and others acting under government orders 7.5.97 There is a ‘lonely Australian’ precedent (Hogg, Monahan and Wright, 2011, p 440) — Cain v Doyle (1946) 72 CLR 109 — to the effect that ‘the Crown’ cannot be held to have committed a criminal offence, and the validity of state legislation extending criminal liability to the Commonwealth is doubtful: see the comments of Gummow J regarding Pirrie v McFarlane (1925) 36 CLR 170 in Re Residential Tenancies Tribunal (1997) 190 CLR 410 at 472. However, after Bropho 7.5.82C the question of whether a core institution of the executive could commit an offence under legislation enacted by its own parliament would seem to be one of legislative intention. Bropho also indicates that the question of whether an executive institution is bound by a statute of the criminal law may be separate from the question of whether ‘Crown servants’ are so bound. A corollary of the Bill of Rights 1688 principle that the executive may not suspend the operation of a law (see Port of Portland Pty Ltd v Victoria (2010) 242 CLR 345 at 358–60) is that individuals who carry out activities in breach of the criminal law are liable to

prosecution for offences under it, even if they do so on government instructions or in accordance with government policy. [page 865]

7.5.98C

A v Hayden (1984) 156 CLR 532

Gibbs CJ: … [W]hen the alleged offences occurred the plaintiffs were taking part, at the direction of the Commonwealth, in a training exercise devised by the Australian Secret Intelligence Service (‘ASIS’), an organisation established by the executive government of the Commonwealth for purposes which include the collection of foreign intelligence by clandestine means and the maintenance of a capability for covert action in wartime or other special circumstances. Four of the plaintiffs (F, H, I and J) were employed by the Commonwealth as officers of ASIS and six (A, B, C, D, E and G) had temporarily left their civilian employment to undergo training organized by ASIS. The other plaintiff, K, was a member of the Australian Army and had the duty of providing training support for ASIS personnel. The object of the exercise … was stated to be the rescue of one of the participants, who was playing the role of hostage, from a room on the tenth floor of the hotel where he was held by two other participants who were playing the part of guards. The plan was to try to trick the guards into opening the door of the room, and, if that failed, to break down the door by force. The plaintiffs (other than K) were supplied by an ASIS officer with firearms and blank ammunition. With the approval of that officer they purchased a sledgehammer. In the course of the exercise, one of the participants, accompanied by four others, used the sledge-hammer to break open a door to the room in which the so-called hostage

was held. When the manager of the hotel went to investigate …, he was met by a participant wearing a mask; the two men entered the lift from which the manager had emerged and jostled one another until the lift arrived at the ground floor, the participant telling the manager that nobody would be hurt. Other participants, most wearing party masks, emerged from the lift at the ground floor … and made their way past guests and staff to a waiting car. They carried firearms, including a pistol and two submachine guns. K played only a minor part in this exercise; he waited, unarmed, in the foyer of the hotel to observe the reactions of other persons in the hotel, and knew nothing of the events on the tenth floor or in the lift. The fact that this foolish exercise was carried out under the authority of the Commonwealth would in itself provide no reason in law why the Commonwealth should not disclose the identities of the plaintiffs to the [Victorian] Chief Commissioner [of Police]. It is fundamental to our legal system that the executive has no power to authorise a breach of the law and that it is no excuse for an offender to say that he acted under the orders of a superior officer …

Chapter references Articles and book chapters Bateman, ‘Constitutional Dimensions of State Executive Power: An Analysis of the Power to Contract and Spend’ (2015) 26 Public Law Review 255 Campbell, ‘Commonwealth Contracts’ (1970) 44 Australian Law Journal 14 Carney, ‘Egan v Willis and Egan v Chadwick: The Triumph of Responsible Government’ in Winterton (ed), State

Constitutional Landmarks, Sydney, 2006a

The

Federation

Press,

[page 866] Castles, ‘Post-election Constitutional Usage in the Shadow of Mount Wellington: Tasmania’s Constitutional Crisis 1989’ (1990) 12 Adelaide Law Review 292 French ‘The Chief Justice and the Governor-General’ (2009) 33 Melbourne University Law Review 647 Groves, ‘Outsourcing and s 75(v) Constitution’ (2011) 22 Public Law Review 3 Harris, ‘The “Third Source” of Authority for Government Action’ (1992) 109 Law Quarterly Review 626 Harris, ‘The “Third Source” of Authority for Government Action Revisited’ (2007) 123 Law Quarterly Review 225 Hill, ‘Private Law Actions Against the Government’ (Part 1): Removing the Government’s Immunity from Suit in Federal Cases’ (2007) 30 Melbourne University Law Review 716 Kerr, ‘Pape v Commissioner of Taxation: Fresh Fields for Federalism?’ (2009) 9 QUT Law and Justice Journal 311 Lindell, ‘The Effect of a Parliamentary Vote of NoConfidence in a Minister: An Unresolved Question (1998) 1 Constitutional Law and Policy Review 6 Lindell, ‘The Changed Landscape of the Executive Power of the Commonwealth after the Williams Case’ (2013) 39 Monash University law Review 348

McLean, ‘The Crown in Contract and Administrative Law’ (2004) 24 Oxford Journal of Legal Studies 129 Maitland, ‘The Corporation Sole’ (1900) 16 Law Quarterly Review 335 Markwell, ‘Griffith, Barton and the Early GovernorGenerals: Aspects of Australia’s Constitutional Development’ (1999) 10 Public Law Review 280 Saunders, ‘The Concept of the Crown’ (2015) 38 Melbourne University Law Review 873 Saunders and Yam, ‘Government Regulation by Contract: Implications for the Rule of Law’ (2004) 15 Public Law Review 51 Selway, ‘Of Kings and Officers: The Judicial Development of Public Law’ (2005) 33 Federal Law Review 187 Twomey, ‘The Dismissal of the Lang Government’ in Winterton (ed), State Constitutional Landmarks, The Federation Press, Sydney, 2006b Twomey, ‘Responsible Government and the Divisibility of the Crown’ (2008) Public Law 742 Twomey, ‘The Governor-General’s Role in the Formation of Government in a Hung Parliament’ (2011) 22(1) Public Law Review 52 Twomey, ‘Changing the Rules of Succession to the Throne’ (2011) Public Law 378 Twomey, ‘Changing the Leader: The Constitutional Conventions Concerning the Resignation of Prime Ministers and Premiers’ (2012) 39 Federal Law Review 329

[page 867] Twomey ‘Advice to the Governor-General on the Appointment of Kevin Rudd as Prime Minister’ (2013) 24 Public Law Review 289 Twomey ‘Advice to Vice-Regal Officers by Crown Law Officers and Others’ (2015) 26 Public Law Review 193 Weller, ‘Parliamentary Accountability for Non-Statutory Executive Power: Impossible Dream or Realistic Aspiration?’ (2005) 16 Public Law Review 314 at 320–1 Zines, ‘The Inherent Executive Power of the Commonwealth’ (2005) 16 Public Law Review 279 Books and texts Bagehot, The English Constitution (latest rev ed, D Appleton and Co, 1887) Blackstone, Commentaries on the Laws of England, 1765, accessed at Boyce, The Queen’s Other Realms: The Crown and its Legacy in Australia, Canada and New Zealand, The Federation Press, Sydney, 2008 Brazil and Mitchell, Opinions of Attorneys-General of the Commonwealth of Australia, Vol 1: 1901–14, AGPS, Canberra, 1981 Carney, The Constitutional Systems of the Australian States and Territories, Cambridge University Press, Port Melbourne, 2006b Chitty, A Treatise of the Law of the Prerogatives of the Crown,

Butterworth, London, 1820 (also available at ) Evatt, The Royal Prerogative, Law Book Co, Sydney, 1987 Hanks, Gordon and Hill, Constitutional Law in Australia, 3rd ed, LexisNexis Butterworths, Sydney, 2012 Hocking, Gough Whitlam: His Time, Random House, 2012 Hogg, Monahan and Wright, Liability of the Crown, Carswell, Toronto, Ont, 2011 Killey, Constitutional Conventions in Australia: An Introduction to the Unwritten Rules of Australia’s Constitutions, Australian Scholarly Publishing, Melbourne, 2009 Maitland, The Constitutional History of England, Cambridge University Press, Cambridge, 1908, accessed at

McPherson, The Reception of English Law Abroad, Supreme Court of Queensland Library, Brisbane, 2007 Selway, The Constitution of South Australia, The Federation Press, Sydney, 1997 Stellios, Zines’s High Court and the Constitution, 6th ed, The Federation Press, Sydney, 2015 Taylor, The Constitution of Victoria, The Federation Press, Sydney, 2006 Twomey, The Constitution of New South Wales, The Federation Press, Sydney, 2004 [page 868]

Twomey, The Chameleon Crown: The Queen and Her Australian Governors, The Federation Press, Sydney, 2006a Twomey, The Australia Acts 1986: Australia’s Statutes of Independence, The Federation Press, Sydney, 2010 Winterton, Parliament, the Executive and the GovernorGeneral, Melbourne University Press, Melbourne, 1983 Papers and reports Commonwealth of Australia, Flipchart of Commonwealth Entities and Companies, 30 September 2015,

Constitutional Commission, Final Report (1988), AGPS, Canberra Griffith, Minority Governments in Australia 1989–2009: Accords, Charters and Agreements (2010), NSW Parliamentary Research Service Background Paper 1/10, available at Government of Canada, Accountable Government: A Guide for Ministers and Ministers of State (2011), accessed at

Industry Commission, Competitive Tendering and Contracting by Public Sector Agencies, (1996), Law Reform Committee of South Australia, Eighty-First Report to the Attorney-General Relating to the Demise of the Crown (1984),

Lindell, Responsible Government and the Australian Constitution: Conventions Transformed into Law? (2004), CIPL Law and Policy Paper 24 New South Wales Parliament, Minority Governments in Australia: Texts of Accords, Charters and Agreements, Issues backgrounder 1/2010, Other Australian Government, Department of Prime Minister and Cabinet, Guidance on Caretaker Conventions (2013),

Australian Government, Department of Prime Minister and Cabinet, Federal Executive Council Handbook (2015),

French, ‘Executive Power’, Inaugural George Winterton Lecture (2010), Sydney Law School, National Museum of Australia, Prime Ministers of Australia: John Gorton and Robert Menzies,

[page 869]

The Australian Judicial System

CHAPTER 8

INTRODUCTION 8.1.1 Chapter III of the Constitution creates the federal judicature. It takes its place in the constitutional system within two overlapping constitutional paradigms: the separation of judicial power from legislative and executive power and the creation of a federal system of government. Both paradigms inform the provisions that are found in Ch III and the doctrines and implications that are said to flow from it. This chapter turns first to consider the separation of judicial power principles that have been developed by the court as implications from Ch III of the Constitution. It then considers the federal dimensions of the Australian judicial system, looking at the heads of federal jurisdiction in relation to which Commonwealth judicial power can be exercised. It considers the way in which lower federal courts and state courts exercise federal jurisdiction and Commonwealth judicial power. The Ch III limitations on state legislative power developed by the High Court are also discussed, as well as the place of territory courts within the Australian judicial system. The High Court sits at the apex of an integrated judicial system, hearing

appeals from both federal and state courts, and this chapter also considers the appellate jurisdiction of the High Court.

SEPARATION OF COMMONWEALTH JUDICIAL POWER 8.2.1 The Commonwealth Constitution identifies three types of government power — legislative (in Ch I), executive (in Ch II) and judicial (in Ch III) — and vests these powers, respectively, in three arms of government: the parliament (s 1), the executive (s 61) and the judiciary (s 71). The separate identification of judicial power in Ch III has led to the development of separation of judicial power principles that apply to limit the exercise of power at the federal level. There are also principles derived from Ch III that apply to limit state parliaments. These will be considered at 8.5.14–8.5.64.

Establishing the separation of judicial power principles 8.2.2 The High Court has established two separation of judicial power principles: first, that Commonwealth judicial power can only be exercised by courts referred to in s 71 of [page 870] the

Constitution;

and,

second,

that

courts

exercising

Commonwealth judicial power can only exercise judicial power and incidental non-judicial power. The first significant decision of the High Court considering the separation of judicial power of the Commonwealth was New South Wales v Commonwealth (Wheat case) (1915) 20 CLR 54. 8.2.3C

New South Wales v Commonwealth (Wheat case) (1915) 20 CLR 54

[Section 101 of the Commonwealth Constitution provides: ‘There shall be an Inter-State Commission, with such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance, within the Commonwealth, of the provisions of this Constitution relating to trade and commerce, and of all laws made thereunder.’ Section 103 provides that members of the commission ‘shall hold office for seven years’, subject to removal in the same way as justices of the High Court. The Commonwealth Parliament enacted the Interstate Commission Act 1912 (Cth). Part V of the Act (headed ‘Judicial Powers of the Commission’) designated the commission as a court of record and gave the commission power to award damages, and to issue injunctions and declarations. The commission was authorised to fix penalties for disobedience to its orders, and was given all the powers, rights and privileges of the High Court necessary for the exercise of its jurisdiction. The commission investigated the New South Wales Government’s seizure under the Wheat Acquisition Act 1914 (NSW), of wheat in the course of interstate trade. The commission declared that the Act, and the actions of the New South Wales Government, infringed s 92 of the Commonwealth Constitution. It issued an injunction to restrain the New South Wales Government from interfering with the interstate movement of wheat. New South Wales appealed to the High Court,

raising the question (inter alia) whether the commission had jurisdiction to grant the injunction.] Griffith CJ: Section 71 of the Constitution provides that the judicial power of the Commonwealth shall be vested in the High Court and in such other Federal Courts as the Parliament creates and in such other Courts as it invests with Federal jurisdiction. Section 72 provides that the Justices of the High Court and of the other Courts created by Parliament (ie, federal courts) shall hold office during good behaviour. It is plain from the provisions of s 103 as to the term of office of the Inter-State Commissioners that they were not to be a Federal Court within the meaning of s 72. But it is contended that s 102 should be read as an exception from, or as a supplement to, the provisions of s 72. I am unable to accept this argument. In my judgment the provisions of s 71 are complete and exclusive, and there cannot be a third class of courts which are neither Federal Courts nor State Courts invested with federal jurisdiction … I pass to the independent argument founded, on both sides, on s 101. That section is contained in Ch IV, which is headed ‘Finance and Trade,’ and deals in substance with the powers of the Parliament and of the States with respect to matters of finance and trade, and not in Ch III which is headed ‘The Judicature.’ It provides that — ‘the Inter-State Commission shall have such powers of adjudication and administration as the Parliament deems necessary for the execution and maintenance of the provisions of the Constitution relating to trade and commerce, and of all laws made thereunder’ … [page 871] It is contended that this power implicitly authorises the creation of a court, because the primary, and, in one sense, the sole, function of a court is to adjudicate. …

In my judgment, the functions of the Interstate Commission contemplated by the Constitution are executive or administrative, and the powers of adjudication intended are such powers of determining questions of fact as may be necessary for the performance of its executive or administrative functions, that is, such powers of adjudication as are incidental and ancillary to those functions. Isaacs J: When the fundamental principle of the separation of powers as marked out in the Australian Constitution is observed and borne in mind, it relieves the question of much of its obscurity. By the first Chapter the legislative power of the Commonwealth is vested in a Parliament consisting of the Sovereign and two Houses, and for this purpose the Governor-General is the Royal representative. By Ch II, headed ‘The Executive Government’, the executive power of the Commonwealth is vested in the Sovereign simply, the Governor-General again being the representative. There might be some ambiguity as to what is meant by executive power, arising from the fact that sometimes in relation to the British Constitution the Judiciary are classed among the executive officers of the Crown. See, for instance, Halsbury’s Laws of England, Vol VII, pp 19, 20 and 21. And in one sense Judges do execute laws. They execute laws relating to the judiciary, by performing their judicial functions. But, in the contrasted sense, executive powers are distinct from judicial powers. … Chapter III is headed ‘The Judicature’, and vests the judicial power of the Commonwealth not in the Sovereign simply, or as he may in Parliament direct, but in specific organs, namely, Courts strictly so called. They are the High Court, such other Federal Courts as Parliament creates, and such other Courts as it invests with federal jurisdiction. There is a mandate to create a High Court; there is a discretionary power to create other Federal Courts; and there is a discretionary power to invest with Federal jurisdiction such Courts as Parliament finds already in existence,

that is, State Courts. But that exhausts the judicature. And as to Federal Courts, the Justices are to have a specific tenure. And the distinct command of the Constitution is that whatever judicial power — that is, in the contrasted sense — is to be exerted in the name of the Commonwealth, must be exercised by these strictly so called judicial tribunals. This command is, as I have said, only emphasised by the manner in which the appeal from the Inter-State Commission is introduced. Section 77 enables Parliament to define the jurisdiction of any Federal Court other than the High Court, which means, either original or appellate jurisdiction … It would require, in view of the careful delimitation I have mentioned, in my opinion, very explicit and unmistakable words to undo the effect of the dominant principle of demarcation. And still more does that necessity press me when I remember how vast a portion of the constitutional field is covered by trade and commerce. So far from finding any such unambiguous words, the language appears to me to point in the opposite direction. [Isaacs J said that s 101 of the Constitution had established ‘a novel administrative and consultative organ with quasi-judicial functions … [with] a duty to actively watch the observance of those laws [relating to trade and commerce], to insist on obedience to their mandates, and to take steps to vindicate them if need be’: 20 CLR at 92, 93. His Honour concluded:] But a Court has no such active duty: its essential feature as an impartial tribunal would be gone, and the manifest aim and object of the constitutional separation of powers would [page 872] be frustrated. A result so violently opposed to the fundamental

structure and scheme of the Constitution requires, as I have before observed, extremely plain and unequivocal language. [Powers and Rich JJ delivered concurring judgments on this issue. Barton and Gavan Duffy JJ dissented.]

8.2.4 In Waterside Workers’ Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434, a majority of the High Court decided that the Commonwealth Court of Conciliation and Arbitration could not be given the power to make orders against a party to an industrial award, penalising any breach of the award, because the arbitration court was not constituted as a court in accordance with s 72 of the Constitution. According to s 12 of the Commonwealth Conciliation and Arbitration Act 1904 (Cth), the President of the Arbitration Court was to be appointed ‘from among the Justices of the High Court’, and was to hold that office for 7 years, subject to reappointment for a similar term. Barton, Isaacs, Starke and Rich JJ held that s 72 of the Constitution required that all appointments to a federal court must be for life, so that if the members of a body created by the Commonwealth Parliament were appointed for a different term (as with the arbitration court), that body was not a federal court for the purposes of Ch III of the Constitution. Isaacs and Rich JJ offered the following justification for their reading of s 72 (as demanding that judges of federal courts, including justices of the High Court be appointed for life) (25 CLR at 469–70): [Section] 72 is one of the strongest guarantees in the Constitution for the security of the States. The Constitution places by s 74 the whole fate of the State Constitutions, where they compete with the Federal Constitution, in the hands of the High Court. That court’s decision in

such a question is final, unless in the exercise of its discretion it grants a certificate permitting an appeal to His Majesty in Council. It is plain that the independence of the tribunal would be seriously weakened if the Commonwealth Parliament could fix any less permanent tenure than for life, subject to proved misbehaviour or incapacity. It is not like the case of unitary Parliament having one interest only to consider, namely, the one territory. It is the case of a federation, where the central legislative and executive bodies are largely competitive with, and in a sense adverse to, the State authorities. On the whole, the suggested inconvenience sinks into insignificance when the greater considerations are borne in mind.

The justices also held that the principal function of the arbitration court, the settlement or prevention of industrial disputes by conciliation or arbitration, was not a judicial function but was analogous to the making of legislation. It followed that the function could be vested in the arbitration court; a body not qualifying as a federal court. 8.2.5 In 1977, s 72 of the Commonwealth Constitution was altered so as to ensure that appointments to the High Court and other federal courts (other than appointments made before the alteration) would terminate when the appointee attained the age of 70 years. The section now permits the Commonwealth Parliament to fix, prospectively, a retirement age of less than 70 years for lower federal courts created by parliament. This power to lower retirement age was exercised in 1977 with the insertion of s 23A into the Family Law Act 1975 (Cth) which set the retirement age at 65 years for Family Court judges: see Family Law Amendment Act 1977 (Cth). Section 23A was repealed in 1991: see Family Law Amendment Act (No 2) 1991 (Cth).

[page 873] The 1977 alteration to s 72 of the Constitution does not affect the central propositions about the exercise of judicial power made in Waterside Workers’ Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434; namely, that the judicial function of enforcing, through penalties for breach, industrial awards could only be given by the Commonwealth Parliament to courts, and that an institution could only be a federal court if its members were appointed and held their tenure under s 72 of the Constitution. 8.2.6 Thus, the first separation of judicial power principle was established early by the High Court: Commonwealth judicial power can only be exercised by a court referred to in s 71 of the Constitution. But, what about the second separation of judicial power principle: can a court exercising Commonwealth judicial power exercise any non-judicial power? In 1926, the Commonwealth Parliament passed the Commonwealth Conciliation and Arbitration Act 1926, which reconstituted the Commonwealth Court of Conciliation and Arbitration. It was to consist of three judges, each with life tenure (and the other protections prescribed by s 72). It was given the powers to make industrial awards and to enforce those award, powers which the High Court decided in the Waterside Workers’ case were respectively non-judicial and judicial. 8.2.7 In Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 at 116–17, Evatt J referred to this mixture of functions in the Commonwealth Conciliation and Arbitration Court as demonstrating that non-judicial functions

could validly be given to a federal court. The same point was made by Latham CJ in R v Federal Court of Bankruptcy; Ex parte Lowenstein (1938) 59 CLR 556. After noting the mixture of functions in the arbitration court, he said (59 CLR at 566): Thus, in my opinion, it is not possible to rely upon any doctrine of absolute separation of powers for the purpose of establishing a universal proposition that no court or person who discharges Federal judicial functions can lawfully discharge any other function which has been entrusted to him by statute.

A similar point was made in the same case by Starke J (59 CLR at 576–7). 8.2.8 The court functioned in this reconstituted form, and with this mixture of functions, until 1956, when the High Court and the Privy Council found that its mixture of functions offended the separation of powers doctrine: R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254; Attorney-General (Cth) v R; Ex parte Boilermakers’ Society of Australia (1957) 95 CLR 529. 8.2.9C R v Kirby; Ex parte Boilermakers’ Society of Australia (Boilermakers’ case) (1956) 94 CLR 254 [The Commonwealth Court of Conciliation and Arbitration, as reconstituted in 1926, consisted of judges whose conditions of appointment and tenure conformed to s 72 of the Commonwealth Constitution as interpreted in Waterside Workers’ Federation of Australia v JW Alexander Pty Ltd (1918) 25 CLR 434. Section 25 of the Conciliation and Arbitration Act 1926 gave the

court power, for the purpose of preventing or settling industrial disputes, to make orders or awards altering the [page 874] standard working hours in an industry, fixing or determining the principles for fixing the basic wage for adult males and females and making provisions for long service leave. Section 29(1) of the Act empowered the court: to impose penalties for breach of an order or award; to order compliance with an order or award; to enjoin contravention of the Act or breaches of orders and awards; and to give interpretations of orders and awards. Section 29A gave the court the same power to punish contempts of its power and authority whether in relation to its judicial power or otherwise as was possessed by the High Court in respect of contempts of the High Court. In June 1955, the court, exercising the power conferred by s 29A, fined the Boilermakers’ Society of Australia £500 for contempt of court. The contempt consisted of its disobedience to an earlier order of the court, made under s 29(1)(b) and (c), ordering the society to comply with an award of the court and restraining further breaches by the society of that award. The society applied to the High Court for a writ of prohibition, which would prohibit the Court of Conciliation and Arbitration from further proceeding on the contempt judgment, on the ground that the vesting of judicial and non-judicial functions in the Arbitration Court was repugnant to Ch III of the Commonwealth Constitution.] Dixon CJ, McTiernan, Fullagar and Kitto JJ: In a federal form

of government a part is necessarily assigned to the judicature which places it in a position unknown in a unitary system or under a flexible constitution where Parliament is supreme. A federal constitution must be rigid. The government it establishes must be one of defined powers; within those powers it must be paramount, but it must be incompetent to go beyond them. The conception of independent governments existing in the one area and exercising powers in different fields of action carefully defined by law could not be carried into practical effect unless the ultimate responsibility of deciding upon the limits of the respective powers of the governments were placed in the federal judicature. The demarcation of the powers of the judicature, the constitution of the courts of which it consists and the maintenance of its distinct functions become therefore a consideration of equal importance to the States and the Commonwealth. While the constitutional sphere of the judicature of the States must be secured from encroachment, it cannot be left to the judicial power of the States to determine either the ambit of federal power or the extent of the residuary power of the States. The powers of the federal judicature must therefore be at once paramount and limited. The organs to which federal judicial power may be entrusted must be defined, the manner in which they may be constituted must be prescribed and the content of their jurisdiction ascertained. These very general considerations explain the provisions of Ch III of the Constitution which is entitled ‘The Judicature’ and consists of 10 sections. It begins with s 71 which says that the judicial power of the Commonwealth shall be vested in a Federal Supreme Court to be called the High Court of Australia and in such other courts as the Parliament creates or it invests with federal jurisdiction. … Had there been no Ch III in the Constitution it may be supposed that some at least of the legislative powers would have been construed as extending to the creation of courts with jurisdictions appropriate to the subject matter of the power. This could hardly have been otherwise with the powers in respect of

bankruptcy and insolvency (s 51(xvii)) and with respect to divorce and matrimonial causes (s 51(xxii)). The legislature would then have been under no limitations as to the tribunals to be set up or the tenure of the judicial officers by [page 875] whom they might be constituted. But the existence in the Constitution of Ch III and the nature of the provisions it contains make it clear that no resort can be made to judicial power except under or in conformity with ss 71–80. An exercise of a legislative power may be such that ‘matters’ fit for the judicial process may arise under the law that is made. In virtue of that character, that is to say because they are matters arising under a law of the Commonwealth, they belong to federal judicial power. But they can be dealt with in federal jurisdiction only as the result of a law made in the exercise of the power conferred on the Parliament by s 76(ii) or that provision considered with s 71 and s 77. Section 51(xxxix) extends to furnishing courts with authorities incidental to the performance of the functions derived under or from Ch III and no doubt to dealing in other ways with matters incidental to the execution of the powers given by the Constitution to the federal judicature. But, except for this, when an exercise of legislative powers is directed to the judicial power of the Commonwealth it must operate through or in conformity with Ch III. For that reason it is beyond the competence of the Parliament to invest with any part of the judicial power any body or person except a court created pursuant to s 71 and constituted in accordance with s 72 or a court brought into existence by a State. It is a proposition which has been repeatedly affirmed and acted upon by this Court: see New South Wales v Commonwealth (1915) 20 CLR 54 at 62, 89, 90, 108, 109; Waterside Workers’ Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434; British Imperial Oil Co Ltd v Federal Commissioner of Taxation

(1925) 35 CLR 422; Silk Bros Pty Ltd v State Electricity Commission (Vict) (1943) 67 CLR 1; R v Davison (1954) 90 CLR 353. Indeed to study Ch III is to see at once that it is an exhaustive statement of the manner in which the judicial power of the Commonwealth is or may be vested. It is true that it is expressed in the affirmative but its very nature puts out of question the possibility that the legislature may be at liberty to turn away from Ch III to any other source of power when it makes a law giving judicial power exercisable within the Federal Commonwealth of Australia. No part of the judicial power can be conferred in virtue of any other authority or otherwise than in accordance with the provisions of Ch III. The fact that affirmative words appointing or limiting an order or form of things may have also negative force and forbid the doing of the thing otherwise was noted very early in the development of the principles of interpretation: 1 Plow 113 [75 ER 176]. In Ch III we have a notable but very evident example … A number of considerations exist which point very definitely to the conclusion that the Constitution does not allow the use of courts established by or under Ch III for the discharge of functions which are not in themselves part of the judicial power and are not auxiliary or incidental thereto. First among them stands the very text of the Constitution. If attention is confined to Ch III it would be difficult to believe that the careful provisions for the creation of a federal judicature as the institution of government to exercise judicial power and the precise specification of the content or subject matter of that power were compatible with the exercise by that institution of other powers. The absurdity is manifest of supposing that the legislative powers conferred by s 51 or elsewhere enabled the Parliament to confer original jurisdiction not covered by ss 75 and 76. It is even less possible to believe that for the Federal Commonwealth of Australia an appellate power could be created or conferred that fell outside s 73 aided possibly by s 77(ii) and (iii) …

To one instructed only by a reading of Ch III and an understanding of the reasons inspiring the careful limitations which exist upon the judicial authority exercisable in the Federal Commonwealth of Australia by the federal judicature brought into existence for the purpose, it must seem entirely incongruous if nevertheless there may be conferred or imposed upon the same judicature authorities or responsibilities of a description wholly unconnected with [page 876] judicial power. It would seem a matter of course to treat the affirmative provisions stating the character and judicial powers of the federal judicature as exhaustive. What reason could there be in treating it as an exhaustive statement, not of the powers, but only of the judicial power that may be exercised by the judicature? It hardly seems a reasonable hypothesis that in respect of the very kind of power that the judicature was designed to exercise its functions were carefully limited but as to the exercise of functions foreign to the character and purpose of the judicature it was meant to leave the matter at large … If you knew nothing of the history of the separation of powers, if you made no comparison of the American instrument of government with ours, if you were unaware of the interpretation it had received before our Constitution was framed according to the same plan, you would still feel the strength of the logical inferences from Chs I, II and III and the form and contents of ss 1, 61 and 71. It would be difficult to treat it as a mere draftsman’s arrangement. Section 1 positively vests the legislative power of the Commonwealth in the Parliament of the Commonwealth. Then s 61, in exactly the same form, vests the executive power of the Commonwealth in the Crown. They are the counterparts of s 71 which in the same way vests the judicial

power of the Commonwealth in this Court, the federal courts the Parliament may create and the State courts it may invest with federal jurisdiction. This cannot all be treated as meaningless and of no legal consequence. Probably the most striking achievement of the framers of the Australian instrument of government was the successful combination of the British system of parliamentary government containing an executive responsible to the legislature with American federalism. This meant that the distinction was perceived between the essential federal conception of a legal distribution of governmental powers among the parts of the system and what was accidental to federalism, though essential to British political conceptions of our time, namely the structure or composition of the legislative and executive arms of government and their mutual relations. The fact that responsible government is the central feature of the Australian constitutional system makes it correct enough to say that we have not adopted the American theory of the separation of powers. For the American theory involves the Presidential and Congressional system in which the executive is independent of Congress and office in the former is inconsistent with membership of the latter. But that is a matter of the relation between the two organs of government and the political operation of the institution. It does not affect legal powers. It was open no doubt to the framers of the Commonwealth Constitution to decide that a distribution of powers between the executive and legislature could safely be dispensed with, once they rejected the system of the independence of the executive. But it is only too evident from the text of the Constitution that was not their decision. In any case the separation of the judicial powers from other powers is affected by different considerations. The position and constitution of the judicature could not be considered accidental to the institution of federalism: for upon the judicature rested the ultimate responsibility for the maintenance and enforcement of the boundaries within which governmental power might be

exercised and upon that the whole system was constructed. This would be enough in itself, were there no other reasons, to account for the fact that the Australian Constitution was framed so as closely to correspond with its American model in the classical division of powers between the three organs of government, the legislature, the executive and the judicature. But, whether it was necessary or not, it could hardly be clearer on the face of the Constitution that it was done. The fundamental principle upon which federalism proceeds is the allocation of the powers of government. In the United States no doubts seem to have existed that the principle should be applied not only between the federal Government and the States but also among the organs of the national Government itself. [page 877] [Dixon CJ, McTiernan, Fullagar and Kitto JJ noted that the Arbitration Court had functioned in its present form since 1936, and that there were dicta of several High Court justices supporting the validity of the Arbitration Court’s mixture of functions. They concluded:] Notwithstanding the presumptive force which has been given to these matters in the consideration of the present case, it has been found impossible to escape the conviction that Ch III does not allow the exercise of a jurisdiction which of its very nature belongs to the judicial power of the Commonwealth by a body established for purposes foreign to the judicial power, notwithstanding that it is organised as a court and in a manner which might otherwise satisfy ss 71 and 72, and that Ch III does not allow a combination with judicial power of functions which are not ancillary or incidental to its exercise but are foreign to it. [Williams, Webb and Taylor JJ dissented.]

8.2.10 On appeal, the Privy Council agreed with the majority of the High Court, and expressed its reasons in similar terms: Attorney-General (Cth) v R; Ex parte Australian Boilermakers’ Society (1957) 95 CLR 529. The Judicial Committee referred to the drafting structure of the Commonwealth Constitution as embodying the separation of powers principle (95 CLR at 538): Section 1 which vests legislative power in a Federal Parliament at the same time, negatives such power being vested in any other body. In the same way, s 71 and the succeeding sections while affirmatively prescribing in what courts the judicial power of the Commonwealth may be vested and the limits of their jurisdiction negatives the possibility of vesting such power in other courts or extending their jurisdiction beyond those limits. It is to Ch III alone that the Parliament must have recourse if it wishes to legislate in regard to the judicial power … There could not well be a clearer case for the application of the maxim Expressio unius exclusio alterius.

Later they referred to a broader, principled justification for their decision (95 CLR at 540–1): [I]n a federal system the absolute independence of the judiciary is the bulwark of the constitution against encroachment whether by the legislature or by the executive. To vest in the same body executive as well as judicial power is to remove a vital constitutional safeguard.

8.2.11 The Privy Council’s reference to the maxim of interpretation expressio unius exclusio alterius is reflected in the statement of the majority of the High Court that Ch III was ‘a notable but very evident example’ of the fact that ‘affirmative words’ could have ‘a negative force’: 94 CLR at 270. However, this approach to interpretation is not inevitable. Amongst the

alternative explanations for the drafting of s 71 is the simple point that it was convenient for the drafters of the Constitution to deal with what they conceived as the functions and institutions of government serially, rather than simultaneously. The Privy Council also appealed to the role of the courts as a ‘bulwark of the Constitution’ in a federal system, a function which demanded that, in order to protect the independence of the judiciary, executive and judicial power not be vested in the same body: 95 CLR at 540–1. In the High Court, the majority had similarly referred to federalism as the foundation for the separation of judicial power principles, although the point was less developed. It is [page 878] unclear why the conferral of non-judicial power would, in all cases, threaten the judiciary’s independence and, consequently, its role as arbiter of the federal system. The argument might relate to a reduction in public confidence in the independence and impartiality of a judiciary that exercises non-judicial powers, or it might relate to the risk of the judiciary unconsciously absorbing the values and perspectives involved in its non-judicial functions and thereby distorting the performance of its judicial functions. A similar point had been made earlier by Isaacs and Rich JJ in Waterside Workers’ Federation of Australia v JW Alexander Pty Ltd (1918) 25 CLR 434 at 469–70, and has been further developed in a line of cases, starting with Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 8.5.17C, that impose limitations on

state parliaments in relation to state courts. These cases will be considered at 8.5.14–8.5.64. 8.2.12 The proposition from New South Wales v Commonwealth (Wheat case) (1915) 20 CLR 54 8.2.3C, that the judicial power of the Commonwealth should only be entrusted to courts, has never been seriously challenged. In 1988, the Constitutional Commission supported the proposition as consistent with ‘[t]he rule of law [which] requires that basic rights granted by the law should be determined by independent judges’: Constitutional Commission, 1988, p 392. The commission endorsed the following statement of Jacobs J in R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 11: The historical approach to the question whether a power is exclusively a judicial power is based upon the recognition that we have inherited and were intended by our Constitution to live under a system of law and government which has traditionally protected the rights of persons by ensuring that those rights are determined by a judiciary independent of the parliament and the executive. But the rights referred to in such an enunciation are the basic rights which traditionally, and therefore historically, are judged by that independent judiciary which is the bulwark of freedom. The governance of a trial for the determination of criminal guilt is the classic example. But there are a multitude of such instances.

The proposition that the separation of judicial power and judicial functions effected by Ch III of the Constitution serves the purpose of protecting individual liberty is explored further at 10.4.1–10.4.37. 8.2.13

The possibility of reversing the reciprocal Boilermakers’

proposition (that federal courts may not be given non-judicial functions) was raised by Barwick CJ and Mason J in R v Joske; Ex parte Australian Building Construction Employees and Builders’ Labourers’ Federation (1974) 130 CLR 87 at 90, 102. However, that possibility has not been realised. For a critique of the Boilermakers’ principle, see Mason, 1996; Wheeler, 1999; Stellios, 2015 and 2011b. 8.2.14 In contrast to these federal separation of judicial power principles, there is no constitutional separation of judicial power within the states. Some state constitutions contemplate a measure of constitutional protection for judicial independence. For example, in New South Wales, a holder of judicial office can only be removed ‘by the Governor, on an address from both Houses of Parliament in the same session, seeking removal on the ground of proved misbehaviour or incapacity’: Constitution Act 1902 (NSW) s 53. (See Carney, 2006, pp 343–4, for a discussion of New South Wales and Victorian provisions that protect the judiciary and their entrenchment.) However, the guarantee that states must retain their courts, at least state supreme courts, and the limitations on what powers and functions can be given to, and taken away from, state courts by state parliaments, derive from Ch III of the [page 879] Constitution. This line of cases, starting with the High Court’s decision in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51, is considered at 8.5.14–8.5.64.

Defining judicial power 8.2.15 An enduring consequence of the separation of judicial power principles has been the need, when drafting Commonwealth legislation, to draw a sharp distinction between judicial and nonjudicial functions, so as to ensure that the former are not given to bodies that are not courts, and that the latter are not given to bodies that are courts. The most difficult aspect of this task is distinguishing between judicial and non-judicial power. Judicial power is a concept that cannot be defined with precision. Windeyer J expressed this imprecision in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 394: The concept seems to me to defy, perhaps it were better to say transcend, purely abstract conceptual analysis. It inevitably attracts consideration of predominant characteristics and also invites comparison with the historic functions and processes of courts of law.

8.2.16 A classic description of judicial power was offered in Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330, where the High Court concluded that the power given to the Comptroller-General of Customs under s 15B of the Australian Industries Preservation Act 1906 (Cth) was not judicial. That section authorised the Comptroller-General to require a person to answer questions and produce documents relating to what the Comptroller-General believed was an offence against the Act. Failure to comply with the Comptroller-General’s requirement attracted a penalty. The court said that this power was analogous to that of an examining magistrate in deciding whether or not to commit for trial. Neither the magistrate nor the Comptroller-

General determined guilt or innocence. Griffith CJ said (8 CLR at 357): I am of opinion that the words ‘judicial power’ as used in s 71 of the Constitution mean the power which every sovereign 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.

As Griffith CJ’s classic definition suggests, the core characteristic of judicial power that has been identified by the High Court is that judicial power involves the determination of a dispute about preexisting rights. This characteristic exercise of judicial power is often contrasted with the legislative and executive function of creating rights. There are also other factors that the court often refers to when attempting to define ‘the judicial power of the Commonwealth’, including: whether there is a historical practice of exercising the power (a historical practice of exercise by the judiciary may point to a power being judicial in the hands of a court); whether the criteria to be applied by the decision-maker are sufficiently legal in character or are more in the nature of broad-based public policy considerations (criteria that are vague and general are less likely to be judicial in character in the hands of a court); whether the discretion conferred on the decision-maker is wide and largely unfettered (the wider the discretion, the more likely it is that the function is non-judicial);

[page 880] whether a decision-maker is required to make a decision according to the usual curial process (if not, then it is less likely to be judicial in character); whether a decision is ‘final and conclusive’ (if so, then it is more likely to be judicial in character); and whether the power has been given to a judicial or nonjudicial body (if given to a judicial body, a judicial character is suggested; if given to a non-judicial body, a non-judicial character is suggested. This factor — commonly referred to as the ‘chameleon principle’ — must have a limited scope of operation, otherwise it would undermine the very existence of separation principles. Its scope, however, remains unclear). The first of these factors, historical practice, was considered by the High Court in R v Davison (1954) 90 CLR 353. 8.2.17C

R v Davison (1954) 90 CLR 353

[The Bankruptcy Act 1924 (Cth) allowed a debtor to petition for the sequestration of her or his estate on the ground of inability to pay her or his debts. Such a petition for voluntary bankruptcy was heard, and an order of sequestration made, by a registrar or deputy registrar in bankruptcy. Davison was made bankrupt on his own petition. When charged with committing certain offences as a bankrupt, Davison contended that he was not a bankrupt because there was no valid sequestration

order. It was argued that the making of a sequestration order was an exercise of judicial power which could not be vested in non-judicial officers of the Bankruptcy Court.] Dixon CJ and McTiernan J: Many attempts have been made to define judicial power, but it has never been found possible to frame a definition that is at once exclusive and exhaustive. In Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC 134, Lord Simonds, LC, speaking for their Lordships of the Privy Council says, Without attempting to give a comprehensive definition of judicial power, they accept the view that its broad features are accurately stated in that part of the judgment of Griffith CJ in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR at 357, which was approved by this Board in Shell Co of Australia Ltd v Federal Commissioner of Taxation [1931] AC 275. Nor do they doubt, as was pointed out in the latter case, that there are many positive features which are essential to the existence of judicial power, yet by themselves are not conclusive of it, or that any combination of such features will fail to establish a judicial power if, as is a common characteristic of so-called administrative tribunals, the ultimate decision may be determined not merely by the application of legal principles to ascertained facts but by considerations of policy also [1949] AC at 149. The definition given by Griffith CJ to which Lord Simonds refers is as follows: I am of opinion that the words ‘judicial power’ as used in s 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

[page 881] 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’ (1909) 8 CLR at 357. Another well known definition is that given by Palles CB. In The Queen v Local Government Board [1902] 2 IR 349, the learned Chief Baron said: I have always thought that to erect a tribunal into a ‘Court’ or ‘jurisdiction’, so as to make its determinations judicial, the essential element is that it should have power, by its determination within jurisdiction, to impose liability or affect rights. By this I mean that the liability is imposed, or the right affected by the determination only, and not by the fact determined, and so that the liability will exist, or the right will be affected, although the determination be wrong in law or in fact. It is otherwise of a ministerial power. If the existence of such a power depends upon a contingency, although it may be necessary for the officer to determine whether the contingency has happened, in order to know whether he shall exercise the power, his determination does not bind. The happening of the contingency may be questioned in an action brought to try the legality of the act done under the alleged exercise of the power. But where the determination binds, although it is based on an erroneous view of facts or law, then the power authorizing it is judicial: [1902] 2 IR at 373. In the United States some very brief definitions of judicial power have gained currency. For example, it has been described simply as that power vested in courts to enable them to administer

justice according to law: Sutherland J, Adkins v Children’s Hospital 261 US 525 (1923) at 544. More widely quoted is the statement of Miller J. that it is the power of a court to decide and pronounce a judgment and carry it into effect between persons and parties who bring a case before it for decision: see Muskrat v United States 219 US 346 (1911) at 356. It will be seen that the element which Sir Samuel Griffith emphasized is that a controversy should exist between subjects or between the Crown and a subject that which Palles CB emphasized is the determination of existing rights as distinguished from the creation of new ones, and those elements emphasized by Miller J are adjudication, the submission by parties of the case for adjudication and enforcement of the judgment. It may be said of each of these various elements that it is entirely lacking from many proceedings falling within the jurisdiction of various courts of justice in English law. In the administration of assets or of trusts the Court of Chancery made many orders involving no lis inter partes, no adjudication of rights and sometimes self-executing. Orders relating to the maintenance and guardianship of infants, the exercise of a power of sale by way of family arrangement and the consent to the marriage of a ward of court are all conceived as forming part of the exercise of judicial power as understood in the tradition of English law. Recently courts have been called upon to administer enemy property. In England declarations of legitimacy may be made. To wind up companies may involve many orders that have none of the elements upon which these definitions insist. Yet all these things have long fallen to the courts of justice. To grant probate of a will or letters of administration is a judicial function and could not be excluded from the judicial power of a country governed by English law. Again the enforcement of a judgment or judicial decree by the court itself cannot be a necessary attribute of a court exercising judicial power. The power to award execution might not belong to a tribunal, and yet its determinations might clearly amount to an exercise of the judicial power. Indeed it may

be said that an order of a court of petty sessions for the payment of money is an example. For warrants for the execution [page 882] of such an order are granted by a justice of the peace as an independent administrative act. But to say that a thing may be done in the course of the exercise of judicial power is not to say that it may not be done without the exercise of judicial power. The legislature may commit some functions to courts falling within Chapter III although much the same function might be performed administratively. In the judgment of this Court in Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144, the observation occurs: Many functions perhaps may be committed to a court which are not themselves exclusively judicial, that is to say which considered independently might belong to an administrator. But that is because they are not independent functions but form incidents in the exercise of strictly judicial powers (1953) 87 CLR at 151. It is this double aspect which some acts or functions may bear that makes it so difficult to define the judicial power. The appointment of a new trustee may be regarded as something to be done in the course of the judicial administration of trusts or assets. But there is no reason why it should not be treated from another point of view and regarded as an act to be done by an administrative body authorized to exercise some governmental control, for example over public charities. An extreme example of a function that may be given to courts as an incident of judicial power or dealt with directly as an exercise of legislative power is that of making procedural rules of court. The proper attribution of this power is a matter that has received much attention in the

United States: cf Wayman v Southard (1825) 10 Wheat 1 [6 Law Ed 253]; Bank of United States v Halstead (1825) 10 Wheat 51 [6 Law Ed 264]; United States v Union Pacific Railroad Co 98 US 569 (1878) at 604 [25 Law Ed 143 at 151]; Ex parte City Bank (1845) 3 Howard 291 at 317 [11 Law Ed 603 at 614]; Livingston v Story (1835) 9 Peters 632 at 655 [9 Law Ed 255 at 263); Fidelity & Deposit Co of Maryland v United States 187 US 315 (1902) [47 Law Ed 194], and The Rule Making Power, 12 American Bar Ass 599, by Dean Pound, whose thesis is that historically and even analytically it is the function of the courts to regulate their procedure. The learned writer places more reliance in all matters of judicial power upon history than upon juristic analysis: In doubtful cases, however, we employ a historical criterion. We ask whether, at the time our constitutions were adopted, the power in question was exercised by the Crown, by Parliament, or by the judges. Unless analysis compels us to say in a given case that there is a historical anomaly, we are guided chiefly by the historical criterion. Nevertheless it is clear enough that making rules of procedure may in one point of view be regarded as a legislative function, though in another point of view it may be considered as an incident of judicial power. The truth is that the ascertainment of existing rights by the judicial determination of issues of fact or law falls exclusively within judicial power so that the Parliament cannot confide the function to any person or body but a court constituted under ss 71 and 72 of the Constitution and this may be true also of some duties or powers hitherto invariably discharged by courts under our system of jurisprudence but not exactly of the foregoing description. But there are many functions or duties that are not necessarily of a judicial character but may be performed judicially, whether because they are incidental to the exercise of judicial power or because they are proper subjects of its exercise. How a particular act or thing of

this kind is treated by legislation may determine its character. If the legislature prescribes a judicial process, it may mean that an exercise of the judicial power is indispensable. It is at that point that the character of the proceeding or of the thing [page 883] to be done becomes all important. Where the difficulty is to distinguish between a legislative and a judicial proceeding, the end accomplished may be decisive … In the present case the thing done is the making of an order characteristic of courts. The primary power to make the very order is entrusted to the court established under ss 71 and 72. The power of the registrar is secondary and in a sense derivative. Further by the definition of the expression ‘the Court’ the legislature has made it clear that for certain purposes he is to enjoy the very powers conferred upon the court and is to act exactly as the court. This he is to do, although under the peculiar arrangements adopted to meet the decision in Le Mesurier v Connor (1929) 42 CLR 481, the registrar is no part of the court and is not an officer of the court. It is clear that s 24(1)(a) of the Bankruptcy Act confers upon the registrar a power which is also exercisable by the court and a power to be exercised by him in the same way and by the same form of instrument as would be used by the judge. He is, in other words, the substitute for the judge. Within the meaning of s 54 he is by definition ‘the Court’. By definition also he is the court within the meaning of s 57. It is therefore his function to decide whether good and sufficient cause exists for refusing to make a sequestration order. Although no doubt it is exceptional for difficulties to arise under this heading, they are by no means unknown; see Re Bachelor [1855] 25 TL (OS) 248; Re Betts; Ex parte Official Receiver [1901] 2 KB 39; Re Hancock [1904] 1 KB 585. When s 24 (1) is construed with the definition of ‘the Court’ and applied to ss

54 and 57, it becomes clear that the function of making an order of sequestration is treated as judicial and is confided to the registrar in the same character as it is confided to the court. In other words it is the intention of the legislature that the registrar should make an order operating as an order of the court. That is exactly what in fact he did in the present case. For upon its face the order is one which could not be made except by a court constituted as it is in conformity with s 71 and s 72 of the Constitution … [Dixon CJ and McTiernan J concluded that the Bankruptcy Act invalidly vested judicial power in the registrars, and that the sequestration order in question was void]. Kitto J: [W]here the Parliament makes a general law which needs specified action to be taken to bring about its application in particular cases, and the question arises whether the Constitution requires that the power to take that action shall be committed to the judiciary to the exclusion of the executive, or to the executive to the exclusion of the judiciary, the answer may often be found by considering how similar or comparable powers were in fact treated in this country at the time when the Constitution was prepared. Where the action to be taken is of a kind which had come by 1900 to be so consistently regarded as peculiarly appropriate for judicial performance that it then occupied an acknowledged place in the structure of the judicial system, the conclusion, it seems to me, is inevitable that the power to take that action is within the concept of judicial power as the framers of the Constitution must be taken to have understood it. The subject of bankruptcy provides an illustration in point. As a matter of practical necessity, it is by means of a general law that the legislature provides for the acquisition of the status of bankruptcy and for the consequences of its acquisition. While it may be considered that in that status and those consequences, considered by themselves, there is nothing which imperatively

requires a judicial act for the inception of the status, it is certain that in 1900, both in England and in the Australian Colonies, it was and had long been an established branch of judicial activity to subject debtors to the operation of the bankruptcy law, by the particular method of making sequestration orders upon the hearing of petitions presented to a court either by creditors or by debtors themselves. An essentially judicial procedure, a curial proceeding initiated by petition, had been prescribed from early times, and had always [page 884] been dealt with in accordance with the basic principles by which courts of justice governed themselves in disposing of judicial business. … [E]ven though in many cases there might be no controversy to be resolved, a decision to make a man bankrupt affects the relative positions of persons whose interests are opposed, and … between those opposing interests there is as much reason for insisting upon an impartial adjudication according to law as there is in the case of litigation inter partes. If bankruptcy is decreed, the debtor gains the advantage of relief from most kinds of liabilities to his creditors, but he loses his property (with a few exceptions), and becomes subject to a number of disabilities and duties and liable to certain punitive proceedings. The unsecured creditors, on the other hand, gain the advantage of having the debtor’s property fairly divided amongst them, including property of other persons which is to be treated as his for a variety of reasons, and they have the benefit of special methods of discovering what and where that property is and of securing its realization; but each, broadly speaking, loses his antecedent rights against the person and property of the debtor. All this is true of voluntary sequestrations no less than of

compulsory, and although issues seldom arise for decision on the hearing of debtors’ petitions, questions calling for judicial solution can arise in an acute form … These considerations lead me to conclude that, while it may well not be correct to say of a power to bring into operation with respect to a debtor statutory provisions such as are contained in the Bankruptcy Act 1924–1950 (Cth) that it is necessarily judicial in character simply because it has that result, yet it is certainly true that the grant to a court of a power to produce that result by the particular process of receiving a debtor’s petition for the sequestration of his estate, hearing the petition in conformity with the settled principles governing judicial proceedings, and granting the prayer of the petition by making a sequestration order, is a grant of judicial power within the meaning of s 71 of the Constitution.

8.2.18 As the Court in R v Davison emphasised, a power may be characterised as judicial in nature if there is a historical practice of its judicial exercise, even if it does not involve the resolution of a dispute about pre-existing rights. Passages from the judgment of Kitto J were endorsed by Gummow, Hayne and Bell JJ in Saraceni v Jones (2012) 246 CLR 251 in relation to a power to make an order under the Corporations Act 2001 (Cth) for the mandatory examination of a person about the affairs of a company. The vesting of such a power in the courts had historical antecedents at 1900 making it ‘peculiarly appropriate for judicial performance’ (246 CLR at 257). An application of the other factors identified at 8.2.16 will be demonstrated in the decisions of the High Court outlined in the following sections.

Application of the separation of judicial power principles Only courts can exercise Commonwealth judicial power 8.2.19 More than 80 years after the Wheat case (1915) 20 CLR 54, the basic proposition that only courts can be entrusted with the judicial power of the Commonwealth is deeply entrenched. In British Imperial Oil Co Ltd v The Commissioner of Taxation (1925) 35 CLR 422, the High Court held that ss 44, 50 and 51 of the Income Tax Assessment Act 1922 (Cth) conferred [page 885] judicial power on a Taxation Board of Appeal and were thus invalid. The boards of appeal were administrative bodies, whose members were appointed for renewable terms of 7 years: s 41(4). Under s 50(4), a taxpayer who objected to an assessment by the Commissioner of Taxation could ask the commissioner to forward the taxpayer’s objection to the High Court or a state Supreme Court (where the objection raised questions of law only) or to one of those courts or a board of appeal (where the objection raised questions of fact). 8.2.20 Section 51(1) authorised the board of appeal hearing the taxpayer’s appeal to make such order as it thought fit, including an order increasing or reducing the assessment. Section 51(2) provided that an order of a board of appeal on a question of fact was final

and conclusive on all parties; s 51(6) directed a board, if requested by a party, to state a case for the opinion of the High Court on a question of law arising in the appeal; and s 51(8) provided that an appeal lay to the High Court from any order made under s 51(1), except a decision of a board on a question of fact. Knox CJ expressed the following conclusions on the validity of ss 44, 50 and 51 (35 CLR at 432): The power conferred on the Board of determining questions of law, the association of the Board as a tribunal of appeal with the High Court and the Supreme Court of a State, and the provision for an appeal to the High Court in its appellate jurisdiction from any order of the Board, except a decision on a question of facts … establish that the expressed intention of Parliament was to confer on the Board portion of the judicial power of the Commonwealth, which at any rate includes the power to adjudicate between adverse parties as to legal claims rights and obligations, and to order right to be done in the matter.

8.2.21 Following the decision in the British Imperial Oil case (1925) 35 CLR 422, the federal parliament amended the Income Tax Assessment Act 1922. A new s 41 established boards of review, whose members had the same tenure as the former boards of appeal. Section 44(1) authorised a board of review to review decisions of the Commissioner of Taxation and, for the purpose of those reviews, to exercise all the powers and functions of the commissioner. Where a board carried out such a review, its decision was to be deemed a decision of the commissioner. Section 51(1) obliged the commissioner to refer a taxpayer’s objection to the commissioner’s assessment of tax to a board of review. On review, the board was directed to confirm, reduce, increase or vary the assessment: s 51(4). Section 51(6) provided that either the taxpayer or the commissioner could appeal to the High Court from

a decision of a board which involved a question of law. Section 51A provided that, if a taxpayer requested that their objection to an assessment be referred to the High Court or a state Supreme Court, the commissioner should do so. The court could then hear the appeal and make such order as it thought fit: s 51A(5). Apart from an appeal to the High Court under s 51A(10), an order of the court under s 51A was declared to be ‘final and conclusive on all parties’: s 51A(6). 8.2.22 In Shell Co of Australia Ltd v Federal Commissioner of Taxation (1930) 44 CLR 530, the Privy Council held that the new provisions did not confer judicial power on the boards of review and were valid. The Privy Council referred with approval to the judgment of Isaacs J in the High Court, from which the appeal was brought: British Imperial Oil Co Ltd v Federal Commissioner of Taxation (No 2) (1926) 38 CLR 153. Isaacs J had referred to a number of significant differences between the new boards of review and the old boards of appeal, including the change in name and the assimilation of the powers and functions of the boards of review to those of the commissioner, not of the courts (as had been the case with the boards of appeal). [page 886] The Privy Council then quoted Griffith CJ’s definition of ‘judicial power’ in Huddart Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357, and continued as follows. 8.2.23C

Shell Co of Australia Ltd v Federal Commissioner of Taxation

(1930) 44 CLR 530 Privy Council: This definition of ‘judicial power’ suggests to their Lordships a further material difference in the status of the two Boards not alluded to by Isaacs J. It will have been noticed that under the new sec 51A the orders which the Court, under sub-sec 5, may make are by sub-sec 6 made final and conclusive on all parties except as provided by the section; and that by subsec 10 it is provided that the Commissioners or a taxpayer may appeal to the High Court in its appellate jurisdiction from any order made by the Court under sub-sec 5. But under the new sec 51, dealing with the orders of the Board of Review, there is no provision in any way corresponding to these sub-secs 6 and 10 of sec 51A. The orders of the Board of Review are not there stated to be conclusive for any purpose whatsoever. On the other hand, under sec 51(2) of the Act of 1922, the orders of the Board of Appeal on questions of fact were expressly declared to be final and conclusive on all parties. The distinction is, their Lordships think, both striking and suggestive. The decisions of the Board of Review are under the amending Act made the equivalent of the decision of the Commissioner. No assessment of his, even when paid, is conclusive upon him. He retains under sec 37 the fullest power of subsequent alteration or addition, and it would appear that that power remains with him notwithstanding any decision in respect of the same assessment by the Board of Review. It is only the decision of the Court which, in respect of an assessment, is now made final and conclusive on all parties — a convincing distinction, as it seems to their Lordships, between a ‘decision’ of the Board and a ‘decision’ of the Court. The authorities are clear to show that there are tribunals with many of the trappings of a Court which, nevertheless, are not Courts in the strict sense of exercising judicial power. It is conceded in the present case that the Commissioner himself exercised no judicial power. The exercise of such power in connection with an assessment commenced, it was said, with the Board of Review, which was in

truth a Court. In that connection it may be useful to enumerate some negative propositions on this subject: (1) A tribunal is not necessarily a Court in this strict sense because it gives a final decision; (2) nor because it hears witnesses on oath; (3) nor because two or more contending parties appear before it between whom it has to decide; (4) nor because it gives decisions which affect the rights of subjects; (5) nor because there is an appeal to a Court; (6) nor because it is a body to which a matter is referred by another body. (See R v Electricity Commissioners [1924] 1 KB 171.) Their Lordships are of opinion that it is not impossible under the Australian Constitution for Parliament to provide that the fixing of assessments shall rest with an administrative officer, subject to review, if the taxpayer prefers, either by another administrative body, or by a Court strictly so called, or, to put it more briefly to say to the taxpayer ‘If you want to have the assessment reviewed judicially, go to the Court; if you want to have it reviewed by businessmen, go to the Board of Review’ … The Board of Review appears to be in the nature of administrative machinery to which the taxpayer can resort at his option in order to have his contentions reconsidered. An administrative tribunal may act judicially, but still remain an administrative tribunal as distinguished from a Court, strictly so-called. Mere externals do not make a direction to an administrative officer by an ad hoc tribunal an exercise by a Court of judicial power. Their Lordships find [page 887] themselves in agreement with Isaacs J, where he says [(1926) 38 CLR, at 175]: — ‘There are many functions which are either inconsistent with strict judicial action … or are consistent with either strict judicial or executive action. … If consistent with either strictly judicial or executive action, the matter must be

examined further’ [(1926) 38 CLR, at 178]. ‘The decisions of the Board of Review may very appropriately be designated … “administrative awards,” but they are by no means of the character of decisions of the Judicature of the Commonwealth.’ They agree with him also when he says that unless ‘it becomes clear beyond reasonable doubt that the legislation in question transgresses the limits laid down by the organic law of the Constitution, it must be allowed to stand as the true expression of the national will’ [(1926) 38 CLR, at 180]. In that view they have come to the conclusion that the legislation in this case does not transgress the limits laid down by the Constitution because the Board of Review is not exercising judicial powers, but is merely in the same position as the Commissioner himself; namely, it is another administrative tribunal which is reviewing the determination of the Commissioner, who admittedly is not judicial, but executive.

Thus, parliament can create administrative review bodies that stand in the shoes of the original administrative decision-maker. 8.2.24 The next set of cases demonstrate that parliament has been given considerable latitude in designing regulatory tribunals and authorising them to make decisions that will impact on rights in important ways. 8.2.25C

R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361

[Part II of the Trade Practices Act 1965 (Cth) established the Trade Practices Tribunal, whose members were appointed for renewable 7year terms: s 11. (It was common ground in the case that the tribunal

was not a court within Ch III of the Constitution.) Part III of the Act provided for the appointment of a Commissioner of Trade Practices, with the responsibility of administering the Act. Part IV of the Act was headed ‘Examinable Agreements and Practices’. An examinable agreement was defined in s 35 as an agreement between parties who carried on business in competition with each other, under which agreement the parties accepted certain restrictions on their businesses. An examinable practice, as defined in s 36, included engaging in monopolisation. Part VI of the Act was headed ‘Examination of Agreements and Practices’ by the tribunal. The commissioner was authorised, under s 47(1), to apply to the tribunal where the commissioner had reason to believe that an agreement was examinable and was of the opinion that the agreement was contrary to the public interest. (A similar application could be made by the commissioner under s 47(2) of the Act in relation to a practice.) Under s 49 of the Act, if the tribunal was satisfied that an examinable agreement or practice existed, it was to make a determination to that effect and determine whether, in its opinion, the agreement or practice was contrary to the public interest. Section 50 set out the factors that the tribunal was to take into account in determining whether an agreement or practice was contrary to the public interest: 50(1) In considering whether any restriction, or any practice other than a practice of monopolisation, is contrary to the public interest, the Tribunal shall take as the basis of [page 888] its consideration the principle that the preservation and encouragement of competition are desirable in the public interest, but shall weigh against the detriment constituted by any proved restriction of, or tendency to restrict, competition any effect of the restriction or

practice as regards any of the matters referred to in the next succeeding sub-section if that effect tends to establish that, on balance, the restriction or the practice is not contrary to the public interest. (2) The matters that are to be taken into account in accordance with the last preceding subsection are — (a) the needs and interests of consumers, employees, producers, distributors, importers, exporters, proprietors and investors; (b) the needs and interests of small businesses; (c) the promotion of new enterprises; (d) the need to achieve the full and efficient use and distribution of labour, capital, materials, industrial capacity, industrial know-how and other resources; (e) the need to achieve the production, provision, treatment and distribution, by efficient and economical means, of goods and services of such quality, quantity and price as will best meet the requirements of domestic and overseas markets; and (f) the ability of Australian producers and exporters to compete in overseas markets. (3) In considering the public interest in relation to a practice of monopolisation, the Tribunal shall weigh against any detriment (including detriment constituted by any proved restriction of, or tendency to restrict, competition) that has resulted or can be expected to result, from the practice any effect of the practice as regards any of the matters referred to in paragraphs (a) to (f) of the last preceding sub-section if that effect tends to establish that, on balance, the practice is not contrary to the public interest.

Section 52 authorised the tribunal to make orders restraining the parties from giving effect to an agreement or practice, and those orders were to have the force of law. Part VII of the Act was headed ‘Enforcement of Orders of Tribunal’. Under s 67 of the Act, a person who did not comply with an order of the tribunal was guilty of contempt of the tribunal; and, under s 68, such a contempt could be punished by the Industrial Court as if it were a contempt of that court. Section 102 of the Act provided that the validity of a determination of the tribunal could not be challenged, subject to the jurisdiction of the High Court to issue mandamus, prohibition or certiorari or grant an application. The commissioner applied to the tribunal for a determination in relation to an agreement to which Tasmanian Breweries Pty Ltd was a party. Tasmanian Breweries Pty Ltd applied to the High Court for a writ of prohibition restraining the tribunal from hearing the commissioner’s application.] Kitto J: [I]t has not been found possible to frame an exhaustive definition of judicial power. But this is not to say that the expression is meaningless. The uncertainties that are met with arise, generally if not always, from the fact that there is a ‘borderland in which judicial and administrative functions overlap’ (Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC 134 at 148), so that for reasons depending upon general reasoning, analogy or history, some powers which may appropriately be treated as administrative when conferred on an administrative functionary may just as appropriately be seen in a judicial aspect and be validly conferred upon a federal court. The judgments in Reg v Davison (1954) 90 CLR 353 provide illustrations of this. But I do not think that any such difficulty confronts us here. There are no traditional concepts to be applied as there were in Reg v Davison, and two considerations, one negative [page 889]

and the other positive, appear to me when taken together to require the conclusion that the powers entrusted to the Tribunal are essentially non-judicial. The powers must, of course, be performed in a judicial manner, that is to say with judicial fairness and detachment, but the same is true of many administrative powers. Close examination of the relevant provisions of the Act shows, I think, that on the one hand no exercise of any of the Tribunal’s powers is an adjudication (in the proper sense of the word), and that on the other hand the result achieved by an exercise of any of the powers is a result foreign to the nature of judicial power. In Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC at 149, Lord Simonds for the Privy Council said: It is a truism that the conception of the judicial function is inseparably bound up with the idea of a suit between parties, whether between Crown and subject or between subject and subject. This is not to say that some powers may not be held to be judicial though no adjudication in a lis inter partes is involved, for there may be sufficient justification for such a conclusion in an analogy with an admittedly judicial function, or in the fact that the power is ancillary to a judicial function, or in some such consideration: see Reg v Davison (1954) 90 CLR at 368. But in general the notion is there, even if in the background, of arbitrament upon a question as to whether a right or obligation in law exists. Griffith C J fastened upon it in the passage in his judgment in Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 which the Privy Council has repeatedly approved, not as a comprehensive definition but as a statement of the broad features of judicial power: see Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC at 149. It will be remembered that to him the central idea was ‘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’. See also the statements of Palles CB and Holmes J cited in Reg v Davison (1954) 90 CLR at 367, 370. Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. It is right, I think, to conclude from the cases on the subject that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified. The powers of the Tribunal do not present any such feature, and they are not directed to any determination or order which resolves an actual or potential controversy as to existing rights or obligations. The Commissioner alone is authorised to institute proceedings before the Tribunal. He is of course a party to the proceedings (see eg s 71), but he does not come before the Tribunal asserting a right to relief in either a personal or a representative capacity. He makes allegations of fact relevant to the questions the Tribunal is required by the Act to consider, and the Tribunal, if it is satisfied that the agreement or practice is examinable, has then to form and give expression to its own opinion as to whether the relevant restriction or practice is ‘contrary to the public interest’. Even where the Commissioner makes submissions

[page 890] on these questions in order to assist the Tribunal, he is not seeking the vindication of any right or obligation. In particular, if he submits that a particular restriction or practice is or is not contrary to the public interest he is not thereby contending that a decision should be made for or against the existence of any right or obligation so as to be binding as between the parties to the restriction or practice, or as between them and either the Crown or the public. The inquiry is not into the validity of the agreement or the legality of the practice, as s 51 shows most clearly. Even in relation to an agreement, the question is not whether it is contrary to public policy in the sense in which the term is used in the common law: cf In re Chemists’ Federation Agreement (No 2) [1958] 1 WIR 1192 at 1212. The determination does not resolve any question as between opposed interests. It merely records whether the Tribunal has satisfied itself, first, that an agreement or practice has the characteristics which the Act comprehends in the word ‘examinable’, and, secondly, that the restriction or practice, if examinable, is contrary to the public interest. Such determinations as these have quite often to be made in the exercise of administrative power. The fact that an official is given a power conditionally upon being satisfied of a particular state of facts — and so is authorised to determine unexaminably ‘the jurisdictional fact’ upon which his power depends (if the expression be thought appropriate) — is no indication that in deciding whether he is so satisfied he is exercising judicial power. In the well-known judgment of Palles CB in R v Local Government Board for Ireland [1902] 2 IR 349 there is a passage which has been repeatedly cited in this Court and has been relied upon in the present case as tending against this view. The learned Chief Baron observed that if the existence of a ministerial power depends upon a contingency, although it may be necessary for the officer to determine whether the contingency has happened, in

order to know whether he shall exercise the power, his determination does not bind, for as his Lordship went on to say: The happening of the contingency may be questioned in an action brought to try the legality of the act done under the alleged exercise of the power. But where the determination binds, although it is based on an erroneous view of the facts or law, then the power authorising it is judicial. [[1902] 2 IR at 374.] The reference is to a power which depends upon the happening of a contingency. We are here concerned with a power which depends upon nothing but the Tribunal’s own satisfaction that certain conditions exist. The determination of the Tribunal that it is so satisfied — the making of its ‘findings’ (as s 49 calls them) — does not bind in the sense in which Palles CB used the expression; that is to say, it does not conclude for all purposes any question as to which the Tribunal declares itself satisfied. It answers only the question whether the Tribunal is in fact so satisfied — and does not answer even that question conclusively, for if the Tribunal were to record that it was so satisfied when in fact it was not, the next step, which the Tribunal is authorised to take only if it is so satisfied, could be set aside by this Court in exercise of the jurisdictions which s 102(2) acknowledges. A determination that an agreement or a practice is examinable therefore has, in my opinion, no point of contact with the concept of judicial action unless it derives it from the nature of the power to which it is preliminary. But the power which the Tribunal may exercise if satisfied on the preliminary point is to determine ‘in accordance with its opinion’, a question that is essentially nonjusticiable. I so describe it for the reason that it does not depend upon the application of any ascertainable criterion. The Act requires the Tribunal in considering the question of the public interest to make a basic assumption and to take certain matters into consideration (s 50), but the question upon which it has to pronounce is not as to whether the

[page 891] relevant restriction or practice satisfies an ascertained standard but as to whether it satisfies a description the content of which has no fixity — a description which refers the Tribunal ultimately to its own idiosyncratic conceptions and modes of thought. In words which I take from the joint judgment in Reg v Spicer; Ex parte Waterside Workers’ Federation of Australia (1957) 100 CLR 312 at 317, it may be said here that there is no ‘claim of right depending on the ascertainment of facts and the application to the facts of some legal criterion provided by the legislature’. The judgment proceeded: The existence of some judicial discretion to apply or withhold the appointed legal remedy is not necessarily inconsistent with the determination of such a matter in the exercise of the judicial power of the Commonwealth. But it is perhaps necessary to add that the discretion must not be of an arbitrary kind and must be governed or bounded by some ascertainable tests or standards. [(1957) 100 CLR 312 at 317.] Similarly, to confer a power of discretionary judgment as to whether a restriction or practice has a specified quality may be to confer judicial power, but only if the quality is so described that its existence is to be judged by applying an objective test or standard supplied by the legislature. When the Tribunal, in conformity with s 49(1)(b), ‘determines, in accordance with its opinion, whether the relevant restrictions to which the proceedings relate are contrary to the public interest’ it necessarily supplies for itself its own subjective criterion for deciding, as a matter of individual opinion, though on the assumption required by s 50(1) and taking into account all the matters specified in the Act, where the public interest appears to it to lie in the circumstances in which the restrictions or practice

operate. Thus the work of the Tribunal is work which would be appropriate for the legislature itself to do if it had the time to consider individual cases. It would be obviously impracticable for the Parliament to apply its own ideas as to what is contrary to the public interest, either by passing a special Act for every individual case or by laying down a definition which in every case would be sure to produce a result satisfactory to it. There is probably no practicable alternative to setting up an authority which with some but incomplete guidance from the legislature will apply its own notions concerning the public interest. This course the Trade Practices Act adopts, contenting itself with prescribing the qualifications for membership of the Tribunal, giving a limited measure of guidance, and then relying upon the Executive’s choice of members to ensure, so far as assurance is possible, that the notions applied will be such as the Parliament would approve. None of the powers of the Tribunal, then, involves any adjudication upon a claim of right. This negative consideration, however, does not stand by itself. The effect given by the Act to a determination under s 49 that a restriction or practice is contrary to the public interest is to render unenforceable for the future an agreement under which the restriction is accepted or the practice is provided for (s 51), and to enable the Tribunal to make such orders as it thinks proper for restraining future conduct which falls within certain descriptions (s 52). The determination itself has no operative effect: it constitutes the factum by reference to which the Act operates to alter the law in relation to the particular case. And an order under s 52 (or an interim restraining order under s 54) is in like case. It presents a direct contrast with an injunction granted by a court as a means of enforcing obligations that have been established by adjudication. The order restrains future conduct, not as being in breach of ascertained obligations, but as being in conformity with ascertained obligations or practices — not in order to ensure observance of them but to prevent observance of them, because it

is considered that their observance would be against the public interest. The Act, particularly s 52(7), operates [page 892] upon the order to give its provisions the force of law, and thus to alter the law for the future in relation to the particular case. For these reasons the powers of the Tribunal seem to me to be of a nature foreign to the concept of judicial power. [McTiernan, Owen, Windeyer and Walsh JJ delivered separate judgments to the same effect. Menzies J dissented].

8.2.26C

Precision Data Holdings Ltd v Wills (1991) 173 CLR 167

[Section 171 of the Australian Securities Commission Act 1989 (Cth) established the Corporations and Securities Panel. The panel was authorised to exercise certain powers under ss 733 and 734 of the Corporations Law 1990. The Corporations Law 1990 was, for the purpose of the present proceedings, a law of the Victorian Parliament. Section 733 authorised the panel, on an application by the Australian Securities Commission (ASC), to declare that an acquisition of shares or conduct was ‘unacceptable’, where the panel was satisfied that ‘unacceptable circumstances’ had occurred in the acquisition of shares and that the public interest made such a declaration desirable. Section 734 authorised the panel, where a s 733 declaration had been made, to make a range of orders on the application of the ASC, including orders prohibiting the exercise of rights attached to shares, directing the disposal of shares or cancelling an agreement. If a person contravened those orders, the Federal Court or the relevant state

Supreme Court was empowered to make an order for the purpose of securing compliance with the panel’s orders. In the present case, the ASC applied to the panel for declarations under s 733, alleging that several companies and individuals had engaged in ‘unacceptable conduct’ in connection with a reverse takeover of Titan Hills Ltd in May 1991. The ASC included, in its application to the panel, an application for orders under s 734. The plaintiffs, who were respondents to the ASC’s application to the panel, began proceedings in the High Court, seeking a declaration that ss 733 and 734 of the Corporations Law were invalid because they vested judicial power in the panel. It was contended that, because the panel was established under Commonwealth law, it could not exercise powers that involved the adjudication of disputes about rights and obligations arising from the operation of the law upon past events or conduct, and that ss 733 and 734 purported to give the panel such powers. The court disposed of the challenge by deciding that ss 733 and 734 did not confer judicial power on the panel. (Accordingly, the court did not need to deal with the complex questions raised by the fact that those provisions were contained in Victorian legislation, while the provision authorising the panel to exercise those powers was contained in a Commonwealth law.)] Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ: Does the Panel exercise judicial power? It is convenient to consider the plaintiffs’ submission that ss 733 and 734 vest the exercise of judicial power in the Panel. Only in the event that this submission is accepted will it be necessary to consider the plaintiffs’ second submission, namely, that the Panel, though it is not a federal court constituted as Ch III of the Constitution prescribes, is exercising [page 893]

the judicial power ‘of the Commonwealth’. It was submitted that the Panel is empowered to hear and determine a dispute between parties, on the application of the ASC, by making a declaration as to past conduct, involving the making of findings of fact, and by making orders affecting the existing rights of parties. Thus, once the Panel declares under s 733(3) an acquisition of shares to have been an unacceptable acquisition, or conduct engaged in by a person in relation to shares in, or the affairs of, a company to have been unacceptable conduct, the Panel is authorised to make orders affecting such rights. By way of example, the panel may make an order prohibiting the exercise of voting rights or the acquisition or disposal of specified shares, or an interest in those shares, or an order that the exercise of the voting or other rights attached to specified shares be disregarded. In this setting, so the argument runs, the making of a declaration and the consequential orders amount to an authoritative and binding determination which is characteristic of the exercise of judicial power. True it is that the making of binding declarations of right by way of adjudication of disputes about rights and obligations arising from the operation of the law upon past events or conduct is a classical instance of the exercise of judicial power. [Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 at 148–9.] But the declarations for which s 733 provides are not binding declarations of right in the sense in which that term is used, more particularly in the context of the exercise of judicial power. That is because the adjudication which the Panel under s 733 is called upon to make is not an adjudication of a dispute about rights and obligations arising solely from the operation of the law on past events or conduct. The acknowledged difficulty, if not impossibility, of framing a definition of judicial power that is at once exclusive and exhaustive arises from the circumstance that many positive features which are essential to the exercise of the power are not by themselves conclusive of it. Thus, although the finding of facts and the making of value judgments, even the formation of

an opinion as to the legal rights and obligations of parties, are common ingredients in the exercise of judicial power, they may also be elements in the exercise of administrative and legislative power. [Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656 at 665–7; Re Cram (1987) 163 CLR at 149.] Again, functions which are ordinary ingredients in the exercise of administrative or legislative power can, in some circumstances, be elements in the exercise of what is truly judicial power. It follows that functions may be classified as either judicial or administrative according to the way in which they are to be exercised. [Reg v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 at 628; Re Ranger Uranium Mines (1987) 163 CLR at 665.] So, if the ultimate decision may be determined not merely by the application of legal principles to ascertained facts but by considerations of policy also, then the determination does not proceed from an exercise of judicial power. [Reg v Davison (1954) 90 CLR 353 at 366–7 per Dixon CJ and McTiernan J, citing the comments of Lord Simonds LC in Labour Relations Board of Saskatchewan v John East Iron Works Ltd [1949] AC 134 at 149.] That is not to suggest that considerations of policy do not play a role, sometimes a decisive role, in the shaping of legal principles. Furthermore, if the object of the adjudication is not to resolve a dispute about the existing rights and obligations of the parties by determining what those rights and obligations are but to determine what legal rights and obligations should be created, then the function stands outside the realm of judicial power. In Re Ranger Uranium Mines (1987) 163 CLR at 666 the Court said: The power of inquiry and determination is a power which properly takes its legal character from the purpose for which it is undertaken. Thus inquiry into and determination of

[page 894] matters in issue is a judicial function if its object is the ascertainment of legal rights and obligations. But if its object is to ascertain what rights and obligations should exist, it is properly characterised as an arbitral function when performed by a body charged with the resolution of disputes by arbitration. The Court was then speaking with reference to an arbitral function of the Conciliation and Arbitration Commission but, as the judgment shows, [(1987) 163 CLR, at 665–6; see also Re Cram (1987) 163 CLR at 149] the remarks apply with equal force to determinations made for administrative, executive or legislative purposes. When the function to be performed by the Panel under s 733 is examined in the light of the principles stated above, it becomes apparent that the decision to be made by the Panel is not an adjudication of a dispute about existing rights and obligations. The Commission alone can institute proceedings before the Panel and invoke an exercise of its authority. In applying for a declaration under s 733, the Commission is not seeking the vindication of any right or obligation; a declaration, when made, does not resolve an actual or potential controversy as to existing rights. Nor does the Panel, in granting or refusing a declaration, make its decision solely by reference to the application of the law to past events or conduct. Although the function entrusted to the Panel is that of making a declaration about past events or conduct, the function is one in which the Panel is bound to take account of the considerations of commercial policy mentioned in s 731 [‘[T]he desirability of ensuring that the acquisition of shares in companies takes place in an efficient, competitive and informed market.’] and ‘any other matters the Panel considers relevant’ in arriving at the conclusion that it is in the public interest to make a declaration, as well as to apply the provisions

of ss 732 and 733 to the facts which it finds. Furthermore, the object of the inquiry undertaken by the Panel and of the declaration which it makes under s 733 is to enable the Panel to make one or more of the orders set out in s 734. In other words, the object of the Panel’s inquiry and determination is to create a new set of rights and obligations, that is, rights and obligations arising from such orders as the Panel may make in a particular case, being rights and obligations which did not exist antecedently and independently of the making of the orders. It follows from what has already been said that, in creating that new set of rights and obligations, considerations of policy, including commercial policy, as well as factors not specified by the legislature yet deemed relevant by the Panel, on which it may form a subjective judgment, must inevitably play a prominent part. The materiality of these considerations is reflected in the prescription in s 172 of the ASC Act of the qualifications for appointment as a Panel member, namely, that he or she have knowledge or experience in one or more of the fields of business, the administration of companies, the financial markets, law, economics and accounting. There is no necessity that any member has a legal qualification. In some situations, the fact that the object of the determination is to bring into existence by that determination a new set of rights and obligations is not an answer to the claim that the function is one which entails the exercise of judicial power. The Parliament can, if it chooses, legislate with respect to rights and obligations by vesting jurisdiction in courts to make orders creating those rights or imposing those liabilities. It is an expedient which is sometimes adopted when Parliament decides to confer upon a court or tribunal a discretionary authority to make orders which create rights or impose liabilities. This legislative technique and its consequences in terms of federal jurisdiction were discussed by Dixon J in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 165 et seq. Leaving aside problems that might arise

because of the subject-matter involved or because of some prescribed procedure not in keeping with the judicial process, [page 895] where a discretionary authority is conferred upon a court and the discretionary authority is to be exercised according to legal principle or by reference to an objective standard or test prescribed by the legislature and not by reference to policy considerations or other matters not specified by the legislature, it will be possible to conclude that the determination by the court gives effect to rights and obligations for which the statute provides and that the determination constitutes an exercise of judicial power. [Reg v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 377, per Kitto J.] However, where, as here, the function of making orders creating new rights and obligations is reposed in a tribunal which is not a court and considerations of policy have an important part to play in the determination to be made by the tribunal, there is no acceptable foundation for the contention that the tribunal, in this case the Panel, is entrusted with the exercise of judicial power. The fact that the Panel is given a power to make orders conditionally upon its having declared the acquisition to have been an unacceptable acquisition or the conduct to have been unacceptable conduct does not indicate that the Panel is exercising judicial power in making the declaration or subsequently in making orders. As the making of a declaration necessarily proceeds in part, at least, from an assessment of considerations of commercial policy, not solely from an application of the law to the facts as found, neither the making of a declaration nor the making of orders is binding in the same sense that a judicial determination would be binding. Both are subject to judicial review. The consequence is that, for much the

same reasons as the Trade Practices Tribunal was held not to exercise judicial power in discharging its functions under ss 49, 50 and 52 of the Trade Practices Act 1965 (Cth), the Panel does not exercise judicial power in making or refusing a declaration under s 733 or in making or refusing orders under s 734.

8.2.27 The provisions setting up the Takeovers Panel and providing for its functions were re-enacted, with some modifications, in the Corporations Act 2001 (Cth). In particular, the Takeovers Panel may declare circumstances to be unacceptable if it appears to the panel that the circumstances constitute or give rise to a contravention of certain offence provisions within the Act. A declaration can only be made if it is not against the public interest to do so ‘after taking into account any policy considerations that the panel considers relevant’. In exercising its powers, the panel must have regard to, amongst other things, the desirability of ensuring an efficient, competitive and informed market. For similar reasons to those put forward in Precision Data, the High Court in Attorney-General (Cth) v Alinta Ltd (2008) 233 CLR 542 held the new provisions to be valid. Importantly, the fact that the panel was required to form a view as to whether there were contraventions of offence provisions did not deny the power a non-judicial character. 8.2.28 These principles were applied in Australian Communications and Media Authority v Today FM (2015) 255 CLR 352. In issue was the validity of provisions of the Broadcasting Services Act 1992 (Cth) that permitted the Australian Communications and Media Authority (the Authority) to take regulatory enforcement action against a commercial broadcaster in the event that the broadcaster committed an offence in the course

of using a broadcast service. It was a condition imposed under cl 8(1)(g) of Sch 2 to the Act that broadcasters would not use a service in the commission of an offence. Breaches of licence conditions were subject to a range of enforcement mechanisms: criminal prosecution (s 129), civil penalty proceedings (s 140A(3)) and administrative action by the Authority, including directions to remedy the [page 896] breach (s 141) and suspension or cancellation of a licence: s 143. A decision by the Authority to suspend or cancel a licence was subject to merits review by the Administrative Appeals Tribunal (the AAT). The respondent held a commercial broadcasting licence and, as a result of an alleged offence, was liable to enforcement action. The question was whether the Authority’s power to take administrative enforcement action, on its view that an offence had been committed, involved an exercise of judicial power in breach of the separation principles. The circumstances giving rise to this High Court challenge are set out in the extract below. 8.2.29C

Australian Communications and Media Authority v Today FM (2015) 255 CLR 352

French CJ, Hayne, Kiefel, Bell and Keane JJ: Today FM … holds a commercial radio broadcasting licence. On 4 December 2012, Today FM recorded a telephone call between two presenters of its ‘Summer 30’ program and two

members of the staff of the King Edward VII Hospital in London, at which the Duchess of Cambridge was an in-patient. The presenters represented that they were Queen Elizabeth II and Prince Charles and they inquired about the Duchess. One of the staff, apparently accepting the callers as genuine, provided some information about the Duchess’ condition. … The Authority initiated an investigation into the broadcast. It invited Today FM to make submissions directed to whether, among other things, it had breached the cl 8(1)(g) licence condition by the commission of the offence in s 11(1) of the Surveillance Devices Act 2007 (NSW) (‘the SDA’). Today FM acknowledged that, before the segment was broadcast, it had not obtained the consent of either of the hospital staff to the recording, but it did not accept that it had committed any offence. [The Authority prepared a preliminary investigation report with its preliminary finding that there had been a contravention of s 11 of the SDA and had, consequently, breached the condition in cl 8(1)(g) of Sch 2 to the Broadcasting Services Act (BSA):] … Today FM asserts that if, upon its proper construction, cl 8(1)(g) authorises the Authority to find that the licensee has breached the condition and to take enforcement action under ss 141 and 143 prior to a competent court finding that the relevant offence has been committed, the provisions of the BSA that purport to authorise that conduct are invalid to that extent because they are inconsistent with the separation of executive and judicial power under the Constitution. Today FM’s constitutional argument in its written submissions … invoked Kitto J’s statement of the attributes of judicial power in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd [(1970) 123 CLR 361 at 374]: [A] judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes

of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. A number of features of the statutory scheme were relied upon for the conclusion that ‘the Authority is purporting to exercise judicial power’. It was asserted that the Authority has purported to: resolve ‘a controversy’ relating to ‘pre-existing and fundamental rights’, being Today FM’s ‘legal rights and interests in licence 3032’; exercise a discretion by applying legal [page 897] criteria to facts as found by it; and have the capacity to make consequential decisions with immediate effect depriving Today FM of its ‘property rights’ in the licence. Finally, it was said that the subject-matter on which the Authority has made findings of fact is ‘quintessentially a subject-matter of the exercise of the judicial power’ — the function of adjudicating and punishing criminal guilt. … On the hearing of the appeal in this Court, Today FM’s constitutional argument was refined. Today FM acknowledges that it is open to an administrative body to form an opinion as to the legal rights of an individual as a step in that body’s ultimate determination. It accepts that the formation of such an opinion does not involve the exercise of judicial power. … Rather than characterising [the Authority’s] finding and any consequential enforcement action as possessing all or any of the attributes of judicial power within Kitto J’s classic statement, Today FM now relies upon the exception his Honour allowed in the concluding passage of his analysis [94]: It is right, I think, to conclude from the cases on the subject

that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified. (emphasis added) The ‘special compelling feature’ on which Today FM relies is the power under s 143 to suspend or cancel a commercial broadcasting licence when that power is enlivened by a claimed breach of the cl 8(1)(g) licence condition. The predicate of the power in this event is the finding of the commission of the relevant offence. That finding is the essential step to the imposition of what is said to be in substance a penalty. To gainsay the finding in proceedings in the AAT, the licensee is required to discharge an onus of demonstrating that it, or a third person, did not commit the relevant offence. In this limited sense, Today FM submits that the Authority’s finding has a ‘quasi-finality’ to it. Although no determination to suspend or cancel Today FM’s licence has been made, the challenge to the validity of the Authority’s finding is put on the footing that the cl 8(1)(g) licence condition is part of the ‘integrated structure’ of … the BSA, governing the enforcement of licence conditions. It adds nothing to the constitutional challenge to describe the Authority’s finding of breach of the cl 8(1)(g) licence condition, where it is the foundation for suspension or cancellation of a commercial broadcasting licence, as possessing a quality of ‘quasi-finality’. Nor do the submissions that characterise a commercial broadcasting licence as a ‘pre-existing and fundamental right’ and its suspension or cancellation as akin to the imposition of a penalty. Commercial broadcasting licences are issued subject to conditions, the breach of any one of which may result in suspension or cancellation. … The finding that Today FM’s broadcasting service was used in the commission of an offence does not resolve a controversy respecting pre-existing rights or obligations. It is a step in the determination of breach of the cl 8(1)(g) licence

condition and is the foundation for the Authority to institute civil penalty proceedings in the Federal Court of Australia or to take administrative enforcement measures, including imposing further conditions on Today FM’s licence, accepting an enforceable undertaking, issuing a remedial direction, or suspending or cancelling Today FM’s licence. It is well settled that functions may be judicial or administrative depending upon the manner of their exercise. … [N]one of the features of the power conferred on the Authority to [page 898] investigate and report on breach of the cl 8(1)(g) licence condition and to take consequential administrative enforcement action support the conclusion that it is engaged in the exercise of judicial power. [Gageler J made similar comments at 382, 386.]

8.2.30 There are a number of other cases that highlight the flexibility allowed to parliament when designing decision-making schemes. Visnic v ASIC (2007) 231 CLR 381 and Albarran v Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 upheld powers given to disciplinary bodies to cancel professional registrations in circumstances of misconduct or breach of professional standards. In Attorney-General (Cth) v Breckler (1999) 197 CLR 83, the High Court upheld a legislative scheme conferring power on the Superannuation Complaints Tribunal, an administrative body, to review the decision of a private trustee to make superannuation payments under a superannuation fund. In Luton v Lessels (2002) 210 CLR 333, the High Court upheld the

conferral of power on the Child Support Registrar to make decisions about child support payments that imposed obligations on a liable parent to pay child support amounts to a child’s carer. All these decisions impacted on rights in important ways. Nevertheless, they did not require the decision-maker to determine a dispute about pre-existing rights and, thus, did not involve an exercise of Commonwealth judicial power. 8.2.31 These cases indicate that the High Court has allowed parliament significant scope to design administrative decisionmaking processes. However, as the decision in British Imperial Oil Co Ltd v Federal Commissioner of Taxation (1925) 35 CLR 422 suggested, there are limits to what parliament can do. Two other examples of successful challenges to Commonwealth legislation conferring powers on administrative tribunals are Brandy v Human Rights and Equal Opportunity Commission (1994) 183 CLR 245 and Lane v Morrison (2009) 239 CLR 230. In Brandy v Human Rights and Equal Opportunity Commission, all members of the High Court held that several provisions of the Racial Discrimination Act 1975 (Cth) were invalid because the sections conferred judicial power on the Human Rights and Equal Opportunity Commission, a body established to administer anti-discrimination laws. The relevant sections provided that, where the commission had resolved a complaint of discrimination and decided that an act of discrimination had been committed, the commission’s decision could be registered with the Federal Court. Upon registration, the commission’s decision would take effect as if it was an order of that court unless the court reviewed the decision. Any review by the court was not to be based on ‘new evidence’ unless the court gave leave for that new evidence to be admitted.

8.2.32 Mason CJ, Brennan and Toohey JJ said that the Racial Discrimination Act 1975, in providing for registration of a determination of the commission and its enforcement as if it were an order of the Federal Court, purported to give the commission the judicial power of the Commonwealth. They added that the jurisdiction of the Federal Court to review a decision of the commission was not an answer to that conclusion. Deane, Dawson, Gaudron and McHugh JJ said that, if it were not for the provisions dealing with the registration and enforcement of the commission’s determinations, it would be plain that the commission did not exercise judicial power ‘because its determination would not be binding or conclusive between any of the parties and would be unenforceable’: 183 CLR at 269. [page 899] However, the registration provisions reversed that situation. The effect of registration was to make the determination enforceable as if it were a decision of the Federal Court, and to invest part of the judicial power of the Commonwealth in the commission (183 CLR at 270): The circumstances in which a determination may be made by the Commission are prescribed by the Act and, except upon a review, the Federal Court is precluded from any consideration of those circumstances either upon the registration of a determination or in relation to its enforcement. The determination remains the determination of the Commission and in no sense becomes the determination of the Federal Court.

Having concluded that registration of the determination did not

amount to the commencement of proceedings in the original jurisdiction of the Federal Court, Deane, Dawson, Gaudron and McHugh JJ said that ‘the existence of the review procedure does not bear upon the question whether the determination was made in the exercise of the judicial power … The existence or exercise of a right of appeal from a decision made in the exercise of judicial power does not convert that decision into one of an administrative kind’: 183 CLR at 270–1. 8.2.33 More recently, in Lane v Morrison (2009) 239 CLR 230 the High Court struck down the Australian Military Court — a non-judicial tribunal established to exercise disciplinary jurisdiction. The High Court held that parliament had conferred Commonwealth judicial power on the tribunal in breach of the separation of judicial power principles. For further discussion of this case, see 8.2.52. 8.2.34 When Griffith CJ set out his classic definition in Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 (see 8.2.16), he emphasised the idea that the exercise of judicial power was an expression of state sovereignty. One of the reasons supporting the conclusion in Attorney-General (Cth) v Breckler (1999) 197 CLR 83 that the Superannuation Complaints Tribunal was not exercising judicial power was that the source of the tribunal’s authority was the private deed of the relevant superannuation trusts that had opted into the tribunal complaints process. The court held that the authority of the tribunal ‘involved not the exercise of the sovereign power … but the arbitration of a dispute using procedures and criteria adopted by the [trust deed] … for the resolution of certain disputes’: 197 CLR at 110–11.

8.2.35 The distinction between judicial power and private arbitration was also relied upon by the High Court in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 to uphold the validity of provisions of the International Arbitration Act 1974 (Cth) which gives force of law to the UNCITRAL Model Law on International Commercial Arbitration. The scheme under the Act allows for the registration and enforcement in an Australian court of arbitral awards made by arbitral tribunals under art 35 of the Model Law. [page 900]

8.2.36C TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533

Hayne, Crennan, Kiefel and Bell JJ: The exercise of judicial power is an assertion of the sovereign [Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357 per Griffith CJ], public authority of a polity. Whilst it is ‘both right and important to observe that the determination of rights and liabilities lies at the heart of the judicial function’ [South Australia v Totani (2010) 242 CLR 1, 86 per Hayne J], parties are free to agree to submit their differences or disputes as to their legal rights and liabilities for decision by an ascertained or ascertainable third party, whether a person or a body. As will be explained, where parties do so agree, ‘the decision maker does not exercise judicial power, but a power of private arbitration’. An agreement to submit disputes to arbitration does not, apart from statute, take from a party the power to invoke the

jurisdiction of the courts to enforce that party’s rights by instituting an action to determine a dispute of a kind that the parties have agreed should be arbitrated. The jurisdiction of the courts is not and cannot be ousted by a private agreement. However, if parties do go to arbitration and the arbitrator makes an award, the making of the award has legal significance in respect of the parties’ dispute and their rights and liabilities. As the plurality in Dobbs [v National Bank of Australasia Ltd (1935) 53 CLR 643, 652–653, citing Kill v Hollister (1746) 1 Wils KB 129] said: ‘if, before the institution of an action, an award was made, it [the award] governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined’ (emphasis added). In such a case, the arbitrator’s award governs the rights of the parties because ‘[b]y submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them’ [at 653]. This gives rise to the general rule that an award made by an arbitrator pursuant to such authority is final and conclusive. Further, the arbitrator’s making of an award in exercise of such authority both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. The former rights of the parties are discharged by an accord and satisfaction. The accord is the agreement to submit disputes to arbitration; the satisfaction is the making of an award in fulfilment of the agreement to arbitrate. It follows that when an arbitral award is enforced by curial process, the obligations sought to be enforced are those which are created by the award in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. A party may sue on an award as a cause of action or, in some cases, as in this case, seek enforcement of the award pursuant to the [International Arbitration Act]. The proposition identified as underpinning TCL’s submissions

assumes, wrongly, that the rights and liabilities which are in dispute in an arbitration continue despite the making of an award. That is, it assumes, wrongly, that the courts will not give effect to the discharge of those pre-existing rights and liabilities by the accord and satisfaction which is effected by a reference to arbitration and the making of an award. [French CJ and Gageler J made similar comments at 553–5.]

[page 901]

Courts cannot exercise non-incidental non-judicial power 8.2.37C

R v Spicer; Ex parte Australian Builders’ Labourers Federation (1957) 100 CLR 277

[Following the High Court’s decision in the Boilermakers’ case (1956) 94 CLR 254 8.2.9C, the federal parliament enacted the Conciliation and Arbitration Act 1956, which amended the Conciliation and Arbitration Act 1904 to establish the Commonwealth Conciliation and Arbitration Commission and the Commonwealth Industrial Court. It was intended that the commission would carry out the functions of conciliating and arbitrating interstate industrial disputes and the court would perform the judicial functions associated with industrial conciliation and arbitration. Among the powers vested in the court was the power of disallowing a rule of an industrial organisation conferred by s 140 of the Conciliation and Arbitration Act 1904 (Cth):

140 (1) The Court may, upon its own motion or upon application made under this section, disallow any rule of an organization which, in the opinion of the Court — (a) is contrary to law, or to an order or award; (b) is tyrannical or oppressive; (c) prevents or hinders members of the organization from observing the law or the provisions of an order or award; or (d) imposes unreasonable conditions upon the membership of any member or upon any applicant for membership, and any rule so disallowed shall be void. (2) Any member of an organization may apply to the Court for the disallowance of any rule of the organization on any of the grounds specified in the last preceding sub-section. (3) The Court may, in its discretion, instead of disallowing that rule, direct the organisation concerned to alter the rule within a specified time, so as to bring it into conformity with the requirements of this Act and, if, at the expiration of that time, the rule has not been so altered, the Court may then disallow the rule and the rule shall be void. In Consolidated Press Ltd v Australian Journalists’ Association (1947) 73 CLR 549, the High Court had held that an equivalent power, conferred on the arbitration court by s 58D of the Conciliation and Arbitration Act 1904, was not a judicial power, so that no appeal could be brought to the High Court, under s 73(ii) of the Constitution, from a decision made under s 58D. In 1957, an application was made to the Industrial Court for an order under s 140 in relation to certain rules of the Australian Builders’ Labourers Federation. The federation applied to the High Court for an

order of prohibition to restrain the Industrial Court from hearing the s 140 application. After referring to the former s 58D of the Conciliation and Arbitration Act 1904 and the decision in Consolidated Press Ltd v Australian Journalists’ Association (1947) 73 CLR 549, Dixon CJ continued:] Dixon CJ: Bearing the stamp of this characterisation, without any change in the provisions delimiting and describing the power, the power has been transferred bodily to a court created under ss 71 and 72 of the Constitution and armed with judicial powers. Why this course was taken we cannot know. Perhaps the decision in the case of Consolidated Press Ltd v Australian Journalists’ Association (1947) 73 CLR 549 escaped notice; and that may be true too of the decision in the Shipping Board case (1925) 36 CLR 442 as to the power to [page 902] cancel registration. If the characterisation was correct and it remains true of the power after the transfer, then the provision must be invalid. As to the correctness of the characterisation, it is proper to say that a close examination of the provision suggests additional reasons in support of it. In the first place the draftsman of s 140 has not approached his task as if he were giving jurisdiction over a ‘matter’ in accordance with s 76(ii) of the Constitution. Provided the necessary existence of a ‘matter’ can be extracted from the nature of the power or authority given or from the terms in which it is given or from the implications, that might not be fatal. The question was discussed in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett; Barrett v Opitz (1945) 70 CLR 141 at 164–9 and in Hooper v Hooper (1955) 91 CLR 529 at 535–8. But while, if the conditions stated are fulfilled, it is possible that the legislative

power given by s 76 and by s 77(i) and (iii) may be validly exercised by an enactment expressed in terms of authorisation or empowering, it is more natural to treat a provision so expressed as an exercise of some other legislative power. In the next place the fact that the court is authorised to act of its own motion tells rather strongly against the view that it is intended to exercise part of the judicial power of the Commonwealth. Again, this is not necessarily decisive: for clearly there may be ‘matters’ for judicial decision where a court exercising judicial powers must act of its own motion, as for example in the case of certain contempts. But these are special cases. In the third place, you find the word ‘may’ employed in conferring the power and that is apt enough if it were intended to give a complete discretion based wholly on industrial or administrative considerations. Sub-section (3), though otherwise of little importance in the question, does lead some support to this interpretation of the provision. In the fourth place, the criteria set by pars (b), (c) and (d) are vague and general and give much more the impression of an attempt to afford some guidance in the exercise of what one may call an industrial discretion than to provide a legal standard governing a judicial decision. Parenthetically, it may be remarked that the meaning is by no means self-evident of the expression ‘impose unreasonable conditions upon the membership of any member’. Having regard to the foregoing considerations it is difficult to see any safe ground upon which we can now proceed to treat the transfer of the power described in s 140 to the new Commonwealth Court as involving an entire change in the meaning and effect of the provision so that the decision in Consolidated Press Ltd v Australian Journalists’ Association (1947) 73 CLR 549 no longer holds and the provision takes on the character of a grant of portion of the judicial power of the Commonwealth. It is a great deal to spell out of the change in the definition of court. The words ‘upon its own motion’ are still there. It is hardly possible to treat those words as simply going

beyond power and having no other effect and then with the aid of s 15A of the Acts Interpretation Act to disregard them altogether. If this could be done the path might be less impossible. For had it not been for those words it might conceivably have been considered a permissible course to treat the word ‘may’ as meaning no more than to grant a power or jurisdiction. If that had been possible, then perhaps its exercise would become obligatory upon the new court and not discretionary, once the jurisdiction was invoked and the requisite conditions were satisfied. But even so, an attempt to construe s 140 down so that it could assume the shape of a grant of portion of the judicial power of the Commonwealth would seem somewhat heroic. Kitto J: Section 140 seems to me an example of a provision which, though it empowers a court to do an act —the disallowing of a rule — which is not insusceptible of a judicial performance, nevertheless is found to mean, on a clear preponderance of considerations, that the function for which it provides is to be performed as an administrative [page 903] function, with a more elastic technique, and more of an eye to consequences and industrial policy generally, than could properly be expected of a court. The authority given is to act in pursuance of an opinion, formed either spontaneously or upon representations made by a person who may or may not be affected by the rule in question. The kinds of rules which may be disallowed are described as possessing any of several qualities which are indicated in terms so broad as to be more appropriate for conveying general conceptions to a person engaged administratively in performing a function conceived of as part of a system of industrial regulation than for stating, to a body acting judicially, grounds of jurisdiction which it is to interpret and apply

with precision. The immediate context provided by ss 132, 133 and 139 strongly suggests a similarity of nature between the power of the registrar under those sections (see especially s 139(4)) and the power given by s 140. Moreover — and this is the most important consideration of all —s 140 belongs to a group of provisions, comprising all those which deal with the registration and regulation of industrial organisations, which as a group are characterised by the purpose of facilitating the prevention and settlement of inter-State industrial disputes by conciliation and arbitration under the Act. It is difficult to think that s 140 intends a consideration of an organisation’s rules to be undertaken otherwise than with a view to the improvement of the organisation as an instrument for the representation of employees in everything connected with the maintenance and restoration of industrial harmony. To read the section as creating a jurisdiction to apply fixed standards to particular situations, and to make decrees with a judicial disregard of consequences, would be plainly incongruous with the scheme of the Act and the terms of the section. In particular, it seems to me to be required, as a matter of practical good sense, that in forming an opinion as to whether a rule of an organisation is ‘tyrannical’ or ‘oppressive’, or imposes ‘unreasonable’ conditions upon the membership of a member or upon an applicant for membership, the repository of the power should look to the effect which the existence or nonexistence of the rule will be likely to have upon the working of the machinery of conciliation and arbitration under the Act; and this points unmistakably to an intention that the performance of the function provided for by the section is to be approached in a manner incompatible with the restraints peculiar to judicial power. [McTiernan and Taylor JJ delivered concurring judgments; Williams and Webb JJ dissented.]

8.2.38C

R v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union (1960) 103 CLR 368

[Following the decision in R v Spicer; Ex parte Australian Builders’ Labourers Federation (1957) 100 CLR 277, the federal parliament repealed s 140 and enacted a new s 140: 140 (1) A rule of an organization — (a) shall not be contrary to a provision of this Act, the regulations or an award or otherwise be contrary to law or be such as to cause the rules of an organization to fail to comply with such a provision; (b) shall not be such as to prevent or hinder the members of the organization from observing the law or the provisions of an award; and [page 904] (c) shall not impose upon applicants for membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of this Act and the purposes of the registration of organizations under this Act, are oppressive, unreasonable or unjust. (2) A member of an organization may apply to the Court for an order declaring that the whole or a part of a rule of the organization contravenes the last preceding sub-section. (3) Subject to the next succeeding sub-section, the Court

has jurisdiction to hear and determine an application under the last preceding sub-section. (4) An organization in respect of which an application is made under this section shall be given an opportunity of being heard by the Court. (5) An order under this section may declare that the whole or a part of a rule contravenes sub-section (1) of this section and, where such an order is made, the rule, or that part of the rule, as the case may be, shall be deemed to be void from the date of the order. An application was made to the Industrial Court for an order declaring that a rule of the Amalgamated Engineering Union contravened s 140(1). The union applied to the High Court for an order of prohibition, to restrain the Industrial Court from hearing the s 140 application.] Fullagar J: If we look only at sub-ss (1) to (4) inclusive, we must say at once, I think, that it is clear that the new power is entirely different in nature from the old power, that it is a judicial power in the strict sense, and that to exercise it is to exercise the judicial power of the Commonwealth. Under the new section the Court is not authorised to do anything of its own motion. An application may be made to it by a member of an organisation for an order declaring that a rule of the organisation has one or more of the qualities specified in sub-s (1) of the section. When such an application is made, a duty is cast upon the Court to determine, as a mixed question of law and fact, whether the challenged rule does or does not possess one of those qualities. If it answers this question in the negative, it must dismiss the application. If it answers it in the affirmative, it must make the declaration sought. It has no discretion in the matter. The function which it is called upon to perform is to hear and determine a matter in controversy, the issue depending on antecedently existing law and fact. The fundamental difference

between the old s 140 and the new s 140 may be expressed by saying that under the old section the Court by its own act — the act of ‘disallowance’— nullifies the rule, whereas under the new section it determines judicially whether the rule is antecedently nullified by sub-s (1). And this difference is the difference between a judicial power and a non-judicial power. [Fullagar J noted that s 140(5), by its use of the word ‘may’, appeared to give a discretion to the court. The union had argued that, as a consequence, the power conferred by the new s 140 was substantially the same as the former s 140. Fullagar J said that it was unlikely that s 140(5) had been intended radically to change the character of the function conferred by s 140: ‘The whole purpose of the new s 140 was to avoid the rock on which the old section had been wrecked’: 103 CLR at 378. His Honour continued:] The recasting which has resulted in the new provision has been sufficiently radical to remove one major disadvantage under which the former section laboured when it was challenged in the Australian Builders’ Labourers’ Case (1957) 100 CLR 277: it was still in the very form which had led to its being characterised as conferring non-judicial power in the earlier case of Consolidated Press Limited v Australian Journalists’ Association (1947) 73 CLR 549. The present section is new in form and for the most part new in language, and it [page 905] must be characterised now for the first time. The principal act which the section empowers the Court to do is differently described and is different in substance. The word ‘disallow’, which was the word used by the former section, was peculiarly appropriate to the exercise by the Court of a choice as to whether or not a rule should be left in force. Now the Court is given no

power to do anything to a rule; its power is to hear an application for an order; to determine a question concerning an existing situation; and, if it determines that question adversely to the rule, to declare what is the situation that it finds. When one turns to the indications relevant to the question whether the section intends the Court to make its decision as a judicial tribunal adjudicating upon a justiciable issue or as an administrative body exercising a supervisory function in the interests of industrial peace, the differences between the two sections are striking. If they are placed side by side the fact becomes obvious that in the drafting of the new section the endeavour has been to eliminate all the features of the old section which were regarded in the Australian Builders’ Labourers’ Case (1957) 100 CLR 277 as indicating an intention to give a power of administrative disallowance. Foremost among these was a provision which made it inevitable that the word ‘may’ in the grant of power should be treated as merely permissive, so that the duty inherent in true jurisdiction should not attach. It was a provision enabling the Court to act of its own motion. There is no such provision now. A typically judicial procedure is laid down. An application must be made; it must be made by a member, that is to say a person who has an interest to procure the elimination of any legally objectionable provision from the rules of his organisation, whether the provision has a direct disadvantageous impact upon him or not. The Court’s function is described as a jurisdiction. The process which it is to follow is described as hearing and determining an application. The organisation must be given an opportunity of being heard. And the process is confined to the ascertainment of a pre-existing state of affairs, the question for decision being only whether a rule is or is not contrary to provisions of the Act or regulations or of the law as found elsewhere, or whether its operation is or is not of one of the described kinds. The order to be made is in terms merely declaratory, and does not purport to effect any change in the legal situation.

In my opinion it should be held, in view of these considerations, that the operation of sub-ss (3), (4) and (5) together is to define a ‘jurisdiction’ in the sense of s 77 of the Constitution, and that the jurisdiction is with respect to a ‘matter’ within the meaning of s 76 (ii) of the Constitution. The ‘matter’ consists in a claim of right which the section enables a member to make and to have acceded to, that is to say a claim to a declaratory order under sub-s (5) in respect of any rule which contravenes sub-s (1) and as to which the organisation does not avail itself of any opportunity of alteration which it may be given under sub-s (6). Where the right is established, the Court must give effect to it. There is not the ‘complete discretion based wholly on industrial or administrative considerations’ (1957) 100 CLR, at 289 which played so large a part in the bringing down of the old section. Emphasis has been placed by the prosecutors upon the scope which there is in some of the provisions of sub-s (1) for uncertainty of opinion. It must be conceded that the words ‘oppressive’, ‘unreasonable’ and ‘unjust’, in relation to conditions, obligations or restrictions imposed by a rule upon applicants for membership or upon members, describe attributes which are not demonstrable with mathematical precision, and are to be recognised only by means of moral judgments according to generally acknowledged standards. There is a degree of vagueness about them which, in the context of the former section, assisted the conclusion that the intention was to confer on the Court a general administrative discretion for the amelioration of rules. But the notions which the words convey, more readily to be associated with administrative than with judicial decisions though they be, must be conceded, having [page 906] regard to the nature of criteria with which courts are familiar in

other fields, to be not so indefinite as to be insusceptible of strictly judicial application; and their employment in the present context is not sufficient to show, against the strong indications which there are to the contrary, that the Court is intended to exercise its power under the section otherwise than judicially. It must not be overlooked that the adjudication which the Court is required to make in regard to the indicated standards is to be made having regard to the objects of the Act and the purposes of the registration of organisations under it. [Dixon CJ agreed with the reasons of Kitto J. McTiernan, Taylor and Menzies JJ delivered separate judgments to the same effect as Fullagar J. Windeyer J also held s 140 valid.]

8.2.39 There are other examples of challenges to provisions giving powers to courts on the basis that the powers are nonjudicial in nature. The National Security (Contracts Adjustment) Regulations, made under the National Security Act 1939 (Cth), authorised a state or territory court to make ‘such order as it thinks just varying the terms of [a] contract or agreement’, where the court was satisfied, on the application of any person, that circumstances attributable to the war meant that: … the performance or further performance of a contract or agreement to which the person is a party, in accordance with the terms thereof, has become or is likely to become inequitable or unduly onerous …

8.2.40 In Peacock v Newtown, Marrickville & General CoOperative Building Society No 4 Ltd (1943) 67 CLR 25, the High Court (Latham CJ, Rich, Starke, McTiernan and Williams JJ) held that the power conferred by the Contracts Adjustment Regulations was judicial. Latham CJ noted that the regulations authorised

courts to alter rights and not merely to declare and give effect to existing rights. However, the Chief Justice said, that did not show that the powers conferred by the regulations were non-judicial (67 CLR at 35): In some cases the powers are analogous to those exercised by a court when it declares that a contract is discharged by impossibility, breach, or frustration. The circumstances which control the exercise of the powers created by the Regulations are similar in their effect, as between the parties, to facts which affect the discretion of a court of equity when it declines to order specific performance of a contract on the ground that it is unconscientious or oppressive. Contracts may be varied by a court under Money Lenders Acts, Rent Restriction Acts and Moratorium Acts in the States of Australia and in Great Britain. Under these Acts courts exercise their powers in order to prevent performance of contracts becoming inequitable or unduly onerous. An outstanding example of a case where a court exercising judicial power is not limited to the declaration or enforcement of existing rights, but where it makes orders altering the rights of the parties, is to be found in the exercise of jurisdiction in matrimonial causes in relation to nullity of marriage, judicial separation, and divorce. In my opinion the objection that, for the reason stated, the powers conferred upon the courts by reg 4 are not judicial in character cannot be supported.

Thus, the fact that there was a historical practice of analogous powers being exercised by the judiciary supported the conclusion that the power in this case was judicial in nature in the [page 907] hands of the judiciary. Latham CJ also rejected an argument that

the width of the discretion given to courts under the regulations was inconsistent with judicial power (67 CLR at 36): In the present case the tribunals specified in the Regulations are, it is true, directed to act according to equity, good conscience and the merits of the case. I should regret to be bound to hold that such a direction disqualified a tribunal from being a court. There is, however, no authority which supports such a proposition. Technicalities and legal forms and rules of evidence may be varied indefinitely without depriving a tribunal of a judicial character. If, however, it had been provided in the Regulations that the tribunals were to be exonerated from all rules of law and equity, the case would, I agree, be different. The Regulations, however, do not so provide.

8.2.41 The High Court in Thomas v Mowbray (2007) 233 CLR 307 considered the validity of provisions in Div 104 of the Criminal Code (Cth) that confers power on federal courts to make ‘control orders’. The object of the control order scheme is ‘to allow obligations, prohibitions and restrictions to be imposed on a person by a control order for the purpose of protecting the public from a terrorist act’: s 104.1. Section 104.4 authorises federal courts to make an interim control order in relation to a person if the court is satisfied on the balance of probabilities, amongst other things, ‘that making the order would substantially assist in preventing a terrorist act’ or ‘that the person has provided training to, or received training from, a listed terrorist organization’, and ‘the court is satisfied on the balance of probabilities that each of the obligations, prohibitions and restrictions to be imposed on the person by the order is reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act’.

8.2.42 Pursuant to s 105.5, the obligations, prohibitions or restrictions in an interim order can include that the person be at specified areas or places; remain at specified premises between specified times each day, or on specified days; wear a tracking device; not communicate or associate with specified individuals; not access or use specified forms of telecommunication or other technology; report to specified persons at specified times and places; and participate in specified counselling or education. Mr Thomas had been convicted of terrorism-related offences in the Supreme Court of Victoria. His convictions were quashed on appeal by the Victorian Court of Appeal. The Australian Federal Police then successfully sought an interim control order against Mr Thomas pursuant to s 104.4 in the Federal Magistrates Court. The provisions were challenged in the High Court on a range of Ch III grounds. A majority of the court (Gleeson CJ, Gummow, Crennan, Callinan and Heydon JJ; Kirby J and Hayne J dissenting) held that the control order provisions were valid. 8.2.43 Two of the Ch III arguments were that: first, the provisions conferred non-judicial power because the courts were authorised to create rights, rather than determine them; and, second, that the power was non-judicial because the criteria involved could not be applied by a court. Both arguments were rejected by a majority of the court. As to the first argument, the majority judges pointed to historical analogies. [page 908]

8.2.44C

Thomas v Mowbray

(2007) 233 CLR 307 Gleeson CJ: Two familiar examples of the judicial exercise of power to create new rights and obligations which may restrict a person’s liberty are bail, and apprehended violence orders. The restraints imposed on the plaintiff by the order made against him are similar to conditions commonly found in a bail order. Of course, there are differences between bail and a control order, but the example of bail shows that imposition of restrictions of the kind imposed on the plaintiff is not foreign to judicial power. Apprehended violence orders have many of the characteristics of control orders, including the fact they may restrain conduct that is not in itself unlawful. For example, an apprehended violence order may forbid a person to approach another person, or to attend a certain place. As a matter of history, apprehended violence orders have their origin in the ancient power of justices and judges to bind persons over to keep the peace. Blackstone, in his Commentaries, wrote of what he called ‘preventive justice’. He said [Blackstone, Commentaries on the Laws of England, 1769, Bk IV, p 248]: This preventive justice consists in obliging those persons, whom there is probable ground to suspect of future misbehaviour, to stipulate with and to give full assurance to the public, that such offence as is apprehended shall not happen; by finding pledges or securities for keeping the peace, or for their good behaviour. This requisition of sureties has been several times mentioned before, as part of the penalty inflicted upon such as have been guilty of certain gross misdemeanours: but there also it must be understood rather as a caution against the repetition of the offence, than any immediate pain or punishment. These analogies are not exact, but the argument for the plaintiff is that the power involved in making anti-terrorist control orders is

exclusively non-judicial and, in its nature, antithetical to the judicial function. Put another way, the argument is that, even assuming it is within the power of the federal Parliament to legislate for such restraints upon the liberty of individuals, the power to make control orders cannot be given to judges. The corollary appears to be that it can only be exercised by the executive branch of government. The advantages, in terms of protecting human rights, of such a conclusion are not selfevident. In Fardon [at 586], I indicated that the exercise of powers, independently, impartially and judicially, especially when such powers affect the liberty of the individual, would ordinarily be regarded as a good thing, not something to be avoided. An argument, as a matter of policy, that legislation for anti-terrorist control orders ought to be subject to some qualification in aid of the human rights of people potentially subject to such orders is one thing. An argument that the making of such orders should be regarded as totally excluded from the judicial function is another. At all events, to return to the passage from the Boilermakers’ case cited earlier [which rejected the contention that judicial and nonjudicial powers are mutually exclusive], powers relevantly similar to those given by Div 104 traditionally have been, and are, exercised by the judiciary. They are not exclusively or distinctively administrative. To decide that such powers are exclusively within the province of the executive branch of government would be contrary to our legal history, and would not constitute an advance in the protection of human rights.

[page 909] Heydon J agreed with the Chief Justice. Gummow and Crennan JJ made similar comments at 356–7. The second argument dealt with by the court was that the criteria addressed in making an order

were not capable of application by a court, that is, they were not legal criteria. The focus of this attack was, in particular, on the requirement that the control order be ‘reasonably necessary’, and ‘reasonably appropriate and adapted’ for the purpose of protecting the public from a terrorist act. The majority held that the words ‘reasonably necessary’ and ‘reasonably appropriate and adapted’ were familiar judicial standards and the assessment of whether the public needed protection was not incapable of judicial application, particularly in light of the historical analogies: at 330–4 per Gleeson CJ, with Heydon J agreeing in this respect; 356–7 per Gummow and Crennan JJ. 8.2.45 Queen Victoria Hospital v Thornton (1953) 87 CLR 144 is an example of a power given to a court being struck down for a breach of the separation of judicial power principles. Section 27 of the Re-establishment and Employment Act 1945 (Cth) conferred on an ex-serviceman a conditional right to preference in employment, unless the employer had reasonable and substantial cause for not engaging the ex-serviceman. In determining as between two or more ex-servicemen who were entitled to preference, the employer was to take account of their comparative qualifications (s 27(4)) and the matters listed in s 27(3): (a) the length, locality and nature of the service of that person; (b) the comparative qualifications of that person and of the other applicants for engagement or employment in the position concerned; (c) the qualifications required for the performance of the duties of the position; (d) the procedure (if any) provided by law for engaging persons for employment in the position; and (e) any other relevant matters.

Section 28 provided that any person who claimed to be entitled to preference under s 27 could, if that person had been refused employment, apply to a state court of summary jurisdiction. That court was directed to consider the matters specified in ss 27(3) and 37(4) and make ‘such order as it thinks just and reasonable in the circumstances’. Section 28(3) directed the court not to make an order directing an employer to engage a person if the court was satisfied that the person would be unable, or was unfit, to perform the duties of the position, or had, since discharge from the armed services, been convicted of an offence of such a nature that the person was unsuitable for engagement in the employment. 8.2.46 In Queen Victoria Hospital v Thornton, the High Court held that s 28 conferred non-judicial power on a state court and was invalid. In a single judgment, the court (Dixon CJ, McTiernan, Williams, Webb, Fullagar, Kitto and Taylor JJ) said (87 CLR at 151): In relation to s 27(4) a court of summary jurisdiction constituted by a magistrate has a discretion which is complete except that he is to be under a duty to consider the matters referred to in sub-s (3)(a) to (e). So long as the court takes them into account it may do as it thinks fit in making the appointment. No antecedent rights exist in any of the persons concerned which the court of summary jurisdiction is called upon to ascertain, examine or enforce. There is no issue of fact submitted to it for decision. Its function appears to be entirely administrative and to differ in no respect from the function of the employer himself in considering applications for employment which are affected by s 27(4). Many functions

[page 910]

perhaps may be committed to a court which are not themselves exclusively judicial, that is to say which considered independently might belong to an administrator. But that is because they are not independent functions but form incidents in the exercise of strictly judicial powers. Here there is nothing but an authority which clearly is administrative.

Where a provision is challenged as conferring a degree of discretion that is incompatible with judicial power, the question is whether the provision confers an uncontrolled discretion such that it is not capable of strictly judicial application. While this has at times been applied strictly, it has been somewhat relaxed in recognition that courts are often given powers expressed in wide and discretionary language. In R v Spicer; Ex parte Australian Builders’ Federation (1957) 100 CLR 277 8.2.37C, the High Court held invalid provisions conferring on the Commonwealth Industrial Court power to disallow rules of registered industrial associations on certain grounds including that they were contrary to law, were ‘tyrannical’, ‘oppressive’ or imposed ‘unreasonable conditions’ upon members or membership applicants. However, the provisions were then amended to give the court the power to determine whether the rules were invalid for breaching certain legal standards including that they were ‘oppressive, unreasonable or unjust’. The amended provisions were held to be valid by the High Court in R v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union, Australian Section (1960) 103 CLR 368 8.2.38C at 383. 8.2.47 This more relaxed approach was applied in Cominos v Cominos (1972) 127 CLR 588, where the High Court upheld provisions of the Matrimonial Causes Act 1959 (Cth) conferring power on state Supreme Courts to make orders, including for maintenance, property settlement and costs, according to what the court considered to be ‘proper’, necessary ‘to do justice’ or ‘just’.

The court held that these words were not insusceptible of judicial application: 127 CLR at 594 per Walsh J; 599 per Gibbs J; 603 per Stephen J. As Mason and Murphy JJ subsequently remarked in R v Joske; Ex parte Shop Distributive and Allied Employees’ Association (1976) 135 CLR 194 at 215–16, there ‘are countless instances of judicial discretion with no specification of the criteria by reference to which they are to be exercised — nevertheless they have been accepted as involving the exercise of judicial power’. See also the discussion of these cases by Gummow and Crennan JJ in Thomas v Mowbray (2007) 233 CLR 307 at 344–8 where the High Court upheld the validity of provisions of the Criminal Code (Cth) conferring power on a federal court to place a control order on a person where the court was satisfied that the making of the order ‘would substantially assist in preventing a terrorist act’ and would be ‘reasonably necessary, and reasonably appropriate and adapted, for the purpose of protecting the public from a terrorist act’: s 104.4.

Exceptions to the separation rules 8.2.48 Despite the recognition of the separation of judicial power principles, the High Court has developed a series of qualifications and exceptions to these propositions. First, as recognised in Boilermakers’ itself, courts exercising Commonwealth judicial power can exercise non-judicial power if incidental to the exercise of judicial power. For example, in R v Joske; Ex parte Shop Distributive and Allied Employees’ Association (1976) 135 CLR 194, the High Court upheld the validity of the provisions in the Conciliation and Arbitration Act which gave the Industrial Court wide powers to rectify or validate actions of, or to approve schemes

to reorganise, industrial trade unions following the court’s decision to invalidate rules of the [page 911] union. The High Court said that this power was incidental to the clearly judicial function of adjudicating on the validity of the union’s rules. Barwick CJ said (135 CLR at 201): [T]he relief which a court is authorised to give consequentially upon its judicial determination of some situation can rarely if ever be denied the quality of an exercise of judicial power.

8.2.49 Other decisions have acknowledged particular breaches in the separation of judicial power. According to the unanimous decision of the High Court in R v Richards; Ex parte Fitzpatrick & Browne (1955) 92 CLR 157, s 49 of the Constitution gives the Senate or the House of Representatives the power to determine conclusively whether a contempt of parliament has been committed and to impose punishment. Dixon CJ, McTiernan, Williams, Webb, Fullagar, Kitto and Taylor JJ acknowledged that the Constitution was based on the separation of powers and that judicial power was vested exclusively in the courts referred to in Ch III. However, the justices said, the contempt power of the House of Commons (by reference to which the powers of the Senate and the House of Representatives are defined in s 49) had historically been regarded as not strictly judicial but ‘as proper incidents of the legislative function’, and concluded (92 CLR at 167): [A] general view of the Constitution and the separation of powers is not a sufficient reason for giving to these words [in s 49 of the

Constitution], which appear to us to be so clear, a restrictive or secondary meaning which they do not properly bear.

Courts-martial, established within the armed services and outside the confines of Ch III, may administer military justice. In R v Bevan; Ex parte Elias & Gordon (1942) 66 CLR 452, Starke J followed a decision of the United States Supreme Court, Dynes v Hoover 61 US 65 (1858), in which it was held that courts-martial established under the laws of the United States formed no part of the judicial system of the United States and that their proceedings could not be controlled by the civil courts. Thus, his Honour held that the Commonwealth’s defence power, s 51(vi) of the Constitution, was sufficient to support legislation establishing a system of military justice independent of Ch III. According to Starke J, ss 51(vi), 51(xxxix) and 68 (66 CLR at 468): … indicate legislative provisions special and peculiar to [the defence] forces in the way of discipline and otherwise, and indeed the Court should incline towards a construction that is necessary, not only from a practical, but also from an administrative point of view.

A similar view was expressed by Williams J: 66 CLR at 481. The court’s decision in R v Bevan was cited by several members of the High Court in R v Cox; Ex parte Smith (1945) 71 CLR 1 as authority for the proposition that Ch III of the Constitution does not affect the establishment and the functions of courts-martial: 71 CLR at 13 per Latham CJ; 23 per Dixon J; 27–8 per Williams J. 8.2.50 In Re Tracey; Ex parte Ryan (1989) 166 CLR 518, Mason CJ, Wilson and Dawson JJ said (166 CLR at 541): [T]he defence power is different because the proper organization of the defence force requires a system of discipline which is administered

judicially, not as part of the judicature erected under Ch III but as part of the organization of the force itself. Thus the power to make laws with respect to the defence of the Commonwealth contains within it the power

[page 912] to enact a disciplinary code standing outside Ch III and to impose upon those administering that code the duty to act judicially.

Mason CJ, Wilson and Dawson JJ went on to conclude that there was no practical limit to the kind of conduct of members of the armed services that can be regulated by such a disciplinary code and dealt with by service tribunals: 166 CLR at 545. Brennan and Toohey JJ said (166 CLR at 573–4): History and necessity combine to show that courts martial and other service tribunals, though judicial in nature and though erected in modern times by statute, stand outside the requirements of Ch III of the Constitution … [W]hen [the jurisdiction of service tribunals] falls to be exercised, the power which is exercised is not the judicial power of the Commonwealth; it is a power sui generis which is supported solely by s 51(vi) for the purpose of maintaining or enforcing service discipline.

However, in their Honours’ view, the offences which could be created and punished under a code of service discipline were limited to those which served ‘the purpose of maintaining or enforcing service discipline’: 166 CLR at 170. Deane and Gaudron JJ, in separate judgments, agreed that the judicial powers of military tribunals lay outside Ch III of the Constitution: 166 CLR at 582–3 per Deane J; 598 per Gaudron J. But they held that the peacetime jurisdiction of military tribunals had to be confined to offences

which were distinct from those penalised under the ordinary criminal law: 166 CLR at 591 per Deane J; 603 per Gaudron J. A similar range of views was expressed by the High Court in Re Nolan; Ex parte Young (1991) 172 CLR 460 and in Re Tyler; Ex parte Foley (1994) 181 CLR 153 and, consequently, no clear majority view emerged from these cases. 8.2.51 The position has been complicated by the High Court’s more recent decisions in Re Colonel Aird; Ex parte Alpert (2004) 220 CLR 308 and White v Director of Military Prosecutions (2007) 231 CLR 570. In particular, in Re Colonel Aird, a majority of the court appeared to accept the view of Brennan and Toohey JJ in Re Tracey. However, the Brennan and Toohey JJ approach was not applied consistently across the judgments and, in any event, the question was not squarely raised for the court’s determination. White did not take the issue any further. 8.2.52 In 2006, the Commonwealth amended the Defence Force Discipline Act 1982 (Cth) to create the Australian Military Court (AMC). In response to the 2005 report of the Senate Foreign Affairs, Defence and Trade Reference Committee — The Effectiveness of Australia’s Military Justice System — the AMC was created to exercise disciplinary jurisdiction as an independent body outside the chain of command. However, despite its identification as a ‘court’, its members being described as ‘judges’ and the provision made for a military ‘jury’, the AMC was not created as a Ch III court. The creation of the AMC was held to be invalid by the High Court in Lane v Morrison (2009) 239 CLR 230, primarily because the creation of an independent body outside the chain of command resulted in the conclusion that the power exercised by the AMC was Commonwealth judicial power and, thus, the

conferral of such a power on the AMC breached the separation of judicial power principles. See also the decisions of the High Court in Haskins v Commonwealth (2011) 244 CLR 22 and Nicholas v Commonwealth (2011) 244 CLR 66, where the High Court upheld the transitional provisions enacted by parliament to validate convictions of the AMC prior to the decision in Lane. For a more detailed discussion of the military tribunal cases, see Stellios, 2010, p 233–59. [page 913] 8.2.53 In R v White; Ex parte Byrnes (1963) 109 CLR 665, the High Court held that public service disciplinary tribunals, established under the Public Service Act 1922 (Cth) with the power of imposing punishment for disciplinary offences, do not offend the separation of judicial power principles. In their joint judgment, Dixon CJ, Kitto, Taylor, Menzies and Windeyer JJ said that, by creating so-called ‘offences’, the Public Service Act 1922 did ‘no more than define what is misconduct on the part of a public servant warranting disciplinary action on behalf of the Commonwealth and the disciplinary penalties that may be imposed or recommended for such misconduct’. Further, they held that the bodies given power to deal with such ‘offences’ did not ‘sit as a court of law exercising judicial power’: 109 CLR at 670–1.

COMMONWEALTH JUDICIAL POWER AND FEDERAL JURISDICTION

8.3.1 The chapter will now consider the federal dimensions of Ch III. It is helpful to start by recognising two central constitutional propositions about judicial power and jurisdiction. The first proposition is that there are two distinct sources of judicial power and jurisdiction in the Australian constitutional system: federal and non-federal (or state) jurisdiction. As Gummow and Hayne JJ said in Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 574: ‘[T]he subject of the judicial power of the Commonwealth is dealt with in the Constitution as a subject that is different and distinct from the judicial power of the states’. Further, as Gleeson CJ, Gaudron and Gummow JJ said in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 570: ‘[S]tate jurisdiction may be described as “the authority which state courts possess to adjudicate under the state Constitution and laws” … and [f]ederal jurisdiction is “the authority to adjudicate derived from the Commonwealth Constitution and laws”’. The second proposition is that federal jurisdiction may be exercised by federal and non-federal courts. The ‘autochthonous expedient’ of allowing state courts to exercise federal judicial power and jurisdiction was one of the great innovations of the Australian constitutional framers. Thus, a ‘state court receives state jurisdiction under the constitution and laws of that state’ and ‘may also be invested with federal jurisdiction by a law made by the parliament under s 77(iii) of the Constitution’: Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 571 per Gleeson CJ, Gaudron and Gummow JJ. 8.3.2 It is often said by High Court judges that Ch III creates an ‘integrated’ or ‘unified’ judicial system: see Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 102 per Gaudron

J; 112–14 per McHugh J; 137–9 per Gummow J; Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 65, 67 per Gleeson CJ; 119 per Kirby J. However, the constitutional significance of that description is not always apparent. At the very least, it means ‘that all avenues of appeal lead ultimately to [the High Court] and there is a single common law throughout the country’: Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 574 per Gummow and Hayne JJ. It also reflects the availability of state and territory courts as a facility for the exercise of federal jurisdiction. However, it has broader significance for the role and place of state and territory courts within the federal judicial system. While Ch III sets out the structures and processes of the federal judicature, its provisions only identify its bare bones. It has been left to the High Court to work out the detailed mechanics of how the federal system is to operate. [page 914]

8.3.3E

Commonwealth Constitution

75 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 Commonwealth; the High Court shall have original jurisdiction.

of

the

76 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. 77 With respect to any of the matters mentioned in the last two sections the Parliament may make laws — (i) defining the jurisdiction of any federal court other than the High Court; (ii) defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the states; (iii) investing any court of a state with federal jurisdiction.

‘Matters’ 8.3.4 Commonwealth judicial power is exercisable in relation to the ‘matters’ of original jurisdiction set out in ss 75 and 76 of the Constitution. In this context, the expression federal jurisdiction means ‘the authority to adjudicate derived from the Commonwealth Constitution and laws’: Baxter v Commissioner of Taxation (NSW) (1907) 4 CLR 1087 at 1142; see also Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219

CLR 365 at 377 per Gleeson CJ and McHugh J; 394 per Gummow, Hayne and Heydon JJ. 8.3.5 The heads of original jurisdiction in s 75 are conferred on the High Court by the Constitution and, thereby, are constitutionally entrenched. By contrast, it is within the legislative power (and discretion) of the parliament to confer the heads of original jurisdiction set out in s 76 of the Constitution. Parliament has only conferred limited additional jurisdiction on the High Court. Section 30 of the Judiciary Act 1903 (Cth) confers original jurisdiction ‘(a) in all matters arising under the Constitution or involving its interpretation; and (c) in trials of indictable offences against the laws of the Commonwealth.’ The limited conferral of original jurisdiction on the High Court reflects policy choices not to overwork the court. In particular, a wholesale conferral of jurisdiction under s 76(ii) to cover all matters ‘arising under any laws made by parliament’ would place ‘an intolerable burden on the court’: Zines, 2002, p 5. [page 915] 8.3.6 The investiture of federal jurisdiction involves the conferral of federal authority to quell the justiciable controversy that constitutes a ‘matter’: see Minister for Immigration and Multicultural and Indigenous Affairs v B (2004) 219 CLR 365 at 377 per Gleeson CJ and McHugh J; 395 per Gummow, Hayne and Heydon JJ. Despite the fact that it appears in other chapters of the Constitution, the High Court has given the word a Ch III-specific meaning, with significant constitutional content, when it appears in the judicature provisions. In deciding what types of disputes can

come before the High Court and other courts exercising federal jurisdiction, and who can bring them, the High Court has placed considerable emphasis on the word ‘matter’ as a jurisdictional filter: see Mantziaris and McDonald, 2006; Burmester, 2000. 8.3.7 The meaning given by the High Court to the word ‘matter’ cannot really be understood in isolation from its Ch III context, and involves a difficult relationship among three concepts: ‘judicial power’, ‘Commonwealth judicial power’ and ‘federal jurisdiction’: see Re McBain; Ex parte Catholic Bishops Conference (2002) 209 CLR 372 at 404 per Gaudron and Gummow JJ. Although the precise interplay between the word ‘matter’ and the conception of ‘Commonwealth judicial power’ may not yet be entirely settled, what is clear is that a ‘matter’ requires a justiciable controversy between interested parties which is capable of being quelled by an exercise of Commonwealth judicial power. 8.3.8 To satisfy these requirements, the jurisdictional filter imposed by the word ‘matter’ operates at various levels. First, there will not be a justiciable controversy capable of being quelled by an exercise of Commonwealth judicial power ‘unless there is some immediate right, duty or liability to be established by the determination of the court’: see Re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265; Croome v Tasmania (1997) 191 CLR 119. Second, even if there is a legal issue that is capable of resolution by a court, the party instituting proceedings may not have the appropriate standing or interest to have the dispute resolved: Re McBain (2009) 209 CLR 37. Third, even if there is a controversy between parties who have appropriate standing, there may not be a ‘matter’ if ‘determination of the controversy would require adjudication of obligations and undertakings which depend

entirely on political sanctions and understandings’ (Re Ditfort; Ex parte Deputy Commissioner of Taxation (1988) 19 FCR 347 at 370 per Gummow J; Thomas v Mowbray (2007) 233 CLR 307 at 354 per Gummow and Crennan JJ), for example, ‘agreements and understandings between governments in the Australian federation [South Australia v The Commonwealth (1962) 108 CLR 130 at 141] and between Australia and foreign governments [Gerhardy v Brown (1985) 159 CLR 70 at 138–9]’. Fourth, even if there is a legal issue that is capable of resolution by a court, there may not be a ‘matter’ if the court has not been given jurisdiction to resolve the dispute: Minister for Immigration and Multicultural Affairs v B (2004) 219 CLR 365. 8.3.9 The need for the determination of an immediate right, duty or liability has figured prominently in the court’s insistence that there be a ‘matter’ and in identifying an essential characteristic of Commonwealth judicial power: see Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 at 262 per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ; Abebe v Commonwealth (1999) 197 CLR 510 at 555 per Gaudron J; 570 per Gummow and Hayne JJ; Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350 at 359–61 per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ; Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 356–7 per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; Momcilovic v R (2011) 245 CLR 1 at 64 per French CJ, with Bell J; 94 per Gummow J, with Hayne J agreeing; 222 per Crennan and [page 916]

Kiefel JJ. This requirement can be traced to the much celebrated case of Re Judiciary and Navigation Acts (1921) 29 CLR 257. Part XII of the Judiciary Act 1903 (Cth) sought to confer on the High Court ‘jurisdiction to hear and determine’ any question of law as to the validity of Commonwealth legislation referred to it by the Governor-General. The referred questions were to be heard by a Full Court. The state Attorneys-General were to be given notice of the referral and had a right to appear before the court. The court could also give notice to any other party to appear, and could request counsel to appear to argue certain points. The determination of the court was to be final and conclusive and not subject to any appeal. In essence, the provisions allowed the Governor-General to seek an advisory opinion on the constitutionality of any Commonwealth law. The GovernorGeneral referred to the court the question of whether the Navigation Act 1912 was valid. A majority of the court (Higgins J dissenting) refused to answer that question, holding that Pt XII was invalid. 8.3.10C

In Re Judiciary and Navigation Acts (1921) 29 CLR 257

Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ: After carefully considering the provisions of Part XII, we have come to the conclusion that Parliament desired to obtain from this court not merely an opinion but an authoritative declaration of the law. To make such a declaration is clearly a judicial function, and such a function is not competent to this court unless its exercise is an exercise of part of the judicial power of the Commonwealth. If this be so, it is not within our province in this case to inquire whether Parliament can impose on this court or on its members any, and if so what, duties other than judicial duties, and we

refrain from expressing any opinion on that question. What, then, are the limits of the judicial power of the Commonwealth? The Constitution of the Commonwealth is based upon a separation of the functions of government, and the powers which it confers are divided into three classes — legislative, executive and judicial (New South Wales v The Commonwealth [(1915) 20 CLR 54 at 88]). In each case the Constitution first grants the power and then delimits the scope of its operation (Alexander’s Case [(1918) 25 CLR 434 at 441]). Section 71 enacts that the judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other Federal Courts as the Parliament creates, and in such other Courts as it invests with Federal jurisdiction. Sections 73 and 74 deal with the appellate power of the High Court, and we need make no further reference to those sections as it is not suggested that the duty imposed by Pt XII of the Judiciary Act is within the appellate jurisdiction of this Court. Section 75 confers original jurisdiction on the High Court in certain matters, and s 76 enables Parliament to confer original jurisdiction on it in other matters. Section 77 enables Parliament to define the jurisdiction of any other Federal Court with respect to any of the matters mentioned in ss 75 and 76, to invest any Court of the states with Federal jurisdiction in respect of any such matters, and to define the extent to which the jurisdiction of any Federal Court shall be exclusive of that which belongs to or is invested in the Courts of the states. This express statement of the matters in respect of which and the Courts by which the judicial power of the Commonwealth may be exercised is, we think, clearly intended as a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth, and as a necessary exclusion of any other exercise of original jurisdiction. The question then is narrowed to this: Is authority to be found under sec 76 of the Constitution for the enactment of Pt XII of the Judiciary

[page 917] Act? Section 51(xxxix) does not extend the power to confer original jurisdiction on the High Court contained in s 76. It enables Parliament to provide for the effective exercise by the Legislature, the Executive and the Judiciary, of the powers conferred by the Constitution on those bodies respectively, but does not enable it to extend the ambit of any such power. It is said that here is a matter arising under the Constitution or involving its interpretation, and that Parliament by s 30 of the Judiciary Act has conferred on this Court original jurisdiction in all matters arising under the Constitution or involving its interpretation. It is true that the answer to the question submitted for our determination does involve the interpretation of the Constitution, but is there a matter within the meaning of s 76? We think not. It was suggested in argument that ‘matter’ meant no more than legal proceeding, and that Parliament might at its discretion create or invent a legal proceeding in which this Court might be called on to interpret the Constitution by a declaration at large. We do not accept this contention; we do not think that the word ‘matter’ in s 76 means a legal proceeding, but rather the subject matter for determination in a legal proceeding. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court. If the matter exists, the Legislature may no doubt prescribe the means by which the determination of the Court is to be obtained, and for that purpose may, we think, adopt any existing method of legal procedure or invent a new one. But it cannot authorize this Court to make a declaration of the law divorced from any attempt to administer that law. The word ‘matter’ is used several times in Chapter III of the Constitution (ss 73, 74, 75, 76, 77), and always, we think, with the same meaning. The meaning of the expression ‘in all matters between states’ in sec 75 was considered by this Court in State of South Australia v State of

Victoria [(1911) 12 CLR 667]. Griffith CJ said that it must be a controversy of such a nature that it could be determined upon principles of law, and in this Barton J agreed. O’Connor J said that the matter in dispute must be such that it can be determined upon some recognized principle of law. Isaacs J said that the expression ‘matters’ used with reference to the Judicature, and applying equally to individuals and states, includes and is confined to claims resting upon an alleged violation of some positive law to which the parties are alike subject, and which therefore governs their relations, and constitutes the measure of their respective rights and duties. Higgins J appeared to think that the expression involved the necessity of the existence of some cause of action in the party applying to the Court for a declaration. He said [at 742]: — ‘Even assuming that the state is to be regarded as being substantially the donee of the power, I know of no instance in any Court in which a donee of a power such as this — a power in gross — has obtained by action a declaration that he has the power. Under the Constitution, it is our duty to give relief as between states in cases where, if the facts had occurred as between private persons, we could give relief on principles of law; but not otherwise.’ All these opinions indicate that a matter under the judicature provisions of the Constitution must involve some right or privilege or protection given by law, or the prevention, redress or punishment of some act inhibited by law. The adjudication of the Court may be sought in proceedings inter partes or ex parte, or, if Courts had the requisite jurisdiction, even in those administrative proceedings with reference to the custody, residence and management of the affairs of infants or lunatics. But we can find nothing in Chapter III of the Constitution to lend colour to the view that Parliament can confer power or jurisdiction upon the High Court to determine abstract questions of law without the right or duty of any body or person being involved.

[page 918] 8.3.11 Higgins J dissented, taking the view that s 51(xxxix) of the Constitution empowered parliament to make laws with respect to matters incidental to the execution of any power vested in government. The government, his Honour reasoned, must execute laws so far as they are valid and, in order to carry out its duty, it is able to obtain the highest legal opinion in the country as to the validity of the law before enacting it. 8.3.12 The decision in Re Judiciary has introduced a degree of rigidity into the types of functions and powers that can be given to a court exercising federal jurisdiction (parliament cannot confer on a state or territory court powers and functions that it cannot give to a federal court). As the cases show, the Re Judiciary requirement is sometimes seen as operating through the word ‘matter’, but at other times through the conception of Commonwealth judicial power. 8.3.13 In Re McBain; Ex parte Catholic Bishops Conference (2002) 209 CLR 372, Victorian legislation (the Infertility Treatment Act 1995 (Vic)) prohibited the use of in-vitro fertilisation (IVF) techniques for women who were not married or living with a man in a de facto relationship. The Sex Discrimination Act 1984 (Cth) makes it unlawful for a person who provides goods or services to discriminate on the basis of a person’s marital status in the provision of those goods and services. Ms Meldrum sought the services of a gynaecologist, Dr McBain, for the provision of IVF treatment. However, not being married or in a de facto relationship with a man, Ms Meldrum was not a person to whom those services

could be provided under the Victorian legislation. Dr McBain sought a declaration from the Federal Court to the effect that the Victorian provisions were inconsistent with the Commonwealth provisions and, thus, invalid under s 109 of the Constitution. Before the Federal Court, Victoria took no active part in the inconsistency question. The Australian Catholic Bishops Conference and the Australian Episcopal Conference of the Roman Catholic Church were given leave to be heard as amici curiae. Although given notice of the constitutional question pursuant to s 78B of the Judiciary Act 1903 (Cth), the Commonwealth Attorney-General did not intervene into the Federal Court proceedings. As a consequence, the AttorneyGeneral missed the opportunity to be made a party to the proceedings pursuant to s 78A(3) of the Judiciary Act 1903. Sundberg J of the Federal Court held that there was s 109 inconsistency, and that the Victorian provisions were accordingly invalid. 8.3.14 None of the parties to the Federal Court proceeding sought to appeal the decision or applied for review under s 75(v) of the Constitution. Neither the Commonwealth Attorney-General nor the Catholic conferences had standing as a party before the Federal Court to appeal the decision. Instead, the AttorneyGeneral and the two Catholic conferences sought to quash the decision of Sundberg J in the original jurisdiction of the High Court. However, there was no allegation that Sundberg J had acted in excess of his jurisdiction, so relief under s 75(v) was unavailable. The challenge posed a question involving a constitutional issue (s 109) and, thus, would fall within the wording of s 76(i) of the Constitution. However, the jurisdictional question for the court was whether there was a ‘matter’ to be determined between the

Attorney-General and the Bishops on the one hand, and Sundberg J and Dr McBain on the other. A majority of the court (Gleeson CJ, Gaudron, Gummow and Hayne JJ; McHugh, Kirby and Callinan JJ dissenting) held that there was no ‘matter’ between the parties to be determined by the court. The Catholic conferences were concerned about the impact of the Federal Court decision on other litigation involving the same issue, but that involved no recognised legal right or interest in this instance. While the Attorney-General [page 919] might have become a party to the Federal Court litigation by intervening pursuant to s 78A of the Judiciary Act 1903, having failed to do so, and there being no appeal or action for review by the parties below, that justiciable controversy had been quelled. 8.3.15C

Re McBain; Ex parte Catholic Bishops Conference (2002) 209 CLR 372

Gaudron and Gummow JJ: Here the Attorney … seeks to reopen closed litigation between other parties and to purge the record of the Federal Court of an order which is at odds with an allegedly desirable state of constitutional affairs. The point may be expressed as a reflection of the limits of the judicial power of the Commonwealth or of the absence of any claim by the Attorney-General to a right, title, privilege or immunity under the Constitution which is necessary to give rise to a ‘matter’ under s 76(i). Whether acting on relation or otherwise, the Attorney-

General, consistently with Ch III, cannot have a roving commission to initiate litigation to disrupt settled outcomes in earlier cases, so as to rid the law reports of what are considered unsatisfactory decisions respecting constitutional law.

8.3.16 See also Gleeson CJ at 209 CLR at 396 and Hayne J at 460. The dissenting judges took the view that the application for relief to the High Court presented a different ‘matter’ to be determined. 8.3.17 The need for an exercise of Commonwealth judicial power to settle a dispute about existing legal rights was emphasised in Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334. The appellants had instituted proceedings in the Federal Court claiming various breaches of the Trade Practices Act 1974 (Cth). During interlocutory proceedings, the primary judge referred a series of questions to a Full Court of the Federal Court for its consideration. The appellant appealed from the Full Court’s answers to those questions. On appeal, the High Court noted that some of the reserved questions could not be determined by an exercise of judicial power as the facts that would be needed for an exercise of that power had not been found. Thus, the answers given by the Full Court of the Federal Court to those questions ‘were not based on facts, found or agreed, they were purely hypothetical’: at 357. (See also Re Macks; Ex parte Saint (2000) 204 CLR 158 at 230 per Gummow J.) In the course of reaching that conclusion, the court highlighted that central to the function of judicial determination ‘is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy’: 198 CLR at

355. The court continued: ‘Courts have traditionally declined to state — let alone answer — preliminary questions when the answers will neither determine the rights of the parties nor necessarily lead to the final determination of their rights’: 198 CLR at 357. That is certainly the case where the questions reserved are unrelated to the facts: see Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 at 576 per Gaudron, Gummow and Hayne JJ. The same result would follow if a declaration is sought on the basis of future acts that are not sufficiently immediate and real: ‘A declaration cannot be made if there be no real controversy, or if the declaration sought be incapable of determining a real controversy’: see Re Trade Practices Act 1974 (s 163A) (1978) 19 ALR 191 at 206–10 per Brennan J. 8.3.18 In Momcilovic v R (2011) 245 CLR 1, the High Court considered the validity of certain provisions of the Victorian Charter of Human Rights and Responsibilities Act 2006.

[page 920] Section 32(2) of the Act provides that Victorian provisions are to be interpreted compatibly with human rights set out in the Act so far as it is possible consistently with their purpose. Section 36(2) of the Act provides that the Supreme Court may make a declaration of incompatibility where a rights consistent interpretation is not possible. The making of such a declaration has no impact on the validity of the provisions in question or the rights and duties of the parties: s 36(5). Instead, the Supreme Court is to provide a copy of the declaration to the Attorney-General (s 36(6)) and the minister administering the statute in question is to prepare a written response for the Victorian Parliament: s 37. The impact of Ch III on these state provisions is considered at 8.5.42–8.5.46. What is relevant for present purposes is that a majority of the High Court (French CJ, Gummow, Hayne, Heydon and Bell JJ) considered that the power in s 36(2) to make a declaration was neither judicial in nature nor incidental thereto because the declaration had no impact on the rights in dispute. Accordingly, such a power could not be given by the Commonwealth Parliament to a court. 8.3.19 At times, the High Court has applied the requirements more flexibly. This is demonstrated first by the court’s decision in Croome v Tasmania (1997) 191 CLR 119. Until 1997, it was a criminal offence in Tasmania for consenting men to engage in homosexual intercourse in private: Criminal Code (Tas) ss 122, 123. Following Australia’s adoption of the First Optional Protocol to the International Covenant for Civil and Political Rights (ICCPR) in 1991, Mr Toonen submitted a complaint to the UN

Human Rights Committee that ss 122 and 123 of the Criminal Code (Tas) violated, amongst other rights, the right to privacy in art 17 of the ICCPR. The Human Rights Committee agreed that Mr Toonen’s right to privacy under art 17 had been violated, and recommended that ss 122 and 123 be repealed by the Tasmanian legislature. The Tasmanian Government refused to repeal the provisions. In response to the committee’s recommendations, the Commonwealth Parliament passed the Human Rights (Sexual Conduct) Act 1994 (Cth). Section 4(1) of that Act provides that ‘sexual conduct involving only consenting adults acting in private is not to be subject, by or under any law of the Commonwealth, a state or a territory, to any arbitrary interference with privacy within the meaning of Article 17 of the International Covenant on Civil and Political Rights’. Following the enactment of the Commonwealth provision, and in response to Tasmania’s continuing refusal to repeal the offending Tasmanian provisions, Mr Toonen and Mr Croome instituted proceedings in the High Court of Australia for a declaration that ss 122 and 123 were invalid, partly on the basis that they were inconsistent with s 4(1) of the Commonwealth Act and thus invalid by operation of s 109 of the Constitution. The Tasmanian Government applied to have the proceedings struck out on the ground that there was no ‘matter’ because the Tasmanian law had not been, and would not be, enforced against Mr Toonen and Mr Croome. The High Court unanimously dismissed Tasmania’s argument. Whether the criminal offences were enforced, the plaintiffs had engaged in conduct that attracted liability for prosecution and punishment. 8.3.20 In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591, the court held that there need not be any reciprocity of the parties’

rights and liabilities for a ‘matter’ to exist. In that case the question was whether the Trade Practices Act 1974 (Cth) could authorise any person to seek a declaration from the Federal Court that a person had engaged in conduct in breach of the Trade Practices Act 1974 even though the applicant had suffered no loss as a consequence of the breach. All members of the court held that the proceedings did present a ‘matter’. As Gummow J said, ‘Ch III does not impose a universal requirement for adjudication under it of mutual or reciprocal relations [page 921] between right and duty, power and liability, each correlative of the other’: 200 CLR at 637; see also McBain (2002) 209 CLR 372 at 406 per Gaudron and Gummow JJ. 8.3.21 There are exceptions to the requirement that there be an immediate right, duty or liability to be established by the determination of the court which allows Commonwealth judicial power to be exercised in the absence of a controversy, yet still satisfy the ‘matter’ requirement. In Minister for Immigration and Multicultural Affairs v B (2004) 219 CLR 365 at 378, Gleeson CJ and McHugh J identified ‘[o]rders concerning judicial advice to trustees or company liquidators, the administration of assets or the giving of consent to the marriage of a ward of the court’ as examples where a court is exercising judicial power in relation to a matter despite there being no adjudication of rights. However, as their Honours emphasised, these examples are exceptional, and historical.

The heads of federal jurisdiction — ss 75 and 76 8.3.22 The Australian Law Reform Commission has said that ‘[o]f the nine paragraphs, there are four that are central to the operation of the federal judicial system and in which the Commonwealth, as a polity, has an undoubted interest’: ALRC, 2001, pp 90–1. These provisions are ss 75(iii), (v), 76(i) and (ii). Professor Zines has said that, ‘[a]part from those matters … many of the areas of jurisdiction in s 75 (and also s 76(iv)) have been regarded by most lawyers as useless, meaningless or inappropriate’: Zines, 2000, p 284. This chapter will consider the jurisdiction in ss 75(i), (iii), (v); 76(i), (ii), and part of the jurisdiction in s 75(iv). For a consideration of the other heads of federal jurisdiction, see Stellios, 2010, Ch 7; Zines, 2002, Chs 1 and 2; Zines, 2000, pp 287–9.

Section 75(iii) and (iv): government parties 8.3.23 The High Court has taken a broad approach to the application of s 75(iii). In Bank of NSW v Commonwealth (1948) 76 CLR 1 at 367, Dixon J explained that its purpose ‘of providing a jurisdiction which might be invoked by or against the Commonwealth could not, in modern times, be adequately attained and secured against colourable evasion, unless it was expressed so as to cover the enforcement of actionable rights and liabilities of officers and agencies in their official and governmental capacity, when in substance they formed part of or represented the Commonwealth’. Thus, the nomination of a Commonwealth statutory corporation as a party can trigger the jurisdiction in s

75(iii). The policy of preventing ‘colourable evasion’ is also applied to the scope of s 75(iv), even though there is no reference in that provision, as there is in s 75(iii), to ‘a person suing or being sued on behalf of’ a state. 8.3.24 Thus, one of the central issues in determining the scope of these provisions is to work out how far beyond the respective executive governments the provisions extend. The court has concentrated on the extent of control that the executive government has over the relevant person or body. For an application of the approach to s 75(iii), see Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559, where the Australian Securities and Investments Commission was considered to be ‘the Commonwealth’: 204 CLR at 584 per Gleeson CJ, Gaudron and Gummow JJ, Hayne and Callinan agreeing at 638; 608 per McHugh J. For an application of the approach to s 75(iii), see the joint judgment (Gleeson CJ, Gummow, Kirby and Hayne JJ) in Sweedman v Transport Accident Commission (2006) 226 CLR 362 where the Victorian Transport [page 922] Accident Commission was considered to be the ‘state’ for the purposes of s 75(iv). For further discussion of the provisions, see Zines, 2000, pp 272–5. 8.3.25 The jurisdiction under s 75(iii) and (iv) has been given exclusively to the High Court in some respects under s 38 of the Judiciary Act. Thus, the following jurisdiction cannot be exercised by state courts: ‘suits between states, or between persons suing or

being sued on behalf of different states, or between a state and a person suing or being sued on behalf of another state’ (s 38(b)); ‘suits by the Commonwealth, or any person suing on behalf of the Commonwealth, against a state, or any person being sued on behalf of a state’ (s 38(c)); and ‘suits by a state, or any person suing on behalf of a state, against the Commonwealth or any person being sued on behalf of the Commonwealth’: s 38(d). However, the exclusivity of jurisdiction in s 38 is subject to some exceptions. The Federal Court has been given jurisdiction under s 39B(1A) of the Judiciary Act in any matter ‘in which the Commonwealth is seeking an injunction or a declaration’. Additionally, under s 44 of the Judiciary Act, the High Court may remit any matter in s 38(a), (b), (c) or (d) to the Federal Court or any court of a state or territory (s 44(2)), and any matter in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party, may be remitted to the Federal Court: s 44(2A).

Section 76(ii): arising under laws made by parliament 8.3.26 The High Court’s approach to s 76(ii) is well demonstrated by the classic case in this area: LNC Industries v BMW (1983) 151 CLR 575. This case concerned an application for leave to appeal to the Privy Council from a New South Wales Supreme Court judgment. Appeals were precluded by s 39(2)(a) of the Judiciary Act 1903 (Cth) if the Supreme Court had been exercising federal jurisdiction. The case involved a contractual dispute where the subject matter of the contract was an import licence granted under Commonwealth regulations.

8.3.27C

LNC Industries v BMW (1983) 151 CLR 575

Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ: The conclusion reached by Latham CJ in [R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154], and stated in a passage that has often been cited with approval, is ‘that a matter may properly be said to arise under a federal law if the right or duty in question in the matter owes its existence to federal law or depends upon federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law’. Equally, there is a matter arising under a federal law if the source of a defence which asserts that the defendant is immune from the liability or obligation alleged against him is a law of the Commonwealth: Felton v Mulligan [(1971) 124 CLR 367 at 408]. When it is said that a matter will arise under a law of the Parliament only if the right or duty in question in the matter owes its existence to a law of the Parliament that does not mean that the question depends on the form of the relief sought and on whether that relief depends on federal law. A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under state law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law.

[page 923]

8.3.28 The court concluded that the ‘very subject of the issue between the parties [was] an entitlement under the Regulations’ (151 CLR at 582) and, thus, the matter arose under laws made by parliament. The Supreme Court had been exercising federal jurisdiction and no appeal to the Privy Council was possible. For recent cases applying these principles, see TCL Air Conditioner (Zhongsham) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 89 ALJR 975; [2015] HCA 36. 8.3.29 With a few exceptions, the High Court does not have jurisdiction conferred on it under s 76(ii). The main exceptions include s 30(c) of the Judiciary Act (‘trials of indictable offences against the laws of the Commonwealth’, although this is probably also supported by s 75(iii): see R v Kidman (1915) 20 CLR 425; Zines, 2002, p 7; see also Momcilovic v R (2011) 245 CLR 1); jurisdiction under the Nauru (High Court Appeals) Act 1976 (Cth); jurisdiction under the Commonwealth Electoral Act 1918 (Cth); and jurisdiction under s 40(3) of the Judiciary Act to hear a cause removed into the High Court from a lower court pursuant to s 40(2) of that Act. The s 76(ii) head of jurisdiction has been conferred on state courts mainly, but not exclusively, under ss 39(2) and 68(2) of the Judiciary Act; on the Federal Court under s 39B(c) of the Judiciary Act and a range of other Commonwealth Acts; on the Family Court under the Family Law Act 1975 (Cth), the Marriage Act 1961 (Cth) and related legislation; and on the Federal Circuit Court by a range of Commonwealth Acts.

Section 75(v): officer of the Commonwealth

8.3.30 Section 75(v) of the Constitution was included in direct response to the United States Supreme Court’s decision in Marbury v Madison, 1 Cranch 137; 5 US 137 (1803). In that case, the United States Supreme Court decided that art III of the United States Constitution did not confer original jurisdiction on the Supreme Court to order mandamus against officers of the United States government: see 1.2.40C. The place of s 75(v) in the Constitution was explained by the court in Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651. 8.3.31C Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ: Section 75(v) has the special significance identified by Dixon J in Bank of NSW v The Commonwealth [(1948) 76 CLR 1]. His Honour said that the purpose of the inclusion of s 75(v) was [at 363]: … to make it constitutionally certain that there would be a jurisdiction capable of restraining officers of the Commonwealth from exceeding Federal power. The reference to restraint of officers of the Commonwealth from exceeding federal power should not be read as limited to the observance of the constitutional limitations upon the executive and legislative power of the Commonwealth. An essential characteristic of the judicature provided for in Ch III is that it declares and enforces the limits of the power conferred by statute up on administrative decision-makers [Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 at

152–153]. Section 75(v) furthers that end by controlling jurisdictional error … In this way, s 75(v) introduced ‘into [page 924] the Constitution of the Commonwealth an entrenched minimum provision of judicial [669] review’. The significance of s 75(v) in the structure of the federal system of government established by the Constitution was further explained in the joint judgment of five members of the Court in Plaintiff S157/2002 [(2003) 211 CLR 476 at 513–14. See also the reasons of Gleeson CJ at 482– 3]: The reservation to this court by the Constitution of the jurisdiction in all matters in which the named constitutional writs or an injunction are sought against an officer of the Commonwealth is a means of assuring to all people affected that officers of the Commonwealth obey the law and neither exceed nor neglect any jurisdiction which the law confers on them. The centrality, and protective purpose, of the jurisdiction of this court in that regard places significant barriers in the way of legislative attempts (by privative clauses or otherwise) to impair judicial review of administrative action. Such jurisdiction exists to maintain the federal compact by ensuring that propounded laws are constitutionally valid and ministerial or other official action lawful and within jurisdiction. In any written constitution, where there are disputes over such matters, there must be an authoritative decision-maker. Under the Constitution of the Commonwealth the ultimate decision-maker in all matters where there is a contest, is this court. The court must be obedient to its constitutional function. In the end, pursuant to s 75 of the Constitution, this limits the powers of the

parliament or of the executive to avoid, or confine, judicial review. [For a detailed discussion of the purposes of s 75(v), see Stellios, 2011a.]

8.3.32 The jurisdiction in s 75(v) overlaps to a significant extent with the jurisdiction in s 75(iii). As Gaudron and Gummow JJ said in Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82 at 92: ‘It appears that s 75(v) was included as a safeguard against the possibility that the provision in s 75(iii) respecting matters in which a person being sued on behalf of the Commonwealth is a party would be read down by reference to decisions construing Art III of the United states Constitution’. In any event, it is well recognised that s 75(v) would have a broader reach than s 75(iii): proceedings for judicial review of a decision of a judge of a federal court created by parliament would not trigger s 75(iii), but would fall within s 75(v). 8.3.33 Because of their ‘high constitutional purposes’, mandamus and prohibition have been described more recently as ‘constitutional writs’ rather than as ‘prerogative writs’ as known earlier and historically in England: Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 at 666 per Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ. There are two other common administrative law remedies not referred to in s 75(v): habeas corpus and certiorari. Section 32 of the Judiciary Act 1903 (Cth) confers on the High Court the power to order habeas corpus. Although not expressly conferred on the court, the power to issue certiorari is probably authorised by the conferral of power under ss 31 and/or 32 of the Judiciary Act to

grant complete relief in a matter. In any event, once original jurisdiction is attracted, it is likely that the High Court would have inherent jurisdiction to grant all remedies necessary to quell the justiciable controversy. 8.3.34 As Gaudron, McHugh, Gummow, Kirby and Hayne JJ recognised in Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at 507, ‘it has long been accepted that certiorari may issue [page 925] as ancillary to the constitutional writs of mandamus and prohibition’, and that, ‘subject to the existence of “a matter”, certiorari may also issue in the exercise of jurisdiction conferred by s 75(iii) of the Constitution in “all matters … in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party” and that conferred pursuant to s 76(i) of the Constitution “in any matter … arising under [the] Constitution, or involving its interpretation.”’ 8.3.35 One of the principal issues at the centre of litigation in relation to s 75(v) has been the extent to which parliament can limit the scope of review that can be undertaken under s 75(v) by the use of a privative clause. A classic form of privative clause was considered by the High Court in R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598. In that case, a Commonwealth tribunal had been empowered to make certain decisions regarding employers and employees in the ‘coal mining industry’. Pursuant to that power, the tribunal made an order about minimum wages in

the industry and sought to bind the plaintiff company to that award. The plaintiff company was a courier that carried coal from a mine to other sites. On the question of whether the plaintiff company’s operations were part of the ‘coal mining industry’ and, thus, whether the company was bound by the award, the court concluded that they were not, and that the contrary decision by the tribunal involved jurisdictional error. Ordinarily, jurisdictional error would attract the operation of s 75(v) and the award of mandamus or prohibition. However, the legislation in Hickman contained a privative clause (reg 17 of the National Security (Coal Mining Industry Employment) Regulations 1941 (Cth), made under the National Security Act 1939 (Cth)) that provided that the tribunal’s decision ‘shall not be challenged, appealed against, quashed or called into question, or be subject to prohibition, mandamus or injunction, in any court on any account whatever’. As Dixon J made clear, ‘such a provision cannot, under the Constitution, affect the jurisdiction of this Court to grant a writ of prohibition against officers of the Commonwealth when the legal situation requires that remedy’: 70 CLR at 614. However, his Honour continued as follows. 8.3.36C

R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598

Dixon J: But a writ of prohibition is a remedy that lies only to restrain persons acting judicially from exceeding their power or authority. It is therefore necessary to ascertain before issuing a writ whether the persons or body against which it is sought are acting in excess of their powers; and that means whether their determination, when made, would be void. The Board derives its power from Regulations of which reg 17 forms a part, and that regulation must be taken into account in ascertaining what are

the true limits of the authority of the Board, and whether its decision is void. The particular regulation is expressed in a manner that has grown familiar. Both under Commonwealth law, and in jurisdictions where there is a unitary constitution, the interpretation of provisions of the general nature of reg 17 is well established. They are not interpreted as meaning to set at large the courts or other judicial bodies to whose decision they relate. Such a clause is interpreted as meaning that no decision which is in fact given by the body concerned shall be invalidated on the ground that it has not conformed to the requirements governing its proceedings or the exercise of its authority or has not confined its acts within the limits laid down by the instrument giving it authority, provided always that its decision is a bona fide attempt to exercise its power, that it relates to the subject matter of the legislation, and that it is reasonably capable of reference to the power given to the body.

[page 926] 8.3.37 Thus, where a privative clause is included in a statutory scheme, it does not — as a literal reading would suggest — exclude the court from reviewing the decision in question. What it does is present a tension within the legislative scheme: on the one hand, one set of provisions sets out the limits of statutory power or jurisdiction but, on the other hand, the privative clause seeks to broaden the scope of power. It seems that Dixon J was suggesting that the tension was reconciled according to the Hickman provisos: provided the decision (1) was a bona fide attempt to exercise power; (2) related to the subject matter of the legislation; and (3) was reasonably capable of reference to the power given to the body,

then the decision would be authorised by the legislation and beyond the scope of review under s 75(v). In subsequent cases, a fourth condition seemed to be adopted: that some provisions imposed ‘imperative duties or inviolable limitations or restraints’ which could not be avoided with the use of a privative clause: see, for example, R v Metal Trades Employers’ Association; Ex parte Amalgamated Engineering Union, Australian Section (1951) 82 CLR 248 per Dixon J; R v Coldham; Ex parte Australian Workers’ Union (1982) 153 CLR 415 per Mason ACJ and Brennan J. Following Hickman, it was thought by many that the three (or four) conditions were qualifications for a valid exercise of power or jurisdiction. Thus, where you had a privative clause in a legislative scheme, provided you satisfied the three (or four) conditions, the decision was within jurisdiction and thus valid. In other words, the privative clause operated to expand the scope of legislative power or jurisdiction by impliedly repealing limitations on power. 8.3.38 On this understanding of how privative clauses operated, the Commonwealth Government introduced amendments to the Migration Act 1958 (Cth) in 2001 to insert a privative clause into the legislative scheme to limit the operation of s 75(v) in relation to certain migration decisions. The privative clause in s 474 took the following form: (1) A privative clause decision: (a) is final and conclusive; and (b) must not be challenged, appealed against, reviewed, quashed or called in question in any court; and (c) is not subject to prohibition, mandamus, injunction, declaration or certiorari in any court on any account. (2) In this section:

privative clause decision means a decision of an administrative character made, proposed to be made, or required to be made, as the case may be, under this Act or under a regulation or other instrument made under this Act (whether in the exercise of a discretion or not), other than a decision referred to in subsection (4) or (5).

Of course, the privative clause could not be read literally to exclude the jurisdiction of the court to review a decision for jurisdictional error; that is, a failure to exercise jurisdiction (which would attract mandamus) or an excess of the jurisdiction (which would attract prohibition). The question was how the privative clause was to be applied as an interpretive tool to affect the scope of jurisdiction conferred by the Act. In their joint judgment, Gaudron, McHugh, Gummow, Kirby and Hayne JJ fundamentally altered the way in which privative clauses are to be seen as operating. [page 927]

8.3.39C

Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476

Gaudron J, McHugh, Gummow, Kirby and Hayne JJ: The construction of legislation containing provisions such as s 474 of the Act has a particular, but not entirely satisfactory, history. For the moment, it is necessary to refer only to the decision in R v Hickman; Ex parte Fox and Clinton [(1945) 70 CLR 598]. Doubtless because of that decision and, also, because of the terms of s 75(v) of the Constitution, the Commonwealth contends that s 474(1) is not to be construed as totally excluding judicial

review. Moreover, it is clear that Parliament did not intend it to have that effect. So far as legislative intent is concerned, it is relevant to note that, in the second reading speech for the Bill that became the Amending Act which amended the Act so to include s 474, the Minister said: The privative clause does not mean that access to the courts is denied, nor that only the High Court can hear migration matters. Both the Federal Court and the High Court can hear migration matters, but the grounds of judicial review before either court have been limited [Australia, House of Representatives, Parliamentary Debates (Hansard), 26 September 2001 at 31559]. A little later, the Minister added: Members may be aware that the effect of a privative clause such as that used in Hickman’s case is to expand the legal validity of the acts done and the decisions made by decision makers. The result is to give decision makers wider lawful operation for their decisions, and this means that the grounds on which those decisions can be challenged in the Federal and High Courts are narrower than currently [at 31561]. … In Hickman, a question arose as to the effect of reg 17 of the National Security (Coal Mining Industry Employment) Regulations 1941 (Cth), made under the National Security Act 1939 (Cth) and thus supported by the defence power. Regulation 17 provided that a decision of a Local Reference Board, which had a general power to settle disputes as to any local matter likely to affect the amicable relations of employers and employees in the coal mining industry, ‘[should] not be challenged, appealed against, quashed or called into question, or be subject to

prohibition, mandamus or injunction, in any court on any account whatever’. [Their Honours quoted from Dixon J’s passage extracted above, and continued:] It should be noted at once that, in the passage last quoted, Dixon J was not speaking of reg 17, but of privative clauses generally. Even so, it is important to appreciate that his Honour’s observations were confined to ‘decision[s] … in fact given’. Moreover and as later decisions of this court have made clear, the expression ‘reasonably capable of reference to the power given to the body’, has been treated as signifying that it must ‘not on its face go beyond … power’. Thus, even on this general statement, a privative clause cannot protect against a failure to make a decision required by the legislation in which that clause is found or against a decision which, on its face, exceeds jurisdiction. As to the effect of the privative clause actually considered in Hickman, Dixon J first noted that the parliament could neither ‘give power to any judicial or other authority’ in excess of constitutional power nor ‘impose limits upon the … authority of a body … with the [page 928] intention that any excess of that authority means invalidity, and … at the same time … deprive this court of authority to restrain the invalid action … by prohibition’ [(1945) 70 CLR 598 at 616]. Rather, if legislation purports to impose limits on authority and contains a privative clause, it is, so his Honour said, ‘a question of interpretation of the whole legislative instrument whether transgression of the limits, so long as done bona fide and bearing on its face every appearance of an attempt to pursue the power, necessarily spells invalidity’ [70 CLR at 616] …

It follows from Hickman, and it is made clear by subsequent cases, that the so-called ‘Hickman principle’ is simply a rule of construction allowing for the reconciliation of apparently conflicting statutory provisions. Once this is accepted, as it must be, it follows that there can be no general rule as to the meaning or effect of privative clauses. Rather, the meaning of a privative clause must be ascertained from its terms; and if that meaning appears to conflict with the provision pursuant to which some action has been taken or some decision made, its effect will depend entirely on the outcome of its reconciliation with that other provision. … [Their Honours then referred to the Commonwealth’s submissions as to how privative clauses should be seen as operating and to the words of Dixon J in R v Murray; Ex parte Proctor (1949) 77 CLR 387 at 399–400 that the first step in the reconciliation process ‘is to apply to a [privative clause] provision … the traditional or established interpretation which makes the protection it purports to afford inapplicable unless there has been an honest attempt to deal with a subject matter confided to the tribunal and to act in pursuance of the powers of the tribunal in relation to something that might reasonably be regarded as falling within its province’. Although this tended to support the Commonwealth’s submissions, their Honours continued:] A proper reading of what Dixon J said in Murray is not that a privative clause is construed as meaning that decisions are protected so long as they conform to ‘the three Hickman provisos’. Rather, the position is that the ‘protection’ which the privative clause ‘purports to afford’ will be inapplicable unless those provisos are satisfied. And to ascertain what protection a privative clause purports to afford, it is necessary to have regard to the terms of the particular clause in question. Thus, contrary to the submissions for the Commonwealth, it is inaccurate to describe the outcome in a situation where the provisos are satisfied as an ‘expansion’ or ‘extension’ of the powers of the decision-makers in question …

So far as it was contended on behalf of the Commonwealth that s 474 effected an implied repeal of statutory limitations on authority or powers conferred by the Act, the argument seeks to give s 474 an effect which was denied in Coldham and which exceeds anything that was said in Hickman. And because it exceeds anything that was said in Hickman, by reference to which the Minister explained the effect of s 474 in the second reading speech for the Bill that became the Amending Act, it is impossible to conclude that the Parliament intended to effect a repeal of all statutory limitations or restraints upon the exercise of power or the making of a decision. More fundamentally, the method of reconciliation by implied repeal of limitations or restraints in the Act on the exercise of power must be rejected because it seeks to give to s 474 a meaning which its terms cannot bear. It seeks to give to that section a meaning that is descriptive of a recognised limitation on the effectiveness of privative clauses generally and ignores the words of the section which, in terms, limit access to the courts. Accordingly, the argument that s 474 effected an implied repeal of all statutory limitations and restraints must be rejected. [page 929] Although s 474 does not purport to effect a repeal of statutory limitations or restraints, it should be noted that it may be that, by reference to the words of s 474, some procedural or other requirements laid down by the Act are to be construed as not essential to the validity of a decision. However, that is a matter that can only be determined by reference to the requirement in issue in a particular case. Of course, the process of reconciliation elaborated by Dixon J in Murray which may result in some procedural or other requirement being construed as not essential to the validity of an act or decision, is necessary only if there is an apparent conflict

between the provisions which impose those requirements and the privative clause in question. Thus, if reliance is placed on a privative clause, the first step must be to ascertain its meaning or, as Dixon J put it in Murray, to ascertain ‘the protection it purports to afford’.

8.3.40 Thus, their Honours considered that, rather than conditioning the exercise of power or jurisdiction, the Hickman provisos conditioned the protection that was otherwise conferred by a privative clause. In other words, the provisos set the outer limits of the extent to which power or jurisdiction can be expanded, but it is not to be assumed in all cases that jurisdiction or power has been expanded to that point. To determine the scope of protection accorded by a privative clause, one has to look at the privative clause in the particular legislative scheme: it is a question of reconciling the privative clause with the particular statutory power in each case. Somewhat confusingly, their Honours went on to consider that the words ‘under this Act’ in s 474(2) did not include decisions that involved jurisdictional error. Accordingly, decisions involving jurisdictional error were not subject to the privative clause. On the facts in the case, the applicant had argued that, in refusing the applicant a visa, the decision-maker had breached the requirements of procedural fairness. Such a breach constituted jurisdictional error and, consequently, the privative clause had no operation. The court’s interpretation of s 474 left it with little work to do, and seemed to frustrate, rather than give effect to, parliament’s intention.

Section s 76(i) and the power of judicial review

8.3.41 The power of the judiciary to determine the constitutional validity of legislative and executive acts marked a significant departure from the English constitutional tradition of parliamentary sovereignty. Judicial review (an expression used in this context in a different sense to the way the expression is used in the administrative law context) is widely considered ‘axiomatic’ (Australian Communist Party v Commonwealth (1951) 83 CLR 1 at 262 per Fullagar J) in the Australian constitutional framework. It is generally accepted that the origins of the function of judicial review are to be found in the United States Supreme Court decision of Marbury v Madison, 1 Cranch 137; 5 US 137 (1803) 1.2.40C. 8.3.42 Although it is well accepted that the framers intended the judiciary to exercise the power of judicial review (see, for example, Galligan, 1979; Irving, 2004), it has been argued by some scholars that the function of judicial review finds no firm textual support within the Constitution: see Thomson, 1986, pp 186–201; Thomson, 1988, pp 129–60; Lane, 1979, pp 1135–7. Although s 76(i) of the Constitution appears, at first glance, to contemplate the power of judicial review, on closer analysis, it provides an unstable foundation to support that function. A matter may arise under the Constitution or involve its interpretation without any role for the court in invalidating legislative or executive acts. A question of inconsistency under [page 930] s 109 would be such an instance. More importantly, though, s 76(i) is a discretionary head of jurisdiction. Parliament has conferred the

jurisdiction on the High Court by the enactment of s 30(a) of the Judiciary Act; however, it need not have done so.

Section 75(i) — treaties 8.3.43 By virtue of s 75(i), the High Court has jurisdiction in matters ‘arising under any treaty’. Section 38 of the Judiciary Act provides that ‘matters arising directly under any treaty’ are exclusive to the High Court, although such matters can be remitted to the Federal Court or any court of a state or territory under s 44(2) of the Judiciary Act. Otherwise (that is, when a matter does not arise directly under a treaty), jurisdiction has been conferred on state courts under s 39 of the Judiciary Act. The interaction between s 75(i) and other heads of federal jurisdiction (primarily s 76(i) and (ii)) has created interpretive complications, as has the layer of complexity added by s 38 of the Judiciary Act: see Zines, 2002; Leeming, 1999; Jones, 2007. 8.3.44 What is clear about s 75(i) is that it is conditioned by the word ‘matter’: there needs to be an immediate right, duty or liability to be established by the determination of the court before the jurisdiction in s 75(i) can be exercised. In Re East; Ex parte Nguyen (1998) 196 CLR 354, the applicant had pleaded guilty to criminal offences in the County Court of Victoria. On his application to the High Court, he claimed that, because of the absence of an interpreter, he was unable to properly instruct his solicitor. Consequently, it was argued, he was denied the rights set out in the International Convention on the Elimination of all Forms of Racial Discrimination, claimed to be enacted in the Racial Discrimination Act 1975 (Cth). In determining whether the

court had jurisdiction to hear the claim, the joint judgment said the following about s 75(i). 8.3.45C

Re East; Ex parte Nguyen (1998) 196 CLR 354

Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ: A proceeding which is said to attract the original jurisdiction of this Court with respect to one of the nine descriptions of ‘matter’ contained in the five paragraphs of s 75 of the Constitution and the four paragraphs of s 76 may contain within it, or involve at its threshold, a matter within another one or more of those heads of original jurisdiction. The present application provides an example. This court has original jurisdiction with respect to matters arising under the Constitution or involving its interpretation: Constitution, s 76(i); Judiciary Act 1903 (Cth), s 30(a). The construction of the phrase ‘matters … Arising under any treaty’ itself may give rise to such a matter. If it be decided adversely to the applicant that here there is no matter arising under any treaty, then his case under s 75(i) falls away and his application must be dismissed. Differing views have been expressed, by judges and commentators, as to the operation, if any, of the words ‘Arising under any treaty’ in s 75(i) of the Constitution. The applicant relied in particular upon the view taken by McLelland J in Bluett v Fadden [(1956) 56 SR (NSW) 254, 261] that ‘where the terms of the treaty have by legislation been made part of the law of the land, it is in a very real sense the treaty which is being interpreted’ and ‘[i]n such cases, the matter in question arises under the treaty’. The result would be that even if, as is the case here with the Act, the law did not confer original jurisdiction upon this court in

[page 931] matters arising under that law, within the meaning of s 76(ii) of the Constitution, this court would have original jurisdiction by force of s 75(i) itself. However, it is unnecessary and therefore inappropriate to go into that question in the present case. This is because, even if the applicant be correct in his reliance upon Bluett v Fadden, nevertheless, in order to attract jurisdiction under s 75(i), it would be necessary for the applicant to identify a justiciable controversy arising under a treaty. The applicant fails at this anterior stage. There is no ‘immediate right, duty or liability to be established by the determination of the court’. Under Art 5 of the International Convention on the Elimination of all Forms of Racial Discrimination, the states parties undertook to prohibit and to eliminate racial discrimination in all its forms and to guarantee the right of everyone, without distinction as to race, colour, or national or ethnic origin, to equality before the law, notably in the enjoyment of certain specified rights, including the ‘right to equal treatment before the tribunals and all other organs administering justice’. The entry into that treaty by Australia created no enforceable rights or obligations under Australian municipal law. However, the Parliament, by enacting the Act, adopted its chosen method of giving effect to Australia’s treaty obligations, by enacting laws creating certain rights and obligations and providing certain remedies.

Accrued jurisdiction 8.3.46 With the creation of a federal legal system comes the possibility that a dispute or set of disputes might give rise to both federal and state legal controversies. Sir Owen Dixon recognised

that the division of courts into state and federal would create difficulties for the ‘practical and efficient administration of justice’: Dixon, 1935, p 607. The jurisdictional disputes that can arise from the existence of a dual system of courts were largely avoided until the establishment of the Federal Court of Australia in 1976. Until the mid-1970s, parliament primarily used state courts for the exercise of Commonwealth judicial power. While parliament had created federal courts prior to that time, their jurisdiction was largely specialised and jurisdictional overlaps were minimal. Of course, jurisdictional disputes were not unknown: there were cases that considered the extent to which state-based questions could be determined by the High Court in its original jurisdiction: see, for example, Carter v Egg & Egg Pulp Marketing Board (Vict) (1942) 66 CLR 557; R v Carter; Ex parte Kisch (1934) 52 CLR 221; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 221; Hopper v Egg & Egg Pulp Marketing Board (Vict) (1939) 61 CLR 665; Parton v Milk Board (Vict) (1949) 80 CLR 229. 8.3.47 With the establishment of the Federal Court, and the conferral on it of exclusive jurisdiction to hear trade practices matters, the potential increased for jurisdictional overlap with traditional common law areas of tort and contract heard in state and territory courts. In a series of cases following the creation of the Federal Court, the High Court was called upon to decide whether the Federal Court’s jurisdiction extended to the hearing of state claims along with federal claims. Allowing federal courts to hear related state or territory claims would reduce jurisdictional disputes and avoid the additional financial burden and inconvenience on litigants if they were forced to litigate their claims in separate courts. However, it also had the potential to

impact on the work of state and territory courts, and their place within the federal judicial system. [page 932] 8.3.48 In Philip Morris Incorporated v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457, proceedings had been instituted in the Federal Court seeking relief under the Trade Practices Act 1974 (Cth) for deceptive and misleading conduct. The plaintiff corporations were the registered owners of certain trademarks in relation to their cigarette products. Without appropriate approval from the plaintiffs, the defendants had manufactured various items of clothing bearing images resembling the registered trademarks. Section 86 of the Trade Practices Act had conferred exclusive jurisdiction on the Federal Court ‘to hear and determine actions, prosecutions and other proceedings’ seeking relief for misleading and deceptive conduct. Along with the claims for relief under the Trade Practices Act, the plaintiffs claimed equitable relief for the tort of passing off. The question for the court was whether the Federal Court had been given jurisdiction to hear the passing off claim and, if so, whether it was beyond the legislative competence of parliament to confer that jurisdiction. A majority of the court held that the Federal Court has jurisdiction to consider certain state claims along with their determination of the federal claims. In the High Court, Mason J (with Stephen J agreeing) outlined the competing arguments and underlying policy considerations. 8.3.49C Philip Morris Incorporated v Adam P Brown

Male Fashions Pty Ltd (1981) 148 CLR 457 Mason J: Critical to the defendant’s argument and to the outcome of this case is the meaning of ‘matter’… The essence of the problem lies, not in ascertaining the abstract meaning of ‘matter’, but in delimiting its content when it is associated with the various heads of jurisdiction in ss 75 and 76, particularly s 76(ii) — ‘in any matter — (ii) Arising under any laws made by the Parliament’. The argument presented by the defendant and its supporters, adopting ‘subject matter for determination’ as a synonym for ‘matter’, sought to equate it in the context of s 76(ii) with ‘cause of action, claim for relief or matter of defence arising under a federal law’. The next step in the argument was to say that s 77(i) enables the Parliament to confer jurisdiction on a federal court to hear and determine those subject matters but no others. The consequence, if the argument be correct, is that jurisdiction cannot be given to federal courts to hear and determine a cause of action or claim for relief not based in federal law, except in so far as a matter of defence based in federal law enables the cause of action or claim to be determined in the exercise of federal jurisdiction. [His Honour referred to Carter v Egg & Egg Pulp Marketing Board (Vict) (1942) 66 CLR 557; R v Carter; Ex parte Kisch (1934) 52 CLR 221; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 221; Hopper v Egg & Egg Pulp Marketing Board (Vict) (1939) 61 CLR 665; Parton v Milk Board (Vict) (1949) 80 CLR 229, and continued:] [T]he lesson to be learned from the authorities is that the Court having jurisdiction to determine a matter falling within ss 75 and 76 giving rise to the exercise of federal jurisdiction has jurisdiction to decide an attached non-severable claim.

The classification of a claim as ‘non-severable’ does not necessarily mean that it is, or must be, united to the federal claim by a single claim for relief, though this is a common illustration of a non-severable claim. The non-severable character of the attached claim may emerge from other aspects of the relationship between the federal and the attached [page 933] claim. For example, it may appear that the resolution of the attached claim is essential to a determination of the federal question. Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction. In the ultimate analysis the validity of this interpretation rests on the proposition that ‘matters’ in ss 75 and 76 has the broad content ascribed to it at the turn of the century by those who were familiar with the course of events which led to the adoption of the Constitution. There are other and powerful considerations which support this proposition. We begin with the premise that the framers of the detailed provisions of Ch III respecting the exercise of judicial power, having carefully considered the corresponding provisions of the United States Constitution, looked to ‘matters’ in the broadest sense of the term as one which would catch up, as far as possible, the controversy which parties brought for determination by a court. It is highly unlikely that they intended to embrace a narrow technical meaning which would result in an undue fragmentation of a total controversy, leaving its resolution to decisions by both state courts and this Court or state courts and federal courts. The probability is that they

contemplated that by their dispositions they were providing for the determination either in state or federal courts of an entire controversy which the parties wished to bring to a court for resolution. Whether they foresaw the subsequent course of judicial exposition of Ch III by this Court we do not know, but we do know that they had before them the American experience with its extended conception of federal jurisdiction … Lurking beneath the surface of the arguments presented in this case are competing policy considerations affecting the role and status of the Federal Court and the Supreme Courts of the states. There is on the one hand the desirability of enabling the Federal Court to deal with attached claims so as to resolve the entirety of the parties’ controversy. There is on the other hand an apprehension that if it be held that the Federal Court has jurisdiction to deal with attached claims, state courts will lose to the Federal Court a proportion of the important work which they have hitherto discharged, work which the Federal Court has no jurisdiction to determine if it be not attached to a federal claim. Added force is given to this apprehension by the vesting of exclusive federal jurisdiction in the Federal Court, for example, by s 86 of the Trade Practices Act. There are those who consider that, in order to avoid jurisdictional conflicts, duplication of proceedings and diminution in status of the Supreme Courts, the Commonwealth Parliament should not create federal courts or, if it does, should not give them an exclusive jurisdiction. On the other hand, others believe that federal courts should interpret federal laws and determine federal rights; and some go further and consider that Parliament should vest an exclusive jurisdiction in a federal court in specialist fields in the hope that this will promote a more informed and uniform application of relevant federal laws. With the force of these respective views we are not concerned. We must approach the question on the footing that Parliament has decided for good reason to establish the Federal Court and to vest in it an exclusive jurisdiction under the Trade Practices Act.

And we cannot assume that, in the event of a decision in this case adverse to the plaintiffs, Parliament would be prepared to vest a concurrent jurisdiction under the Trade Practices Act in state courts. In deciding whether to attribute either a broad or a narrow content to ‘matter’, we should take into account that the adoption of the broad meaning will lead to the speedier determination of entire controversies between parties without undue duplication of proceedings. Perhaps the adoption of this view will have some adverse consequences for state courts, though this is by [page 934] no means self-evident, but even if this be so, it is a consideration which is secondary to the interests of litigants. This circumstance is an additional reason for giving the word a broad rather than a narrow meaning. [A majority of the court (Barwick, Gibbs, Stephen, Mason, Murphy JJ; Aickin and Wilson JJ dissenting) concluded that the Federal Court in question was able to consider and determine the passing off claim. In hearing and determining the non-severable state claim, the court would be exercising federal jurisdiction, which Barwick CJ labelled ‘accrued jurisdiction’: at 475. Having accepted the possibility of some state claims falling within the accrued jurisdiction and, thus to be determined by an exercise of federal jurisdiction, the next issue to arise was the degree of connection needed between the state claim and the federal claim to bring the state claim within accrued jurisdiction. A majority of the court adopted a broad approach. In addition to Mason J’s conception of ‘nonseverability’, it was thought that state claims will fall within the matter if not ‘separate and disparate’ or ‘disparate and independent’ (Barwick CJ at 474); or not ‘separate and distinct’ from the federal matter (Murphy J at 521). In giving the word ‘matter’ a broad interpretation,

Mason J explicitly preferred the interests of the litigants and the desire to reduce duplication of proceedings over the place and status of state courts within the federal judicial system. His Honour also emphasised that the framers were likely to have intended the exercise of judicial power to be effective. Similarly, Murphy J highlighted the need to minimise the fragmentation of legal disputes so as to ensure the ‘effective operation of federal courts’: at 519. Thus, it was not just a policy choice to be made between the effective exercise of judicial power and the place of state courts in the federal judicial system, it was an outcome that was required by the nature of the federal judicature contemplated by Ch III. The response by Gibbs J to such a claim was that Ch III provided options to avoid the ineffectiveness of Commonwealth judicial power: state courts could be invested with federal jurisdiction: at 493. By contrast, Wilson J took a narrower view of the word ‘matter’: state claims will only fall into the federal matter ‘where the federal question cannot be resolved without the determination of the non-federal questions’: at 545. The non-federal claims in Philip Morris did not, in his Honour’s view, satisfy that condition. In reaching those conclusions, his Honour recognised the competing policy considerations identified by Mason J, but balanced those considerations the other way.] Wilson J: I am conscious of, and burdened by, the consideration that such a conclusion may well not be in the best interests of litigants, who naturally seek convenience and economy in the resolution of their disputes. However, burdened as I am by that consideration, it seems to me that any other decision will not offend the true intent and operation of the Constitution as established by its proper construction but diminished its effectiveness in maintaining a viable federation. The Constitution itself in s 77(iii) provides the Parliament with a solution to the problem.

8.3.50 Aickin J adopted an even more restrictive view of the word ‘matter’ by denying the possibility of matters arising under the common law or state provisions ever falling within federal jurisdiction where the head of jurisdiction is derived from s 76(ii). Both Aickin and Wilson JJ were of the view that federal jurisdiction might be wider under s 76(i) than under s 76(ii). Gibbs J also favoured a narrow view of the word ‘matter’, but found it to be satisfied on the facts in the case. In his Honour’s view, ‘if a party claims relief on two different legal grounds, [page 935] but the facts on which the relief is sought on each ground are identical, and the relief sought on each ground is the same in substance if not in form, there is only one matter for determination’: at 148 CLR 499. On the facts, the Trade Practices Act claims and the passing-off claims were based on identical facts and sought substantially the same remedy in effect. 8.3.51 In Fencott v Muller (1983) 152 CLR 570, a majority of the court rejected the narrower views of the word ‘matter’. The case concerned similar questions to those presented in Philip Morris: did the conferral of jurisdiction on the Federal Court by the Trade Practices Act extend to authorise the determination of common law claims for damages in deceit, negligence and breach of warranty, and for indemnity? The Trade Practices Act claims and the common law claims arose out of alleged misrepresentations made in relation to the sale of a business.

8.3.52C

Fencott v Muller (1983) 152 CLR 570

Mason, Murphy, Brennan and Deane JJ: The concept of ‘matter’ as a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy, was accepted by a majority of the court in Philip Morris … There was a clear difference of opinion in Philip Morris as to the meaning of ‘matter’ in the context of s 76(ii). The majority view was that a ‘matter’ is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim. The proposition that a matter may include a cause of action arising under a non-federal law, though denied in the dissenting judgments, is the ratio decidendi of Philip Morris … It follows also that, though the facts upon which a nonfederal claim arises do not wholly coincide with the facts upon which a federal claim arises, it is nevertheless possible that both may be aspects of a single matter arising under a federal law … Perhaps it is not possible to devise so precise a formula that its application to the facts of any controversy would determine accurately what claims are disparate and what claims are not. Whatever formula be adopted as a guide — and the formula of ‘common transactions and facts’ is a sound guide for the purpose — it must result in leaving outside the ambit of a matter a ‘completely disparate claim constituting in substance a separate proceeding’ (per Barwick CJ in Felton v Mulligan [(1971) 124 CLR 367 at 373]), a non-federal matter which is ‘completely

separate and distinct from the matter which attracted federal jurisdiction’ (per Murphy J in Philip Morris [(1981) 148 CLR 457 at 521]) or ‘some distinct and unrelated non-federal claim’ (per Stephen, Mason, Aickin and Wilson JJ in Moorgate Tobacco [(1980) 145 CLR 457 at 482]) … What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships. The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter … [page 936] The power judicially to determine the whole of a dispute is inconsistent with a limitation which would restrict the court to resolving only the federal claim and what is necessary for that purpose. To adopt a more restrictive approach to the ascertainment of the ambit of a matter is to ensure that the obstacles of arid jurisdictional dispute will beset the path of a party who must invoke federal jurisdiction, especially federal jurisdiction exclusively vested in a federal court pursuant to s 77(ii). The judicial ascertainment of facts in a particular controversy would be bedevilled by the possibility of divergent findings or by unseemly attempts to secure a first finding from one court rather than another. The judicial award of effective remedies in resolution of a controversy would be impaired, especially in cases where remedies are discretionary or reciprocal.

The judicial power of the Commonwealth would at once prove insufficient to accomplish its purpose and productive of inefficiency in the exercise of the judicial power of the states. These consequences cannot be accepted unless they follow from the language of the Constitution, and they do not. [Their Honours then referred to Mason J’s balancing of underlying interests in favour of a broad interpretation of the word ‘matter’, and concluded with some caution:] However, federal judicial power is attracted to the whole of a controversy only if the federal claim is a substantial aspect of that controversy. A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect. Again, impression and practical judgment must determine whether it is appropriate and convenient that the whole controversy be determined by the exercise of federal judicial power. [On the facts, the Trade Practices Act claims and the common law claims all arose out of common transactions and facts and, accordingly, were part of the one controversy constituting a single matter. Gibbs CJ relaxed the strictness of his approach in Philip Morris by accepting that state claims might fall into a federal matter even though the relief sought was not substantially the same. His Honour adopted the ‘severability’ test set out by Mason J in Philip Morris, although he applied it more strictly than the majority did in Fencott. While his Honour concluded that the actions for damages in deceit, negligence and breach of warranty were inseverable from the Trade Practices Act claim (as they were all based on the same facts and the remedies were natural alternatives), the indemnity claim was severable (it involved different parties; an entirely different cause of action; and a

consideration of different issues). In dissent, Wilson J and Dawson J applied the strict Gibbs J approach from Philip Morris, and held that each of the common law claims involved the proof of additional facts which were not needed to be proved for the Trade Practices Act claims. Accordingly, the common law claims did not fall within the jurisdiction of the Federal Court. In dissent, Dawson J expressed the view that the policy balancing provided an insufficient foundation for a broad reading of the word ‘matter’:] Dawson J: The no doubt desirable aim of avoiding the inconvenience which is caused when litigants fall between two jurisdictional stools can perhaps be called in aid to support as wide an interpretation as possible of the word ‘matter’ when employed, as it is by the majority in the Philip Morris case, to define the jurisdiction of the Federal Court, but that provides no explanation in legal or constitutional terms.

[page 937] 8.3.53 Dawson J also raised a point largely avoided by the majority judgments in Philip Morris and Fencott (at 629): if state claims can fall within a ‘matter’ of federal jurisdiction and parliament can make ‘matters’ of federal jurisdiction exclusive to federal courts under s 77(ii) of the Constitution, are state courts excluded from hearing the state claims that fall into the federal ‘matter’? The issue was raised squarely in Stack v Coast Securities (No 9) (1983) 154 CLR 261. The applicants in that case had contracted to purchase home units developed by the respondents. Prior to completion of the contracts, the applicants sought to

rescind the contracts on the basis that they were induced to enter the contracts by misrepresentations made by the respondents. The respondents then instituted a number of proceedings in the Supreme Court of Queensland for specific performance. In ordering summary judgment in the respondents’ favour in some of those proceedings, the trial judge rejected the applicants’ contention that the alleged misrepresentations could justify rescission. His Honour, however, acknowledged that the misrepresentations might form the basis of relief under the Trade Practices Act (although his Honour had no jurisdiction to hear that claim), and granted a stay to allow the applicants the opportunity to seek relief under the Trade Practices Act. 8.3.54 The applicants then commenced proceedings in the Federal Court alleging misrepresentations in contravention of the Trade Practices Act, and seeking orders including a declaration that the contracts were void and that the deposits be repaid; damages; and injunctions restraining the Supreme Court from enforcing its summary judgments and from continuing to hear the remaining proceedings in relation to which summary judgment had not yet been ordered. 8.3.55 The issues for the High Court were, first, whether the Federal Court had jurisdiction to consider the state-based claims considered by the Supreme Court; and, second, what effect that had on the Supreme Court’s jurisdiction to consider the state-based claims. In the leading judgment, Mason, Brennan and Deane JJ held that the course of decisions in the High Court had established ‘that the content of a “matter” in s 76 and that the scope of federal jurisdiction in a proceeding are not restricted to the determination of the federal claim or cause of action in the proceeding, but extend

beyond that to the litigious or justiciable controversy between parties of which the federal claim or cause of action forms part’: 154 CLR at 290. Having reviewed the previous case law, their Honours continued as follows. 8.3.56C

Stack v Coast Securities (No 9) (1983) 154 CLR 261

Mason, Brennan and Deane JJ: The review of the authorities which we have undertaken enables us to say that the extended concept of ‘matter’ where it appears in ss 75–77 of the Constitution, especially in relation to s 76(ii), takes its shape and content from the subject-matter of ss 75–77 and the object which they seek to attain — delimitation of the content of federal jurisdiction and provision for its exercise by federal and state courts, with the object of making effective disposition of justiciable controversies by the means chosen by Parliament. A central element in this design for the exercise of the judicial power of the Commonwealth is the power given to Parliament to make a choice between conferring federal jurisdiction on federal courts which it creates and investing federal jurisdiction in state courts. There is no indication in Ch III that the making of this choice was to be strongly weighted against the creation of federal courts in favour of investing federal jurisdiction in [page 938] state courts, as it would be if the Constitution were to deny power to give authority to federal courts to decide the whole of a single justiciable controversy of which a federal issue forms an integral part. It would be contrary to the advice of the Judicial Committee in Nelungaloo Pty Ltd v Commonwealth [(1952) 85 CLR 545 at

571], cited by Walsh J in Felton v Mulligan [(1971) 124 CLR 367 at 410], to approach the provisions in Ch III on the footing that they require courts exercising federal jurisdiction ‘to dissect out of an entire legal question one of the component issues it involves and to submit it for decision in artificial isolation’. That approach would, contrary to settled authority, preclude this court in its original jurisdiction from deciding non-severable claims having their origin in state law. It would, again contrary to settled authority, restrict Parliament to the creation of federal courts lacking jurisdiction to determine such claims, thereby inhibiting their capacity as effective elements in the court system for which Ch III makes provision. The preferable approach from the viewpoint of principle is that established by authority, namely, to regard Ch III as empowering the Parliament to make sensible and practical dispositions for determination of justiciable controversies by either of the two means for which Ch III makes provision. [On the second important question addressed by the High Court, that is, what happens to the state court’s jurisdiction to consider the statebased claims where those state claims fall within the accrued jurisdiction of the Federal Court and where federal jurisdiction is exclusively conferred on a Federal Court, the joint judgment said:] Mason, Brennan and Deane JJ: The question here relates not to the ambit of the jurisdiction conferred upon the Federal Court by s 86, but to the extent to which that jurisdiction is made exclusive by that section. It is a question which has not previously arisen in this court. There is a strong argument that the two limbs in s 86, namely that conferring jurisdiction and that making jurisdiction exclusive, should be regarded as co-extensive so that the entire jurisdiction conferred on the Federal Court, including accrued jurisdiction, is made exclusive. However, in our opinion this is not the correct construction of s 86. The reference to ‘that jurisdiction’ which is made exclusive should be read as a

reference to the jurisdiction conferred, other than the accrued jurisdiction. To say the least of it, it is highly improbable that Parliament intended by the second limb of s 86 to deny to state courts the exercise of jurisdiction in relation to issues which fall within the Federal Court’s accrued jurisdiction merely because they are incidental to a determination by that Court of issues arising under the Act. To attribute that intention to the section would yield complex consequences resulting in the loss of jurisdiction by a state court at any stage of a proceeding, no matter how late, when it is perceived that the proceeding involves an issue which is incidental or related to an issue arising under the Act. Problems of this kind have beset the exercise of federal jurisdiction in the past. Thus far, however, they have not resulted in the entire loss of jurisdiction by a state court; the loss has been confined to state jurisdiction which has been replaced by federal jurisdiction and in the exercise of that jurisdiction the state court has been able to determine the issues in the proceeding before it. Here the result would be to deprive the state court of its jurisdiction to determine the case at all, because, if the second limb of s 86 has the effect contended for, it deprives the state court of any jurisdiction, state and federal. Accordingly we prefer the view that the second limb of s 86 does not make the accrued jurisdiction of the Federal Court exclusive. We would add that it is not unlikely that the draftsman intended to achieve this result.

[page 939] 8.3.57 Thus, the potential for jurisdictional problems ‘at the other end’ (Dawson J in Fencott 8.3.52C) was resolved as a matter of statutory construction. Parliament had not intended to confer

exclusive jurisdiction on the Federal Court in relation to the state claims that fell within its accrued jurisdiction. This, however, leaves open the possibility that parliament might be able to express an intention to vest accrued jurisdiction exclusively in a federal court. Murphy J agreed with the outcome, saying that ‘[i]n the absence of any statutory expression or necessary implication, this will be best achieved by treating the Federal Court’s accrued jurisdiction as non-exclusive, and as jurisdiction which the court may, but need not, exercise’: at 154 CLR 299. Gibbs CJ accepted the majority view in Fencott on accrued jurisdiction and with the conclusion on the non-exclusivity of accrued jurisdiction. In a joint judgment, Wilson and Dawson JJ reluctantly applied the majority position in Fencott on accrued jurisdiction, although their Honours continued to express their opposition to it. Their Honours too agreed with the conclusion on the non-exclusivity of accrued jurisdiction. 8.3.58 The development of the concept of accrued jurisdiction did much to reduce the potential for jurisdictional disputes. As a practical matter, much of a dispute between parties would arise from the same ‘matter’ and, thus, fall within the jurisdiction of a Federal Court. The potential for jurisdictional problems was further minimised with the enactment by the Commonwealth, state and territory legislatures of complementary legislation setting up cross-vesting schemes. These schemes will be considered in more detail in the next section. Broadly speaking, the schemes were designed to eliminate jurisdictional disputes by vesting state and territory jurisdiction in federal courts and vesting federal jurisdiction in state and territory courts. In Re Wakim; Ex parte McNally (1999) 198 CLR 511, the court held that the schemes invalidly conferred state jurisdiction on federal courts. Consequently, the High Court again was required to return to and

apply the principle of accrued jurisdiction. In Re Wakim, the court considered that the principles of accrued jurisdiction developed in Philip Morris, Fencott and Stack were well established. It was the application of those principles that the court needed to address. 8.3.59 In one of the cases before the High Court, Re Wakim, there were three separate proceedings instituted in the Federal Court. The plaintiff in each proceeding (Mr Wakim) had been injured in the course of his employment, and successfully sued his employers in an action in the Supreme Court of New South Wales. There followed the bankruptcy of one of his employers; the appointment of the Official Trustee in Bankruptcy; action taken by the Official Trustee against the solvent employer; and the engagement by the Official Trustee of solicitors and counsel to advise on that action. Mr Wakim contended that the Official Trustee should have taken certain steps against his solvent employer which would have increased the amount available to him as one of the bankrupted employer’s creditors. Mr Wakim instituted proceedings in the Federal Court against the Official Trustee seeking orders under the Bankruptcy Act 1966 (Cth), and subsequently commenced proceedings in the Federal Court against the Official Trustee’s solicitors and barrister for negligence. The question for the High Court was whether the claims for negligence could fall within the Federal Court’s accrued jurisdiction when considering the claims under the Bankruptcy Act. Gummow and Hayne JJ (with Gleeson CJ and Gaudron J generally agreeing on accrued jurisdiction), considered that the existence of separate proceedings and the joining of different parties ‘would ordinarily suggest (and perhaps suggest very strongly) that there is more than one matter’: at 198 CLR 584. However, Philip Morris, Fencott and Stack had all shown, it was

[page 940] said, that ‘the identification of the justiciable controversy between the parties is not determined only by considerations of there being separate proceedings and different parties in the one court’: 198 CLR at 585. Indeed, it was observed that ‘in some circumstances a single matter can proceed through more than one court’: 198 CLR at 585. Having earlier referred to the majority’s statements in Stack endorsing the approach set out in Fencott for the identification of the justiciable controversy, Gummow and Hayne JJ said the following in Re Wakim. 8.3.60C

Re Wakim; Ex parte McNally (1999) 198 CLR 511

Gummow and Hayne JJ: The central task is to identify the justiciable controversy. In civil proceedings that will ordinarily require close attention to the pleadings (if any) and to the factual basis of each claim. In Fencott it was said that ‘in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.’ The references to ‘impression’ and ‘practical judgment’ cannot be understood, however, as stating a test that is to be applied. Considerations of impression and practical judgment are relevant because the question of jurisdiction usually arises before evidence is adduced and often before the pleadings are complete. Necessarily, then, the question will have to be decided on limited information. But the question is not at large. What is a single controversy ‘depends on what the parties have done, the relationships between or among them and the laws which attach

rights or liabilities to their conduct and relationships’. There is but a single matter if different claims arise out of ‘common transactions and facts’ or ‘a common substratum of facts’, notwithstanding that the facts upon which the claims depend ‘do not wholly coincide’. So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are ‘completely disparate’, ‘completely separate and distinct’ or ‘distinct and unrelated’ are not part of the same matter. Often, the conclusion that, if proceedings were tried in different courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.

8.3.61 On the facts, their Honours held that the three proceedings involved claims arising out of the one set of facts; that is, the action taken (and the steps not taken) by the Official Trustee against the solvent employer. Mr Wakim’s claims were that the Official Trustee was negligent and had breached its statutory duties in not taking certain steps, and that its legal representatives had failed to advise it of its rights. There was ‘a common substratum of facts in each proceeding’: at 198 CLR 588. An important factor suggesting to the contrary, the existence of three separate proceedings, was not sufficient here to displace that conclusion, particularly because the proceedings could have been joined as one. McHugh J was sceptical as to whether there was one

‘matter’. However, particularly because the damage claimed in each proceeding was identical, his Honour said that he was not convinced that the negligence claims [page 941] were outside federal jurisdiction. In dissent on the issue of accrued jurisdiction, Callinan J considered that accrued jurisdiction could only arise where a federal claim is actually made in an action: at 198 CLR 627–8.

The exclusivity of Ch III as a source of original jurisdiction — cross-vesting of state jurisdiction 8.3.62 The court in Re Judiciary emphasised the exclusivity of ss 75 and 76 as the source of original federal jurisdiction. As their Honours said, this ‘express statement of the matters in respect of which and the courts by which the judicial power of the Commonwealth may be exercised is, we think, clearly intended as a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth, and as a necessary exclusion of any other exercise of original jurisdiction’: 29 CLR at 265. The exclusivity of Ch III as a source of Commonwealth judicial power was also emphasised in the Boilermakers’ case 8.2.9C, where the High Court said that ‘the existence in the Constitution of Ch III and the nature of the provisions it contains make it clear that no resort can be made to

judicial power except under or in conformity with ss 71–80’: R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 269 per Dixon CJ, McTiernan, Fullagar and Kitto JJ. 8.3.63 These cases did not, however, consider whether state jurisdiction or state judicial power could be conferred on federal courts. The Commonwealth and the states sought to do this by establishing a cross-vesting scheme which, in part, vested state jurisdiction in federal courts. The origins and rationale for the cross-vesting schemes were explained by Kirby J in Gould v Brown (1998) 193 CLR 346. 8.3.64C

Gould v Brown (1998) 193 CLR 346

Kirby J: For most of the history of the Australian Federation, there was no need for cross-vesting legislation. Whereas the Founders of the United States Constitution considered, and rejected, the exercise of federal jurisdiction by state courts, the Australian Founders embraced the ‘autochthonous expedient’. Pursuant to this, the Federal Parliament could make laws investing any court of a state with federal jurisdiction. The High Court would have jurisdiction to hear appeals from courts exercising federal jurisdiction or from Supreme Courts of the states. In this way the state courts were enlisted to try matters within federal jurisdiction. Appeals lay to this Court from their judgments. In a country with established state court systems, initially limited federal jurisdiction, a small population and limited resources, the arrangement was efficient. It worked well. It had the merit of avoiding many of the jurisdictional conflicts which had arisen in the dual court system of the United States, the Constitution of which otherwise provided the model for Ch III of the Australian Constitution.

When the Family Court of Australia, in 1976, and the Federal Court of Australia, in 1977, began to exercise their substantial respective national jurisdictions, the predicted difficulty of jurisdictional conflict and competition soon emerged. In 1983, the Australian Constitutional Convention began to explore the solutions which would obviate or remove jurisdictional conflicts between federal and state courts. One such solution, socalled ‘cross-vesting’, was examined in a paper prepared by the Solicitor-General for Western Australia. [page 942] The idea, and others, continued to be debated in the Judicature Sub-Committee of the Australian Constitutional Convention. In October 1984, that Sub-Committee produced a report which contained a proposal for a scheme to remove jurisdictional problems by a system of ‘cross-vesting’ of jurisdictions. Annexed to that report was a legal opinion of Professor Leslie Zines. Whilst acknowledging difficulties and uncertainties, the opinion concluded that ‘the principle in favour of co-operation, as expounded in [R v] Duncan, will, in my view, prevail’. However, this view was based ‘on general principles, and there are no decisions, or even dicta, that are directly in point’. The Sub-Committee’s report recommended legislation. The proposal was taken up by the Advisory Committee on the Australian Judicial System of the Australian Constitutional Commission. That Committee concluded that ‘to put cross-vesting legislation beyond doubt as to validity’ there should either be a reference of powers or a constitutional amendment. In its Final Report, the Constitutional Commission recommended formal amendment of the Constitution. However, in the meantime, the general cross-vesting legislation was enacted by the federal, state and Northern Territory legislatures to commence on 1 July 1988. The legislation so enacted had an experimental element. In the

federal cross-vesting legislation, provision was made to empower the Governor-General to terminate the legislation if satisfied that the state cross-vesting legislation was not effective. This provision was an apparent reflection of lingering federal doubts about constitutional validity. In academic writing, uncertainty continued to be expressed, either generally or with particular reference to special aspects of the legislation. Surprisingly, perhaps, given the cautious foundation of Professor Zines’ published opinion and the widespread doubts expressed about the constitutionality of the legislation, challenges to it have been comparatively few.

8.3.65 In Gould (1998) 193 CLR 346, the six-member court was evenly split on the constitutional validity of the cross-vesting scheme (Brennan CJ and Toohey and Kirby JJ held the scheme to be valid; Gaudron, McHugh and Gummow JJ considered the cross-vesting of state jurisdiction to be invalid). The decisions of the courts below, which had affirmed the constitutional validity of the schemes, were affirmed pursuant to the tie-breaking rule in s 23 of the Judiciary Act. However, the issues were again brought before the court in Re Wakim; Ex parte McNally (1999) 198 CLR 511. Following the retirement of Brennan CJ and Toohey J, a differently constituted court, by majority (Kirby J dissenting), held that the conferral of non-federal jurisdiction on federal courts was invalid. At the heart of the majority’s reasoning was that Ch III exclusively sets out the jurisdiction that federal courts can exercise and, by implication, no state jurisdiction can be conferred by either the Commonwealth or state parliaments. 8.3.66C

Re Wakim; Ex parte McNally (1999) 198 CLR 511

McHugh J: What prevents a State conferring jurisdiction on a federal court in respect of a matter specified in ss 75 or 76 is … the negative implications arising from Ch III of the Constitution. By granting power to the parliament of the Commonwealth to create federal courts and by expressly stating the matters in respect of which the parliament may confer jurisdiction on those courts, Ch III impliedly forbids the conferring of any other jurisdiction [page 943] on those courts by the Commonwealth or the states. The express statement of those ‘matters’ would be pointless if the parliament or the states could disregard them. Moreover, the reasons that show that the states cannot confer jurisdiction on a federal court in respect of ss 75 and 76 matters point just as strongly, perhaps more so because of s 77(iii), to the conclusion that the states cannot confer state jurisdiction on federal courts … One of the remarkable aspects of the argument of those supporting the validity of the legislation is that they contend that the States can invest only judicial power in the federal courts and that they cannot do so without the consent of the Commonwealth. Why do they contend that the states cannot invest non-judicial power in the federal courts? It is because they accept that Ch III impliedly forbids it. That is to say, they accept that the terms of ss 71, 75 and 76 contain an implication that the general powers of the states, saved and continued by ss 106 and107 of the Constitution, do not extend to investing non-judicial power in the federal courts. Yet those supporting validity deny that those same sections contain an implication that the states cannot invest judicial power in the federal courts. But if Ch III impliedly prevents the parliament of the

Commonwealth from investing non-judicial power generally and State judicial power in particular in federal courts, upon what logical basis can it be held that Ch III allows the States to invest State judicial power but forbids them from investing non-judicial power in those courts? The distinction cannot be justified by reference to the doctrine of the separation of powers. In the Constitution, that doctrine is concerned with the separation of the legislative, executive and judicial powers of the Commonwealth. Except in jurisdictions where a doctrine of separation of powers applies, judges can, and do, exercise many non-judicial powers that are compatible with them exercising the judicial power of their jurisdiction. It is the separation of the legislative, executive and judicial powers of the Commonwealth which prevents Australia’s federal judges from exercising non-judicial powers. Because those powers are vested in the Parliament or the executive government of the Commonwealth, the Constitution impliedly forbids them being vested in the federal judiciary. But the Constitution’s doctrine of separation of powers has nothing to say about the separation of the legislative, executive or judicial powers of the states, except in those rare situations exemplified by Kable v Director of Public Prosecutions (NSW) [(1996) 189 CLR 51]. State courts can and do exercise many non-judicial powers that are compatible with those courts being invested with federal jurisdiction. Chapter III either forbids the States conferring jurisdiction on the federal courts or it does not. If the States can confer judicial power on federal courts, they can confer non-judicial powers on them, at all events non-judicial power that is not incompatible with the exercise of state judicial power. There is nothing in Ch III that would permit the conferral of one class of State jurisdiction but totally prevent the conferral of the other. If the general powers of the States enable them to legislate for the federal courts, they must be able to legislate generally for those courts. If Ch III does not prevent them doing so in respect of State judicial power, there is no logical basis for holding, for example, that it withdraws

from a state the power to invest the federal courts with the jurisdiction of its Supreme Court which may well require the exercise of matters calling for the exercise of non-judicial power as that term is understood in Ch III. [Gleeson CJ expressed similar ideas. Gummow and Hayne JJ (with Gaudron J agreeing) concisely captured the main point.] Gummow and Hayne JJ: If, then, s 76 is the exclusive source of power to confer original jurisdiction on this court it follows, first, that the jurisdiction that may be conferred on a federal court under s 77 is similarly limited to the heads identified in ss 75 and 76 and, secondly, that no other polity can confer jurisdiction on a federal court.

[page 944] 8.3.67 The decision in Re Wakim created considerable controversy: see, for example, Hill, 2002; Hill, 1999; Rose, 1999. Not only did the High Court invalidate a legislative scheme that had attracted the overwhelming support of the legislatures in Australia, but it did so largely on the basis of a negative implication flowing from Ch III: the Commonwealth has express power in s 77(iii) of the Constitution to vest jurisdiction in state courts, but there is no express power for state jurisdiction to be given to federal courts. Kirby J dissented, considering that there was nothing in Ch III that prevented the conferral of state jurisdiction on federal courts.

FEDERAL COURTS

8.4.1 There is no explicit power in Ch III of the Constitution to create federal courts. However, the legislative power to establish federal courts is clearly contemplated by ss 71 and 77(i) and (ii). Section 77(i) vests power in parliament to make laws ‘defining the jurisdiction of any federal court other than the High Court’ with respect to any of the matters set out in ss 75 and 76 of the Constitution. Section 77(ii) allows parliament to makes laws ‘defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the states’. Once a federal court is created, s 71 vests that court with Commonwealth judicial power. 8.4.2 There are currently three federal courts: the Federal Court of Australia (established by the Federal Court of Australia Act 1976 (Cth) s 5), the Family Court of Australia (established by the Family Law Act 1975 (Cth) s 21) and the Federal Circuit Court of Australia (continued in existence by the Federal Circuit Court of Australia Act 1999 (Cth) s 8). All three courts are statutory courts, and their jurisdiction is defined pursuant to s 77(i) by reference to the matters in ss 75 and 76. It is well accepted that the power in s 77(i) allows parliament to give a federal court both original and appellate jurisdiction: see AH Yick v Lehmert (1905) 2 CLR 593; Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529; R v Spicer (1957) 98 CLR 40; Cockle v Isaksen (1957) 99 CLR 155. For a review of the history of these three courts, and earlier federal industrial and bankruptcy courts, see French, 2000, Ch 5.

Power to define jurisdiction 8.4.3

The power in s 77(i) to define the jurisdiction of a federal

court was considered in Abebe v Commonwealth of Australia (1999) 197 CLR 501. The decision in Abebe followed attempts by the Commonwealth Parliament to limit the extent to which unsuccessful visa applicants could seek judicial review of the decisions refusing their visas. Broadly speaking, Commonwealth administrative decision-making is judicially reviewable by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977 (Cth) and/or under s 39B of the Judiciary Act which confers s 75(v) jurisdiction on the Federal Court. Abebe concerned amendments to the Migration Act 1958 (Cth) which sought to create a special system of judicial review for certain migration-related decisions. The insertion of Pt 8, in the form it then took, effectively replaced the judicial review avenue under the Administrative Decisions (Judicial Review) Act and s 39B of the Judiciary Act with a separate system. Under s 476, many traditional grounds of review for determining the scope of statutory power and, thus, the lawfulness of a decision, were removed. The effect of these exclusions was that a relevant migration decision could not be judicially reviewed by the Federal Court on certain [page 945] grounds; for example, taking irrelevant considerations into account; failing to take relevant considerations into account; an exercise of power in bad faith; a breach of natural justice; and Wednesbury unreasonableness (that is, where no reasonable decision-maker could have made the decision, a ground of review first recognised in Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223). Section 485 provided that the Federal Court had no power of judicial review other than under Pt 8.

8.4.4 Ms Abebe’s application for a protection visa under the Migration Act 1958 (Cth) had been refused by the initial decisionmaker and, then, on review, by the Refugee Review Tribunal. She then applied to the Federal Court for judicial review of the tribunal’s decision on the grounds of breach of natural justice and Wednesbury unreasonableness. The Federal Court judge refused jurisdiction on the basis of Pt 8. The question for the High Court was whether parliament could define the jurisdiction of the Federal Court in a way that removed some of the traditional grounds upon which the court can review the lawfulness of the decision. Ms Abebe argued that if jurisdiction is conferred on a Federal Court with respect to a ‘matter’ in s 75, there must be jurisdiction to quell the whole justiciable controversy. That is, jurisdiction cannot be conferred with respect to part of a ‘matter’: jurisdiction must be conferred over the whole ‘matter’. A majority of the court held that Pt 8 of the Migration Act was valid. 8.4.5C

Abebe v Commonwealth of Australia (1999) 197 CLR 510

Gleeson CJ and McHugh J: The power of the parliament to make laws defining the jurisdiction of a federal court ‘[w]ith respect to any of the matters’ mentioned in ss 75 and 76 is a power to make laws with respect to a class of things which answer a certain description. A law concerning that description brings within its scope each concrete factual situation which constitutes a ‘matter’. But s 77(i) is not concerned with any particular case. It is concerned with the general, not the particular. It is necessarily pitched at a level of generality that covers an infinite variety of factual situations, each of which itself is a ‘matter’ which answers the relevant constitutional description. However, the outcome of a specific controversy is not the concern of s 77

which treats ‘matters’ as a legal abstraction descriptive of such rights, duties and liabilities as will be enforceable in the federal or state court upon which is conferred or in which is invested authority to adjudicate. As long as the law defining or investing jurisdiction is one ‘with respect to’ any of the ‘matters’, as so understood, it will be a law authorised by s 77. The conferring of a power to make laws ‘with respect to’ a subject ‘is as wide a legislative power as can be created’, as Latham CJ pointed out in Bank of NSW v The Commonwealth [(1948) 76 CLR 1 at 186]. A law which changes, regulates or abolishes rights, duties, powers and privileges relating to a subject is made ‘with respect to’ that subject. That being so, a law defines the jurisdiction of a federal court with respect to any of the ‘matters’ mentioned in ss 75 and 76 when it defines the authority of that court to decide what are the rights of parties in a proceeding that may be brought in that court with respect to any of those ‘matters’. Thus, a law authorised by s 77 may confer or invest jurisdiction in a federal or state court over the whole range of rights, powers, privileges and liabilities arising from the operation of a law or the existence of a state of affairs answering any of the descriptions in ss 75 and 76 of the Constitution. On the other hand, a s 77 law may validly confer or invest jurisdiction in respect of some only of those rights, powers, privileges and liabilities and may even limit the remedies [page 946] which are available to a person affected by a breach of those rights. Given the ordinary and natural meaning of s 77(iii), it seems impossible, for example, to deny parliament the power to enact a law which invests state courts with jurisdiction to hear only applications for urgent injunctions to restrain breaches of (say) s 52 of the Trade Practices Act (Cth). Once that is accepted, it is impossible to find any satisfactory ground for thinking that s

77(i) requires the parliament to define the jurisdiction of federal courts by reference to the totality of rights, powers, privileges and duties which arise under the law or state of affairs which comes within s 75 or s 76 and which is to be the basis of the federal court’s jurisdiction … As we have pointed out, the plaintiff also contends that, when parliament gives a federal court jurisdiction under s 77, it must give it authority to quell the whole controversy between the parties. That contention was based on the claim that a ‘matter’ ‘exists dehors the procedure or the particular court’. That being so, the plaintiff contends that parliament can legislate with respect only to that ‘matter’. Even if the plaintiff is correct in contending that a ‘matter’ exists independently of any court or its procedures, it does not lead to the conclusion that any part of Pt 8 of the Act is invalid. First, the power conferred by s 77 is a power to make laws ‘with respect to’ ‘matters’. Those words are wide enough to authorise the parliament to give a federal court jurisdiction with respect to part of a controversy even if a ‘matter’ exists independently of the courts and their procedures. Second, as we have pointed out, the term ‘matters’ in s 77 of the Constitution is not dealing with individual cases as such but with a class of things. The power is one to make laws ‘with respect to’ a class, not an individual case. But in any event the claim that a ‘matter’ exists independently of any court or its procedure is incorrect. The term ‘matter’ has meaning only in the context of a legal proceeding, as the passages from South Australia v Victoria [(1911) 12 CLR 667 at 675], In re Judiciary and Navigation Acts [(1921) 29 CLR 257 at 265], Stack v Coast Securities (No 9) Pty Ltd [(1983) 154 CLR 261 at 290] and Attorney-General (NSW) v Commonwealth Savings Bank [(1986) 160 CLR 315 at 323] demonstrate. A ‘matter’ cannot exist in the abstract. If there is no legal remedy for a ‘wrong’, there can be no ‘matter’. A legally enforceable remedy is as essential to the existence of a ‘matter’

as the right, duty or liability which gives rise to the remedy. Without the right to bring a curial proceeding, there can be no ‘matter’. If a person breaches a legal duty which is unenforceable in a court of justice, there can be no ‘matter’ … It also follows from these premises that, when parliament enacts a law under s 77 and gives a court authority to grant some legal remedy in aid of a right or the enforcement of a duty or liability falling within any of the classes in the numbered paragraphs in ss 75 and 76, it defines the jurisdiction of that court with respect to a ‘matter’. The fact that parliament has elected not to give the court all the remedies that might be available to resolve the controversy or has conferred jurisdiction to deal with only part of the subject matter of the controversy cannot alter the fact that parliament has defined the jurisdiction of the court with respect to a ‘matter’. … In construing provisions such as s 77(i), it is necessary to keep in mind that the Constitution is an instrument of government, not easily or readily amended, and intended to endure indefinitely. To hold that the parliament cannot confer federal jurisdiction in respect of the matters mentioned in ss 75 and 76 unless the parliament gives the relevant court jurisdiction to dispose of the whole controversy between the parties would create immense practical problems for the administration of federal law which the makers of the Constitution can hardly have intended. Such a holding would seem to deny the parliament the right to have [page 947] specialist federal courts or courts whose jurisdiction was limited by reference to remedies, geographical areas or monetary limits. It would also seem to deny the parliament the power to prevent federal courts from dealing with certain subject matters such as

title to land or actions in contract or from granting certain remedies such as injunctions or prerogative relief. Historically, governments have found it useful to create courts of limited jurisdiction, and it was, and is, usual for the jurisdiction of magistrates’ courts to be limited in such a fashion. If the contention of the plaintiff is right, the parliament breaches the terms of s 77 of the Constitution unless its law grants to federal courts, and perhaps even state courts exercising federal jurisdiction, the authority to quell the whole controversy between the parties and also arms that court with every remedy necessary to achieve that end. Acceptance of that contention would also throw in doubt the validity of s 40 of the Judiciary Act which provides for the removal into this Court of parts of causes pending in state and federal courts and the validity of s 44 of that Act which provides for this Court to remit parts of matters pending in this Court to state and federal courts. While consequences cannot alter the meaning of the Constitution, they may throw light on its meaning. It is hardly to be supposed that the framers of the Constitution intended Ch III to operate so that the only choice available to the parliament was to give a court no jurisdiction in respect of a ‘matter’ or, irrespective of the court’s status or geographical area, to give it jurisdiction to dispose of the whole controversy between the parties by every available legal remedy … Thus, the subject matter for decision by a federal court may embrace the whole controversy between the parties or part of it. The law defining the jurisdiction of the court may provide limited remedies for the successful party or every remedy that is necessary to do justice between the parties and which is appropriate to the exercise of judicial power by a federal court. The choice is one for the parliament … Kirby J: In s 77(i) the word ‘defining’ connotes the fixing of the bounds or limits of the jurisdiction conferred on a federal court. The word ‘defining’ should be given its full meaning. It

connotes the imposition of restrictions on the jurisdiction of the federal court in question. It does so in the context of laws made ‘with respect to’ ‘matters’. It contradicts the rigid indivisibility and irreducibility of the notion of a ‘matter’ urged by Ms Abebe … To describe every part of such a legal controversy as indivisible and irreducible within the one constitutional ‘matter’ and to insist that each and every such proceeding must, for that reason, be heard in a federal court if jurisdiction is conferred on it, is to impute a most serious inflexibility to the Constitution. [Writing separately, Gaudron J and Gummow and Hayne JJ dissented.] Gummow and Hayne JJ: The validity of the impugned provisions depends upon the related questions whether there is a ‘matter’ and whether, under those provisions, the Federal Court exercises judicial power … Since the decision in In re Judiciary and Navigation Acts it has been accepted that there can be no matter ‘unless there is some immediate right, duty or liability to be established by the determination of the Court’. And it has long been recognised that an important aspect of federal judicial power is that, by its exercise, a controversy between the parties about some immediate right, duty or liability is quelled … The fact that Pt 8 entitles a person dissatisfied with a decision of the Refugee Review Tribunal to commence a proceeding in the Federal Court does not mean that the proceeding [page 948] relates to a matter. Much of the argument advanced in favour of

the validity of Pt 8 proceeded from the unstated premise that the existence of a matter can be demonstrated by showing that a litigant may commence a proceeding … But the majority of the Court in In re Judiciary and Navigation Acts rejected the contention that ‘matter’ means no more than legal proceeding. It was held there that ‘matter’ in s 76 means the subject matter for determination in a legal proceeding rather than the proceeding itself. Thus, to say that a party may bring a proceeding under Pt 8 does not mean that the subject of the proceeding is a ‘matter’. The answer put forward on behalf of the Commonwealth was, in effect, that the ‘matter’ was not the right to bring a proceeding but the right to have the Tribunal’s decision set aside if one or more of the grounds specified in Pt 8 was established. That invites attention to what are the rights or duties that are to be judicially established. No doubt a lay observer may say that the grievance of a person like the present applicant is that she was not granted refugee status. But no person who claims to be a refugee has any right recognised in law to have the merits of the executive’s decision about refugee status reconsidered and decided in the exercise of the judicial power of the Commonwealth. By contrast, however, and as indicated earlier in these reasons, an applicant for refugee status does have a right to have the executive make its decision about an application for a protection visa in accordance with law. And that right may be vindicated by seeking the exercise of the judicial power of the Commonwealth. Thus, to cast the issue in terms of rights and duties, what is significant for immediate purposes is that the Tribunal has a duty to reach its decision according to law and an applicant to that Tribunal has a right enforceable in the exercise of federal judicial power to have it do so. That right does not find its origin in Pt 8 of the Act … What Pt 8 of the Act seeks to do is to say that some, but not all, allegations of breach of that duty may be raised in and decided by the Federal Court. The inevitable consequence of

limiting the kinds of allegation that may be made is that the Federal Court can never conclude that the decision challenged was made according to law. It may decide only that the particular grounds of challenge that were raised in the proceeding were not made out. The statute forbids it from embarking on some aspects of the more general inquiry whether the decision was made according to law.

8.4.6 Thus, their Honours concluded that there was ‘no conferring on the Federal Court of jurisdiction over a “matter” arising under a law made by Parliament, within the meaning of ss 77(1) and s 76(ii) of the Constitution’: at 197 CLR 574. Parliament had invalidly tried ‘to confer jurisdiction over something less than the justiciable controversy’: 197 CLR at 574. In other words, removing the grounds of review from the Federal Court’s consideration prevented it from quelling the justiciable controversy of whether the decision was made within power and, thus, frustrated the exercise of Commonwealth judicial power. Gaudron J reached a similar conclusion. While s 77(i) confers power to ‘define’ federal court jurisdiction, s 77(iii) refers to the power to ‘invest’ state courts with federal jurisdiction. Despite the difference in wording, the same principles would seem to apply to both federal courts and state courts.

Exercise of federal jurisdiction by court officers other than judges 8.4.7

Section 71 of the Constitution vests Commonwealth

judicial power in the High Court, federal courts created by parliament and in such other courts as it invests with federal [page 949] jurisdiction. Section 77(iii) empowers parliament to vest federal jurisdiction in state courts. Section 72 sets out the tenure and remuneration requirements for justices of the High Court and other federal courts, and s 79 provides that federal jurisdiction may be exercised by such number of judges as parliament prescribes. 8.4.8 One of the issues that has been dealt with in the context of both federal and state courts is whether federal jurisdiction and Commonwealth judicial power can be exercised by court officers other than judges (for example, masters and registrars). This section will consider whether non-judicial officers of the High Court and lower federal courts can exercise federal jurisdiction. The possibility that a non-judicial officer of a state court can exercise federal jurisdiction will be considered below (see 8.5.11–8.5.13C), although the two sections should be read together. 8.4.9 The Boilermakers’ doctrine dictates that Commonwealth judicial power can only be exercised by courts set out in s 71 of the Constitution. Should this principle be extended to require that only federal judges, whose appointment and remuneration satisfy the requirements in s 72, can exercise federal jurisdiction? The issue was resolved in Harris v Caladine (1991) 172 CLR 84, where a majority (Mason CJ, Deane, Dawson, Gaudron and McHugh JJ; Brennan and Toohey JJ dissenting) of the court held that federal jurisdiction can be exercised by non-judicial officers of federal

courts, provided that it is an exercise of delegated power that is subject to review by a judge. The question for the court was whether parliament could empower the Family Court to delegate the exercise of Commonwealth judicial power to Family Court registrars. In Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 8.5.13C, it was held that federal jurisdiction is vested under s 77(iii) in a ‘court’ as an institution, consisting of judges and non-judicial officers. Thus, non-judicial officers of state courts could exercise federal jurisdiction. In Harris v Caladine, Mason CJ and Deane J considered that, once it is accepted that non-judicial officers of state courts can exercise federal jurisdiction, then the same reasoning must be applied to a federal court. 8.4.10C

Harris v Caladine (1991) 172 CLR 84

Mason CJ and Deane J: Now that it has been established by the [Hospital Contribution Fund Case] that some part of the federal jurisdiction of a state court may be exercised by a master or registrar in conformity with state legislation, it becomes difficult, if not impossible, to assert that s 71 vests the exercise of judicial power in the judges of the courts specified in the section. It makes little sense either as a matter of logic or policy to require that the power be exercised solely by federal judges to the exclusion of officers of a court when, in the case of invested federal jurisdiction, the power may be exercised by officers of state courts. More importantly, as a matter of construction, it is not permissible to read s 71 as speaking differently in its application to federal and state courts … The legislative power of Parliament to authorize the exercise by officers of the Family Court of part of its jurisdiction, powers and functions is subject to some limitation, as is the

power of the Court to delegate some part of its jurisdiction, powers and functions, whether in the exercise of its rule-making power under [the Family Law Act 1975 (Cth)] or in the exercise of its inherent jurisdiction. The limitation is that the legislative power and the power of delegation [page 950] cannot be exercised in a manner that is inconsistent with the continued existence of the Family Court as a federal court constituted under Ch III. In other words, both the legislative power and the power of delegation must be exercised in conformity with the requirement that the court’s federal jurisdiction, powers and functions are to be exercised by a court whose members are judges appointed pursuant to s 72 of the Constitution. Because a federal court, in common with other courts, may be organized or structured in a variety of ways for the purpose of the exercise of its jurisdiction, it does not follow that all the jurisdiction, powers and functions of the Family Court must be exercised by a judge or judges of that court. But the requirement does mean that the judges of the court do effectively control and supervise the exercise of its jurisdiction, powers and functions by participating in the hearing and determination of cases and otherwise by having the capacity to review the decisions of officers of the court and other persons to whom jurisdiction, powers and functions may be delegated. We must emphasize that the role of the officers of the court such as Judicial Registrars and Registrars is secondary to that of the judges. The role of the officers is to assist the judges in the exercise of the jurisdiction, powers and functions of the court. Although it is a commonplace characteristic of modern courts that officers such as masters and registrars exercise jurisdiction, powers and functions in a wide variety of matters, those matters

are, generally speaking, subsidiary in importance to matters which are heard and determined by judges. It seems to us that, so long as two conditions are observed, the delegation of some part of the jurisdiction, powers and functions of the Family Court as a federal court to its officers is permissible and consistent with the control and supervision of the Family Court’s jurisdiction by its judges. The first condition is that the delegation must not be to an extent where it can no longer properly be said that, as a practical as well as a theoretical matter, the judges constitute the court. This means that the judges must continue to bear the major responsibility for the exercise of judicial power at least in relation to the more important aspects of contested matters. The second condition is that the delegation must not be inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of their delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court. For present purposes it is sufficient for us to say that, if the exercise of delegated jurisdiction, powers and functions by a court officer is subject to review or appeal by a judge or judges of the court on questions of both fact and law, we consider that the delegation will be valid. Certainly, if the review is by way of hearing de novo, the delegation will be valid. The importance of insisting on the existence of review by a judge or an appeal to a judge is that this procedure guarantees that a litigant may have recourse to a hearing and a determination by a judge. In other words, a litigant can avail him or herself of the judicial independence which is the hallmark of the class of court presently under consideration. [Dawson J also considered that, provided a federal court retains ‘effective supervision and control over the exercise of its functions by its officers’ (172 CLR at 122), it was possible for non-judicial court officials to exercise delegated authority. If that supervision and control is lacking, then the court impermissibly will have abdicated its judicial

functions and non-judicial court officers impermissibly would be exercising ‘independent authority’: 172 CLR at 122. Gaudron J considered that, to be permissible, delegation had to be consistent with the Commonwealth judicial power, including observance of judicial process requirements and supervision by the court: 172 CLR at 151. Although agreeing that non-judicial officers of federal courts could exercise judicial power, McHugh J disapproved of the analogy to the state court cases.] [page 951] McHugh J: Nothing in the reasoning in the [Hospital Contribution Fund case] suggests that the masters and other officers of state courts can exercise invested federal jurisdiction only if the exercise of the jurisdiction is subject to review by the judges of those courts. If the holding in the [Hospital Contribution Fund case] is applied to the High Court and federal courts, there is no escape from the conclusion that the original jurisdiction of those courts can be exercised by persons who are not subject to review by the Justices or judges of those courts and who were not appointed in accordance with s 72 of the Constitution. [His Honour proceeded to explain that there is a real difference between state courts exercising federal jurisdiction and federal courts.] In a federal system, the states and the people of the states must rely on the judiciary to protect them from unconstitutional encroachments by the Federal Parliament or executive government. But there is a difference between the state judiciary and the federal judiciary in relation to this role. The Executive Government of the Commonwealth does not appoint the judges or officers of state courts; nor does the Parliament or the Executive Government of the Commonwealth have any powers with respect to the creation or constitution of state courts. If the

Parliament wishes to invest state courts with federal jurisdiction, it must, subject to s 79 of the Constitution, take those courts as it finds them: [Le Mesurier v Connor (1929) 42 CLR 481]. Moreover, it is in the highest degree unlikely that the officers of a state court, appointed by the executive government of that state, would not protect the state and its people from unconstitutional encroachments by the federal Parliament or the Executive Government of the Commonwealth. But a state and its citizens do not appoint, remove or remunerate the members of the federal judiciary. The Justices of the High Court and judges of other federal courts created by the Parliament are appointed by the Executive Government of the Commonwealth. Those who framed the Constitution were aware of the need to insulate the federal judiciary from the pressures of the Executive Government of the Commonwealth and the Parliament of the Commonwealth so that litigants in federal courts could have their cases decided by judges who were free from potential domination by the legislative and executive branches of government …

8.4.11 Instead, his Honour thought, the question of delegation had to be resolved by considering the consistency of such a practice with the ‘substance and spirit of the doctrine of separation of powers’: 172 CLR at 160. There was no offence to that principle if the exercise of delegated power remained subject to review by the judicial officers of the court. 8.4.12 The provisions of the Family Law Act in Harris v Caladine, which effectively allowed a de novo review of the registrar’s decision, provided the necessary degree of review, supervision or control for the delegation to be valid. Brennan and Toohey JJ dissented in separate judgments. Although Brennan J recognised that some limited functions could be delegated to non-

judicial officers of federal courts, ‘those powers do not include the power of adjudication of a legal controversy pending in a court’: Brennan J 172 CLR at 111. The delegated function in Harris v Caladine involved the making of consent orders for the settlement of property. That order determined the rights of the parties and could not be exercised by a non-judicial officer. The administrative aims of the Family Court could only be accommodated by ‘turning Ch III of the Constitution on its head’: 172 CLR at 141 per Toohey J. See also the criticism of Harris v Caladine by Callinan J in Luton v Lessels (2002) 210 CLR 333 at 387. [page 952]

Persona designata 8.4.13 One of the core separation of powers principles established by the Boilermakers’ case 8.2.9C was that parliament can only vest in federal judges Commonwealth judicial power or power that is incidental to the exercise of that power. That implied constitutional constraint imposes a degree of inflexibility on the Commonwealth Parliament when it decides to allocate decisionmaking responsibilities. The legal skills and experience possessed by federal court judges make them well qualified to make governmental decisions of various kinds. However, the respectability that judges and courts enjoy in the community, and the great confidence that the public has in the impartiality and objectivity that is associated with an independent judiciary, can sometimes be co-opted by the legislative and executive arms of government for political ends. The need for some greater flexibility

in constitutional doctrine has been partially facilitated by the High Court’s acceptance of the persona designata doctrine. Ch III judges are permitted to perform in their personal capacity some functions and exercise some powers which neither involve an exercise of Commonwealth judicial power nor are incidental thereto. However, the concern that the performance of such functions and powers might adversely impact upon the independence and impartiality of the federal judicial system has resulted in significant limitations placed upon the operation of that principle. First, Commonwealth legislation must clearly (expressly or impliedly) provide that the function is to be performed or power is to be exercised by a judge in his or her personal capacity. Second, the federal judge must consent to the performance of that function or the exercise of that power. Third, the performance of that function or the exercise of that power must not be incompatible with the exercise of the judge’s judicial function or with the proper discharge by the judiciary of its judicial power. 8.4.14 The first significant High Court case on the persona designata doctrine was Hilton v Wells (1985) 157 CLR 57. That case concerned the validity of s 20 of the Telecommunications (Interception) Act 1979 (Cth) which conferred on ‘a Judge of the Federal Court’ the power to issue a telecommunications interception warrant. The provision was challenged on the basis that it conferred non-judicial power on the Federal Court in breach of separation of powers limitations, it being common ground that the issue of a warrant was a non-judicial power not incidental to the exercise of judicial power. A majority of the court (Gibbs CJ, Wilson and Dawson JJ) held that, on its proper construction, the Act purported to confer a non-judicial power on Federal Court judges in their personal capacity. Thus, there was no breach of the

Boilermakers’ principles. Their Honours then emphasised the limitations to the doctrine, but concluded that those limitations had not been transgressed. 8.4.15C

Hilton v Wells (1985) 157 CLR 57

Gibbs CJ, Wilson and Dawson JJ: If the nature or extent of the functions cast upon judges were such as to prejudice their independence or to conflict with the proper performance of their judicial functions, the principle underlying the Boilermakers’ Case would doubtless render the legislation invalid. But the exercise of the functions conferred by s 20 would not have that result. The section designates the judges as individuals particularly well qualified to fulfil the sensitive role that the section envisages, and confers on them a function which [page 953] is not incompatible with their status and independence or inconsistent with the exercise of their judicial powers. [Mason and Deane JJ took a different view of the statutory provisions, concluding that the power was ‘imposed upon the judges of the Federal Court not as designated individuals but as a function to be performed by them as judges of that court in their capacity as such’: at 86. In doing so, their Honours emphasised the importance of insisting upon a clear expression of statutory intention:] Mason and Deane JJ: There are compelling reasons why the court should strictly maintain and apply established principle by insisting upon a clear expression of legislative intention before holding that functions entrusted to a judge of a federal court are

exercisable by him personally. The ability of Parliament to confer non-judicial power on a judge of a Ch III court, as distinct from the court to which he belongs, has the potential, if it is not kept within precise limits, to undermine the doctrine in the Boilermakers’ case. One may ask: what is the point of our insisting, in conformity with the dictates of the Boilermakers’ case, that non-judicial functions shall not be given to a Ch III court, if it is legitimate for Parliament to adopt the expedient of entrusting these functions to judges personally in lieu of pursuing the proscribed alternative of giving the functions to the court to which the judges belong? The answer is that the independence of the federal judiciary which is protected by the Boilermakers’ case will be preserved in a substantial way if … we continue to acknowledge that Parliament may confer non-judicial functions on a federal judge only where there is a clear expression of legislative intention that the functions are to be exercised by him in his personal capacity, detached from the court of which he is a member. [Following the decision in Hilton, the Commonwealth Parliament amended the Telecommunications (Interception) Act to make it even clearer that the power to issue a warrant was conferred on Federal Court judges in their personal capacities. Furthermore, Federal Court judges had to consent to the exercise of the power. Another challenge to the provisions came before the High Court in Grollo v Palmer (1995) 184 CLR 348. The court concluded that the power had been conferred upon the judges in their personal capacity, and a majority held (McHugh J dissenting) that there was no breach of separation of judicial power limitations.]

8.4.16C

Grollo v Palmer (1995) 184 CLR 348

Brennan CJ, Deane, Dawson and Toohey JJ: The conditions thus expressed on the power to confer non-judicial functions on Judges as designated persons are two fold: first, no nonjudicial function that is not incidental to a judicial function can be conferred without the Judge’s consent; and, second, no function can be conferred that is incompatible either with the Judge’s performance of his or her judicial functions or with the proper discharge by the judiciary of its responsibilities as an institution exercising judicial power (‘the incompatibility condition’). … The incompatibility condition may arise in a number of different ways. Incompatibility might consist in so permanent and complete a commitment to the performance of non-judicial functions by a Judge that the further performance of substantial judicial functions by that [page 954] Judge is not practicable. It might consist in the performance of non-judicial functions of such a nature that the capacity of the Judge to perform his or her judicial functions with integrity is compromised or impaired. Or it might consist in the performance of non-judicial functions of such a nature that public confidence in the integrity of the judiciary as an institution or in the capacity of the individual Judge to perform his or her judicial functions with integrity is diminished. Judges appointed to exercise the judicial power of the Commonwealth cannot be authorised to engage in the performance of non-judicial functions so as to prejudice the capacity either of the individual Judge or of the judiciary as an institution to discharge effectively the responsibilities of exercising the judicial power of the Commonwealth. So much is implied from the separation of powers mandated by Chs I, II and III of the Constitution and from

the conditions necessary for the valid and effective exercise of judicial power. [As to whether the issue of an interception warrant satisfied the incompatibility condition, their Honours said:] … The decision to issue a warrant is, for all practical purposes, an unreviewable in camera exercise of executive power to authorise a future clandestine gathering of information. Understandably a view might be taken that this is no business for a Judge to be involved in, much less the large majority of the Judges of the Federal Court. Yet it is precisely because of the intrusive and clandestine nature of interception warrants and the necessity to use them in today’s continuing battle against serious crime that some impartial authority, accustomed to the dispassionate assessment of evidence and sensitive to the common law’s protection of privacy and property (both real and personal), be authorised to control the official interception of communications. In other words, the professional experience and cast of mind of a Judge is a desirable guarantee that the appropriate balance will be kept between the law enforcement agencies on the one hand and criminal suspects or suspected sources of information about crime on the other. It is an eligible Judge’s function of deciding independently of the applicant agency whether an interception warrant should issue that separates the eligible Judge from the executive function of law enforcement. It is the recognition of that independent role that preserves public confidence in the judiciary as an institution. [One of the arguments put forward by the applicant to support the incompatibility argument was that a Federal Court judge who issues a warrant might be prevented by provisions in the Telecommunications (Interception) Act and other Commonwealth Acts in subsequent proceedings arising from the issue of the warrant from disclosing that judge’s prior involvement in the matter. Although concerned about the

argument, their Honours considered that appropriate practices could be adopted to prevent a judge from sitting on subsequent cases. Gummow J considered that the Commonwealth provisions could not prevent appropriate disclosure to the parties. If a contrary construction were adopted, his Honour would have considered that the provisions undermined the Boilermakers’ doctrine. It was the ‘intrusive and clandestine nature of interception warrants’ that suggested to McHugh J that this power in fact breached the incompatibility condition.] McHugh J: Open justice is the hallmark of the common law system of justice and is an essential characteristic of the exercise of federal judicial power. Participation in secret, ex parte administrative procedures that approve the acts of federal law enforcement officers by those who hold federal judicial office contravenes the spirit of the requirement that justice in the federal courts should be open; it weakens the perception that the federal courts are independent of the federal government and its agencies. Much of the litigation in the Federal Court is between the ordinary citizen and the federal government and its agencies. [page 955] The maintenance of public confidence in the independence and impartiality of the Federal Court judges in hearing disputes between the citizen and the government and its agencies is contingent upon the public perception that the judges of the federal courts are impartial and entirely independent of the executive arm of government. That public perception must be diminished when the judges of the Federal Court are involved in secret, ex parte administrative procedures, forming part of the criminal investigative process, that are carried out as a routine part of their daily work.

8.4.17 In Wainohu v NSW (2011) 243 CLR 181 8.5.61C, the High Court appeared to accept that the absence of a requirement to give reasons would imperil the validity of a function conferred on a persona designata. However, the court also adopted a statement by Gaudron J in Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 that certain functions, like the issuing of warrants in Hilton and Grollo, might be justified by historical practice: 243 CLR at 225–6. 8.4.18 The High Court again considered the persona designata doctrine in Wilson. The legislation considered in that case — the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) — set up a legislative scheme for the protection of areas and objects that were of particular significance to Aboriginal people. The relevant minister was given the power to make declarations for the protection of those areas and objects. Prior to making such a declaration, a person nominated by the minister was to provide to the minister a report dealing with various matters: the significance of the area to Aboriginals; the nature and extent of the threat of injury; the extent of the area that should be covered; the prohibitions and restrictions to be made with respect to the area; the impact of a declaration on the property or pecuniary interests of others; the duration of the declaration; the extent to which the area was protected under state or territory law and other prescribed matters. Justice Mathews, a Federal Court judge, accepted a nomination under the legislation to report on an application for protection of ‘Goolwa and Hindmarsh Island, their Foreshores, the Goolwa Channel and surrounding waters forming the mouth of the Murray River’: 189 CLR at 6. It was common ground that the

function conferred on Mathews J was non-judicial. In applying the conditions for the application of the persona designata principle, the court accepted that Mathews J was appointed to act in a personal capacity. Having consented to the appointment, the question for the court was whether the appointment as reporter contravened the ‘incompatibility condition’. If the appointment was incompatible with the holding of an office as a Ch III judge, then the Act had to be read down to prevent the nomination of a Ch III judge. 8.4.19 A majority of the court (Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ, Gaudron J in a separate judgment; Kirby J dissenting) held that the appointment of a Ch III judge contravened the incompatibility doctrine. In reaching that conclusion, their Honours supported the view that ‘[t]he separation of the judicial function from the other functions of government advances two constitutional objectives: the guarantee of liberty and, to that end, the independence of Ch III judges’: 189 CLR at 11. However, the separation of judicial functions ‘is not so rigid as to preclude the conferring on a Ch III judge with the judge’s consent of certain kinds of non-judicial powers’ (189 CLR at 13), and their Honours quoted with approval from the Grollo joint judgment’s description of the persona designata principle. However, as the court had recognised in Grollo, there must be limits to the doctrine, otherwise [page 956] there may be a threat to the reputation and perceived independence of the judicial branch of government. Their Honours then quoted

with approval from the Grollo joint judgment’s description of the incompatibility condition and continued as follows. 8.4.20C Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ: [The incompatibility doctrine’s] purpose is to protect effectively the independence of Ch III judges from the political branches of government as a guarantee of liberty and as a buttress to public confidence in the administration of justice by Ch III courts … In the present case, the category of incompatibility that arises for consideration is ‘the performance of non-judicial functions of such a nature that public confidence in the integrity of the judiciary as an institution or in the capacity of the individual judge to perform his or her judicial functions with integrity is diminished’. Bearing in mind that public confidence in the independence of the judiciary is achieved by a separation of the judges from the persons exercising the political functions of government, no functions can be conferred on a Ch III judge that would breach that separation … Where a non-judicial power is purportedly conferred, constitutional incompatibility is ascertained by reference to the function that has to be performed to exercise the power. The statute or the measures taken pursuant to the statute must be examined in order to determine, first, whether the function is an integral part of, or is closely connected with, the functions of the Legislature or the Executive Government. If the function is not closely connected with the Legislature or the Executive Government, no constitutional incompatibility appears. Next, an answer must be given to the question whether the function is

required to be performed independently of any instruction, advice or wish of the Legislature or the Executive Government, other than a law or an instrument made under a law (hereafter ‘any nonjudicial instruction, advice or wish’). If an affirmative answer does not appear, it is clear that the separation has been breached. The breach is not capable of repair by the Ch III judge on whom the function is purportedly conferred, for the breach invalidates the conferral of the function. If the function is one which must be performed independently of any non-judicial instruction, advice or wish, a further question arises: Is any discretion purportedly possessed by the Ch III judge to be exercised on political grounds — that is, on grounds that are not confined by factors expressly or impliedly prescribed by law? In considering these questions, it will often be relevant to note whether the function to be performed must be performed judicially, that is, without bias and by a procedure that gives each interested person an opportunity to be heard and to deal with any case presented by those with opposing interests. An obligation to observe the requirements of procedural fairness is not necessarily indicative of compatibility with the holding of judicial office under Ch III, for many persons at various levels in the executive branch of government are obliged to observe those requirements. But, conversely, if a judicial manner of performance is not required, it is unlikely that the performance of the function will be performed free of political influence or without the prospect of exercising a political discretion. [Their Honours then noted that the appointment of a judge to conduct a royal commission or to the Administrative Appeals Tribunals will usually satisfy the incompatibility condition. However, the appointment of a Ch III judge to report to the minister under the Aboriginal and Torres Strait Islander Heritage Protection Act did not.] [page 957]

The only power conferred by … the Act is the power conferred on the Minister to make a declaration. A report is no more than a condition precedent to the exercise of the Minister’s power to make a declaration. The function of a reporter … is not performed by way of an independent review of an exercise of the Minister’s power. It is performed as an integral part of the process of the Minister’s exercise of power. The performance of such a function by a judge places the judge firmly in the echelons of administration, liable to removal by the Minister before the report is made and shorn of the usual judicial protections, in a position equivalent to that of a ministerial adviser. [Their Honours were of the view that the reporting function was essentially a political one: the reporter weighed up the competing interests of Aboriginal applicants and others; and determined the extent of the areas that should be protected and the prohibitions to be made. There was also nothing in the legislative scheme to require the reporter to disregard ministerial direction. Furthermore, the report on what state and territory protections were in place involved an advisory opinion on questions of law: something ‘quite alien to the exercise of the judicial power of the Commonwealth’: 189 CLR at 20. Consequently, the minister could not nominate a Ch III judge to perform the function. Gaudron J concluded that the performance of the function by a Ch III judge ‘gives the appearance that the judge is acting, not in an independent way, but as the servant or agent of the Minister’: 189 CLR at 26. Kirby J dissented and considered that the majority’s conclusion significantly narrowed the persona designata doctrine as applied in Hilton and Grollo.] Kirby J: If the suggested test is impermissible closeness to the Legislature or the Executive Government and their respective functions, the activities of a federal judge, secretly and anonymously authorising telephonic intercepts, is clearly much closer to the functions of the other branches than are those of a statutory reporter, publicly identified, evaluating evidence and submissions, judicially reviewable and presenting a report which

reality suggests would inevitably find its way into the public domain, save for any specially confidential parts. Yet by the authority of this Court, Hilton and Grollo permit the former and that authority was not challenged. This case will prohibit the latter.

STATE COURTS EXERCISING FEDERAL JURISDICTION Investiture of federal jurisdiction 8.5.1 Section 77(iii) of the Constitution provides that parliament can invest any ‘court of a state with federal jurisdiction’ with respect to any of the matters in ss 75 and 76. Sections 39 and 68 of the Judiciary Act confer federal jurisdiction on state and territory courts. There are other Commonwealth provisions that confer federal jurisdiction on state and territory courts, for example, s 4 of the Jurisdiction of Courts (Cross-vesting Act) 1987 (Cth) confers certain additional federal jurisdiction on state Supreme Courts (and also provides for the transfer of proceedings between state Supreme Courts and the Federal Court or Family Court, and from state Supreme Courts to other state Supreme Courts: s 5(1), (2)). However, ss 39 and 68 are the primary vehicles for the conferral of federal jurisdiction. Section 68 confers federal criminal jurisdiction on state and territory courts. Section 39 confers noncriminal jurisdiction on state courts. Section 38 of the Judiciary Act makes certain federal jurisdiction exclusive to the High Court (that is, exclusive of state courts).

[page 958]

8.5.2E

Judiciary Act 1903 (Cth)

38 Matters in which jurisdiction of High Court exclusive Subject to sections 39B and 44, the jurisdiction of the High Court shall be exclusive of the jurisdiction of the several Courts of the States in the following matters: (a) matters arising directly under any treaty; (b) suits between states, or between persons suing or being sued on behalf of different States, or between a State and a person suing or being sued on behalf of another state; (c) suits by the Commonwealth, or any person suing on behalf of the Commonwealth, against a State, or any person being sued on behalf of a State; (d) suits by a State, or any person suing on behalf of a State, against the Commonwealth or any person being sued on behalf of the Commonwealth; (e) matters in which a writ of mandamus or prohibition is sought against an officer of the Commonwealth or a federal court. Note: Under the Jurisdiction of Courts (Cross-vesting) Act 1987, State Supreme Courts are, with some exceptions and limitations, invested with the same civil jurisdiction as the Federal Court has, including jurisdiction under section 39B of this Act. 39 Federal jurisdiction of State Courts in other matters (1) The jurisdiction of the High Court, so far as it is not exclusive of the jurisdiction of any Court of a state by

virtue of section 38, shall be exclusive of the jurisdiction of the several Courts of the states, except as provided in this section. (2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions: (a) A decision of a Court of a State, whether in original or in appellate jurisdiction, shall not be subject to appeal to Her Majesty in Council, whether by special leave or otherwise. Special leave to appeal from decisions of State Courts though State law prohibits appeal (c) The High Court may grant special leave to appeal to the High Court from any decision of any Court or Judge of a State not withstanding that the law of the State may prohibit any appeal from such Court or Judge. 68 Jurisdiction of State and Territory courts in criminal cases (1) The laws of a State or Territory respecting the arrest and custody of offenders or persons charged with offences, and the procedure for: (a) their summary conviction; and (b) their examination and commitment for trial on indictment; and (c) their trial and conviction on indictment; and (d) the hearing and determination of appeals arising out of any such trial or conviction or out of any

proceedings connected therewith; and for holding accused persons to bail, shall, subject to this section, apply and be applied so far as they are applicable to persons who are charged with offences against the laws of the [page 959] Commonwealth in respect of whom jurisdiction is conferred on the several courts of that State or Territory by this section. (2) The several Courts of a State or Territory exercising jurisdiction with respect to: (a) the summary conviction; or (b) the examination and commitment for trial on indictment; or (c) the trial and conviction on indictment; of offenders or persons charged with offences against the laws of the State or Territory, and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected therewith, shall, subject to this section and to section 80 of the Constitution, have the like jurisdiction with respect to persons who are charged with offences against the laws of the Commonwealth. [Subsections (4), (5), (5A), (5B), (5C), (6), (7), (8), (9), (10) and (11) detail some of the powers exercised by state and territory courts when exercising federal jurisdiction and the extent of that jurisdiction].

8.5.3 Section 39 operates in two ways: s 39(1) operates to divest state courts of state jurisdiction with respect to matters in relation

to which the High Court has been granted original jurisdiction, and s 39(2) operates to invest federal jurisdiction (that is, federal authority) to determine any of the matters listed in ss 75 and 76 to the extent that they have not been made exclusive to the High Court by s 38. (Section 38 is an exercise of power under s 77(ii) of the Constitution to define the extent to which the jurisdiction of a federal court is to be exclusive of that which is invested in state courts.) However, there is an asymmetry in the way that the provisions operate. The High Court has not been granted jurisdiction in relation to all matters in s 76. For example, there has been no general conferral of jurisdiction in relation to s 76(ii). Consequently, except where the High Court has been specifically conferred with jurisdiction under s 76(ii) (for example, s 30(c) of the Judiciary Act), state courts have not been stripped of state jurisdiction to determine matters that fall within s 76(ii). However, s 39 of the Judiciary Act confers federal jurisdiction to determine those matters. That discordance between the divestiture of state jurisdiction and the investiture of federal jurisdiction gives rise to the possibility that a state court might exercise one or the other or both forms of jurisdiction to determine those matters. 8.5.4 In Lorenzo v Carey (1921) 29 CLR 243 at 252 (Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ) it had been suggested that a litigant might elect which jurisdiction the court was to exercise. On the other hand, in other cases, it had been suggested that s 109 of the Constitution would operate to render inoperative a state law conferring state jurisdiction where the court was also exercising federal jurisdiction: Ffrost v Stevenson (1937) 58 CLR 528 at 573 per Dixon J; Minister of State for the Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459 at 482–3 per Latham CJ. The issue was raised squarely for consideration in Felton v Mulligan

(1971) 124 CLR 367. That case involved a maintenance dispute. Upon the dissolution of their marriage a husband and wife had agreed upon the payment of maintenance. Following the husband’s death, his executors stopped paying the maintenance on the basis that the maintenance agreement was invalid for unlawfully ousting the jurisdiction of the New South Wales Supreme Court from making a maintenance order under the Matrimonial Causes Act 1959 (Cth). On an application for a declaration by the wife, the New South Wales [page 960] Supreme Court concluded that the agreement was void. The wife then sought leave to appeal to the Privy Council, and that application was removed to the High Court. 8.5.5 The question for the High Court was whether an appeal could be taken from the Supreme Court to the Privy Council. Section 39(2) of the Judiciary Act prevented appeals to the Privy Council from courts exercising federal jurisdiction. There were two steps in the court’s analysis: first, whether the Supreme Court was exercising federal jurisdiction; and, second, whether it could also exercise state jurisdiction in relation to the same claim. As to the first question, a majority of the court concluded that the Supreme Court was exercising federal jurisdiction on the basis that the claims constituted a matter ‘arising under’ a Commonwealth Act for the purposes of s 76(ii) of the Constitution (that is, the Matrimonial Causes Act). As to the second question, Barwick CJ, Windeyer and Walsh JJ considered that, by its conferral of federal jurisdiction, parliament intended for the Supreme Court’s federal

jurisdiction to be exercised exclusively of its state jurisdiction to determine the federal matter. Accordingly, the Supreme Court was exercising federal jurisdiction, and no appeals could be taken from its orders to the Privy Council. The judgment of Walsh J concisely captured the relevant point. 8.5.6C

Felton v Mulligan (1971) 124 CLR 367

Walsh J: Section 39(1) of the Judiciary Act took away the jurisdiction of the state courts in matters in which this Court had jurisdiction. It did so by making the jurisdiction of this Court exclusive (except as provided in the section) of that of the state courts. No provision of the Act was expressed to take away the jurisdiction of the state courts in those matters in which this Court did not have original jurisdiction but in which original jurisdiction might be conferred upon it. By s 39(2) the courts of the states were invested with federal jurisdiction in both classes of matter. In my opinion the solution adopted in Lorenzo v Carey [(1921) 29 CLR 243] of the problem created by those provisions should be rejected. If the court had a double jurisdiction, there would be no acceptable way of determining in a particular case what jurisdiction it had exercised and thereby determining what were the consequences as to the right of a party to appeal. It is not satisfactory to hold that this determination may depend upon an election made by a litigant. There is no reason why a right of election should reside in one of the litigants to the exclusion of another and it is impossible to suppose that it resides in both. In my opinion the problem must be resolved by treating the Commonwealth law as paramount and as excluding, in relation to the matters to which that law applies, the operation of the laws under which the state jurisdiction of the court would be exercised.

The equitable jurisdiction of the Supreme Court of New South Wales in this case depended upon Imperial legislation (including the statute 9 Geo IV c 83, s 11) and legislation of the state of New South Wales (including the Equity Act, 1901–1968): see Parker’s Practice in Equity (NSW), 2nd ed, pp 4–6. The supremacy of the laws of the Commonwealth over the legislation of the state of New South Wales is established by covering cl 5 and s 109 of the Constitution. In so far as it may be necessary to assert their supremacy over any Imperial legislation from which the Court derived a power to adjudicate, authority for doing so is to be found in The Commonwealth v Limerick Steamship Co Ltd [(1924) 35 CLR 69]. Doubts have been expressed by Professor Cowen and by Professor Sawer as to the availability of s 109 to meet the problem under discussion: see Cowen’s Federal Jurisdiction in Australia, [page 961] p 195; and Sawer, in Essays on the Australian Constitution, edited by Else-Mitchell, 2nd ed, p 86. Those writers have suggested that s 39 does not disclose an intention ‘to cover the field’, but, on the contrary, indicates that the intention was not to override, in all the matters to which s 39(2) refers, the jurisdiction which already belonged to the state courts. But in spite of difficulties created by the manner in which s 39 has been framed, my conclusion is that the laws under which the state courts would exercise their ‘belonging’ jurisdiction are made inoperative by s 39. If sub-s (2) thereof had simply invested the state courts with federal jurisdiction without adding the conditions and restrictions to which the investing was expressed to be subject, there would be perhaps no conflict with any laws under which the state courts already had jurisdiction. But when the conditions which have been attached to the grant of federal

jurisdiction are considered, I think it should be held that Parliament intended that in the federal matters to which the section relates the only jurisdiction to be exercised by the state courts was to be federal jurisdiction, the exercise of which would be subject to the specified conditions. [Although there was no majority view for that position (as McTiernan J did not address the issue explicitly), the weight of authority seemed to support that view, and it seemed to be a practical solution to the problem created by the possibility of a state court exercising both federal and state jurisdiction: see Zines, 2002, pp 237–8. The High Court endorsed this position in MZXOT v Minister for Immigration and Citizenship (2008) 233 CLR 601 at 619 per Gleeson CJ, Gummow and Hayne JJ; 657–8 per Heydon, Crennan and Kiefel JJ.]

The place of state courts in the federal system 8.5.7 State ‘courts’ have considerable significance in the federal judicial system. The ‘autochthonous expedient’ allows parliament to vest federal jurisdiction in state courts (Constitution s 77(iii)) and, subject to exceptions and regulations made by parliament, appeals are constitutionally guaranteed from state Supreme Courts and other state courts exercising federal jurisdiction to the High Court. In considering the place of state courts in the federal judicial system, a number of important questions arise.

Parliament’s power over state courts

8.5.8 It is a well-established principle that the federal parliament has ‘no power to alter either the constitution or the organisation of a state court’ and, in that sense, it is often said that the federal parliament ‘must take a state court “as it finds it”’: Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 74–6 per Gummow, Hayne and Crennan JJ. One of the first statements of that proposition was in Le Mesurier v Connor (1929) 42 CLR 481. The Bankruptcy Act 1924 (Cth) had empowered the Governor-General to confer bankruptcy jurisdiction on state courts. The Supreme Court of Western Australia was authorised by the Governor-General to exercise bankruptcy jurisdiction. The Commonwealth Act also authorised the Governor-General to make arrangements with state governors for an officer of the state public service to be appointed as a Bankruptcy Registrar to perform duties as an officer of the Commonwealth public service. The registrar was to be an officer of the court. A bankruptcy notice issued by the Registrar in Bankruptcy in the Western Australian Supreme Court was challenged on the basis that his appointment was unlawful. A majority of the court [page 962] (Knox CJ, Rich and Dixon J; Isaacs and Starke JJ dissenting) held that the Commonwealth provisions appointing the registrar were invalid and that the registrar had no authority to issue the bankruptcy order. 8.5.9C

Le Mesurier v Connor (1929) 42 CLR 481

Knox CJ, Rich and Dixon JJ: But the question at once arises whether the legislative power of the Commonwealth enables Parliament to regulate, in such a manner, the organization of Courts of States which it invests with Federal jurisdiction. ‘The Constitution, by chapter III, draws the clearest distinction between Federal Courts and State Courts, and while enabling the Commonwealth Parliament to utilize the judicial services of State Courts recognizes in the most pronounced and unequivocal way that they remain “State Courts”’ (per Isaacs J in R v Murray and Cormie [(1916) 22 CLR 437 at 452], and see per Higgins J [at 464] and Gavan Duffy J and Rich J [at 471]). The Parliament may create Federal Courts, and over them and their organization it has ample power. But the Courts of a State are the judicial organs of another Government. They are created by state law; their existence depends upon state law; that law, primarily at least, determines the Constitution of the Court itself, and the organization through which its powers and jurisdictions are exercised. When a Court has been erected, its jurisdiction, whether in respect of place, person or subject matter, may be enlarged or restricted. The extent of the jurisdiction of a state Court would naturally be determined by state law; and in the United States it was decided that the general legislative power of the Congress with respect to the subjects assigned to it did not enable Congress to confer additional jurisdiction upon state Courts (Martin v Hunter’s Lessee [1 Wheat 304, 330–1 (1816)]; Houston v Moore [5 Wheat 1, 27–8 (1820); Robertson v Baldwin [165 US 275, 278 (1897)]). Section 77 of the Commonwealth Constitution expressly confers upon the Parliament power to make laws investing the Courts of the States with Federal jurisdiction. But the provisions of ss 77 and 79, which explicitly give legislative power to the Commonwealth in respect of State Courts, make it plain that the general powers of the Parliament to legislate with respect to the subjects conferred to it, like the similar powers of Congress, must not be interpreted as authorizing legislation giving jurisdiction to State Courts.

It is no less certain that these general powers cannot be interpreted as authorizing legislation dealing with the organization of State Courts. The power conferred by s 77(iii) is expressed in terms which confine it to making laws investing State Courts with Federal jurisdiction. Like all other grants of legislative power this carries with it whatever is necessary to give effect to the power itself. But the power is to confer additional judicial authority upon a Court fully established by or under another legislature. Such a power is exercised and its purpose is achieved when the Parliament has chosen an existing Court and has bestowed upon it part of the judicial power belonging to the Commonwealth. To affect or alter the Constitution of the Court itself or of the organization through which its jurisdiction and powers are exercised is to go outside the limits of the power conferred and to seek to achieve a further object, namely, the regulation or establishment of the instrument or organ of Government in which judicial power is invested, an object for which the Constitution provides another means, the creation of Federal Courts. Section 77(iii), therefore, does not enable the Parliament to make a Commonwealth officer a functionary of a State Court and authorize him to act on its behalf and administer part of its jurisdiction.

[page 963] 8.5.10 Thus, as Gummow, Hayne and Crennan JJ said in Forge, the federal parliament has no power to alter either the constitution or the organisation of a state court and, in that sense, the federal parliament must take a state court ‘as it finds it’. However, apart from defining the jurisdiction that state courts are to exercise, it is clear that parliament can regulate the practice and procedures to be

followed by state courts in exercising federal jurisdiction: Russell v Russell (1976) 134 CLR 495. It can also prescribe the rules of evidence to be applied (see Russell v Russell at 519 per Gibbs J), and the number of judges who are to exercise federal jurisdiction: Constitution s 79. There is no clear dividing line between, on the one hand, laws that alter the constitution or the organisation of a state court and, on the other hand, laws that regulate the practice and procedure of the court. Difficult judgments will be required, and will largely depend upon individual conceptions of what is central or essential to the functioning or character of a court and of the place of state courts in the federal judicial system. The High Court’s decision in Russell v Russell is a good illustration of the differing views that can be taken to the inquiry. That case considered the validity of two provisions of the Family Law Act 1975 (Cth). The first provision required state courts, when exercising jurisdiction under that Act, to hear proceedings in closed court. The second provided that neither judges nor counsel could be robed. Barwick CJ and Gibbs J held that both provisions were invalid: they related to the court’s organisation and not to the procedure to be adopted in determining a matter. Mason and Jacobs JJ held that both provisions were valid: neither altered the structure of the court. Stephen J held that the requirement that robes should not be worn did not affect the constitution or organisation of the court, but that the requirement that proceedings be held in closed court did. Thus, the former was valid, but the latter was not.

Which members of a state court can exercise federal jurisdiction?

8.5.11 In Kotsis v Kotsis (1970) 122 CLR 69 and Knight v Knight (1971) 122 CLR 114, the court held that the word ‘court’ in s 77(iii) referred to those of whom a court is composed. In those cases, the relevant court was considered to be composed of the judges and, consequently, only the judges could exercise federal jurisdiction, even though state legislation had delegated or authorised other court officers to exercise certain powers or functions. Thus, in Kotsis, the Registrar of the New South Wales Supreme Court could not make an order for costs in a matter involving a matrimonial cause and, in Knight, the Master of the Supreme Court of South Australia could not exercise that court’s matrimonial causes jurisdiction. Gibbs J dissented in Kotsis, taking the view that ‘court’ meant the ‘institution’ upon which federal jurisdiction had been conferred. 8.5.12C

Kotsis v Kotsis (1970) 122 CLR 69

Gibbs J: In my opinion there is nothing in the decisions of this Court to detract from the authority of Le Mesurier v Connor. That case supports the view that I have already indicated, namely that when the Commonwealth Parliament invests a state court with federal jurisdiction, what is invested is the state court with its organization as provided by the state law. The federal jurisdiction may therefore be exercised not only by the judges of the court but also by those officers of the court who form part of the organization through which it exercises jurisdiction in analogous cases under state law. It is perhaps misleading to say that [page 964]

the Parliament must take the state courts with their existing organization for this suggests that changes in the Constitution or organization of the court after its investiture with federal jurisdiction would have no effect in relation to the exercise of federal jurisdiction; it is more accurate to say that the investing provisions must take an existing court, with its organization as it is from time to time. If this were not so the consequence would be that if, after a state court had been invested with federal jurisdiction, the Constitution of the court were altered by a state statute which increased the number of judges, the federal jurisdiction could not be exercised by the court under its amended Constitution or at least by the additional judges. The conclusion that I have reached on authority conforms with my own view. For many years before Federation courts in England, and in some at least of the Australian colonies, had exercised part of their jurisdiction through officers such as masters and registrars. This system does not in any way involve a relaxation of the safeguards of individual liberty which are provided by the existence of a separate and independent judiciary. The judges control the officers of the courts and can call their orders in question whenever necessary. On the other hand, the system entails the great benefit that the judges are not obliged to perform functions which can with equal efficiency be performed by masters and registrars so that the time of the judges is spared for matters of greater importance. If the judges themselves are obliged to exercise all the jurisdiction that is quite satisfactorily exercised by masters and registrars, some of which is of a comparatively minor and routine character, a considerable increase in the numbers of the judiciary will be required. The Constitution itself discloses no reason, and I can think of none, why its framers, in adopting the expedient of allowing state courts to be invested with federal jurisdiction, should have intended at the same time to reject the organization through which the state courts operated, when that organization was established in

practice and useful in operation. The exercise of federal jurisdiction is not necessarily any more difficult, complicated or important than the exercise of state jurisdiction, and in fact, of course, some matters which formerly fell within state jurisdiction are now within federal jurisdiction; matrimonial causes and bankruptcy are obvious examples. The nature of federal jurisdiction did not require any different kind of organization, and there was no less need for courts exercising federal jurisdiction to be organized so that their officers, acting subject to confirmation or review by the judges, might perform on behalf of the court judicial functions which were of a routine or comparatively minor character or which could for other reasons be safely entrusted to them. There is no reason of which I am aware why the exercise of federal jurisdiction should necessarily be less flexible and more costly than the exercise of state jurisdiction. When, therefore, the Constitution spoke of investing state courts with federal jurisdiction, it meant to refer to state courts with the organization and structure provided by state law, including in appropriate cases masters and registrars who exercised some judicial power. [In Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 Gibbs J’s dissenting judgment found favour with the court.]

8.5.13C Commonwealth v Hospital Contribution Fund (1982) 150 CLR 49 Mason J: As s 77(iii) grants power to invest jurisdiction in courts, and does not deal with their composition, structure or organization, it supplies in itself no reason for restricting the content of the expression ‘any court of a state’ to judges or judges and other judicial

[page 965] officers who comprise its membership. A more natural reading is to take the expression in its application to the possible recipients for federal jurisdiction as referring to the curial institutions of the state as they happen to be organized from time to time … Generally speaking, the Parliament of a State may in the exercise of its plenary legislative power alter the composition, structure, and organization of its Supreme Court for the purposes of the exercise of state jurisdiction. It is in the exercise of this power that provisions of the kind already discussed have been enacted. Chapter III of the Constitution contains no provision which restricts the legislative competence of the states in this respect. Nor does it make any discernible attempt to regulate the composition, structure or organization of the Supreme Courts as appropriate vehicles for the exercise of invested federal jurisdiction. It is therefore sensible and natural to read the expression ‘any Court of a state’ in s 77(iii) as referring to state courts in the sense explained by Gibbs J in Kotsis. His Honour there observed that the exercise of federal jurisdiction did not call for a curial organization different in kind from that established for the exercise of state jurisdiction. In this situation there is every reason for supposing that the framers of the Constitution intended to arm the Parliament of the Commonwealth with a power to invest federal jurisdiction in a state court as it happened to be organized under state law from time to time. Although the Commonwealth Parliament has no power to alter the structure or organization of state courts, its freedom of action is completely preserved. It has the choice of investing state courts with federal jurisdiction or of establishing appropriate federal courts. Moreover, it may condition the investment of federal jurisdiction on the existence of a suitably structured state court — see, for example, s 39(2) of the Judiciary Act 1903 (Cth), as amended.

To me it seems highly improbable that the framers of the Constitution intended to restrict the power to invest federal jurisdiction in state courts so that the exercise of it was limited to an exercise by judges to the exclusion of any exercise by masters, registrars or deputy registrars, who are officers of state courts. I am unable to perceive any basis in any of the provisions of Ch III for the implication of such a limitation on the power. For the most part the majority in Kotsis appear to have regarded the word ‘court’ in s 77(iii) as the source of an implication based on the traditional distinction between judges and officers forming part of the court organization. This approach, as I have sought to show, insufficiently takes account of the states’ legislative competence to alter the structure and organization of state courts. An exercise of the legislative power conferred by s 77(iii) imposes an obligation on the state court to exercise the jurisdiction thereby invested. It would indeed be a great inconvenience to the states and their courts if the structure and composition of a state court for the exercise of federal jurisdiction is to differ from that selected by the state for the exercise of its similar non-federal jurisdiction. Yet this is the unfortunate consequence of the Kotsis interpretation. What is more it will have a coercive and restraining influence on the states’ competence to organize their courts as they choose. If the states are compelled to employ their judges in the exercise of federal jurisdiction, even in unimportant matters, they may be impelled to use the same organization for the exercise of similar nonfederal jurisdiction, to avoid having two organizations or to avoid drawing an unacceptable distinction between federal and nonfederal business. As we know the exercise of federal jurisdiction may suddenly intrude into the exercise of non-federal jurisdiction without the court or the parties perceiving that a federal element has arisen. The consequence is that if the states adopt a curial organization for the despatch of non-federal business that differs from the Kotsis specification the intrusion of a federal element in the exercise of what is thought to

[page 966] be non-federal jurisdiction could make the hearing abortive. There is no reflection in the provisions of Ch III of an intention to submerge the exercise of federal jurisdiction in problems of this kind or of an intention to constrain the states’ freedom of action in the organization of their courts. [Thus, the Master of the Supreme Court, as an officer of the Supreme Court of New South Wales and part of the organisation through which the court’s jurisdiction was to be exercised, could exercise federal jurisdiction.]

Chapter III limitations on state legislative power 8.5.14 It is well accepted that the state constitutions do not entrench the position of state courts or the separation of judicial power. Consequently, they do not provide a fertile basis for drawing separation of judicial power principles. As French CJ documented in South Australia v Totani (2010) 242 CLR 1 at 45: … [u]nsuccessful attempts to persuade courts of the existence of such a doctrine were made in New South Wales [Clyne v East (1967) 68 SR (NSW) 385, Builders Construction Employees and Builders’ Labourers Federation of New South Wales v Minister for Industrial Relations (1986) 7 NSWLR 372], Western Australia [Nicholas v Western Australia [1972] WAR 168], and South Australia [Gilbertson v South Australia (1976) 15 SASR 66] in the 1960s and 1970s, and Victoria [Collingwood v Victoria [No 2] [1994] 1 VR 652] in 1993, relying, inter alia, upon the decision of the Privy Council in Liyanage v The Queen [[1967] 1 AC 259].

See the discussion of these cases in Carney, 2006, pp 344–9. 8.5.15 Furthermore, as the extract from Mason J in Commonwealth v Hospital Contribution Fund suggests, the conventional view was that Ch III of the Constitution did not impose limitations on the way in which state parliaments could regulate their courts when exercising state jurisdiction. However, as the court’s decision in Commonwealth v Queensland (1975) 134 CLR 298 demonstrated, state legislative power is not totally free from Ch III implications. The court in that case held that Queensland legislation could not authorise the referral of questions from the Queensland Supreme Court for the opinion of the Privy Council. The referral of such questions would include matters that could not be taken on appeal to the Privy Council from either the High Court or a state court and, thus, it was considered that the referral legislation was ‘contrary to the inhibitions which, if not express, are clearly implicit in Ch III’: 134 CLR at 315 per Gibbs J.

The development of the Kable principles 8.5.16 That Ch III imposes constraints on state legislative power was further developed in the case of Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. The Community Protection Act 1994 (NSW) empowered the New South Wales Supreme Court to make an order for the detention of a person in prison if it was satisfied on reasonable grounds that a person was more likely than not to commit a serious act of violence and if the detention was appropriate to protect the community. A person could be detained whether or not already in lawful custody. The proceedings for detention orders were to be civil proceedings

[page 967] and were to be determined on the balance of probabilities. In some respects, the rules of evidence were relaxed for the detention proceedings. Despite the generality of the provision, the New South Wales legislation specifically provided that it only authorised the detention of Gregory Wayne Kable, the appellant, who had been convicted of the manslaughter of his wife. Indeed, the imminent release of the appellant from detention for his conviction was the trigger for the enactment of the Community Protection Act 1994. Pursuant to the legislation, an order was made by Levine J for Kable’s continued detention, but a subsequent application for a further order was refused. A majority of the court in Kable held that the New South Wales legislation was incompatible with Ch III of the Constitution and, therefore, was invalid. 8.5.17C

Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51

Gaudron J: Neither the recognition in Ch III that State courts are the creatures of the states nor its consequence that, in the respects indicated, the Commonwealth must take State courts as it finds them detracts from what is, to my mind, one of the clearest features of our Constitution, namely, that it provides for an integrated Australian judicial system for the exercise of the judicial power of the Commonwealth. Moreover, neither that recognition nor that consequence directs the conclusion that state Parliaments may enact whatever laws they choose with respect to State courts. If Ch III requires that state courts not exercise

particular powers, the parliaments of the States cannot confer those powers upon them … The question whether the Constitution requires that State courts not have particular powers conferred upon them depends, in my view, on a proper understanding of the integrated judicial system for which Ch III provides — the ‘autochthonous expedient’, as it has been called. One thing which clearly emerges is that, although it is for the states to determine the organisation and structure of their court systems, they must each maintain courts, or, at least, a court for the exercise of the judicial power of the Commonwealth. Were they free to abolish their courts, the autochthonous expedient, more precisely, the provisions of Ch III which postulate an integrated judicial system would be frustrated in their entirety. To this extent, at least, the states are not free to legislate as they please. Two other matters of significance emerge from a consideration of the provisions of Ch III. The first is that State courts are neither less worthy recipients of federal jurisdiction than federal courts nor ‘substitute tribunals’, as they have sometimes been called. To put the matter plainly, there is nothing anywhere in the Constitution to suggest that it permits of different grades or qualities of justice, depending on whether judicial power is exercised by state courts or federal courts created by the parliament. The second and, perhaps, the more significant matter which emerges from a consideration of the provisions of Ch III is, as I pointed out in Leeth v The Commonwealth [(1992) 174 CLR 455], that state courts, when exercising federal jurisdiction ‘are part of the Australian judicial system created by Ch III of the Constitution and, in that sense and on that account, they have a role and existence which transcends their status as courts of the states’. Once the notion that the Constitution permits of different grades or qualities of justice is rejected, the consideration that state courts have a role and existence transcending their status as state courts directs the conclusion that Ch III requires that the

parliaments of the states not legislate to confer powers on state courts which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth. … [page 968] The proceedings which the Act contemplates are not proceedings otherwise known to the law. And except to the extent that the Act attempts to dress them up as legal proceedings (for example, by referring to the applicant as ‘the defendant’, by specifying that the proceedings are civil proceedings and by suggesting that the rules of evidence apply), they do not in any way partake of the nature of legal proceedings. They do not involve the resolution of a dispute between contesting parties as to their respective legal rights and obligations. And … the applicant is not to be put on trial for any offence against the criminal law. Instead, the proceedings are directed to the making of a guess — perhaps an educated guess, but a guess nonetheless — whether, on the balance of probabilities, the appellant will commit an offence of the kind specified in the definition of ‘serious act of violence’. And, at least in some circumstances, the Act directs that that guess be made having regard to material which would not be admissible as evidence in legal proceedings … The power purportedly conferred by s 5(1) of the Act requires the making of an order, if the conditions specified in s 5(1) are satisfied, depriving an individual of his liberty, not because he has breached any law, whether civil or criminal, but because an opinion is formed, on the basis of material which does not necessarily constitute evidence admissible in legal proceedings, that he ‘is more likely than not’ to breach a law by committing a serious act of violence as defined in s 4 of the Act. That is the antithesis of the judicial process, one of the central purposes of which is, as I said in Re Nolan; Ex parte Young

[(1991) 192 CLR 460], to protect ‘the individual from arbitrary punishment and the arbitrary abrogation of rights by ensuring that punishment is not inflicted and rights are not interfered with other than in consequence of the fair and impartial application of the relevant law to facts which have been properly ascertained’. It is not a power that is properly characterised as a judicial function, notwithstanding that it is purportedly conferred on a court and its exercise is conditioned in terms usually associated with the judicial process. Moreover, when regard is had to the precise nature of the function purportedly conferred by s 5(1), the matters to be taken into account in its exercise and its contrariety to what is ordinarily involved in the judicial process, the effect of s 5(1) is, in my view, to compromise the integrity of the Supreme Court of New South Wales and, because that court is not simply a state court but a court which also exists to exercise the judicial power of the Commonwealth, it also has the effect of compromising the integrity of the judicial system brought into existence by Ch III of the Constitution. McHugh J: The working of the Constitution requires and implies the continued existence of a system of state courts with a Supreme Court at the head of the state judicial system. Covering cl 5 of the Constitution, for example, in declaring that the Constitution ‘and all laws made by the Parliament of the Commonwealth under the Constitution, shall be binding on the courts, judges, and people of every state’ necessarily implies the continuing existence of a system of state courts declaring the legal rights and duties of the people of Australia. So does s 118 in declaring that ‘(f)ull faith and credit shall be given, throughout the Commonwealth to the … judicial proceedings of every state.’ So too do s 51(xxiv) and s 51(xxv) in granting to the Parliament of the Commonwealth the power to make laws with respect to ‘(t)he service and execution throughout the Commonwealth of the civil and criminal process and the judgments of the courts of the states’ and ‘(t)he recognition throughout the Commonwealth of …

the judicial proceedings of the states’. Section 77 of the Constitution also necessarily implies the existence of a court system in each state. It gives the Parliament of the Commonwealth the power to invest ‘any court of a state with federal jurisdiction’ and to define ‘the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the states’ … [page 969] If a state could abolish its court system, the powers conferred by s 77(ii) and (iii) would be rendered useless and the constitutional plan of a system of State courts invested with federal jurisdiction, as envisaged by Ch III, would be defeated. This is because only courts can be invested with federal jurisdiction pursuant to the provisions of s 77(iii). It is hardly to be supposed that the Constitution intended that a state could defeat the exercise of the grants of power conferred on the parliament of the Commonwealth by s 77 by the simple expedient of abolishing its courts and setting up a system of tribunals that were not courts. State Supreme Courts cannot be abolished Furthermore, s 73 of the Constitution implies the continued existence of the state Supreme Courts by giving a right of appeal from the Supreme Court of each state to the High Court, subject only to such exceptions as the Commonwealth Parliament enacts. Section 73(ii) gives this court jurisdiction to determine appeals from the decisions of any ‘court exercising federal jurisdiction; or of the Supreme Court of any State, or any other court of any State from which at the establishment of the Commonwealth an appeal (lay) to the Queen in Council’. The right of appeal from a State Supreme Court to this court, conferred by that section, would be

rendered nugatory if the Constitution permitted a state to abolish its Supreme Court. It necessarily follows, therefore, that the Constitution has withdrawn from each state the power to abolish its Supreme Court or to leave its people without the protection of a judicial system. That does not mean that a state cannot abolish or amend the constitutions of its existing courts. Leaving aside the special position of the Supreme Courts of the States, the States can abolish or amend the structure of existing courts and create new ones. However, the Constitution requires a judicial system in and a Supreme Court for each state and, if there is a system of state courts in addition to the Supreme Court, the Supreme Court must be at the apex of the system. With the abolition of the right of appeal to the Privy Council, therefore, this Court is now the apex of an Australian judicial system … An essential part of the machinery for implementing that supervision of the Australian legal system and maintaining the unity of the common law is the system of state courts under a Supreme Court with an appeal to the High Court under s 73 of the Constitution. The judgment of the High Court in such an appeal is ‘final and conclusive’. Without the continued existence of a right of appeal from the Supreme Court of each State to the High Court, it would be difficult, indeed probably impossible, to have the unified system of common law that the Constitution intended should govern the people of Australia. Moreover, although it is not necessary to decide the point in the present case, a State law that prevented a right of appeal to the Supreme Court from, or a review of, a decision of an inferior State court, however described, would seem inconsistent with the principle expressed in s 73 and the integrated system of State and federal courts that covering cl 5 and Ch III envisages … Under the Constitution, therefore, the State courts have a status and a role that extends beyond their status and role as part of the State judicial systems. They are part of an integrated

system of state and federal courts and organs for the exercise of federal judicial power as well as State judicial power. Moreover, the Constitution contemplates no distinction between the status of State courts invested with federal jurisdiction and those created as federal courts. There are not two grades of federal judicial power. The terms of s 71 of the Constitution equate the vesting of judicial power in the federal courts with the vesting of federal judicial power in the state courts. And s 77(iii) permits the Parliament of the Commonwealth to invest any court of a State with federal jurisdiction in respect of all matters that are or can be vested in the original jurisdiction of this court or the federal courts. [page 970] Other sections of the Constitution also draw no distinction between the exercise of federal judicial power by the State courts and its exercise by federal courts. It is true that the Constitution does not protect the appointment, remuneration and tenure of the judges of state courts invested with federal jurisdiction although it protects the judges of federal courts in respect of those matters. But this difference provides no ground for concluding that the exercise of federal judicial power by state courts was intended to be inferior to the exercise of that power by federal courts … Legislatures cannot alter or undermine the constitutional scheme set up by Ch III … Because the state courts are an integral and equal part of the judicial system set up by Ch III, it … follows that no state or federal parliament can legislate in a way that might undermine the role of those courts as repositories of federal judicial power.

Thus, neither the Parliament of New South Wales nor the Parliament of the Commonwealth can invest functions in the Supreme Court of New South Wales that are incompatible with the exercise of federal judicial power. Neither parliament, for example, can legislate in a way that permits the Supreme Court while exercising federal judicial power to disregard the rules of natural justice or to exercise legislative or executive power. Such legislation is inconsistent with the exercise of federal judicial power. … Courts exercising federal jurisdiction must be perceived to be free from legislative or executive interference One of the basic principles which underlie Ch III and to which it gives effect is that the judges of the federal courts must be, and must be perceived to be, independent of the legislature and the executive government. Given the central role and the status that Ch III gives to State courts invested with federal jurisdiction, it necessarily follows that those courts must also be, and be perceived to be, independent of the legislature and executive government in the exercise of federal jurisdiction. Public confidence in the impartial exercise of federal judicial power would soon be lost if federal or State courts exercising federal jurisdiction were not, or were not perceived to be, independent of the legislature or the executive government. In the case of State courts, this means they must be independent and appear to be independent of their own State’s legislature and executive government as well as the federal legislature and government. Cases concerning the States, the extent of the legislative powers of the States and the actions of the executive governments of the States frequently attract the exercise of invested federal jurisdiction. The Commonwealth Government and the residents and governments of other States are among those who litigate issues in the courts of a state. Quite often the government of the State concerned is the opposing party in actions brought by these litigants. Public

confidence in the exercise of federal jurisdiction by the courts of a State could not be retained if litigants in those courts believed that the judges of those courts were sympathetic to the interests of their state or its executive government. While nothing in Ch III prevents a state from conferring nonjudicial functions on a State Supreme Court in respect of nonfederal matters, those non-judicial functions cannot be of a nature that might lead an ordinary reasonable member of the public to conclude that the court was not independent of the executive government of the State. A State law which gave the Supreme Court powers to determine issues of a purely governmental nature — for example, how much of the State Budget should be spent on child welfare or what policies should be pursued by a particular government department — would be invalid. It would have the effect [page 971] of so closely identifying the Supreme Court with the government of the state that it would give the appearance that the Supreme Court was part of the executive government of the state. The law would fail not because it breached any entrenched doctrine of separation powers in the state Constitution but because it gave the appearance that a court invested with federal jurisdiction was not independent of its state government. In addition, in the case of the Supreme Court, although nonjudicial functions may be vested in that court, they cannot be so extensive or of such a nature that the Supreme Court would lose its identity as a court. Thus, a state can invest its Supreme Court with a jurisdiction similar to that which is presently exercised in the federal sphere by the Administrative Appeals Tribunal. The Supreme Court would not lose its identity as the Supreme Court of the state merely because it was given a jurisdiction similar to that of that Tribunal. Nor could such a jurisdiction lead any

reasonable person to conclude that the Supreme Court was part of the executive government of the state. However, a State could not legislate to abolish all other jurisdictions of the Supreme Court and invest it with no more than a jurisdiction similar to that Tribunal. To do so would make a mockery of the principles contained in Chapter III of the Constitution. Furthermore, although nothing in Ch III prevents a State from conferring executive government functions on a State court judge as persona designata, if the appointment of a judge as persona designata gave the appearance that the court as an institution was not independent of the executive government of the State, it would be invalid. No doubt there are few appointments of a judge as persona designata in the State sphere that could give rise to the conclusion that the court of which the judge was a member was not independent of the executive government. Many Chief Justices, for example, act as Lieutenant-Governors and Acting Governors. But, given the long history of such appointments, it is impossible to conclude that such appointments compromise the independence of the Supreme Courts or suggest that they are not impartial. Similarly, a law that provided for a judge of a state court to be appointed as a member of an Electoral Commission fixing the electoral boundaries of the state would not appear to suggest that the court was not impartial. However, a state law which purported to appoint the Chief Justice of the Supreme Court to be a member of the Cabinet might well be invalid because the appointment would undermine confidence in the impartiality of the Supreme Court as an institution independent of the executive government of the state. It follows therefore that, although New South Wales has no entrenched doctrine of the separation of powers and although the Commonwealth doctrine of separation of powers cannot apply to the State, in some situations the effect of Ch III of the Constitution may lead to the same result as if the State had an enforceable doctrine of separation of powers. This is because it is

a necessary implication of the Constitution’s plan of an Australian judicial system with State courts invested with federal jurisdiction that no government can act in a way that might undermine public confidence in the impartial administration of the judicial functions of State courts. If it could, it would inevitably result in a lack of public confidence in the administration of invested federal jurisdiction in those courts. State governments therefore do not have unrestricted power to legislate for state courts or judges. A State may invest a State court with non-judicial functions and its judges with duties that, in the federal sphere, would be incompatible with the holding of judicial office. But under the Constitution the boundary of State legislative power is crossed when the vesting of those functions or duties might lead ordinary reasonable members of the public to conclude that the state court as an institution was not free of government influence in administering the judicial functions invested in the court … [page 972] In my opinion, those who initiated and passed the Act plainly expected and intended that the imprisonment of the appellant would continue after the expiration of his sentence for the manslaughter of his wife. The object of the Act, its ad hominem nature and the grounds and method of proof of the s 5 order together with the provision for s 7 interim orders leave no other conclusion open. Why else would the executive government have introduced legislation into the parliament which is directed only to the appellant and which expressly states that its object is to protect the community by providing for the detention of the appellant unless the government intended that he should be kept in prison? It is true that the Act places the necessity for a Supreme Court order between the obvious intention of the executive government and the imprisonment of the appellant. But when the Act was passed it must have seemed to many that the

risk of that intention being defeated was minimal. The matters that signal the intention of the makers of the Act also undermined the ordinary safeguards of the judicial process and made it highly likely that the appellant would be imprisoned. The Parliament of New South Wales has the constitutional power to pass legislation providing for the imprisonment of a particular individual. And that is so whether the machinery for the imprisonment be the legislation itself or the order of a Minister, public servant or tribunal. Moreover, there is no reason to doubt the authority of the State to make general laws for preventive detention when those laws operate in accordance with the ordinary judicial processes of the state courts. However, whatever else the Parliament of New South Wales may be able to do in respect of the preventive detention of individuals who are perceived to be dangerous, it cannot, consistently with Ch III of the Constitution, invoke the authority of the Supreme Court to make the orders against the appellant by the methods which the Act authorises. This is because the Act and its procedures compromise the institutional impartiality of the Supreme Court … It is not merely that the Act involves the Supreme Court in the exercise of non-judicial functions or that it provides for punishment by way of imprisonment for what the appellant is likely to do as opposed to what he has done. The Act seeks to ensure, so far as legislation can do it, that the appellant will be imprisoned by the Supreme Court when his sentence for manslaughter expires. It makes the Supreme Court the instrument of a legislative plan, initiated by the executive government, to imprison the appellant by a process that is far removed from the judicial process that is ordinarily invoked when a court is asked to imprison a person. The Act expressly removes the ordinary protections inherent in the judicial process. It does so by stating that its object is the preventive detention of the appellant, by removing the need to prove guilt beyond reasonable doubt, by providing for proof by materials that may not satisfy the rules of evidence and by

declaring the proceedings to be civil proceedings although the court is not asked to determine the existing rights and liabilities of any party or parties. It is not going too far to say that proceedings under the Act bear very little resemblance to the ordinary processes and proceedings of the Supreme Court. They do not involve any contest as to whether the appellant has breached any law or any legal obligation. They ‘are not directed to any determination or order which resolves an actual or potential controversy as to existing rights or obligations’ which is the benchmark of an exercise of judicial power. The Act is thus far removed from the ordinary incidents of the judicial process. It invests the Supreme Court with a jurisdiction that is purely executive in nature … At the time of its enactment, ordinary reasonable members of the public might reasonably have seen the Act as making the Supreme Court a party to and responsible for implementing the political decision of the executive government that the appellant should be imprisoned without the benefit of the ordinary processes of law. Any person who reached that conclusion could justifiably draw the inference that the Supreme Court was an instrument of executive [page 973] government policy. That being so, public confidence in the impartial administration of the judicial functions of the Supreme Court must inevitably be impaired. The Act therefore infringed Ch III of the Constitution and was and is invalid … Gummow J: The present case is not one of incarceration by legislative or executive fiat. The involuntary detention of the appellant is brought about by orders of the Supreme Court in exercise of what is described in [the Act] as its ‘jurisdiction’ under the Act. I have referred to the striking features of this legislation. They must be considered together. But the most

significant of them is that, whilst imprisonment pursuant to Supreme Court order is punitive in nature, it is not consequent upon any adjudgment by the court of criminal guilt. Plainly, in my view, such an authority could not be conferred by a law of the Commonwealth upon this Court, any other federal court, or a state court exercising federal jurisdiction. Moreover, not only is such an authority non-judicial in nature, it is repugnant to the judicial process in a fundamental degree … The translation of what may be a politically difficult choice into what one distinguished United states judge called ‘a grossly unjudicial chore’ jeopardises the integrity of the federal or State court in question in the exercise in other cases of the judicial power of the Commonwealth. It saps the appearance of institutional impartiality and the maintenance of public confidence. The point was made by the Supreme Court of the United states in Mistretta v United States, [488 US 361, 407 (1989)]: The legitimacy of the Judicial Branch ultimately depends on its reputation for impartiality and nonpartisanship. That reputation may not be borrowed by the political Branches to cloak their work in the neutral colors of judicial action. Earlier, in In re Richardson [160 NE 655, 661 (1928)], Cardozo CJ had emphasised that judges should be saved ‘from the entanglements, at times the partisan suspicions, so often the result of other and conflicting duties’. The appellant submits, and I accept, that such reasoning is particularly applicable where, as here, the Act draws in the Supreme Court of a state as an essential and determinative integer of a scheme whereby, by its order, an individual is incarcerated in a penal institution otherwise than for breach of the criminal law … … The Act requires the Supreme Court to inflict

punishment without any anterior finding of criminal guilt by application of the law to past events, being the facts as found. Such an activity is said to be repugnant to judicial process. I agree. The Act is an extraordinary piece of legislation. The making thereunder of ‘detention orders’ by the Supreme Court in the exercise of what the statute purports to classify as an augmentation of its ordinary jurisdiction, to the public mind, and in particular to those to be tried before the Supreme Court for offences against one or other or both of the state and federal criminal law, is calculated to have a deleterious effect. This is that the political and policy decisions to which the Act seeks to give effect, involving the incarceration of a citizen by court order but not as punishment for a finding of criminal conduct, have been ratified by the reputation and authority of the Australian judiciary. The judiciary is apt to be seen as but an arm of the executive which implements the will of the legislature. Thereby a perception is created which trenches upon the appearance of institutional impartiality to which I have referred … [His Honour then discussed various propositions about Ch III, one of which was that ‘there is no prohibition arising from the Constitution which operates upon state legislatures [page 974] and necessarily bars the conferral upon state courts of authority which does not have the character or quality of the judicial power of the Commonwealth’: at 137]. Reference is made to Le Mesurier v Connor. But this decision did not determine that a state legislature has power to impose upon the Supreme Court of that state functions which are incompatible with the discharge of obligations to exercise federal

jurisdiction, pursuant to an investment by the Parliament of the Commonwealth under s 77(iii) of the Constitution. Nor, in the absence from the Constitution of the state concerned of an express statement of a separation of judicial power, reflecting that achieved by Ch III of the Constitution, did it imply such a capacity … The existence of such an integrated system of law and the terms of s 73 itself necessarily imply that there be in each state a body answering the constitutional description of the Supreme Court of that State. Contrary to what appeared to be a tentative submission by the Solicitor-General for New South Wales, it would not be open to the legislature of that State to abolish the Supreme Court and to vest the judicial power of the State in bodies from which there could be no ultimate appeal to this court … It is, of course, open to the parliament not to invest State courts in the broad terms found in ss 39 and 68 of the Judiciary Act. That is quite plain. But it does not follow that the Constitution is entirely silent as to the character or quality of the state court system which would provide substitute or alternative tribunals to the creation by the parliament of a system of federal courts … The expedient provided for in s 77(iii) would be frustrated if there were no system of state courts to provide these substitute tribunals as repositories of the judicial power of the Commonwealth. Federal jurisdiction could not be invested in a state body which was not a ‘court’ within the meaning of s 77(iii). The Constitution is premised upon the proposition (in covering cl 5) that, of every state (a phrase which includes new states admitted or established pursuant to s 121 (covering cl 6)) there will be ‘courts’ and ‘judges’. Indeed, any other conclusion, to adopt the phrase of Dixon CJ in another context [Lamshed v Lake (1958) 99 CLR 132 at 143], ‘rather taxes legal credulity’.

The continuing existence of a system of State courts is recognised not only in covering cl 5 but also in ss 73, 77(iii) and 79. Further, s 51(xxiv) provides for the making of laws with respect to the service and execution throughout the Commonwealth of the civil and criminal process and the judgments of ‘the courts of the States’, and s 51(xxv) provides for laws with respect to the recognition throughout the Commonwealth of ‘the judicial proceedings of the States’. Section 118 requires the giving of full faith and credit, throughout the Commonwealth, to ‘the judicial proceedings of every state’ … No doubt the other components of the State court systems may change from time to time, and s 77(iii) is to be read in an ambulatory fashion. But s 73(ii) puts the Supreme Courts in a distinct position. Section 73(ii) states that the High Court ‘shall have’ appellate jurisdiction in appeals from ‘the Supreme Court of any state’. The last paragraph of s 73 rendered applicable on such appeals to the High Court, until the parliament otherwise provided, the conditions of and restrictions on appeals to the Privy Council from the Supreme Courts of the several States. The meaning of the term ‘Supreme Court’ in s 73 is to be determined in the process of construction of the Constitution and is not to be governed merely by legislation of the relevant state. It is, in this sense, a constitutional expression. The phrase identifies the highest [page 975] court for the time being in the judicial hierarchy of the State and entrenches a right of appeal from that court to this court. In any event, to say of s 77(iii) that it offers to the Commonwealth but a facility, so that the Constitution does not bring the courts of the states necessarily into any relationship with the federal judicial power, does not meet the appellant’s

case. Section 73(ii) indicates that the functions of the Supreme Courts of the States, at least, are intertwined with the exercise of the judicial power of the Commonwealth. This is because decisions of the State courts, whether or not given in the exercise of invested jurisdiction, yield ‘matters’ which found appeals to this court under s 73(ii). By this means, the judicial power of the Commonwealth is engaged, at least prospectively, across the range of litigation pursued in the courts of the States … Thus, as both a practical consideration and as a conclusion drawn from the structure of the Constitution, the submissions for the appellant accurately emphasise that the institutional impairment of the judicial power of the Commonwealth inflicted by a statute such as the Act upon the judicial power of the Commonwealth is not to be confessed and avoided by an attempt at segregation of the courts of the states into a distinct and self-contained stratum within the Australian judicature. Rather, there is an integrated Australian legal system, with, at its apex, the exercise by this Court of the judicial power of the Commonwealth.

8.5.18 Toohey J reached a similar conclusion but limited the incompatibility test to circumstances where the state court was actually exercising federal jurisdiction: 189 CLR at 94. In separate judgments, Brennan CJ and Dawson J dissented, maintaining the conventional position expressed by Mason J in Commonwealth v Hospital Contribution Fund 8.5.13C that Ch III does not impose limitations on the way in which state parliaments can regulate their courts. As Dawson J said, Ch III ‘accepts those courts as existing institutions which may be invested with federal jurisdiction notwithstanding that they are not subject to any doctrine of separation of powers’: 189 CLR at 85.

8.5.19 The separate majority judgments in Kable made it difficult to distil the principles that would apply to this new limitation. What was sufficient to give rise to incompatibility with Commonwealth judicial power was unclear, as the majority judges referred to different standards by which that question was to be answered. The core idea found across the majority judgments was that state courts must maintain their institutional integrity. However, other ideas (often overlapping) were referred to. Gummow J asked whether the provisions were ‘repugnant to the judicial process in a fundamental degree’ (189 CLR at 132), focusing the constitutional inquiry on deficiencies in the usual curial process. The maintenance of public confidence in the judiciary was also referred to by a number of majority judges. The deprivation of liberty otherwise than in accordance with the usual criminal process of adjudging and punishing criminal guilt was also pointed to as impugning the validity of the provisions. With this mix of ideas, it was unclear how this new Kable principle would be applied. 8.5.20 Following Kable, the High Court considered the Kable principle in North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146. That case concerned a challenge to the appointment of the Chief Magistrate in the Northern Territory. The Chief Magistrate had been appointed pursuant to the Magistrates Act (NT) until the statutorily prescribed age of 65 years. However, his remuneration was set only for his first 2 years in office on the basis of an understanding between Mr Bradley and the Northern Territory [page 976]

Government that he would only stay for 2 years. His appointment was challenged by the Legal Aid Service on the basis that the Magistrates Act was invalid ‘in so far as it authorised the appointment of a Chief Magistrate to age 65 but with remuneration fixed only for the first two years of the term’: 218 CLR at 161. Kable was relied on to argue that the appointment and remuneration provisions deprived the court of independence and impartiality. The court rejected the application but accepted the arguments about Ch III. McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ made the following observations in response to the Legal Aid Service’s arguments on the implications to be derived from Ch III.

8.5.21C

North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146

McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ: Counsel for the Legal Aid Service put an argument in three steps. The first is that a court of the Territory may exercise the judicial power of the Commonwealth pursuant to investment by laws made by the parliament. That proposition, to which there was no demurrer by the Territory or by the Attorney-General of the Commonwealth who intervened in this Court, is supported by the citations of authority by Gaudron J in the above passage from Ebner v Official Trustee in Bankruptcy [(2000) 205 CLR 337]. It should be accepted. The second step in the Legal Aid Service’s argument is that it is implicit in the terms of Ch III of the Constitution, and necessary for the preservation of that structure, that a court capable of exercising the judicial power of the Commonwealth be and appear to be an independent and impartial tribunal. That proposition, which again appears in the passage from Ebner, also should be accepted. The difficulty arises with the third step. This requires discernment of the relevant minimum characteristic of an independent and impartial tribunal exercising the jurisdiction of the courts over which the Chief Magistrate presides. No exhaustive statement of what constitutes that minimum in all cases is possible.

8.5.22 Thus, although Kable dealt with state courts, these Ch III principles are equally applicable to territory courts. This position has been confirmed in Attorney- General (NT) v Emmerson

(2014) 253 CLR 393 and Northern Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16; [2015] HCA 41. Bradley also suggested that the Kable principles might apply not only to powers and functions conferred on judges, but also to their terms of appointment. 8.5.23 The court read the provisions in the Magistrates Act in such a way that placed an enforceable duty on the Administrator of the Northern Territory to always have a remuneration determination in place. Thus, prior to the expiry of the initial remuneration determination, the administrator was under a duty to make a further determination. On the facts in Bradley this had occurred. Thus, at no time during the appointment of the Chief Magistrate would there be a ‘hiatus where no determination was in operation’: 218 CLR at 170. On this construction of the Magistrates Act, the Kable argument had no foundation. In the course of reaching their conclusion, their Honours noted that no question arose in Bradley ‘respecting the effect upon [the] appearance of impartiality and the application of the Kable principle to a series of acting rather than full appointments which is so extensive as to distort the character of the [page 977] court concerned’: at 164 (an issue that was later considered in Forge v Australian Securities and Investments Commission (2006) 228 CLR 45).

Kable refined

8.5.24 Fardon v Attorney-General (Qld) (2004) 223 CLR 575 gave the High Court another opportunity to consider the Kable principles in relation to a statutory scheme not too dissimilar to that in Kable. Fardon concerned the Dangerous Prisoners (Sexual Offenders) Act 2003 (Qld), which authorises the Supreme Court of Queensland to order the continuing detention of a prisoner serving imprisonment for a serious sexual offence if the court forms the view that the person is a serious danger to the community: s 13(1). That serious danger is present where there is ‘an unacceptable risk that the prisoner will commit a serious sexual assault’: s 13(2). The court can only make the order if it is satisfied of the statutory requirement on the basis of ‘acceptable, cogent evidence’ and ‘to a high degree of probability’: s 13(3). In making its decision, the court is to have regard to a range of matters, including psychiatric and medical reports and assessments; information of any propensity or evidence of a pattern of behaviour; participation in rehabilitation programs; the risk that the prisoner would commit another serious sexual offence; and the need to protect the community. An order for continuing detention is subject to an appeal and to periodic reviews. There is also the power to order an interim detention order in advance of the hearing for the detention order application, and supervised release is a possible alternative to detention. The appellant had been imprisoned following a conviction for rape. Upon his release, he committed a further serious sexual offence and was convicted and sentenced to a further period of imprisonment. Shortly before his release from this further period of imprisonment, on the application of the Queensland Attorney-General, the Supreme Court made an interim detention order under the Dangerous Prisoners Act which returned him to prison. A majority of the

High Court (Kirby J dissenting) held that the detention regime did not violate the Kable principles. 8.5.25C

Fardon v Attorney-General (Qld) (2004) 223 CLR 575

Gleeson CJ: The decision in Kable established the principle that, since the Constitution established an integrated Australian court system, and contemplates the exercise of federal jurisdiction by state Supreme Courts, state legislation which purports to confer upon such a 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 … The members of the court in the majority considered that the appearance of institutional impartiality of the Supreme Court was seriously damaged by a statute which drew it into what was, in substance, a political exercise … The Act is a general law authorising the preventive detention of a prisoner in the interests of community protection. It authorises and empowers the Supreme Court to act in a manner which is consistent with its judicial character. It does not confer functions which are incompatible with the proper discharge of judicial responsibilities or with the exercise of judicial power. It confers a substantial discretion as to whether an order should be made, and if so, the type of order. If an order is made, it might involve either detention or release under supervision. The onus of proof is on the Attorney-General. The rules of evidence apply. [page 978] The discretion is to be exercised by reference to the criterion of

serious danger to the community. The court is obliged, by s 13(4) of the Act, to have regard to a list of matters that are all relevant to that criterion. There is a right of appeal. Hearings are conducted in public, and in accordance with the ordinary judicial process. There is nothing to suggest that the Supreme Court is to act as a mere instrument of government policy. The outcome of each case is to be determined on its merits … In some of the reasons in Kable, references were made to the capacity of the legislation there in question to diminish public confidence in the judiciary. Those references were in the context of a statute that was held to impair the institutional integrity of a court and involve it in an ad hominem exercise. Nothing that was said in Kable meant that a court’s opinion of its own standing is a criterion of validity of law. Furthermore, nothing would be more likely to damage public confidence in the integrity and impartiality of courts than judicial refusal to implement the provisions of a statute upon the ground of an objection to legislative policy. If courts were to set out to defeat the intention of parliament because of disagreement with the wisdom of a law, then the judiciary’s collective reputation for impartiality would quickly disappear. This case involves no question of the interpretation of an ambiguous statute, or of the application of the common law. It concerns a specific challenge to the validity of a state law on the ground that it involves an impermissible attempt to resolve a certain kind of problem through the state’s judicial process. McHugh J: Does the Act compromise the institutional integrity of the Supreme Court of Queensland? With great respect to those who hold the contrary view, nothing in the Act or the surrounding circumstances gives any ground for supposing that the jurisdiction conferred by the Act compromises the institutional integrity of the Supreme Court of Queensland. Nothing in the Act gives any ground for concluding that it impairs the institutional capacity of the Supreme Court to exercise federal

jurisdiction that the Federal Parliament has invested or may invest in that court. Nothing in the Act might lead a reasonable person to conclude that the Supreme Court of Queensland, when exercising federal jurisdiction, might not be an impartial tribunal free of governmental or legislative influence or might not be capable of administering invested federal jurisdiction according to law. It is a serious constitutional mistake to think that either Kable or the Constitution assimilates state courts or their judges and officers with federal courts and their judges and officers. The Constitution provides for an integrated court system. But that does not mean that what federal courts cannot do, state courts cannot do. Australia is governed by a federal, not a unitary, system of government. … Nor is there anything in the Constitution that would preclude the states from legislating so as to empower non-judicial tribunals to determine issues of criminal guilt or to sentence offenders for breaches of the law. The Queensland Parliament has power to make laws for ‘the peace welfare and good government’ of that state. That power is preserved by s 107 of the Commonwealth Constitution. Those words give the Queensland Parliament a power as plenary as that of the Imperial Parliament. They would authorise the Queensland Parliament, if it wished, to abolish criminal juries and require breaches of the criminal law to be determined by non-judicial tribunals. The content of a state’s legal system and the structure, organisation and jurisdiction of its courts are matters for each state. If a state legislates for a tribunal of accountants to hear and determine ‘white collar’ crimes or for a tribunal of psychiatrists to hear and determine cases involving mental health issues, nothing in Ch III of the Constitution [page 979]

prevents the state from doing so. Likewise, nothing in Ch III prevents a state, if it wishes, from implementing an inquisitorial, rather than an adversarial, system of justice for state courts. The powers conferred on the Queensland Parliament by s 2 of the Constitution Act 1867 (Q) are, of course, preserved subject to the Commonwealth Constitution. However, no process of legal or logical reasoning leads to the conclusion that, because the Federal Parliament may invest state courts with federal jurisdiction, the states cannot legislate for the determination of issues of criminal guilt or sentencing by non-judicial tribunals. The bare fact that particular state legislation invests a state court with powers that are or jurisdiction that is repugnant to the traditional judicial process will seldom, if ever, compromise the institutional integrity of that court to the extent that it affects that court’s capacity to exercise federal jurisdiction impartially and according to federal law. State legislation may alter the burden of proof and the rules of evidence and procedure in civil and criminal courts in ways that are repugnant to the traditional judicial process without compromising the institutional integrity of the courts that must administer that legislation. State legislation may require state courts to exercise powers and take away substantive rights on grounds that judges think are foolish, unwise or even patently unjust. Nevertheless, it does not follow that, because state legislation requires state courts to make orders that could not be countenanced in a society with a Bill of Rights, the institutional integrity of those courts is compromised … Conclusions In my opinion, Kable does not govern this case. Kable is a decision of very limited application. That is not surprising. One would not expect the states to legislate, whether by accident or design, in a manner that would compromise the institutional integrity of their courts. Kable was the result of legislation that was almost unique in the history of Australia. More importantly,

however, the background to and provisions of the Community Protection Act pointed to a legislative scheme enacted solely for the purpose of ensuring that Mr Kable, alone of all people in New South Wales, would be kept in prison after his term of imprisonment had expired. The terms, background and parliamentary history of the legislation gave rise to the perception that the Supreme Court of that state might be acting in conjunction with the New South Wales Parliament and the executive government to keep Mr Kable in prison. The combination of circumstances which gave rise to the perception in Kable is unlikely to be repeated. The Kable principle, if required to be applied in future, is more likely to be applied in respect of the terms, conditions and manner of appointment of state judges or in circumstances where state judges are used to carry out non-judicial functions, rather than in the context of Kable-type legislation. In this case, it is impossible to conclude that the Queensland Parliament or the executive government of that state might be working in conjunction with the Supreme Court to continue the imprisonment of the appellant. Nor is it possible to conclude that the Act gives rise to a perception that the Supreme Court of Queensland might not render invested federal jurisdiction impartially in accordance with federal law. The Act is not directed to a particular person but to a class of persons that the parliament might reasonably think is a danger to the community. Far from the Act giving rise to a perception that the Supreme Court of Queensland is acting in conjunction with the Queensland Parliament or the executive government, it shows the opposite. It requires the Court to adjudicate on the claim by the executive that a prisoner is ‘a serious danger to the community’ in accordance with the rules of evidence and ‘to a high degree of probability’. Even if the court is satisfied that there is an unacceptable risk that the prisoner will commit a serious sexual offence if released from custody, the court is not required

[page 980] to order the prisoner’s continued detention or supervised release. Furthermore, the court must give detailed reasons for its order, reasons that are inevitably subject to public scrutiny. It is impossible to hold, therefore, that the Queensland Parliament and the executive government intend that the appellant’s imprisonment should continue and that they have simply used the Act ‘to cloak their work in the neutral colors of judicial action’. On the contrary, the irresistible conclusion is that the Queensland Parliament has invested the Supreme Court of Queensland with this jurisdiction because that court, rather than the Parliament, the executive government or a tribunal such as a Parole Board or a panel of psychiatrists, is the institution best fitted to exercise the jurisdiction. Gummow J: In the written submissions, the Victorian Solicitor-General essays the principle for which Kable is authority in a fashion which in its essentials should be accepted. First, it was a particular combination of features of the NSW Act that led to its invalidity. These included the apparent legislative plan to conscript the Supreme Court of New South Wales to procure the imprisonment of the appellant by a process which departed in serious respects from the usual judicial process. Secondly, the essential notion is that of repugnancy to or in compatibility with that institutional integrity of the state courts which bespeaks their constitutionally mandated position in the Australian legal system … Thirdly, one important indication that a particular law has the character just stated is that the exercise of the power or function in question is calculated, in the sense of apt or likely, to undermine public confidence in the courts exercising that power or function. The relationship between institutional integrity and public confidence in the administration of justice was discussed, in strongly disapproving any judicial participation in ‘plea

bargaining’, by the Full Court of the Supreme Court of Victoria in R v Marshall [[1981] VR 725 at 733–4]. However, although in some of the cases considering the application of Kable, institutional integrity and public confidence perhaps may have appeared as distinct and separately sufficient considerations, that is not so. Perception as to the undermining of public confidence is an indicator, but not the touchstone, of invalidity; the touchstone concerns institutional integrity. Fourthly, the notions of repugnancy and incompatibility appear elsewhere in constitutional doctrine. Examples are provided by the interaction between Imperial law and colonial and state law before the enactment of s 3 of the Australia Act 1986 (Cth), between federal and Territory laws, and between statute and delegated legislation. A closer, if inexact, analogy is provided by the constitutional restriction on the availability of Ch III judges to perform non-judicial functions as designated persons. But, in that last category, as with Kable and the present case, the critical notions of repugnancy and incompatibility are insusceptible of further definition in terms which necessarily dictate future outcomes. For example, in the joint judgment in Northern Australian Aboriginal Legal Aid Service Inc v Bradley, there was reserved for consideration elsewhere ‘the application of Kable to a series of acting rather than full [judicial] appointments which is so extensive as to distort the character of the court concerned’ … Conclusions Emphasis already has been given in these reasons to the consideration that, while the outcome contemplated and authorised by the Act, the making of a continuing detention order under s 13, could not be attained in the exercise of federal jurisdiction by any court of a state, this circumstance itself cannot dictate a conclusion of repugnancy and incompatibility and therefore of invalidity of the Act.

[page 981] On the other hand, the particular preventative detention regime established by the Act cannot be said to bestow upon the Supreme Court a function which ‘is an integral part of, or is closely connected with, the functions of the Legislature or the Executive Government’. Rather, the regime is sui generis in nature. That, other things being equal, supports the case by the respondent that no incompatibility in the necessary sense is to be found. Mention also should be made of several matters of significance which, taken together with others, support the case in opposition to the appellant’s attack on the validity of s 13 of the Act. First, the factum upon which the attraction of the Act turns is the status of the appellant to an application by the Attorney-General as a ‘prisoner’ … who is presently detained in custody upon conviction for an offence of the character of those offences of which there is said to be an unacceptable risk of commission if the appellant be released from custody. To this degree there remains a connection between the operation of the Act and anterior conviction by the usual judicial processes. A legislative choice of a factum of some other character may well have imperilled the validity of s 13 …

8.5.26 His Honour then emphasised that what is vital to validity here is the requirement for regular reviews; that there are specified legal criteria for the court to consider; and that the court’s determination of the statutory question is to be reached to a high degree of satisfaction and independently of any ‘instruction, advice or wish of the legislative or executive branches of government’. His Honour concluded that the appellant had failed ‘to establish the necessary impairment of the institutional integrity of the Supreme

Court by reason of repugnancy or incompatibility of the Act, in particular s 13 of the statute’: 223 CLR at 621. Although such a provision could be enacted by a state legislature, his Honour emphasised that such a law would be beyond the power of the Commonwealth Parliament: 223 CLR at 608, 614. Hayne J agreed with the reasons of Gummow J except on the question of whether the Commonwealth Parliament could pass a similar law. His Honour reserved that question for further consideration: 223 CLR at 647–8. In a joint judgment, Callinan and Heydon JJ rejected the Kable argument, holding that the Act was designed to achieve a legitimate non-punitive purpose ‘with due regard to a full and conventional judicial process, including unfettered appellate review’: 223 CLR at 658. The state court was ‘not called upon to act and decide, effectively as the alter ego of the legislature or the executive’: it undertook a ‘genuine adjudicative process’ and its ‘integrity and independence as a court’ were not compromised: 223 CLR at 656. 8.5.27

In dissent, Kirby J said (223 CLR at 631–2):

There are five features in the Act which, combined, indicate an attempted imposition upon the judges of the Supreme Court of Queensland of functions repugnant to Ch III of the federal Constitution as explained in Kable. These features severally authorise the Supreme Court, contrary to traditional judicial process in Australia, to order: (1) the civil commitment of a person to a prison established for the reception of prisoners, properly so-called; (2) the detention of that person in prison, in the absence of a new crime, trial and conviction and on the basis of the assessment of future re-offending, not past offences; (3) the imprisonment of the person in circumstances that do not conform to established principles relating to civil judicial

commitment for the protection of the public, as on a ground of mental illness;

[page 982] (4) the imposition of additional judicial punishment on a class of prisoners selected by the legislature in a manner inconsistent with the character of a court and with the judicial power exercised by it; and (5) the infliction of double punishment on a prisoner who has completed a sentence judicially imposed by reference, amongst other things, to the criterion of that person’s past criminal conduct which is already the subject of final judicial orders that are (or shortly will be) spent at the time the second punishment begins.

In his Honour’s view, their cumulative effect brought the Act into conflict with the Kable principle. His Honour concluded with a caution that the court had diluted the Kable principle (223 CLR at 646): The principle in Kable was a wise and prudent one, defensive of judicial independence in Australia and concerned with much more than Mr Kable’s liberty. I dissent from the willingness of this Court, having stated the principle, now repeatedly to lend its authority to the confinement of the application of the principle. This has been done virtually to the point where the principle itself has disappeared at the very time when the need for it has greatly increased, as this case shows.

8.5.28 The judgments in Fardon focused the criterion for the operation of the Kable incompatibility doctrine on ‘institutional integrity’. All the majority judges identified ‘institutional integrity’ as the test for applying the Kable incompatibility doctrine. Both

Bradley and Fardon saw ‘institutional integrity’ as a measure of the court’s independence and impartiality. Other ideas like public confidence and deficiencies in curial processes, although indicators of institutional integrity, were not seen as central conceptions. 8.5.29 In Bradley, the joint judgment had left open the question of the application of Kable to the practice of appointing acting judges to state courts. The point was again highlighted by Gummow J in Fardon. McHugh J in Fardon said that if Kable were to be applied in future, it would be more likely ‘to be applied in respect of the terms, conditions and manner of appointment of state judges’. The question of acting judges arose for consideration in Forge v Australian Securities and Investments Commission (2006) 228 CLR 45. 8.5.30 Forge concerned various New South Wales Supreme Court proceedings that had been heard by the Hon Michael Leader Foster who had been appointed to the New South Wales Supreme Court as an acting judge pursuant to s 37 of the Supreme Court Act 1970 (NSW). Prior to his appointment to the New South Wales Supreme Court, Foster AJ had been a judge of the Federal Court of Australia. He was appointed to the Supreme Court for four successive 12-month periods from 1999 to 2002. In the third of these periods, Foster AJ heard the proceedings in question, and in the fourth period he delivered his judgment. Section 37 allows for the appointment of acting judges for periods not exceeding 12 months. Persons eligible for appointment include persons entitled to be appointed as Supreme Court judges and persons who are or have been Federal Court judges or judges of Supreme Courts of other states or territories. The question for the court was whether Foster AJ’s appointment was valid. It was

argued by the applicants that the practice of appointing acting judges had become so extensive that the institutional integrity of the court has become impaired. A majority of the court (Kirby J dissenting) rejected the challenge, however there were significant differences in the approaches of the majority judgments to the practice of appointing acting judges. [page 983]

8.5.31C

Forge v Australian Securities and Investments Commission (2006) 228 CLR 45

Gummow, Hayne and Crennan JJ: Because Ch III requires that there be a body fitting the description ‘the Supreme Court of a state’, it is beyond the legislative power of a state so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description. One operation of that limitation on state legislative power was identified in Kable. The legislation under consideration in Kable was found to be repugnant to, or incompatible with, ‘that institutional integrity of the state courts which bespeaks their constitutionally mandated position in the Australian legal system’. The legislation in Kable was held to be repugnant to, or incompatible with, the institutional integrity of the Supreme Court of New South Wales because of the nature of the task the relevant legislation required the Court to perform. At the risk of undue abbreviation, and consequent inaccuracy, the task given to the Supreme Court was identified as a task where the court acted as an instrument of the executive. The consequence was that the court, if required to perform the task, would not be an appropriate recipient of

invested federal jurisdiction. But as is recognised in Kable, Fardon v Attorney-General (Qld) and North Australian Aboriginal Legal Aid Service Inc v Bradley [(2004) 218 CLR 146 at 164], the relevant principle is one which hinges upon maintenance of the defining characteristics of a ‘court’, or in cases concerning a Supreme Court, the defining characteristics of a state Supreme Court. It is to those characteristics that the reference to ‘institutional integrity’ alludes. That is, if the institutional integrity of a court is distorted, it is because the body no longer exhibits in some relevant respect those defining characteristics which mark a court apart from other decision-making bodies. It is neither possible nor profitable to attempt to make some single all-embracing statement of the defining characteristics of a court. The cases concerning identification of judicial power reveal why that is so. An important element, however, in the institutional characteristics of courts in Australia is their capacity to administer the common law system of adversarial trial. Essential to that system is the conduct of trial by an independent and impartial tribunal. It by no means follows, however, that the only means of securing an independent and impartial Supreme Court is to require that the court is made up of none other than full-time permanent judges with security of tenure. This proposition, cast in absolute and universal terms, is not fundamentally different from a proposition that a state Supreme Court must be constituted by judges who have the same security of tenure as s 72 of the Constitution provides in respect of the Justices of this Court and of the other courts created by the parliament. Yet Ch III makes no explicit reference to the appointment, tenure or remuneration of judges of state courts. Rather, s 71 refers to ‘such other courts as it [the parliament] invests with federal jurisdiction’, s 77(iii) speaks of ‘investing any court of a state with federal jurisdiction’, and s 73 makes a number of references to the ‘Supreme Court’ of a state. Questions of appointment, tenure and remuneration of judges of state courts are dealt with

in Ch III only to whatever extent those subjects are affected by the identification of the repositories of invested federal jurisdiction as ‘any court of a state’ and the identification of a court from whose judgments, decrees, orders and sentences an appeal may lie to this court as ‘the Supreme Court of [a] state’. As explained in Ebner v Official Trustee in Bankruptcy [(2000) 205 CLR 337 at 345 (Gleeson CJ, McHugh, Gummow and Hayne JJ)], effect has been given to the fundamental importance which is attached to the principle that a court must be independent and impartial by the development and application of the apprehension of bias principle. Even the appearance of departure from the principle that the tribunal must be independent and impartial is prohibited [page 984] lest the integrity of the judicial system be undermined. As further explained in Ebner, the apprehension of bias principle admits of the possibility of human frailty and its application is as diverse as human frailty. Thus when reference is made to the institutional ‘integrity’ of a court, the allusion is to what The Oxford English Dictionary describes as ‘[t]he condition of not being marred or violated; unimpaired or uncorrupted condition; original perfect state; soundness’. Its antithesis is found in exposure, or the appearance of exposure, to human frailties of the kinds to which reference was made in Ebner. In applying the apprehension of bias principle to a particular case, the question that must be asked is whether a judicial officer might not bring an impartial mind to the resolution of a question in that case. And that requires no prediction about how the judge will in fact approach the matter. Similarly, if the question is considered in hindsight, the test is one which requires no conclusion about what factors actually influenced the outcome which was reached in the case. No attempt need be made to

inquire into the actual thought processes of the judge; the question is whether the judge might not (as a real and not remote possibility rather than as a probability) bring an impartial mind to the resolution of the relevant question. The apprehension of bias principle has its application in particular cases. No unthinking translation can be made from the detailed operation of the apprehension of bias principle in particular cases to the separate and distinct question about the institutional integrity of a court. But the apprehension of bias principle is one which reveals the centrality of considerations of both the fact and the appearance of independence and impartiality in identifying whether particular legislative steps distort the character of the court concerned. [Their Honours then considered that s 37 does not authorise ‘the appointment of so few persons as judges, and so many to act as judges, as would permit the conclusion that the court was predominantly, or chiefly, composed of acting judges’. That interpretation was said to proceed from ‘an unstated premise about what constitutes a “court”’, either on the premise that ‘a court, or at least the Supreme Court, of a state must principally be constituted by permanent judges (who have tenure of the kind for which the Act of Settlement provided: appointment during good behaviour for life, or now, until a set retirement age, with no diminution of remuneration during tenure)’ or the more abstract premise ‘that the courts, and in particular the Supreme Court, of a state must be institutionally independent and impartial’: 228 CLR at 79. Their Honours favoured this second premise, as it reflected the more general premise identified by the court in Bradley that courts capable of exercising federal jurisdiction must be and appear to be independent and impartial. Their Honours noted that the mechanisms for achieving that independence and impartiality and, thus, institutional impartiality, may vary according to the place of the court in the judicial hierarchy. Thus, state courts of summary jurisdiction, which were not historically composed of judges, need not

be composed in such a way to satisfy the constitutional requirements of independence and impartiality.] The independence and impartiality of inferior courts, particularly the courts of summary jurisdiction, was for many years sought to be achieved and enforced chiefly by the availability and application of the Supreme Court’s supervisory and appellate jurisdictions and the application of the apprehension of bias principle in particular cases. But by contrast, the independence and impartiality of a state Supreme Court cannot be, or at least cannot so readily be, achieved or enforced in that way. Rather the chief institutional mechanism for achieving those ends, in the case of the Supreme Courts, has been the application of Act of Settlement terms of appointment to the Court’s judges coupled with rules about judicial immunity … [page 985] [However, the question for their Honours was ‘whether Act of Settlement terms of appointment for all judges constituting a state Supreme Court are essential to the institutional integrity of those courts’: 228 CLR at 83. Their Honours held that the appointment of acting judges did not necessarily result in an impairment of the court’s institutional integrity. And, the point at which institutional integrity might be impaired was not to be assessed by a quantitative criterion. There may be good reasons, their Honours thought, why acting judges are appointed (for example, absence because of sickness or other good reason or embarrassment). To hold that no acting judges could be appointed would have particular adverse consequences for smaller state courts. A quantitative criterion for determining validity would render these circumstances irrelevant. Indeed, their Honours thought, the identification of a quantitative criterion would be arbitrary. Of more relevance, their Honours thought, are the considerations that go to the fact and appearance of independence and impartiality (for example, who

has been appointed, for how long, to do what and for what reasons). In that respect, the appointment of some persons as acting judges might have a greater adverse impact on independence and impartiality than the appointment of other persons.] The person in active practice may be thought by some to be concerned about prospects of future permanent appointment, or about the effect of what is done while an acting judge upon resumption of practice at the end of the period of appointment. The person who holds some other judicial office may be thought to be concerned about prospects of promotion to the Supreme Court. The retired judge may be thought to be concerned about the prospect of being able to continue to act as a judge beyond retirement and beyond the statutory retiring age with its consequences for continued professional engagement and enjoyment of a larger income … Kable demonstrates that the institutional integrity of the court must be preserved and that the preservation of that institutional integrity operates as a limit upon state legislative power. The institutional integrity of state Supreme Courts is not inevitably compromised by the appointment of an acting judge. But the institutional integrity of the body may be distorted by such appointments if the informed observer may reasonably conclude that the institution no longer is, and no longer appears to be, independent and impartial as, for example, would be the case if a significant element of its membership stood to gain or lose from the way in which the duties of office were executed. [The position would be different, their Honours thought, where the appointment was of a serving or retired judge of another Supreme Court or of a retired Federal Court judge for a limited time.] There are circumstances, perhaps many circumstances, in which appointing a serving judge of the Supreme Court of one state to act as a judge of the Supreme Court of another state for a limited time (as, for example, to hear a matter in which the permanent

judges of the court would be embarrassed) could, of itself, have no adverse effect on the institutional integrity of the court. It could have no adverse effect on the institutional integrity of the court because the person appointed in the circumstances described would have nothing to gain and nothing to fear. Prospects of permanent appointment or reappointment as an acting judge would be irrelevant. As a serving judge of another court, the appointee would return to the duties of that office when the task in hand had been performed … The appointment of a retired judge of the Federal Court or an interstate Supreme Court in the particular circumstances just described could likewise have no adverse effect on the institutional integrity of the court. It could have no adverse effect because, again, the [page 986] appointment being made in the unusual circumstances of all (or most) permanent judges being embarrassed, and limited to the hearing of one case, the person appointed would have nothing to gain and nothing to fear from the performance of the task confided in that person. Because the circumstances of appointment are unusual and the appointment is limited, there is no immediate prospect of reappointment.

8.5.32 Even the appointment of persons in active practice might be justified by necessity. Thus, for their Honours, it was a question of looking at the circumstances that impacted upon the real and perceived independence and impartiality of the court. Although their Honours accepted the point made in Bradley that ‘there may come a point where the series of acting rather than full

appointments is so extensive as to distort the character of the court’ (228 CLR at 87), those parties claiming invalidity in Forge had not established that that point had been reached. Gleeson CJ (with Callinan J agreeing) was less enthusiastic about the possibility of challenging the appointment of acting judges. His Honour agreed that ‘courts’ in Ch III must ‘satisfy minimum requirements of independence and impartiality’: state legislation would be contrary to Ch III if it ‘attempted to alter the character of a state Supreme Court in such a manner that it no longer satisfied those minimum requirements’: at 67–8. However, tenure and guaranteed remuneration as required for federal judges by s 72 of the Constitution was not essential for states courts. Gleeson CJ said (228 CLR at 680): State legislation which empowers the Governor of a state to appoint acting judges to a state Supreme Court does not, on that account alone, deprive the body of the character of a court, or of the capacity to satisfy the minimum requirements of judicial independence. Before and since Federation, such legislation has been common. Minimum standards of judicial independence are not developed in a vacuum. They take account of considerations of history, and of the exigencies of government. There are sound practical reasons why state governments might need the flexibility provided by a power to appoint acting judges. Judicial independence and impartiality is secured by a combination of institutional arrangements and safeguards … [A]cting Judges of the Supreme Court of New South Wales are appointed by the same authority as appoints permanent Judges; they take the same judicial oath; they may be removed only by the Governor on an address of both Houses of Parliament; and their remuneration is fixed by an independent tribunal. They are now subject to the scrutiny of the Judicial Commission of New South Wales and the Independent Commission Against Corruption …

8.5.33 His Honour then noted that any concern about acting judges acting out of self-interest would be generally dealt with by standards of professional behaviour in the same way that similar concerns would be dealt with concerning permanent judges acting in light of promotion prospects. His Honour said (228 CLR at 69): It is possible to imagine extreme cases in which abuse of the power conferred by s 37 could so affect the character of the Supreme Court that it no longer answered the description of a court or satisfied the minimum requirements of independence and impartiality. It is, however, a basic constitutional principle that the validity of the conferral of a statutory power is not to be tested by reference to ‘extreme examples and distorting possibilities’. Possible abuse of power is rarely a convincing reason for denying its existence.

[page 987] 8.5.34 Heydon J explored the historical practice of state governments appointing acting judges both before and after federation. The word ‘court’ in Ch III was drafted against the background of that historical practice and ‘contemplates the validity of state legislation permitting the appointment of acting judges’: at 149. As to whether the extent of appointments had affected the court’s independence and impartiality, his Honour held that the applicants had not produced sufficient evidence to support that claim. His Honour agreed with Gummow, Hayne and Crennan JJ ‘that the numbers of judges appointed alone cannot be decisive and that it is necessary to consider why they have been appointed and what safeguards are in place to protect judicial independence and impartiality’: at 150. By contrast, Kirby J concluded that s 37 was invalid. Kirby J stated (at 228 CLR at 94):

In my opinion, the number and type of acting appointments made under the impugned provisions of s 37 … are such as to amount to an impermissible attempt to alter the character of the Supreme Court. They attempt to work a change in a fundamental respect forbidden by the federal Constitution. What was intended as a statutory provision for occasional and exceptional additions to judicial numbers, in special circumstances, has become a means for an institutional alteration that is incompatible with the role of the state courts, particularly the Supreme Court. It has made the courts beholden to the Executive for regular short-term reappointments of core numbers of the judiciary. This is offensive to basic constitutional principle … The time has come for this Court to draw a line and to forbid the practice that has emerged in New South Wales, for it is inimical to true judicial independence and impartiality. When viewed in context, the acting judicial commission in question in these proceedings was not an ad hoc, special one for particular purposes. When the line is crossed, this Court should say so. It should not postpone the performance of its role as guardian of the Constitution. The challenge to the validity of the legislation should be upheld.

8.5.35 Accordingly, the principles guiding the application of the Kable doctrine have become clearer since Kable was decided. The ‘touchstone’ of the doctrine is now accepted to be ‘institutional integrity’, a concept now seen as alluding, at least, to the characteristics of ‘independence’ and ‘impartiality’ which are said to be essential for a court to have in order to meet the constitutional description of a ‘court’: see Dziedzic, 2007, p 129. Consequently, a law that fails the test of institutional integrity would undermine the state/territory court’s essential characteristics of independence and impartiality and, thus, be invalid.

Independence and impartiality

8.5.36 In International Finance Trust Co Ltd v NSW Crime Commission (2009) 240 CLR 319, the High Court considered the validity of provisions in the Criminal Asset Recovery Act 1990 (NSW) (CAR Act) authorising the issue of restraining orders against the property of persons suspected of having engaged in serious crime. Section 10(2) of the Act provided that the New South Wales Crime Commission could apply to the New South Wales Supreme Court for a restraining order. Section 10(3) provided that the court ‘must’ make the order applied for where the application was supported by an affidavit of an authorised officer stating that the officer suspected that the person had engaged in serious crime, and the court was satisfied that there were reasonable grounds for the suspicion. The application was to be heard by the court on an ex parte basis. It was required to determine the application in the absence of the affected party and there was no opportunity for that order to be challenged by the affected party or set aside once made. [page 988] 8.5.37 The validity of the restraining order provision in s 10 was challenged on the basis that it breached the Kable principle. A narrow majority of the court (French CJ, Gummow, Heydon and Bell JJ; Hayne, Crennan and Kiefel JJ dissenting) considered that the provisions breached the Kable requirements. There were, however, three layers to the majority view. 8.5.38C International Finance Trust Co Ltd v NSW Crime Commission (2009) 240 CLR 319

French CJ: The validity of s 10 The separation of legislative, executive and judicial powers reflected in the structure of Chs I, II and III of the Constitution does not prevent the Commonwealth Parliament from passing a law which has the effect of requiring a court exercising federal jurisdiction to make specified orders if certain conditions are met. If the satisfaction of a condition enlivening the court’s statutory duty depends upon a decision made by a member of the executive branch of government, it does not necessarily follow that the parliament has thereby authorised the Executive to infringe impermissibly upon the judicial power [Palling v Corfield (1970) 123 CLR 52 at 58–9 per Barwick CJ, 62 per McTiernan J, 64–5 per Menzies J, 65 per Windeyer J agreeing with other members of the court, 67 per Owen J, 69–70 per Walsh J, 70 per Gibbs J]. On the other hand, parliament cannot direct courts exercising federal jurisdiction as to the manner and outcome of the exercise of that jurisdiction. As was pointed out in Chu Kheng Lim v Minister for Immigration [(1992) 176 CLR 1], that would constitute an impermissible intrusion into the judicial power which Ch III vests exclusively in the courts which it designates [(1992) 176 CLR 1 at 36 per Brennan, Deane and Dawson JJ]. In Nicholas v The Queen [1998) 193 CLR 173 at 188], Brennan CJ observed that the acceptance of instructions from the legislature to exercise judicial power in a particular way was inconsistent with the duty to act impartially. Gaudron J said that the essential character of a court and the nature of judicial power necessitate that a court not be required or authorised to proceed in a manner that does not ensure, inter alia, the right of a party to meet the case made against him or her [at 208]. Gummow J put it thus [at 232]: The legislative powers of the Commonwealth do not extend to the making of a law which authorises or requires a court

exercising the judicial power to do so in a manner which is inconsistent with its nature. As his Honour said, quoting from a judgment of Windeyer J [R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 394], the concept of judicial power and that of impermissible intrusions upon the manner and outcome of its exercise ‘transcends “purely abstract [353] conceptual analysis” and “inevitably attracts consideration of predominant characteristics”, together with “comparison with the historic functions and processes of courts of law”.’ [(1998) 193 CLR 173 at 233] His Honour again touched upon the question in APLA Ltd v Legal Services Commissioner (NSW) [(2005) 224 CLR 322 at 411] when he accepted that: … a law may not validly require or authorise the courts in which the judicial power of the Commonwealth is vested to exercise judicial power in a manner which is inconsistent with the essential character of a court or with the nature of judicial power. Whether that proposition could be subsumed in a concept of ‘due process’ was left open. [page 989] In Bodruddaza v Minister for Immigration and Multicultural Affairs [(2007) 228 CLR 651], this court noted that the Minister did not dispute that if s 486A of the Migration Act 1958 (Cth), which was then under challenge, ‘had the character of a law which purported to direct the manner in which the judicial power of the Commonwealth should be exercised, it would be invalid’ [at 669]. The court referred to the judgment in Chu Kheng Lim as demonstrating the point [at 669–70].

In their joint judgment in Thomas v Mowbray [(2007) 233 CLR 307 at 355], Gummow and Crennan JJ observed that the decisions of this court had not gone so far as to imply something like a ‘due process’ requirement from the text and structure of Ch III. I would add that the term ‘due process’, imported from another constitutional setting, should be treated with some caution in relation to Ch III. Whether a more general implication may emerge from Ch III than has hitherto been made, and how it should be designated, is a matter for another day. It is sufficient, for the present, to accept as a proposition that which Gummow and Crennan JJ accepted, albeit as a working hypothesis, when they said in Thomas [at 355]: … it may be accepted for present purposes that legislation which requires a court exercising federal jurisdiction to depart to a significant degree from the methods and standards which have characterised judicial activities in the past may be repugnant to Ch III. The plaintiff in that case argued that provisions of Div 104 of the Criminal Code (Cth) providing for the issue of interim control orders were invalid. One of the grounds of the asserted invalidity was that ‘Div 104 provides for the routine making of interim control orders depriving a person of liberty on an ex parte basis and without notice’ [(2007) 233 CLR 307 at 312 (R Merkel QC in argument)]. Gummow and Crennan JJ rejected that contention on the basis that [at 355]: … ex parte applications are no novelty, and the scheme of the legislation … is to provide in the very short term for a contested confirmation hearing if the person in question wishes to proceed in that way. The question whether Div 104 required a court to proceed ex parte upon receipt of a request for the issue of an interim control order was not agitated.

Chu Kheng Lim, Nicholas and Thomas were concerned with courts exercising federal jurisdiction and the question whether duties or functions were imposed upon them which were inconsistent with their independence from the legislative and executive branches of government. Although it is right to say, as was recognised in Kable, that the Constitution provides for an integrated national court system, that does not mean that State courts or their judges and officers are to be assimilated with federal courts and their judges and officers [see Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 598 per McHugh J]. On the other hand, as McHugh J explained in Kable: … in some situations the effect of Ch III of the Constitution may lead to the same result as if the State had an enforceable doctrine of separation of powers. This is because it is a necessary implication of the Constitution’s plan of an Australian judicial system with State courts invested with federal jurisdiction that no government can act in a way that might undermine public confidence in the impartial administration of the judicial functions of State courts. [page 990] Procedural fairness or natural justice lies at the heart of the judicial function. In the federal constitutional context, it is an incident of the judicial power exercised pursuant to Ch III of the Constitution. It requires that a court be and appear to be impartial, and provide each party to proceedings before it with an opportunity to be heard, to advance its own case and to answer, by evidence and argument, the case put against it. According to the circumstances, the content of the requirements of procedural fairness may vary. When an ex parte application for interlocutory relief is made the court, in the ordinary course, has a discretion whether or not to hear the application without notice to the party

to be affected. In exercising that discretion it will have regard to the legitimate interests of the moving party which have to be protected, whether there is likely to be irrevocable damage to the interests of the affected party if the order is made, and what provision can be made for the affected party to be heard to have the order discharged or varied after it has been made. In so saying, it is not intended to suggest that an official cannot validly be authorised by statute to bring an application ex parte to a federal court or to a state or territory court capable of exercising federal jurisdiction. The CAR Act takes the further step of requiring the Supreme Court to hear and determine such an application ex parte. To require a court, as s 10 does, not only to receive an ex parte application, but also to hear and determine it ex parte, if the Executive so desires, is to direct the court as to the manner in which it exercises its jurisdiction and in so doing to deprive the court of an important characteristic of judicial power. That is the power to ensure, so far as practicable, fairness between the parties. The possibility that a statutorily mandated departure from procedural fairness in the exercise of judicial power may be incompatible with its exercise was considered in Leeth v The Commonwealth [(1992) 174 CLR 455]. Mason CJ, Dawson and McHugh JJ said [(1992) 174 CLR 455 at 470]: It may well be that any attempt on the part of the legislature to cause a court to act in a manner contrary to natural justice would impose a non-judicial requirement inconsistent with the exercise of judicial power, but the rules of natural justice are essentially functional or procedural and, as the Privy Council observed in the Boilermakers’ Case, a fundamental principle which lies behind the concept of natural justice is not remote from the principle which inspires the theory of separation of powers (footnote omitted). In my opinion the power conferred on the Commission to choose, in effect, whether to require the Supreme Court of New South

Wales to hear and determine an application for a restraining order without notice to the party affected is incompatible with the judicial function of that Court. It deprives the Court of the power to determine whether procedural fairness, judged by reference to practical considerations of the kind usually relevant to applications for interlocutory freezing orders, requires that notice be given to the party affected before an order is made. It deprives the court of an essential incident of the judicial function. In that way, directing the court as to the manner of the exercise of its jurisdiction, it distorts the institutional integrity of the court and affects its capacity as a repository of federal jurisdiction. The preceding conclusion involves a judgment about the quality of the Executive’s intrusion, sanctioned by the legislature, into the judicial function. It is not to the point to say that in many, if not most cases of such applications, the Supreme Court would be likely, if it had the discretion, to hear and determine them ex parte. It is likely that, before deciding to proceed ex parte, the court would first determine that procedural fairness could be accorded by provision for discharge on application. Alternatively, it might make the order limited in time [page 991] so that the applicant would have to justify its continuation. Nor is it to the point to say that the particular intrusion upon the judicial function authorised by s 10 is confined in scope and limited in effect both in time and by the facility to seek ancillary or exclusion orders. Such a calculus will not accord sufficient significance to the quality of the intrusion upon the judicial function. An accumulation of such intrusions, each ‘minor’ in practical terms, could amount over time to death of the judicial function by a thousand cuts. … In my opinion, s 10 is invalid. Although the authority it

confers on the Commission to make ex parte applications subsumes the authority to make applications on notice, assumed in other provisions of the CAR Act, it cannot sensibly be read down to limit its operation to applications on notice. That operation is inextricably linked to the express authority which it confers and which, for the reasons outlined, thus spells invalidity. Such a reading down would impose a judicial gloss on the section at odds with its text. [Gummow and Bell JJ contrasted restraining orders under s 10 with similar confiscation provisions in the United Kingdom which allowed the affected party the opportunity to have them later set aside:] Gummow and Bell JJ: The scheme of the restraining order provisions of the Act is quite different, not the least with respect to the absence of a clear means of curial supervision of the duty to disclose material facts on ex parte applications. The importance of that duty in the administration of justice is to be seen from the reasons given by Lingdren J in Hayden v Teplitzky [(1997) 74 FCR 7 at 11–13] for discharging certain assets preservation orders which had been made on an ex parte application. The English system described above clearly allows for the prompt enforcement of that duty … The Supreme Court is conscripted for a process which requires in substance the mandatory ex parte sequestration of property upon suspicion of wrong doing, for an indeterminate period, with no effective curial enforcement of the duty of full disclosure on ex parte applications. … Section 10 engages the Supreme Court in activity which is repugnant in a fundamental degree to the judicial process as understood and conducted throughout Australia. [Heydon J also considered the provisions to be invalid, but on a slightly different basis:]

Heydon J: The central issue. If there is no procedure by which the person subject to a s 10(2) restraining order made ex parte may approach the court to have it set aside once that person has learnt of the order, the effect of s 10 is to compel the Supreme Court of New South Wales to engage in activity which is repugnant to the judicial process in a fundamental degree. The element which is repugnant is not the grant of a power to make restraining orders ex parte. That is a very well-known aspect of Australian judicial process in relation to injunctions, although the power should only be exercised in exceptional or special cases, where there is some special hazard or cause of urgency. A risk of dissipation of assets in such a fashion as to frustrate the objects of the law can be in that category. Nor is the element which is repugnant the creation of a duty on the Court to make the order, if the conditions in s 10(3) are satisfied. That too is a well-known aspect of Australian judicial process. Nor is the element which is repugnant to be found in the failure of the legislation to give the Court power to consider whether the circumstances are sufficiently extreme to justify a [page 992] grant of ex parte relief or whether the order, if made, should be limited so as to last only for a short time. That is because that failure will cause little injustice if a wrongly made order is only made for a short time or can be dissolved speedily. The repugnance arises if the legislation ensures that there is no facility for the Court to entertain an application to dissolve an ex parte restraining order once the defendant has received notice of its grant pursuant to s 11(2). If that facility existed, the potential injustice flowing from the preceding three characteristics of s 10 would be nullified or mitigated. But if it does not exist, there is

the potentiality for extreme injustice in a fashion repugnant to the judicial process in a fundamental degree. The crucial question is thus whether it is possible for a defendant to apply for speedy dissolution of the ex parte restraining order. The answer is ‘No’. The Act does not expressly or implicitly grant defendants that facility. And its structure excludes it.

8.5.39 Thus, the Chief Justice considered the provisions were invalid because the court was required to determine an application on an ex parte basis. In other words, there was no discretion. Accordingly, the provisions directed the manner in which the power was to be exercised and, therefore, undermined the court’s institutional integrity. In their joint judgment, Gummow and Bell JJ considered the offensive part of the scheme to be the inability of the court to look behind the affidavit put forward supporting the restraining order and to test the evidence. For Gummow and Bell JJ that was repugnant to the judicial process in a fundamental degree. The fourth majority judge — Heydon J — also considered the legislation to be repugnant to the judicial process in a fundamental degree because the affected party was completely denied the opportunity to be heard. For Heydon J the problem was not that it was an ex parte application, or that the court was required to hear it. Nor was the problem that the court could not go behind the affidavit. The problem was the lack of opportunity for the affected party to have it later set aside. The dissenting judges took the view that the affected person could come before the court to challenge the order and could challenge the evidence. On that basis, there was no danger to the institutional integrity of the court: at 377–8.

8.5.40 In South Australia v Totani (2010) 242 CLR 1, the High Court considered a challenge to South Australian legislation empowering the South Australian Magistrates Court to issue control orders against members of declared criminal organisations. Subsection 10(1) of the Serious and Organised Crime (Control) Act 2008 (SA) (SOCC Act) authorised the Attorney-General, on the application of the Commissioner of Police, to make a declaration in relation to an organisation. Such a declaration could be made if the Attorney-General were satisfied that members of the organisation associated for criminal activity and the organisation represented a risk to public safety and order. Subsection 14(1) then required the Magistrates Court, on application by the commissioner, to make a control order against a person if the court were satisfied that the person was a member of a declared organisation. A person subject to a control order would be prevented from associating with other members of declared organisations, and from possessing certain dangerous items and prohibited weapons. The court could also impose control conditions prohibiting the person from associating or communicating with others and from being within the vicinity of certain premises. The High Court (with only Heydon J dissenting) held that s 14(1) was invalid. [page 993]

8.5.41C

South Australia v Totani (2010) 242 CLR 1

French CJ: Established as a court by the State, the

Magistrates Court cannot be deprived by the State ‘of those minimum characteristics of the institutional independence and impartiality identified in the decisions of this Court’ [KGeneration Pty Ltd (2009) 237 CLR 501 at 544 per Gummow, Hayne, Heydon, Crennan and Kiefel JJ]. For, as appears below, the continuing existence of those characteristics is an assumption which underlies Ch III of the Constitution … Section 14(1) represents a substantial recruitment of the judicial function of the Magistrates Court to an essentially executive process. It gives the neutral colour of a judicial decision to what will be, for the most part in most cases, the result of executive action. That executive action involves findings about a number of factual matters including the commission of criminal offences. None of those matters is required by the SOCC Act to be disclosed to the Court, nor is the evidence upon which such findings were based. In some cases the evidence, if properly classified as ‘criminal intelligence’, would not be disclosable. Section 14(1) impairs the decisional independence of the Magistrates Court from the executive in substance and in appearance in areas going to personal liberty and the liability to criminal sanctions which lie at the heart of the judicial function. I agree with the conclusion of Gummow J, Crennan and Bell JJ and Kiefel J that s 14(1) authorises the executive to enlist the Magistrates Court to implement decisions of the executive in a manner incompatible with that Court’s institutional integrity. I agree also with the conclusion reached by Hayne J about the operation of s 14(1) in permitting the executive to enlist the Magistrates Court for the purpose of applying special restraints to particular individuals identified by the executive as meriting application for a control order and the repugnancy of that function to the institutional integrity of the court. In the exercise of the function conferred on it by s 14(1), the Magistrates Court loses one of its essential characteristics as a

court, namely, the appearance of independence and impartiality. In my opinion, s 14(1) is invalid … Gummow J: The making of a control order under s 14(1) against a defendant is not an adjudication of the criminal guilt of that person. But the order is made in aid of the important legislative objective spelled out in s 4(1) of protecting members of the public from violence associated with organisations involved in ‘serious crime’, and the order creates a norm of conduct breach of which is attended by the criminal sanction in s 22. Further, it is the executive branch which not only initiates the process of the Magistrates Court, by the Commissioner making the application, but also has by its own processes under Pt 2 already achieved the result that there exists a vital circumstance, the existence of a declaration by the Attorney-General, upon which the Court now must act. The Court must be satisfied of the membership of the defendant, but, as already explained in these reasons, the defendant need not have engaged or be likely to engage in criminal activity. The operation of s 14(1) may be contrasted with that of the legislation the validity of which was upheld in Thomas v Mowbray. Section 104.4 of the Criminal Code (Cth) required, among other matters, that the court be satisfied on the balance of probabilities that the making of the interim control order ‘would substantially assist in preventing a terrorist act’ or that the person in question had ‘provided training to, or received training from, a listed terrorist organisation’, these being offences under ss 101.1 and 102.5 of the Criminal Code. There was no anterior determination by the executive branch which was an essential element [page 994] in the curial decision. The same is true of s 18 of the Criminal Organisation Act 2009 (Q), to which the Solicitor-General of that

State referred. It conditions the power of the court upon its satisfaction that the respondent engages in, or has engaged in, serious criminal activity … The place of s 14(1) in the scheme of the Act is that it supplements the exercise by the Attorney-General of the politically accountable function conferred by Pt 2 with respect to the declaration of organisations. But that supplementation involves the conscription of the Magistrates Court to effectuate that political function. This is achieved by obliging the Magistrates Court to act upon the declaration by the executive, by making a control order in respect of the defendant selected by the Commissioner, subject only to the satisfaction of the Magistrates Court that the defendant is a member of the declared organisation. It is the declaration by the executive which provides the vital circumstance and essential foundation for the making by the Magistrates Court of the control order … This court should accept the submission by the respondents that the practical operation of s 14(1) of the Act is to enlist a court of a state, within the meaning of s 77(iii) of the Constitution, in the implementation of the legislative policy stated in s 4 by an adjudicative process in which the Magistrates Court is called upon effectively to act at the behest of the AttorneyGeneral to an impermissible degree, and thereby to act in a fashion incompatible with the proper discharge of its federal judicial responsibilities and with its institutional integrity. Section 14(1) is invalid. Hayne J: In summary, then, s 14(1) requires the Magistrates Court to perform functions that have the following characteristics: (a) upon application by the Executive, the Magistrates Court must make a control order against a person who is shown to be a member of a declared organisation; (b) a control order imposes significant restrictions on the

defendant’s freedom of association, over and above the restrictions that are generally applicable to others dealing with members of declared organisations; (c) a control order must be imposed without any judicial determination (and without the need for any executive determination) that the defendant has engaged, or will or may engage, in criminal conduct; (d) a control order will preclude the defendant’s association with others in respect of whom there has been no judicial determination (and without the need for any executive determination) that those others have engaged, or will or may engage, in criminal conduct; (e) a control order creates new norms of conduct, contravention of which is a crime; (f) making a control order neither depends upon, nor has the consequence of, ascertaining, declaring or enforcing any existing right or liability, whether of the defendant, any other member of the subject organisation, the subject organisation itself, or any other organisation (declared or not). All of these features of the task that is given to the Magistrates Court are important to the conclusion that performance of that task is repugnant to, or incompatible with, the institutional integrity of the court. The task is repugnant to, or incompatible with, the institutional integrity of the court because the court is enlisted, by the executive, to make it a crime, for particular persons upon whom the Executive fixes, to associate together when, but for the court’s order, the act of association (as distinct from repeated and persistent associations of the kind with which s 35 deals) would not be a crime. Those whom the executive chooses, for the [page 995]

compulsory imposition of a special regime by order of the Magistrates Court, must be drawn from a group determined by the executive to be an organisation that ‘represents a risk to public safety and order in [the] State’ [s 10(1)(b)]. But it is no part of the function of the Magistrates Court under SOCCA to determine what the particular defendant has done, or may do in the future. The court is required to act on the assumption that ‘membership’ of a declared organisation requires imposition of limitations on the freedom of the defendant which are not otherwise imposed, when the legislation does not make either the fact of membership of the organisation, or the continued existence of the organisation, unlawful. That is, upon the motion of the executive, the court is required to create new norms of conduct, that apply to a particular member of a class of persons who is chosen by the executive, on the footing that the executive has decided that some among the class (who may or may not include the defendant) associate for particular kinds of criminal purposes. It is not the business of the courts, acting at the behest of the executive, to create such norms of conduct without inquiring about what the subject of that norm has done, or may do in the future. To be required to do so is repugnant to the institutional integrity of the courts. It is desirable to amplify a number of aspects of these points. Crennan and Bell JJ: These considerations show that, in conferring a power on the court to make control orders under s 14(1), the state requires the court to exercise judicial power to make a control order after undertaking an adjudicative process that is so confined, and so dependent on the Executive’s determination in the declaration, that it departs impermissibly from the ordinary judicial processes of an independent and impartial tribunal. Specifically, s 14(1) operates to draw the court into the implementation of the legislative policy expressed in the objects of the Act. The conditions upon which the court must make a control order require the court to give effect to the determination of the Executive in the declaration (which

implements the legislative policy), without undertaking any independent curial determination, or adjudication, of the claim or premise of an application for a control order by the Commissioner of Police, that a particular defendant poses risks in terms of the objects of the Act. This has the effect of rendering the court an instrument of the executive, which undermines its independence. Section 14(1) requires the Magistrates Court of South Australia to act in a way which is incompatible with its constitutional position and the proper discharge of federal judicial responsibilities, and with its institutional integrity. [Kiefel J reached similar conclusions. Heydon J dissented.]

8.5.42 A Kable challenge was also raised in Momcilovic v R (2011) 245 CLR 1 to provisions of the Victorian Charter of Human Rights and Responsibilities Act 2006. Sections 32 and 36 of the Charter provide the Victorian judiciary with two mechanisms to safeguard human rights. The first is the interpretative rule contained in s 32(1) that requires Victorian statutory provisions to be interpreted in a way that is compatible with human rights, ‘[s]o far as it is possible to do so consistently with their purpose’. Subsection 36(2) then empowers the Victorian Supreme Court to make a declaration of incompatibility: ‘[I]f in a proceeding the Supreme Court is of the opinion that a statutory provision cannot be interpreted consistently with a human right, the Court may make a declaration to that effect in accordance with this section’. The making of such a declaration has no impact on the validity of the provisions in question or the rights and duties of the parties: s 36(5). Instead, the Supreme Court is to provide a copy of the declaration to the Attorney-General (s 36(6)) and the

minister administering the statute in question is to prepare a written response for the Victorian Parliament: s 37. [page 996] 8.5.43 Ms Momcilovic had been charged with an offence of trafficking in a drug of dependency in s 71AC of the Drugs, Poisons and Controlled Substances Act 1981 (Vic). Section 73(2) of that Act provides that the unauthorised possession of a certain quantity of a controlled drug is prima facie evidence of trafficking. Section 5 of the Act provides that ‘any substance shall be deemed for the purposes of this Act to be in the possession of a person so long as it is upon any land or premises occupied by him …, unless the person satisfies the court to the contrary’. A quantity of drugs in excess of the trafficable amount was found at Ms Momcilovic’s apartment. The trial court and the Victorian Court of Appeal held that s 5 operated to reverse the legal burden of proof, with the Court of Appeal concluding that such an interpretation resulted in a breach of the human right to the ‘presumption of innocence’ provided for in s 25(1) of the Charter. Not being able to interpret the provision consistently with that human right, the Court of Appeal made a declaration of incompatibility. 8.5.44 There were a number of Ch III issues considered in Momcilovic, but the one presently relevant was whether the interpretive rule and the declaration of inconsistency, as powers and functions conferred on the Supreme Court, were inconsistent with an exercise of Commonwealth judicial power and, thus, in breach of the Kable principle. The case involved multiple layers of complexity, and the conclusions on the Kable challenge depended,

in part, on the view taken by each judge on other Ch III issues. However, in broad terms, the interpretive rule in s 32(1) was considered by six judges (Heydon J dissenting) to involve an ordinary interpretive process and, thus, was not in any risk of invalidity under Kable. The outcome was much closer for the declaration power in s 36(2). A majority of the court (French CJ, Gummow, Hayne, Heydon and Bell JJ) considered that the declaration was neither judicial in nature nor incidental thereto. However, the Kable question was whether it was incompatible with an exercise of judicial power, and a tight majority (French CJ, Crennan, Kiefel and Bell JJ; Gummow, Hayne and Heydon JJ dissenting) held that the declaration survived invalidity. The majority judges focused on the institutional integrity test: in making the declaration, the court was acting with independence and impartiality. The court was free from executive influence and was not being enlisted by the executive to give effect to a predetermined conclusion. 8.5.45C

Momcilovic v R (2011) 245 CLR 1

French CJ: As explained in this court in a line of decisions beginning with Kable, the placement of the courts of the states in the integrated national judicial system created by Ch III of the Constitution constrains the range of functions which can be conferred upon those courts. They cannot be authorised or required to do things which substantially impair their institutional integrity and which are therefore incompatible with their role as repositories of federal jurisdiction [Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 96 per Toohey J, 103 per Gaudron J, 116–119 per McHugh J, 127–8 per Gummow J; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 591 per

Gleeson CJ]. Legislation impairs the institutional integrity of a court if it confers upon it a function which is repugnant to or incompatible with the exercise of the judicial power of the Commonwealth [Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103 per Gaudron J, 134 per Gummow J; Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 617 per Gummow J, 628 per Kirby J]. In particular, a state legislature cannot enact a law conferring upon a state [page 997] court or a judge of a state court a non-judicial function which is substantially incompatible with the judicial functions of that court [Wainohu v New South Wales (2011) 243 CLR 181 at 210 per French CJ and Kiefel J, 228–9 per Gummow, Hayne, Crennan and Bell JJ]. The constraints which Ch III imposes upon state legislatures in relation to the courts of the states do not have the effect that state legislatures are deprived of power to determine the constitution and organisation of state courts [South Australia v Totani (2010) 242 CLR 1 at 45–6 per French CJ and cases there cited]. Professor Enid Campbell rightly cautioned against overprotective applications of the incompatibility doctrine which pay insufficient attention to ‘the assessments of elected parliaments about what functions are appropriate for courts to perform’. [Campbell, ‘Constitutional Protection of State Courts and Judges’ (1997) 23 Monash University Law Review 397 at 421]. The power conferred upon the Supreme Court of Victoria to make a declaration of inconsistent interpretation is, for the reasons already set out, a distinct non-judicial power. It provides a mechanism by which the Court can direct the attention of the legislature, through the Executive Government of Victoria, to disconformity between a law of the State and a human right set

out in the Charter … The making of the declaration does not affect the court’s judicial function. It is consistent with the existing constitutional relationship between the Court, the legislature and the Executive. The metaphor of ‘dialogue between the three arms of the government’ has been used to describe the interaction between the Supreme Court, the executive and the legislature for which the Charter provides [Victoria, Legislative Assembly, Parliamentary Debates (Hansard), 4 May 2006 at 1290]. The metaphor is inapposite. At best, it distracts from recognition of the subsisting constitutional relationship between the three branches of government. At worst, it points misleadingly in the direction of invalidity. It is true that the court, in making a declaration under s 36(2), may be seen as announcing that its decision in the proceedings is based upon an interpretation of the law which is inconsistent with a human right. That is a human right which, according to the Charter, parliament specifically seeks to protect and promote. The making of the declaration, however, does no more than manifest, in a practical way, the constitutional limitations upon the court’s role and the fact that it is parliament’s responsibility ultimately to determine whether the laws it enacts will be consistent or inconsistent with human rights. The court must decide the cases which come before it according to law. If the parliament has enacted a valid law which cannot be interpreted consistently with a human right, the court must nevertheless decide the case according to that law and not according to its view of what the law should be, whether by reference to the protection of human rights or otherwise. There is no distinction in principle to be drawn in this respect between civil and criminal proceedings which would render a declaration of inconsistent interpretation inappropriate in the latter class of case. A declaration of inconsistent interpretation does not infringe upon the constraints derived from Ch III of the Constitution. By exemplifying the proper constitutional limits of the court’s

functions it serves to reinforce, rather than impair, the institutional integrity of the court. Crennan and Kiefel JJ: Section 36(2) of the Charter does not oblige the Supreme Court to make a declaration. Whether it does so is a discretionary matter for the decision of the court. The only requirement imposed on the court is to ensure notice is given if a declaration is in contemplation [s 36(3) and (4)] and, if one is made, to cause a copy of the declaration to be given to the Attorney-General [s 36(6)]. But this is not to enlist the court to give effect to any pre-determined conclusion on the part of the legislature or the executive, as was the case in Totani. The making of a declaration is not a function having a close connection with the executive or the legislature. It is made independently of any ‘instruction, advice or wish of the [page 998] Legislature or the Executive Government’ [Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 17]. The declaration here was made by the Court of Appeal (albeit erroneously as will shortly be explained), as the result of its own, independent, assessment … The process by which the Court of Appeal here reached its conclusion of inconsistency cannot be said to involve functions which are incompatible with, or antithetical to, judicial power. The process involves an ordinary interpretive task. The content of the declaration cannot be a cause for concern. It merely records a finding of inconsistency … It does not answer a question directed to the court, as to the validity of legislation, as was the case in Re Judiciary and Navigation Acts. The court does not purport to advise as to law reform. It is not unknown for judges to incidentally pass comments upon conclusions they have reached

about defects in legislation in the course of their reasons. Doing so in the course of a permissible exercise of judicial power is ‘a function properly regarded as incidental to the exercise of the power’ [Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 20, fn 68]. However, that function is not a function which, if it were undertaken independently of the exercise of ‘a principal judicial duty’ [Steele v Defence Forces Retirement Benefits Board (1955) 92 CLR 177 at 187], might be said to ‘belong to an administrator’ [Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 151; see also R v Davison (1954) 90 CLR 353 at 368]. The form of the process under s 36(2) does not alter that analysis.

8.5.46 There were two strong dissents: Gummow J (with Hayne J agreeing) and Heydon J. Gummow J considered that the court was being required to give an advisory opinion to the executive government: it was required to engage in the first step of a law reform process — and that was a matter for the executive and legislature. Heydon J expressed his conception of the limitation in even stronger terms — courts are limited to judicial functions according to the judicial process. This was neither judicial nor incidental thereto. For further analysis of the issues in Momcilovic, see Bateman and Stellios, 2012. 8.5.47 In Attorney-General (NT) v Emmerson (2014) 253 CLR 393, the High Court considered the validity of s 36A of the Misuse of Drugs Act (NT) which, on application of the Director of Public Prosecutions, required the Northern Territory Supreme Court to declare a person to be a ‘drug trafficker’ if the person had been convicted of certain drug-related offences in the previous 10 years. On the making of such a declaration, s 94(1) of the Criminal

Property Forfeiture Act (NT) operated to forfeit all property owned, controlled or given away by the declared drug trafficker. The court (Gageler J writing separately and not considering the challenge) held that there was no contravention of the Kable principle. 8.5.48C

Attorney-General (NT) v Emmerson (2014) 253 CLR 393

French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ: The error alleged by the appellants in the reasoning of the majority in the Court of Appeal is expressed in the notice of appeal as: ‘holding that the statutory scheme comprised by the interoperation of s 36A … and s 94 … is invalid because the scheme enlists the Supreme Court of the Northern Territory to give effect to executive decisions and/or legislative policy in a manner which undermines its institutional [page 999] integrity in a degree incompatible with its role as a repository of federal jurisdiction.’ The incompatibility referred to is identified in Kable, a case which considered the involvement of a Supreme Court in a decision-making process concerning detention. The principle for which Kable stands is that because the Constitution establishes an integrated court system, and contemplates the exercise of federal jurisdiction by State Supreme Courts [s 77(iii)], State legislation which purports to confer upon such a court a power or function which substantially impairs the court’s institutional integrity, and which is therefore incompatible with that court’s role as a repository of federal jurisdiction, is constitutionally invalid.

In Mistretta v United States [(1989) 488 US 361 at 407], the fundamental nature of judicial independence and the relationship between institutional integrity and impartiality were identified by the Supreme Court of the United States: The legitimacy of the Judicial Branch ultimately depends on its reputation for impartiality and nonpartisanship. That reputation may not be borrowed by the political Branches to cloak their work in the neutral colors of judicial action. Ultimately the inquiry in respect of a function or process bestowed upon, or required of, a court was ‘whether [it] undermines the integrity of the Judicial Branch’ [at 404]. The ad hominem legislation in Kable (the stated object of which was ‘to protect the community’) authorised the Supreme Court of New South Wales to order preventive detention without any breach of the law being alleged or any adjudication of guilt. A majority of this Court found that task incompatible with the institutional integrity of the Supreme Court because the legislation drew the Court into implementing what was essentially a political decision or government policy that Mr Kable should be detained, without the benefit of ordinary judicial process. This Court has subsequently confirmed that Kable applies beyond its extraordinary circumstances to the Supreme Courts of the Territories and to all State and Territory courts as Ch III courts. Some mention should be made of the authorities in this Court, after Kable, which were relied upon in argument in this appeal. By comparison with Kable, in Fardon v Attorney-General (Qld) [(2004) 223 CLR 575], legislation of general application authorising the continued detention or supervised release of prisoners who were ‘a serious danger to the community’ was upheld as valid. This was because the adjudicative process required of the State Supreme Court in that case supported the maintenance of the institutional integrity of the Court and the adjudicative process required could be performed

‘independently of any instruction, advice or wish of the legislative or executive branches of government’. Since Kable, it has been stated often that a court must satisfy minimum requirements of independence and impartiality, even though it is not possible to make a single statement embracing all of the defining characteristics of a court. In the context of the arguments advanced in this appeal, it is worth repeating the wellestablished proposition that independence and institutional impartiality mark a court apart from other decision-making bodies. A legislature which imposes a judicial function or an adjudicative process on a court, whereby it is essentially directed or required to implement a political decision or a government policy without following ordinary judicial processes, deprives that court of its defining independence and institutional impartiality. This was exemplified in International Finance Trust Co Ltd v NSW Crime Commission [(2009) 240 CLR 319]. Section 10 of the Criminal Assets Recovery Act 1990 (NSW) required the Supreme Court of New South Wales to hear and determine an application, made ex parte, for a restraining order in respect of property, if a law enforcement officer suspected that the owner of the property had committed one of a range of crimes or that the property in question derived from criminal activity. [page 1000] Members of the majority in this Court found that s 10 conscripted the Supreme Court into a process incompatible with, and repugnant in a fundamental degree to, the judicial function of the Court and ordinary judicial processes. … In South Australia v Totani [(2010) 242 CLR 1], the legislation under consideration was directed to the making of control orders. Section 14(1) of the Serious and Organised Crime (Control) Act 2008 (SA) provided that, on application by a member of the Executive (the Commissioner of Police), the Magistrates Court of

South Australia was required to make a ‘control order’ against a defendant if satisfied the defendant was a member of a ‘declared organisation’, without the need to determine, by ordinary judicial processes, whether the defendant engaged in, or had engaged in, serious criminal activity. A ‘declared organisation’ was an organisation that was subject to an anterior declaration by another member of the Executive (the Attorney-General). By majority, s 14(1) was held invalid on the ground that it authorised the ‘enlistment’ or ‘recruitment’ of the Magistrates Court to implement the decisions of the Executive in a manner incompatible with the proper discharge of its federal judicial responsibilities and its institutional integrity (153). … The impugned provisions are compatible with the constitutional requirements imposed on a Ch III court because they do not require the Northern Territory Supreme Court to give effect to any decision made by the Executive, here the DPP. This is demonstrated by the powers, and concomitant duties, conferred on the Supreme Court, the role of the DPP, and the judicial processes required to be undertaken to give effect to the statutory scheme. Section 36A authorises and empowers the Supreme Court to make a declaration that a person is a drug trafficker if the conditions attached to the power are satisfied. It is well established that Australian legislatures can empower courts to make specified orders if certain conditions are satisfied, even if satisfaction of such conditions depends on a decision, or application, made by a member of the Executive. … Such provisions are not, for that reason alone, taken to trespass on the judicial function or to be impermissibly determinative of the outcome of an exercise of jurisdiction. In selecting the Supreme Court as the repository of a power to determine a particular fact or status, in the absence of any express or implicit contrary legislative intention, it can be inferred that Parliament accepts that the power will be exercised in

accordance with standards characterising ordinary judicial processes. That attack is based on a misconception of the Supreme Court’s powers and duties under the statutory scheme. The Supreme Court is authorised to determine whether the statutory criteria set out are satisfied and, if they are, the Court must make the declaration sought. The Forfeiture Act provides the consequences which follow from the Supreme Court’s declaration. Together, these steps are an unremarkable example of conferring jurisdiction on a court to determine a controversy between parties which, when determined, will engage stated statutory consequences. That the controversy is initiated by an officer of the Executive, the DPP, does not deprive the Supreme Court of its independence. The DPP’s decision to make an application to the Supreme Court in respect of an individual … is a discretionary decision, similar to the well-recognised prosecutorial discretion to decide who is to be prosecuted and for what offences (170). … The role of the DPP in the statutory scheme reflects no more than procedural necessity in the adversarial system. Unlike the position in Kable, the statutory scheme is not directed ad hominem. The Supreme Court is not required to make any order providing for the further detention of any person who is alleged to meet the statutory criteria. … [page 1001] A declaration can only be made by the Supreme Court on receipt of evidence sufficient to satisfy the civil standard of proof in respect of a person’s requisite number of past convictions. There is nothing in the statutory scheme which indicates that the determination to be made by the Supreme Court is to be undertaken other than in open court, in circumstances where an

affected party has a right to be heard, may have legal representation, and may make submissions and receive reasons. That the determination of whether the statutory criteria are satisfied may readily be performed, because of the ease of proof of the criteria, does not deprive the process of its judicial character. The effect of a declaration is the creation of a legal status for the purposes of the Misuse of Drugs Act, reflecting the satisfaction of the statutory criteria. As submitted by the AttorneyGeneral of the State of Queensland intervening, which submission should be accepted, there is nothing in the statutory scheme which would inhibit a judge making a declaration from treating the expression ‘drug trafficker’ as the reflex of the statutory criteria set out, and recording that the declaration is made for the purposes of the Misuse of Drugs Act. The usual rights of appeal subsist in respect of the making of any declaration.

8.5.49 There have been other unsuccessful Kable challenges. In Pollentine v Bleijie (2014) 253 CLR 629, the court rejected a challenge to Queensland provisions authorising the Governor-inCouncil, on the recommendation of medical practitioners, to decide when a sexual offender should be released from prison. In Kuczborski v Queensland (2014) 254 CLR 51, the court considered the validity of Queensland criminal offences applying to members of declared criminal organisations, an element of which was the declaration made by regulation. No breach of Kable was found (Hayne J dissenting); however, at least for Crennan, Kiefel, Gageler and Keane JJ (223 CLR at 121–2), that conclusion was reached because the defendant could establish a defence that the criminal organisation did not pose the threat that provided the foundation for the legislative declaration in the first place. Consequently, the criminal court retained the capacity to test the fact-finding underlying the declaration by regulation, albeit that

the onus of proof had been reversed. In Duncan v Independent Commission Against Corruption (2015) 89 ALJR 835; [2015] HCA 32, the court upheld the validity of New South Wales provisions that deemed to be valid certain actions taken by the Independent Commission Against Corruption. The High Court had earlier held in Independent Commission Against Corruption v Cunneen (2015) 89 ALJR 475; [2015] HCA 14 that certain actions of the commission were beyond power and the impugned provisions in Duncan were designed to validate those actions. The High Court in Duncan held that there was no breach of a court’s institutional integrity. The impugned provisions retrospectively altered the substantive law ‘which was to be applied by the courts in accordance with their ordinary processes’: 89 ALJR at [28] per French CJ, Kiefel, Bell and Keane JJ. 8.5.50 Kable was also raised in Hogan v Hinch (2011) 243 CLR 506. The Serious Sex Offenders Monitoring Act 2005 (Vic) creates a scheme for the ongoing supervision and monitoring of certain sex offenders in Victoria. On the application of the Secretary to the Department of Justice, the Victorian Supreme Court and County Court are empowered to make supervision orders against persons serving a custodial sentence for certain sex offences. Section 42 empowers a court to make a suppression order preventing the publication of certain information and makes it an offence for a person to breach a suppression order. Derryn Hinch was charged with breaching a suppression order by disclosing the identity of an offender [page 1002]

on a website and at a public protest. He challenged the validity of s 42 of the Act, partly on Kable grounds, arguing that s 42 impermissibly diminished the institutional integrity of the courts of Victoria. That challenge appeared to be advanced partly on the basis that the statutory test to be applied when exercising the power to make a suppression order (that is, ‘in the public interest’) was not susceptible of judicial application, and partly on the basis that Ch III requires state courts to be ‘open to the public and carry out their activities in public’. The challenge was rejected by the whole court, with the leading judgment delivered by Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ. Their Honours held (243 CLR at 551) that the test to be applied when making the suppression orders under s 42 (that is, ‘in the public interest’) was not ‘so indefinite as to be insusceptible of strictly judicial application’ (quoting R v Commonwealth Industrial Court; Ex parte The Amalgamated Engineering Union, Australian Section (1960) 103 CLR 368 at 383 per Kitto J). Furthermore, although it was accepted that, as a general rule, judicial proceedings must be conducted in public, there are exceptions. Consequently, it was held that there was no absolute proposition to be derived from Ch III that all courts must be open to the public, and the suppression provisions in this case did not ‘attack the institutional integrity of the state courts as independent and impartial tribunals’: 243 CLR at 554.

Procedural fairness 8.5.51 As French CJ said in International Finance Trust, it is well accepted that ‘[p]rocedural fairness or natural justice lies at the heart of the judicial function’: 240 CLR at 354. However,

accommodating the demands of procedural fairness within the Kable principle of institutional integrity has presented some challenges. In Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (2008) 234 CLR 532, the court considered the validity of provisions authorising the Western Australian Police Commissioner to issue a notice requiring the removal of fortification around premises if satisfied that they were being used for organised crime. Upon judicial review of such decisions by the Western Australian Supreme Court, the commissioner could identify information as ‘confidential’ if disclosure might prejudice police operations. The consequence was that such confidential information could not be disclosed by the court to any person, including the other party to the proceeding. The court (Kirby J dissenting) held that the provisions did not breach the Kable limitation. The Supreme Court was left free to determine for itself whether the information was ‘confidential’ in the relevant sense. Furthermore, although the other party might be denied access to the information, this was not necessarily offensive to the Kable standard of institutional integrity. There were other examples of courts denying parties access to information, including cases involving claims of public interest immunity, and patent and national security cases. Similar issues were raised in K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501 and the court responded in the same way. 8.5.52 The issue of procedural fairness was given its most extensive consideration in Assistant Commissioner Condon v Pompano (2013) 252 CLR 38. The Criminal Organisation Act 2009 (Qld) created a control order scheme whereby the Supreme Court of Queensland was empowered to issue control orders. On the application of the Police Commission, the Supreme Court was

empowered under s 10 of the Act to declare an organisation to be a ‘criminal organisation’ if satisfied that its members associated for criminal purposes and there was an unacceptable risk to the community. Once a declaration was made, the Supreme Court could then issue a control order against a member of the organisation. Before the hearing of the declaration application, the commissioner could apply under s 63(1) to the Supreme Court [page 1003] for a declaration that certain information was ‘criminal intelligence’: information that could prejudice a criminal investigation, enable the discovery of the identity of a confidential source or endanger a person’s life or safety. The application was to be considered by the court without notice to the other party. If a criminal intelligence declaration were made, then the court was to close the court for any part of the control order hearing in which that information was heard and exclude from the court anyone except the commissioner, his or her legal representatives, other law enforcement officers, the independent public interest monitor appointed under the Act and court staff. The court rejected a Kable challenge to these provisions. 8.5.53C Assistant Commissioner Condon v Pompano (2013) 252 CLR 38 Hayne, Crennan, Kiefel and Bell JJ: The arguments that [the Act’s] provisions dealing with criminal intelligence render s 10 invalid, though expressed in various ways, depended upon one central proposition: that Ch III of the Constitution puts beyond

the legislative power of a State any enactment that would permit a State Supreme Court to decide a disputable issue by reference to evidence or information of which one party does not know and to which that party can have no access whether personally or by a representative. The proposition admitted of no exception. Although reference was made to the special procedures that have long been adopted by State and other courts in dealing with matters such as evidence of trade secrets and some kinds of evidence in cases concerning children, these procedures were treated as depending upon the courts’ power (perhaps obligation) to permit access to the relevant material by at least the legal representatives of the parties. And inferentially if not explicitly, much of the argument appeared to proceed from the premise that cases of the kind described constitute a closed class of limited qualifications to an adversarial system to which no legislative addition could validly be made. That revelation of criminal intelligence could reasonably be expected to have consequences contrary to the public interest was treated as irrelevant to the issue of validity. The argument for invalidity asserted that in deciding any dispute a State Supreme Court must always follow an adversarial procedure by which parties (personally or by their representatives) know of all of the material on which the Court is being asked to make its decision. Otherwise, so it was asserted, there would be such a departure from procedural fairness that the institutional integrity of the Supreme Court would be impaired. Several observations must be made about this central proposition. First, it is absolute. Secondly, because it is absolute, it entrenches a particular form of adversarial procedure as a constitutionally required and defining characteristic of the State Supreme Courts. Thirdly, as will be seen, it seeks to found this result not in any particular constitutional text but in what is said to be the logical consequence of earlier decisions of this Court. Examination of this central proposition, which underpinned the

argument for invalidity, will demonstrate that it cannot be adopted. … The applicable principles The argument for invalidity depended upon the application of principles first stated in Kable v Director of Public Prosecutions (NSW) [(1996) 189 CLR 51] and later considered and applied in several cases including, in particular, Fardon v Attorney-General (Qld) [(2004) 223 CLR 575], Gypsy Jokers Motorcycle Club Inc v Commissioner of Police (WA) [(2008) 234 CLR 532], KGeneration Pty Ltd v Liquor Licensing Court [(2009) 237 CLR 501], [page 1004] International Finance Trust Co Ltd v New South Wales Crime Commission [(2009) 240 CLR 319], South Australia v Totani [(2010) 242 CLR 1] and Wainohu v New South Wales [(2011) 243 CLR 181]. The relevant principles have their roots in Ch III of the Constitution. As Gummow J explained [(2004) 223 CLR 575 at 617–619] in Fardon, the State courts (and the State Supreme Courts in particular) have a constitutionally mandated position in the Australian legal system. Once the notion is rejected, as it must be, that the Constitution ‘permits of different grades or qualities of justice’ [Kable (1996) 189 CLR 51 at 103 per Gaudron J], and it is accepted that the State courts have the constitutional position that has been described, it follows that ‘the Parliaments of the States [may] not legislate to confer powers on State courts which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth’ [ibid] (emphasis added). As Gummow J further pointed out [(2004) 223 CLR 575 at 617], and as is now the accepted doctrine of the

Court, ‘the essential notion is that of repugnancy to or incompatibility with that institutional integrity of the State courts which bespeaks their constitutionally mandated position in the Australian legal system’. Three further points must be made about this ‘essential notion’. First, ‘the critical notions of repugnancy and incompatibility are insusceptible of further definition in terms which necessarily dictate future outcomes’ [Fardon (2004) 223 CLR 575 at 618 [104] per Gummow J]. Secondly, the repugnancy doctrine ‘does not imply into the Constitutions of the States the separation of judicial power mandated for the Commonwealth by Ch III’ [Ibid at 614]. Thirdly, content must be given to the notion of institutional integrity of the State courts, and that too is a notion not readily susceptible of definition in terms which will dictate future outcomes. Something more must be said about the second and third points. Independence and impartiality are defining characteristics of all of the courts of the Australian judicial system. They are notions that connote separation from the other branches of government, at least in the sense that the State courts must be and remain free from external influence. In particular, the courts cannot be required to act at the dictation of the Executive. In this respect, clear parallels can be drawn with some aspects of the doctrines that have developed in relation to federal courts. But because the separation of judicial power mandated by Ch III does not apply in terms to the States, and is not implied in the constitutions of the States, there can be no direct application to the State courts of all aspects of the doctrines that have been developed in relation to Ch III. More particularly, the notions of repugnancy to and incompatibility with the continued institutional integrity of the State courts are not to be treated as if they simply reflect what Ch III requires in relation to the exercise of the judicial power of the Commonwealth. Two related consequences follow from these propositions and should be noted. First, in applying the notions of repugnancy and

incompatibility it may well be necessary to accommodate the accepted and constitutionally uncontroversial performance by the State courts of functions which go beyond those that can constitute an exercise of the judicial power of the Commonwealth. Secondly, the conclusions reached in this matter cannot be directly translated and applied to the exercise of the judicial power of the Commonwealth by a Ch III court. As pointed out by this Court in HA Bachrach Pty Ltd v Queensland [(1998) 195 CLR 547 at 562], the ‘occasion for the application of Kable does not arise’ if the impugned State law would not offend Ch III had it been enacted by the Commonwealth Parliament for a Ch III court. But because ‘[n]ot everything by way of decision-making denied to a federal judge is denied to a judge of a State’ [Fardon v Attorney-General (Qld) (2004) 223 CLR 575 at 656], that a State law does not infringe the principles associated with Kable does not conclude [page 1005] the question whether a like Commonwealth law for a Ch III court would be valid. It is not necessary for the resolution of this case to pursue those matters further. … It is convenient to begin consideration of the submissions about procedural fairness by reference to this Court’s decisions in Gypsy Jokers and K-Generation, in each of which … at least a majority of the Court upheld the legislation in question. In Gypsy Jokers, the Court considered the validity of s 76(2) of the Corruption and Crime Commission Act 2003 (WA) (the CCC Act). Under the CCC Act, the Commissioner of Police could issue a ‘fortification removal notice’ if the Commissioner reasonably believed that premises were heavily fortified and habitually used as a place of resort by members of a class a significant number of whom might reasonably be suspected to be involved in organised

crime. A person to whom a notice of that kind was directed could apply to the Supreme Court of Western Australia for review of the notice. Section 76(2) of the CCC Act restricted the information available to an applicant for review by providing that the Commissioner could identify information provided to the Supreme Court as confidential ‘if its disclosure might prejudice the operations of the Commissioner’. Information of that kind would then be for the Court’s use only. The appellant in Gypsy Jokers … submitted that, by allowing only the Court to have access to information which was found to be properly claimed as confidential, s 76(2) was beyond power because it was repugnant to or inconsistent with the continued institutional integrity of the Court. Crennan J (with whom Gleeson CJ agreed) explicitly rejected this submission. The plurality said [at 559] of the provision only that it had ‘an outcome comparable with that of the common law respecting public interest immunity, but with the difference that the Court itself may make use of the information in question’. The plurality said nothing to indicate that s 76(2), by allowing only the Court to have access to the confidential information, might, on that account, be of doubtful validity. Rather, the plurality’s conclusion in Gypsy Jokers proceeded from an acceptance that, as Crennan J rightly pointed out [at 595–596], ‘Parliament can validly legislate to exclude or modify the rules of procedural fairness’. The decision in Gypsy Jokers points firmly against accepting the central proposition advanced by those advocating invalidity of [the Act]. But lest it be said that the point was not dealt with expressly by a majority of the Court in Gypsy Jokers, it is as well to explore the issue further. In K-Generation, this Court unanimously upheld the validity of s 28A of the Liquor Licensing Act 1997 (SA). That provision required, on application by the Commissioner of Police, the Liquor and Gambling Commissioner, the Licensing Court of South Australia and the Supreme Court of South Australia to take steps to maintain the confidentiality of information classified by the Commissioner as criminal

intelligence. The Court held that s 28A was not repugnant to or incompatible with the continued institutional integrity of the relevant South Australian State courts because the courts could determine for themselves both whether the information met the definition of criminal intelligence in the Liquor Licensing Act and what steps to take to maintain the confidentiality of the information. The respondents submitted in this case that K-Generation can be distinguished because [the Act] prohibits the Supreme Court from giving a respondent (or a respondent’s representative) access to criminal intelligence whereas the Liquor Licensing Act allowed the courts to decide what steps should be taken to maintain confidentiality. Even assuming that to be so …, the relevant provisions of [the Act] are not invalid by reason only of this difference. No member of the Court in K-Generation said that the State courts’ ability to decide what steps to take to maintain confidentiality was necessary to validity. In K-Generation, the Court paid close attention to all of the relevant features of the Liquor Licensing Act, and a similarly close examination of [the Act] is required in this case. [page 1006] Procedural fairness and the judicial process The rules of procedural fairness do not have immutably fixed content. As Gleeson CJ rightly observed [Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 14] in the context of administrative decision-making but in terms which have more general and immediate application, ‘[f]airness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice’. To observe that procedural fairness is an

essential attribute of a court’s procedures is descriptively accurate but application of the observation requires close analysis of all aspects of those procedures and the legislation and rules governing them. Consideration of other judicial systems may be taken to demonstrate that it cannot be assumed that an adversarial system of adjudication is the only fair means of resolving disputes. But if an adversarial system is followed, that system assumes, as a general rule, that opposing parties will know what case an opposite party seeks to make and how that party seeks to make it. As the trade secrets cases show, however, the general rule is not absolute. There are circumstances in which competing interests compel some qualification to its application. And, if legislation provides for novel procedures which depart from the general rule described, the question is whether, taken as a whole, the court’s procedures for resolving the dispute accord both parties procedural fairness and avoid ‘practical injustice’. … [The Act] requires (s 8(2)) the Commissioner to give, as part of the application for a declaration of an organisation as a criminal organisation, detailed particulars of both the grounds for making the declaration and the information supporting those grounds. The operation of the criminal intelligence provisions will prevent a respondent and the respondent’s representatives knowing of one class of material that the Commissioner alleges supports the case for a declaration. In this respect [the Act] may be said to require departure from the usual incidents of an adversarial system of adjudication, but the nature and extent of that departure must be identified with some care. The procedural unfairness which it was said was worked by the criminal intelligence provisions of [the Act] was identified as being the denial to the respondent of any opportunity to test the criminal intelligence. But three points must then be made. First, if it is unfair to keep criminal intelligence from the respondent because the respondent cannot test its truth or reliability, it is not apparent how that unfairness could be cured by telling the respondent’s lawyer that the applicant intends to

rely on identified criminal intelligence. Yet argument of the present matter assumed that procedural fairness would be accorded if a lawyer representing a respondent organisation could be told what was the criminal intelligence upon which the applicant for a declaration relied. If told of the content of criminal intelligence to be proved in support of an application for a declaration of an organisation as a criminal organisation, what could the respondent’s lawyer do with that knowledge? The criminal intelligence is (s 59(1)) information relating to actual or suspected criminal activity. The lawyer could not seek or obtain instructions from anyone about the factual assertions made in that criminal intelligence. The lawyer could not, without disclosing the existence or content of the information constituting the criminal intelligence, ask any member of the respondent to comment on what the lawyer had been told. The lawyer could assemble no ammunition to launch an attack upon the veracity of a confidential source alleged to have provided criminal intelligence without disclosing that source’s existence. Unlike the commonplace case of evidence of a secret process or other confidential commercial information, the lawyer could not look to some independent third party expert to provide in confidence the means of testing the evidence. [page 1007] Secondly, s 72(2) of [the Act] expressly permits the Supreme Court, in exercising its discretion to declare information to be criminal intelligence, to have regard to whether the considerations of prejudice to criminal investigations, enabling discovery of the existence or identity of an informer or danger to anyone’s life or physical safety ‘outweigh any unfairness to a respondent’. No doubt it must be recognised that this discretion falls to be exercised before information is relied on for a substantive application (s 67), and thus must be exercised when all who may

be affected by the information may not be identified or identifiable. But fairness to a respondent is a matter to which the Supreme Court may have regard in deciding whether to declare information to be criminal intelligence. In many cases, including those where the respondent to a substantive application is known or can be ascertained, it is a matter to which the Court would be bound to have regard. The third point to be made is that the criminal intelligence provisions deny a respondent knowledge of how the Commissioner seeks to prove an allegation; they do not deny the respondent knowledge of what is the allegation that is made against it. As has already been shown, a respondent to an application for a declaration of an organisation as a criminal organisation, its representatives and those who are alleged to be its members will know from the application the case that the Commissioner seeks to make. If, as must always be the case, the Commissioner alleges that the organisation should be declared to be a criminal organisation because some or all of its members associate for the purpose of engaging in, or conspiring to engage in, serious criminal activity, the Commissioner will have had to provide particulars of the activity upon which the Commissioner relies, of those who are alleged to have engaged in that activity and of whether those persons are alleged to be or to have been members of the organisation. For all practical purposes, demonstration of association for the purposes described would be possible only if persons alleged to have then been members of the organisation were alleged to have engaged in relevant acts or omissions constituting serious criminal activity before the application for declaration of the organisation was made. Thus the Commissioner must allege and prove not only the occurrence of past serious criminal activity by persons who then were members of the organisation but also that members of the organisation associate for one or more of the identified purposes relating to that activity. The criminal activity upon which the Commissioner relies could

be demonstrated by proof of the previous prosecution and conviction of members for conduct constituting activity of the kind alleged. To the extent that it is, the respondent can dispute the conclusions which the Commissioner seeks to draw from those facts. (The respondent could also seek to dispute the fact that convictions were recorded but that possibility can be dismissed from consideration as unlikely to be practically relevant.) And to the extent that prior criminal activity is not established by proving the prior convictions of persons shown to have been members of the organisation at relevant times, the respondent, its members and its representatives would know that the case to be met is founded on assertions and allegations not yet made and established in a court. In deciding any application for declaration of an organisation as a criminal organisation, the Supreme Court would know that evidence of those assertions and allegations that constituted criminal intelligence had not been and could not be challenged directly. The Court would know that the respondent and its members could go no further than make general denials of any wrongdoing of the kind alleged. What weight to give to that evidence would be a matter for the Court to judge. Contrary to a proposition which ran throughout the respondents’ submissions in this case, noticing that the Supreme Court must take account of the fact that a respondent cannot [page 1008] controvert criminal intelligence does not seek to deny the allegation of legislative invalidity by asserting that the Supreme Court can be ‘relied on’ to remedy any constitutional infirmity or deficiency in the legislative scheme. Rather, it points to the fact that under the impugned provisions the Supreme Court retains its capacity to act fairly and impartially. Retention of the Court’s

capacity to act fairly and impartially is critical to its continued institutional integrity. … When it is said, as it was in this case, that there has been a departure from hitherto accepted forms of procedure and thus a departure from accepted judicial process, the significance of providing for some novel procedure must be measured against some standard or criterion. Consideration of the continued institutional integrity of the State courts directs attention to questions of independence, impartiality and fairness. In cases where it is said that the courts have been conscripted to do the Executive’s bidding, the principal focus will likely fall upon questions of independence and impartiality. But that is not and was not said to be this case. Where, as here, a novel procedure is said to deny procedural fairness, attention must be directed to questions of fairness and impartiality. Observing that the Supreme Court can and will be expected to act fairly and impartially points firmly against invalidity. … For these reasons, the impugned provisions of [the Act] are not repugnant to or inconsistent with the institutional integrity of the Supreme Court.

8.5.54 French CJ and Gageler J accepted that institutional integrity required the observance of procedural fairness, being also an essential characteristic of the Supreme Court, and that compliance with procedural fairness required the avoidance of practical injustice. For Gageler J, the provisions were spared from invalidity only because of the inherent jurisdiction of the Supreme Court to stay the control order proceeding in circumstances of practical unfairness. French CJ too considered the inherent jurisdiction of the Supreme Court to be important, and also took

account of the role of the public interest monitor appointed under the Act.

New directions for the Kable principles 8.5.55 The cases considered so far are within the traditional Kable framework of assessing whether functions or powers conferred on state courts are incompatible with an exercise of Commonwealth judicial power. The High Court’s decisions in Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531 and Wainohu v NSW (2011) 243 CLR 181 signal an extension and further development of the Kable principles. The appeals before the High Court in Kirk arose from certain convictions in the Industrial Court of New South Wales for offences against the Occupational Health and Safety Act 1983 (NSW). The convicted appellants (a corporation and its director) had applied to the New South Wales Court of Appeal for relief in the nature of certiorari to quash the convictions on the basis that the Industrial Court had fallen into jurisdictional error. However, there was within the state legislative scheme a privative clause providing that a ‘decision’ of the Industrial Court is ‘final and may not be appealed against, reviewed, quashed or called into question by any court or tribunal’. The Court of Appeal held that there was no jurisdictional error affecting the Industrial Court’s decision and, thus, questions concerning the operation of the privative clause did not arise. On appeal, having held that the decision of the Industrial Court was affected by jurisdictional error, the question for the High Court was whether the privative clause operated to prevent the Court of Appeal from issuing relief by way of certiorari.

[page 1009] 8.5.56 In Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476, the High Court held that a similar provision in Commonwealth legislation could not prevent the High Court from determining whether a Commonwealth officer’s decision was affected by jurisdictional error and issuing relief under s 75(v) of the Constitution: for a discussion of that case, see 8.3.39C. However, that conclusion drew support from the constitutional entrenchment of High Court jurisdiction in s 75(v) to hear matters in which a writ of mandamus or prohibition is sought against an officer of the Commonwealth. In Kirk, the High Court turned to the constitutional meaning of state Supreme Court in s 73 of the Constitution. The steps in its analysis were conveniently summarised in the following way. 8.5.57C Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531 French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ: (d) Chapter III of the Constitution requires that there be a body fitting the description ‘the Supreme Court of a State’ [Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76]. (e) It is beyond the legislative power of a State so to alter the constitution or character of its Supreme Court that it ceases to meet the constitutional description. (f) A defining characteristic of State Supreme Courts is the power to confine inferior courts and tribunals within the

limits of their authority to decide by granting relief in the nature of prohibition and mandamus, and, as explained further in these reasons, also certiorari, directed to inferior courts and tribunals on grounds of jurisdictional error. (g) If a court has limited powers and authority to decide issues of an identified kind, a privative provision does not negate those limits on that court’s authority. (h) A privative provision in State legislation, which purports to strip the Supreme Court of the State of its authority to confine inferior courts within the limits of their jurisdiction by granting relief on the ground of jurisdictional error, is beyond the powers of the State legislature. It is beyond power because it purports to remove a defining characteristic of the Supreme Court of the State.

8.5.58 Thus, in Kirk, the court extended the Plaintiff S157 outcome to state privative clauses in their application to state Supreme Courts. State parliaments cannot alter the constitution or character of their Supreme Courts so that they cease to meet the constitutional description of a ‘Supreme Court of a State’. The power ‘to confine inferior courts and tribunals within the limits of their authority to decide’ by granting prohibition, mandamus and certiorari on the grounds of jurisdictional error is a ‘defining characteristic of State Supreme Courts’ which cannot be removed by state parliaments. Construed against that constitutional background, the state privative clause could not exclude the jurisdiction of the New South Wales Supreme Court to grant certiorari for jurisdictional error. A ‘decision’ affected by jurisdictional error is not one to which the privative clause applies.

8.5.59 In Wainohu, the High Court considered the validity of New South Wales criminal organisation legislation — the Crimes (Criminal Organisations Control) Act 2009 (NSW). In broad terms, the legislation authorised the making of control orders by the New South [page 1010] Wales Supreme Court in relation to members of criminal organisations. The Act had a two-step process for the making of a control order. The first step was for the Commissioner of Police to apply to an eligible Supreme Court judge to make a declaration that an organisation be a ‘declared organisation’. Such declarations, made under Pt 2 of the Act, could be made where the judge was satisfied that the members of the organisation associated for the purposes of serious criminal activity and the organisation represented a risk to public safety and order. In making the declaration, the eligible Supreme Court judge was acting in his or her personal capacity, that is, as persona designata. Importantly for the outcome in the case, the persona designata was under no obligation to give reasons for his or her decision. Section 13(2) of the Act provided that eligible judges were generally not required to provide such reasons. The second step of the process was for the commissioner to then apply to the New South Wales Supreme Court for a control order to be made against a member of the declared organisation. The control order, made under Pt 3 of the Act, had the effect of placing special obligations on the person subject to the control order. 8.5.60

At the federal level, despite the separation of judicial

power principles, the High Court in a series of cases has recognised that judges can exercise non-judicial powers in a personal capacity, so long as certain conditions are satisfied: for a discussion of these cases, see 8.4.13–8.4.20C. The conditions are designed to ensure that the independence of the judiciary is maintained. Prior to Wainohu, these persona designata principles had not been applied to state courts and state judges. The question in Wainohu was whether they could be integrated with the Kable principles at the state level, and a majority of the High Court held that they could. The question to be asked, then, was whether the conferral of this function on the judge in a personal capacity was incompatible with the Supreme Court’s institutional integrity, and a majority of six (with Heydon J dissenting) held the provision to be invalid. The leading judgment was delivered by Gummow, Hayne, Crennan and Bell JJ. 8.5.61C

Wainohu v New South Wales (2011) 243 CLR 181

Gummow, Hayne, Crennan and Bell JJ: In Medical Board of Victoria v Meyer [(1937) 58 CLR 62 at 106], Evatt J observed: Often the state parliaments select a judge as a special tribunal only because they repose confidence in the individual holding the office and not at all because they are intending to resort to the court as the executants of judicial power so as to lay the ground for permitting further appeal and the delay and possible mischief thereby occasioned (emphasis added). The emphasised passage invites attention to the causes for that reposing of confidence in judges and the limits upon the uses to

which it may be utilised by provisions such as those now challenged in this court. … [I]n Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [(1996) 189 CLR 1], Gaudron J made three relevant statements of principle, with which we agree. Her Honour resolved the issues posed earlier in these reasons by reference to the statement of Evatt J in Meyer, by saying [at 22] that the confidence reposed in judicial officers … depends [page 1011] on their acting openly, impartially and in accordance with fair and proper procedures for the purpose of determining the matter in issue by ascertaining the facts and the law and applying the law as it is to the facts as they are [see R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 362 at 374]. And, just as importantly, it depends on the reputation of the courts for acting in accordance with that process. Gaudron J then said [at 25–6]: In general terms, a function which is carried out in public, save to the extent that general considerations of justice otherwise require, [and which is] manifestly free of outside influence and which results in a report or other outcome which can be assessed according to its own terms, will not be one that gives the appearance of an unacceptable relationship between the judiciary and the other branches of government (emphasis added). Her Honour added that: … there may be functions (for example, the issuing of

warrants such as those considered in Hilton v Wells [(1985) 157 CLR 57] and in Grollo) which do not satisfy these criteria but which, historically, have been vested in judges in their capacity as individuals and which, on that account, can be performed without risk to public confidence. However, history cannot justify the conferral of new functions on judges in their capacity as individuals if their performance would diminish public confidence in the particular judges concerned or in the judiciary generally. These statements of principle are determinative of the issue of the validity of s 13(2), the provision of the Act which is of critical importance… Section 13(2) is readily construed as conferring a power upon an eligible Judge to provide grounds or reasons in respect generally of decisions and declarations under Pt 2. However, the sub-section goes further by denying any requirement to provide any grounds or reasons. … The result is that the Act imposes no duty upon the eligible Judge to provide reasons or grounds when deciding applications to make or revoke a declaration under Pt 2, and for that reason Pt 2 is invalid. We turn to explain why this is so. The Commonwealth Solicitor-General correctly submitted that the reasoning in the decisions in Wilson and Kable v Director of Public Prosecutions (NSW), delivered respectively on 6 and 9 September 1996, share a common foundation in constitutional principle. That constitutional principle has as its touchstone protection against legislative or executive intrusion upon the institutional integrity of the courts, whether federal or State. The principle applies throughout the Australian integrated court system because it has been appreciated since federation that the Constitution does not permit of different grades or qualities of justice [Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 103; Fardon v Attorney-General (Qld)

(2004) 223 CLR 575 at 617–618; South Australia v Totani (2010) 242 CLR 1 at 37–39]. It follows that repugnancy to or incompatibility with that institutional integrity may be manifested by State (and Territory) [North Australian Aboriginal Legal Aid Service Inc v Bradley (2004) 218 CLR 146 at 163], as well as federal, legislation which provides for the conferral of functions upon a judicial officer persona designata. The submissions by Victoria to the contrary should be rejected. [page 1012] In Hilton v Wells [at 83–4], Mason and Deane JJ observed that: … when a function is entrusted to a judge by reference to his judicial office the legislators and the community are entitled to expect that he will perform the function in that capacity. To the intelligent observer, unversed in what Dixon J accurately described — and emphatically rejected — as ‘distinctions without differences’ (Meyer [(1937) 58 CLR 62 at 97]), it would come as a surprise to learn that a judge, who is appointed to carry out a function by reference to his judicial office and who carries it out in his court with the assistance of its staff, services and facilities, is not acting as a judge at all, but as a private individual. Such an observer might well think, with some degree of justification, that it is all an elaborate charade. With those words in mind, the immediate question is whether s 13(2) displays in its practical operation within the scheme of the Act repugnancy to or incompatibility with the institutional integrity of the Supreme Court. Such questions, as Gleeson CJ emphasised in North Australian Aboriginal Legal Aid Service Inc v Bradley [(2004) 218 CLR 146 at 158], do not arise in the abstract; they present concrete, practical issues, resolution of

which may be assisted by regard to what other course was available to the legislature … The vice in s 13(2) as it presently stands is that s 9 [the power to make a declaration] and s 12 [the power to revoke] confer new functions on Supreme Court Judges in their capacity as individuals with the result that an outcome of what may have been a contested application cannot be assessed according to the terms in which it is expressed. This is unlike the outcome under Pt 3 of the Act. The opaque nature of these outcomes under Pt 2 also makes more difficult any collateral attack on the decision, and any application for judicial review for jurisdictional error. The effect of Pt 2 is to utilise confidence in impartial, reasoned and public decision-making of eligible Judges in the daily performance of their offices as members of the Supreme Court to support inscrutable decision-making under s 9 and s 12. [In a separate judgment, French CJ and Kiefel J agreed with the outcome.] French CJ and Kiefel J: To the extent that the statute effectively immunises the eligible judge from any obligation to provide such reasons, it marks the function which that judge carries out as lacking an essential incident of the judicial function. At the same time, however, the Act creates a connection between the non-judicial function conferred upon an eligible judge by Pt 2 of the Act and the exercise of jurisdiction by the Supreme Court under Pt 3 of the Act. This has the consequence that a judge of the Court performs a function integral to the exercise of jurisdiction by the Court, by making the declaration, but lacks the duty to provide reasons for that decision. The appearance of a judge making a declaration is thereby created whilst the giving of reasons, a hallmark of that office, is denied. These features cannot but affect perceptions of the role of a judge of the Court, to the detriment of the Court. [Heydon J dissented.]

8.5.62 Thus, Gummow, Hayne, Crennan and Bell JJ considered that the use of judges to exercise non-judicial power, in circumstances where they were not required to produce an explanation of their reasons, undermined public confidence in the judiciary. The reputation of the courts and their judges depends on their acting openly, impartially and in accordance with fair and proper procedures. The provisions borrowed the reputation of the judiciary to support [page 1013] the inscrutable exercises of power to make declarations and, consequently, the Act undermined the court’s institutional integrity. For French CJ and Kiefel J writing separately, the giving of reasons was an essential characteristic of the court. Because the persona designata was making a decision that formed the basis of a Supreme Court order, the absence of a duty to give reasons impaired that essential characteristic. For further analysis of the constitutional limits on the extra-judicial activities of state court judges, see Wheeler, 2015. 8.5.63 The decisions in Kirk and Wainohu mark a change in direction for the development of Kable principles. While the traditional Kable approach asks whether a power or function given to a state court is incompatible with judicial power, Kirk considered whether a power could be taken away from a state Supreme Court. Furthermore, Wainohu held a provision to be invalid as breaching a

state court’s institutional integrity because it conferred an incompatible function on a judge in a personal capacity. 8.5.64 It is unclear how far the court is prepared to go in developing the Kable limitation. In Totani, Gummow J ((2010) 242 CLR 1 at 66–7, with French CJ agreeing at 50–1) suggested that state parliaments could not take the enforcement of criminal law away from state courts. The issue was raised but not determined in North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16; [2015] HCA 41. The court in that case considered a Kable challenge to provisions that authorise the detention of a person for up to 4 hours (or longer if the person is intoxicated) where the person is suspected of having committed a minor offence for which an infringement notice could be issued. As interpreted by a majority of the court (Gageler J contra), these arrest powers were non-punitive in character and subject to the ordinary mechanisms for judicial supervision and, accordingly, there was no foundation for a Kable argument. French CJ, Kiefel and Bell JJ (326 ALR at [45]) left open the possibility that Kable might be developed ‘to prevent a State parliament from investing a police officer with investigative, prosecutorial and punitive functions’. By contrast, Keane J appeared to accept (326 ALR at [186]–[188]) that Kable will not be implicated where state or territory provisions confer functions on executive decision-makers. Gageler, Nettle and Gordon JJ did not engage with the question.

TERRITORY COURTS 8.6.1 There has been considerable uncertainty about the relationship between Ch III and the territories power in s 122 of

the Constitution. On its face, the legislative power in s 122 is broad enough to authorise (1) legislation that creates rights and duties within, or in relation to, a territory; (2) the creation of courts with authority to hear and determine disputes about those rights and duties; and (3) the appointment of judges to those courts. The traditional view taken was that s 122 was entirely separate to, and independent of, the federal judicial system in Ch III and, consequently, s 122 was not affected by its terms and implications. However, in the 1990s, the High Court began to emphasise the integrated features of the Australian legal system. Cases such as Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51, Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 and Lipohar v R (1999) 200 CLR 485 drew attention to: the ‘integrated’ nature of the Australian legal system; the position of the High Court at its apex; and [page 1014] the fact that ‘there is but one common law in Australia which is declared by this court as the final court of appeal’ (Lange (1997) 189 CLR 520 at 563) and which must not be at odds with the Constitution. This new emphasis added a new dimension to existing controversy over the relationship between Ch III and s 122, as Gummow J observed in Kruger v Commonwealth (1997) 190 CLR 1 at 175: The entrusting by Ch III, in particular by s 73, to this Court of the

superintendence of the whole of the Australian judicial structure, its position as ultimate interpreter of the common law of Australia and as guardian of the Constitution are undermined, if not contradicted, by acceptance, as mandated by the Constitution, of the proposition that it is wholly within the power of the Parliament to grant or withhold any right of appeal from a territorial court to this Court.

8.6.2 It has also long been accepted that some provisions of Ch III (for example, the High Court’s power to grant what are now referred to as ‘constitutional writs’ directed to ‘officers of the Commonwealth’) operate in territories: Waters v Commonwealth (1951) 82 CLR 188. Furthermore, the High Court has more recently reaffirmed the following propositions about the relationship between Ch III and s 122: The courts of self-governing territories are not ‘federal courts’ for the purposes of ss 71 or 73 of the Constitution. Section 72 of the Constitution does not govern appointments to territory courts: Spratt v Hermes (1965) 114 CLR 226; Capital Television and Appliances Pty Ltd v Falconer (1971) 125 CLR 591; Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322. When the Commonwealth Parliament confers jurisdiction on federal courts under a s 122 law, this is federal jurisdiction ‘arising under any laws made by the Parliament’ under s 76(ii) of the Constitution and Northern Territory v GPAO (1998) 196 CLR 553. Territory courts can exercise federal jurisdiction, and are, consequently, subject to the Kable limitation: North Australian Aboriginal Legal Service v Bradley (2004) 218 CLR 146; Attorney-General (NT) v Emmerson (2014) 253

CLR 393; Northern Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16; [2015] HCA 41. Older authorities, however, still maintain that: the guarantee of trial by jury on indictment under Commonwealth laws does not apply to laws made under s 122 (R v Bernasconi (1915) 19 CLR 629); and appeals to the High Court from territory courts exercising ‘territory jurisdiction’ depend on s 122 of the Constitution, not s 73(ii): R v Porter; Ex parte Yee (1926) 37 CLR 42. That is, they are statutory in nature, not constitutionally guaranteed. 8.6.3 The court has moved away from the view of Griffith CJ in Bernasconi that the whole of Ch III has no application to territories. However, to find a constitutionally guaranteed place for territory courts (or at least those of the internal territories) in an integrated Australian judicial system, it may be necessary for the judicial perspective to be adjusted even more fundamentally, in a manner suggested by Gaudron J (Eastman v R (2000) 203 CLR 1 at 25): [A]s I explained in Re Governor, Goulburn Correctional Centre; Ex parte Eastman [(1999) 200 CLR 322] the existence of a Territory court is ultimately sustained by a law under s 122

[page 1015] of the Constitution and the rights, duties and obligations in question in a matter before a Territory court must ultimately depend for their

enforcement on the law by which the existence of that court is sustained. They, thus, arise under that law.

On this approach, there is no such thing as ‘territory jurisdiction’. The jurisdiction exercised by territory courts is always federal jurisdiction, because self-governing territories are established by Commonwealth law. Even if territory courts are established under territory legislation, they remain ‘such other courts as [the Commonwealth Parliament] invests with federal jurisdiction’ within the meaning of that phrase in s 71 of the Constitution. Support for this view has been expressed by Finn J in the Federal Court: see O’Neill v Mann (2000) 101 FCR 160, discussed in Zines, 2002, pp 183–4. See also the views of Dixon J in Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582. 8.6.4 The issue was raised but not determined in North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16; [2015] HCA 41. The court in that case considered a challenge to provisions that authorise the detention of a person for up to 4 hours (or longer if the person is intoxicated) where the person is suspected of having committed a minor offence for which an infringement notice could be issued. It had been argued that the provisions conferred punitive (judicial) power on the police in contravention of a claimed separation of powers in the Northern Territory. However, as interpreted by a majority of the Court (Gageler J contra), these arrest powers were non-punitive in character and, thus, the question of whether all jurisdiction in territory courts is federal and the applicability of the federal separation of powers in the Territory did not arise for determination: at [38] per French CJ, Kiefel and Bell JJ; [237] per Nettle and Gordon JJ. In a separate judgment, Gageler J (at [104]–

[118]) and Keane J (at [172]–[181]) rejected the plaintiff’s contention that all jurisdiction exercised by territory courts is federal jurisdiction. However, adding a further layer of complexity to these uncertainties, Gageler J said the following in response to the plaintiff’s argument that all jurisdiction in territory courts is federal jurisdiction (at [113]–[114]): The argument has significant implications for the scope of the appellate jurisdiction of the High Court under s 73 and, in consequence, for whether it might be possible in Territories (although it is impossible in States) to ‘create islands of power immune from supervision and restraint’ (Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 581). Acceptance of the argument would lead to rejection of the conclusion in Capital TV and Appliances Pty Ltd v Falconer that no appeal lies to the High Court from a Territory court under s 73 of the Constitution. Acceptance of the argument would also involve rejection of reasoning in Spratt v Hermes to the effect that a Territory court did not exercise federal jurisdiction when it heard a prosecution for an offence against a Commonwealth law at a time before the amendment in 1976 of s 68(2) of the Judiciary Act 1902 (Cth) specifically to confer federal jurisdiction on Territory courts in the same way as it confers federal jurisdiction on State courts. The argument need not be considered now. The argument, if accepted, would not take the plaintiffs the whole of the distance they need to travel. Section 71, it is to be recalled, relevantly refers to the judicial power of the Commonwealth as being vested in such courts as the Parliament invests with federal jurisdiction. To accept that all jurisdiction exercised by a Territory court is federal jurisdiction would not be to accept that all federal jurisdiction exercised by a Territory court is federal jurisdiction vested in that court by the Parliament, so as to involve the exercise of judicial power of the Commonwealth within the meaning of s 71. It therefore would not follow,

[page 1016] from acceptance that all jurisdiction exercised by a Territory court is federal jurisdiction, that any judicial power conferred by a Territory law is judicial power of the Commonwealth.

8.6.5 Judicial ambivalence about the application of Ch III to self-governing territories seems to be driven by two factors: on the one hand, a desire (consistent with precedent) to place the courts of self-governing territories on the same footing as those of states by not requiring their judges to be appointed in accordance with the rigorous requirements of s 72 of the Constitution (see, for example, Gleeson CJ, McHugh and Callinan JJ in Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 331); and a countervailing anxiety about avoiding ‘rogue’ development of the common law by territory courts over which the High Court exercises no constitutionally guaranteed jurisdiction: McDonald, 2005. There may well be legitimate judicial concern that the legislative and judicial recognition of territory self-government has proceeded without due regard to this issue. 8.6.6 To understand the effect of these factors on judicial opinion, it is necessary to keep in mind that Ch III has been interpreted as exhaustive on the topic of ‘the judicial power of the Commonwealth’, at least as it applies in the states: Re Judiciary and Navigation Acts (1921) 29 CLR 527 8.3.10C. This view was

reiterated in Re Wakim; Ex parte McNally (1999) 198 CLR 511 8.3.66C, where the High Court held that federal courts cannot exercise state jurisdiction (purportedly conferred on them by crossvesting legislation). This makes judges reluctant to resort to the approach of the early High Court of treating s 122 as supplementing the federal judicial power conferred by Ch III when it comes to appeals from the territories. In Ruhani v Director of Police (Nauru) (2005) 222 CLR 489, the High Court accepted that parliament could confer on it jurisdiction to entertain ‘appeals’ from the courts of a foreign country which are really in the nature of original jurisdiction under s 76(ii). However, the idea that ‘appeals’ from territory courts could be of this nature is inconsistent with the exhaustive provision on Commonwealth judicial power that Ch III is said to make: Re Judiciary and Navigation Acts (1921) 29 CLR 527. 8.6.7 Some of the issues explored above were referred to in the High Court’s judgment in North Australian Aboriginal Legal Aid Service v Bradley (2004) 218 CLR 146. Mr Hugh Bradley was appointed by the Northern Territory Government to the office of Northern Territory Chief Magistrate until retirement age, but with remuneration prescribed for a 2-year period. Section 68 of the Judiciary Act 1903 (Cth) allows territory courts to exercise jurisdiction over persons charged with offences under Commonwealth laws. The service challenged Bradley’s appointment on several grounds, including that the limited remuneration entitlement created a relationship of dependence on the Northern Territory Executive (to provide remuneration beyond the 2-year period) that was incompatible with the exercise of federal judicial power. It was argued that, despite the High Court’s decisions on s 72 of the Constitution and its inapplicability in the

territories, the separation of judicial power effected by Ch III of the Constitution required that judicial officers exercising federal judicial power be, and be seen to be, independent of the executive government. The Full Federal Court rejected this challenge, holding Bradley’s appointment valid. The High Court unanimously dismissed North Australian Aboriginal Legal Aid Services’ appeal. [page 1017]

8.6.8C North Australian Aboriginal Legal Aid Service v Bradley (2004) 218 CLR 146 McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ: … The proper construction of the Magistrates Act is of primary and critical importance for the Legal Aid Service’s case. When the statute receives its proper construction, the grounds upon which the Legal Aid Service urges invalidity cannot succeed. Accordingly, the appeal must fail … The Legal Aid Service relies upon the analysis by Spigelman CJ of Kable in John Fairfax Publications Pty Ltd v Attorney-General (NSW) (2000) 181 ALR 694 at 698, where his Honour said: The reasoning of the majority in Kable was not confined to the character of a function or power conferred by a State law. Some of the reasoning encompasses the manner in which a function or power is to be performed. Although Kable was concerned with the compatibility of a specific non-judicial

power (to order imprisonment without any finding of criminal guilt) with the exercise by a state Supreme Court of the judicial power of the Commonwealth, the reasoning of the majority did involve principles of broader application: see Bruce v Cole (1998) 45 NSWLR 163 at 166. Further, in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 363, Gaudron J observed: Impartiality and the appearance of impartiality are necessary for the maintenance of public confidence in the judicial system. Because State courts are part of the Australian judicial system created by Ch III of the Constitution and may be invested with the judicial power of the Commonwealth, the Constitution also requires, in accordance with Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51, that, for the maintenance of public confidence, they be constituted by persons who are impartial and who appear to be impartial even when exercising non-federal jurisdiction. And as courts created pursuant to s 122 of the Constitution may also be invested with the judicial power of the Commonwealth (see Northern Territory v GPAO (1999) 196 CLR 553 at 603–604 [127] per Gaudron J; Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 at 336–40 per Gaudron J, 348 per Gummow and Hayne JJ; cf at 354–6 per Kirby J), it should now be recognised, consistently with the decision in Kable , that the Constitution also requires that those courts be constituted by persons who are impartial and who appear to be impartial. In his reasons in Ebner (at 373), Kirby J, by reference to Kable, also expressed the view that: … in Australia, the ultimate foundation for the judicial requirements of independence and impartiality rests on the

requirements of, and implications derived from, Ch III of the Constitution. Counsel for the Legal Aid Service put an argument in three steps. The first is that a court of the Territory may exercise the judicial power of the Commonwealth pursuant to investment by laws made by the Parliament. That proposition, to which there was no demurrer by the Territory or by the Attorney-General of the Commonwealth who intervened in this Court, is supported by the citations of authority by Gaudron J in the above passage from Ebner. It should be accepted. [page 1018] The second step in the Legal Aid Service’s argument is that it is implicit in the terms of Ch III of the Constitution and necessary for the preservation of that structure, that a court capable of exercising the judicial power of the Commonwealth be and appear to be an independent and impartial tribunal. That proposition, which again appears in the passage from Ebner, also should be accepted. The difficulty arises with the third step. This requires discernment of the relevant minimum characteristic of an independent and impartial tribunal exercising the jurisdiction of the courts over which the Chief Magistrate presides. No exhaustive statement of what constitutes that minimum in all cases is possible. However, the Legal Aid Service refers in particular to the statement by McHugh J in Kable at 119 (see also Toohey J at 98, Gaudron J at 108 and Gummow J at 133–4) that the boundary of legislative power, in the present case that of the Territory: … is crossed when the vesting of those functions or duties might lead ordinary reasonable members of the public to

conclude that the [Territory] court as an institution was not free of government influence in administering the judicial functions invested in the court. Much then turns upon the permitted minimum criteria for the appearance of impartiality. In that regard, Re Governor, Goulburn Correctional Centre; Ex parte Eastman (1999) 200 CLR 322 established that s 72 of the Constitution had no application to the Supreme Court of the Australian Capital Territory because that Court was not a court ‘created by the Parliament’ within the meaning of s 72 of the Constitution. It followed that there was no objection based upon the tenure requirement of s 72 to the appointment of an acting judge in that Court. Although in Eastman and in earlier cases other views have been stated on this subject, for these proceedings the point should be taken as settled … [The justices concluded that the Magistrates Act was intended to provide a measure of independence to Northern Territory magistrates, but that even by placing a magistrate in a position in which he or she might be required to apply for mandamus to secure ongoing remuneration, a government did not infringe Ch III.]

8.6.9 A few months after Bradley was handed down, the Northern Territory Government introduced into the Legislative Assembly amendments to the Northern Territory Remuneration Tribunal Act and Magistrates Act to strengthen the principle of judicial independence. 8.6.10 That territory courts can exercise federal jurisdiction and are subject to the Kable limitation is now well accepted: see Attorney-General (NT) v Emmerson (2014) 253 CLR 393; North

Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16; [2015] HCA 41. [page 1019]

THE HIGH COURT’S APPELLATE JURISDICTION 8.7.1E

Commonwealth Constitution

73 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. But no exception or regulation prescribed by the Parliament shall prevent the High Court from hearing and determining any appeal from the Supreme Court of a state in any matter in which

at the establishment of the Commonwealth an appeal lies from such Supreme Court to the Queen in Council. Until the Parliament otherwise provides, the conditions of and restrictions on appeals to the Queen in Council from the Supreme Courts of the several states shall be applicable to appeals from them to the High Court. 74 No appeal shall be permitted to the Queen in Council from a decision of the High Court upon any question, howsoever arising, as to the limits inter se of the Constitutional powers of the Commonwealth and those of any state or states, or as to the limits inter se of the Constitutional powers of any two or more states, unless the High Court shall certify that the Question is one which ought to be determined by Her Majesty in Council. The High Court may so certify if satisfied that for any special reason the certificate should be granted, and thereupon an appeal shall lie to Her Majesty in Council on the question without further leave. Except as provided in this section, this Constitution shall not impair any right which the Queen may be pleased to exercise by virtue of Her Royal prerogative to grant special leave of appeal from the High Court to Her Majesty in Council. The Parliament may make laws limiting the matters in which such leave may be asked, but proposed laws containing any such limitation shall be reserved by the Governor-General for Her Majesty’s pleasure.

‘Judgments, decrees, orders, and sentences’ 8.7.2 The Constitution guarantees, subject to acceptable exceptions and regulations, appeals to the High Court from the ‘judgments, decrees, orders, and sentences’ of certain courts. Prior to Mellifont v Attorney-General (Qld) (1991) 173 CLR 289 8.7.7C,

the High Court took a very narrow view of what constituted a ‘judgment, decree, order or sentence’ for the purposes of s 73(ii). It is clear that the court has always understood this expression to be ‘confined to decisions made in the exercise of judicial power’: Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 at 38 per Gaudron, Gummow and Hayne JJ. See also Wong v R (2001) 207 CLR 584 at 600 per Gaudron, Gummow and Hayne JJ. Even from the early case of Holmes v Angwin (1906) 4 CLR 297, which involved an appeal from a declaration of the Western Australian

[page 1020] Supreme Court sitting as the Court of Disputed Returns, Barton J held that the declaration could not fall within s 73(ii) as it did not involve an exercise of judicial power: ‘The character of the jurisdiction which has been exercised by parliaments as to election petitions is purely incidental to the legislative power; it has nothing to do with the ordinary determination of the rights of parties who are litigants’ (4 CLR at 309); see also Webb v Hanlon (1939) 61 CLR 313 at 324 per Starke J; 335 per McTiernan J. 8.7.3 However, the court initially took a very strict approach as to when a court’s judgment determined the rights of parties. This is well illustrated by a range of cases dealing with legislative schemes for the referral or reservation of questions of law for judicial determination. The state of the law prior to Mellifont was concisely summarised by Mason CJ, Wilson, Deane, Toohey and Gaudron JJ in Swiss Aluminium Australia Ltd v Federal Commissioner of Taxation (1987) 163 CLR 421. 8.7.4C

Swiss Aluminium Australia Ltd v Federal Commissioner of Taxation (1987) 163 CLR 421

Wilson, Deane, Toohey and Gaudron JJ: It is well settled that an order must finally determine the rights of parties before it will qualify as an order within the meaning of s 73 of the Constitution … Thus, a distinction has been drawn between answers given to questions in a stated or special case which determine the rights

of the parties … and answers to a stated or special case which are advisory or consultative only … The former, but not the latter, constitute an order within the meaning of s 73 …

8.7.5 Thus, where the statutory scheme provided that the answers were to be binding on the referring judge or tribunal and the parties, and definitive of legal rights, then the answers given by the relevant court would, themselves, create the rights and liabilities of the parties and, thus, be a judgment for the purposes of s 73(ii): Smith v Mann (1932) 47 CLR 426; O’Toole v Charles David Pty Ltd (1991) 171 CLR 232. By contrast, where the answers had no such effect or operation, they were treated as advisory or consultative: Fisher v Fisher (1986) 161 CLR 438; Swiss Aluminium Australia Ltd v Federal Commissioner of Taxation (1987) 163 CLR 421. For example, the court in Saffron v R (1953) 88 CLR 523 considered a legislative scheme permitting referrals of questions of law by a trial judge to the New South Wales Court of Criminal Appeal after a person had been acquitted. Because the determination of the referred questions would not have any effect on the acquittal, the answers to those questions were held to constitute an advisory opinion. As Dixon CJ said, the decision of the Court of Criminal Appeal ‘can operate only as a judicial precedent, having at best the effect which in English jurisprudence is afforded to the decisions of a court as precedents. That is an entirely different thing from binding a right or creating a liability, or precluding a person who asserts a right or denies a liability’: 88 CLR at 528. 8.7.6 The narrow view adopted in the pre-Mellifont cases had significant consequences for the role of the High Court ‘as the final

appellate court of the nation’ ((1991) 171 CLR 232 at 268 per Brennan J; 283–4 per Deane, Gaudron and McHugh JJ), and for the availability of convenient methods — like the case stated procedure — for the efficient administration of justice. In recognition of these consequences, the High Court significantly reworked the [page 1021] operation of s 73 in Mellifont. That case involved a Queensland statutory provision (s 669A(2) of the Criminal Code (Qld)) that allowed the referral of questions of law by the Attorney-General to the Court of Criminal Appeal in circumstances where the accused had been acquitted of the charge or discharged following a withdrawal of the charge by the Crown as a result of a ruling by the trial judge on the referred legal question. Thus, the proceeding that gave rise to the referred question was no longer on foot. 8.7.7C

Mellifont v Attorney-General (Qld) (1991) 173 CLR 289

Mason CJ, Deane, Dawson, Gaudron and McHugh JJ: It is evident from the passages in the judgment of Dixon CJ [in Saffron] to which we have already referred that his Honour considered that the decision of the Court of Criminal Appeal … was an advisory opinion or abstract declaration of the kind which this Court decided it could not give in its original jurisdiction in In re Judiciary and Navigation Acts. It is implicit in Dixon CJ’s judgment that this Court’s appellate jurisdiction does not extend to entertaining appeals from such opinions or declarations. It is,

therefore, to In re Judiciary and Navigation Acts that we must turn in order to ascertain whether the decision by the Court of Criminal Appeal in this case was an advisory opinion or abstract declaration of the kind that will not ground an appeal to this Court in the exercise of its appellate jurisdiction. In In re Judiciary and Navigation Acts, the Governor-General, with the advice of the Executive Council and pursuant to Pt XII of the Judiciary Act, referred to the court the questions whether and to what extent various sections and schedules of the Navigation Act were valid enactments of the Commonwealth Parliament. The court, with the sole dissent of Higgins J, in refusing to entertain this reference, stated that the legislature: … cannot authorise this court to make a declaration of the law divorced from any attempt to administer that law … we can find nothing in Chapter III of the Constitution to lend colour to the view that Parliament can confer power or jurisdiction upon the High Court to determine abstract questions of law without the right or duty of any body or person being involved. The passage contains two critical concepts. One is the notion of an abstract question of law not involving the right or duty of any body or person; the second is the making of a declaration of law divorced or dissociated from any attempt to administer it. In O’Toole (1990) 171 CLR at 244–5, 258–9, 279–85, 300– 2, it was explicitly recognised that answers given by the full court of a court to questions reserved for its consideration in the course of proceedings in a ‘matter’ pending in that court do not constitute an advisory opinion or abstract declaration of the kind dealt with in Re Judiciary and Navigation Acts whether or not those answers, of themselves, determine the rights of the parties. Such answers are not given in circumstances divorced from an attempt to administer the law as stated by the answers; they are given as an integral part of the process of determining the rights

and obligations of the parties which are at stake in the proceedings in which the questions are reserved. Once this is accepted, as indeed it must be, it follows inevitably that the giving of the answers is an exercise of judicial power because the seeking and the giving of the answers constitutes an important and influential, if not decisive, step in the judicial determination of the rights and liabilities in issue in the litigation. Viewed in this context, it matters not whether the giving of the answers is, as a matter of legal theory, a binding determination, that [page 1022] is, binding on the court at first instance and the parties, as Mason CJ and Dawson J thought, or influential, that is, binding in a practical sense or virtually so, as Deane, Gaudron and McHugh JJ thought. The consequence is that the answers fall within the description ‘judgments, decrees, orders’ in s 73 of the Constitution. The difficulties and inconveniences which would flow from a contrary conclusion were identified in O’Toole and there is no occasion to repeat them here. It follows that Fisher v Fisher and Swiss Aluminium were incorrect to the extent that they decided that no appeal lies to this Court from answers given to a special or stated case where those answers do not determine the parties’ rights. In that respect they should not be followed. However, this conclusion does not dispose of the objection to jurisdiction in the present case. The Attorney-General’s power under the Code to refer a point of law to the Court of Criminal Appeal for its consideration arises only if the accused has been acquitted of the charge in the indictment or if the accused has been discharged in respect of that charge after counsel for the Crown, as a result of a ruling by the trial judge on that point of law, has informed the court that the Crown will not proceed further upon the indictment in respect of that charge [s 669A(2)].

In other words, in the case of discharge, the exercise of the power to refer and the exercise of jurisdiction by the Court pursuant to the reference both proceed on the footing that no further proceedings on the indictment in respect of the relevant charge will be taken. Consequently, the ruling on the point of law pursuant to the reference will not play any part in the subsequent determination of the charge on the indictment. Likewise, in the case of acquittal, the ruling on the reference has no impact on the acquittal [s 669A(5)]. In this respect, the decision on the point of law referred stands in a different position from answers given by a full court to questions reserved in a stated case in the situation previously discussed. Although the indictment itself cannot serve as a vehicle for the further determination of the charge in consequence of the statement by counsel for the Crown and the subsequent filing of the nolle prosequi, the reference and the decision on the reference arise out of the proceedings on the indictment and are a statutory extension of those proceedings. The questions referred all relate to the correctness of the trial judge’s ruling on materiality and his interpretation of the provisions of the Order in Council of 24 June 1987 relating to the timeframe of the Inquiry and are asked in the context of the charge laid on the indictment against the applicant. The Crown sought the reference in order to establish that the trial judge’s ruling was wrong in various respects. In this situation, the decision on the reference was made with respect to a ‘matter’ which was the subject-matter of the legal proceedings at first instance and was not divorced from the ordinary administration of the law. The decision is therefore to be distinguished from the abstract declaration sought by the Executive Government in In Re Judiciary and Navigation Acts. That opinion was academic, in response to an abstract question, and hypothetical in the sense that it was unrelated to any actual controversy between parties. True it is that the purpose of seeking and obtaining a review of the trial judge’s ruling was to secure a correct statement of the

law so that it would be applied correctly in future cases. However, in our view, in the context of the criminal law, that does not stamp the procedure for which s 669A(2) provides as something which is academic or hypothetical so as to deny that it is an exercise of judicial power. The statutory procedure, which has counterparts in other Australian jurisdictions, is a standard procedure for correcting error of law in criminal proceedings without exposing the accused to double jeopardy. It is a procedure which was designed to enable the Crown to secure a reversal of a ruling by a trial judge without infringing the common law rule that the Crown cannot appeal against a verdict of acquittal, a rule which precluded a review of a trial judge’s ruling at the instance of the Crown in the case of acquittal. [page 1023] The fundamental point, as it seems to us, is that s 669A(2) enables the Court of Criminal Appeal to correct an error of law at the trial. It is that characteristic of the proceedings that stamps them as an exercise of judicial power and the decision as a judgment or order within the meaning of s 73. Were it otherwise, the appellate jurisdiction of this Court would not extend to a review of decisions of courts of criminal appeal and full courts under s 669A(2) and similar provisions in other jurisdictions which have as their object the giving of authoritative decisions on questions of criminal law for the better administration of justice. To repeat the words of Deane, Gaudron and McHugh JJ in O’Toole in a context which is only slightly different, there is no ‘persuasive reason in law or policy why’ a decision under s 669A(2) should not fall within the words ‘judgments, decrees, orders’ in s 73. It follows that, in our opinion, Saffron v The Queen, which is not relevantly distinguishable from the present case, was wrongly decided and should not be followed. It also follows that the objection to jurisdiction must be overruled. In reaching that

conclusion we should state that we do not rely on the fact that it was foreshadowed to the applicant that a fresh indictment would be presented against him in the event of a ‘successful’ reference and that, at any subsequent trial, the decision of the Court of Criminal Appeal on the construction of the second Order in Council and the meaning of ‘materiality’ under s 123 would have been applied. In our view the decision of the Court of Criminal Appeal would have grounded an appeal to this Court, subject to the grant of special leave, even if the Crown did not propose to issue a fresh indictment. The question of this court’s jurisdiction cannot turn on whether or not the Crown decides to present a fresh indictment against the applicant.

8.7.8 The decision in Mellifont relaxed the overly rigid approach that had been applied to s 73 in previous cases. A decision may fall within s 73 where it ‘arises out of’ a matter, involves a ‘statutory extension’ of the proceedings involving the matter, or is made ‘with respect to’ a matter. Thus, the decision need not actually determine any rights to be characterised as a judgment for the purposes of s 73. Nevertheless, there is still an emphasis on connecting the decision to the resolution of a justiciable controversy. As Gaudron, Gummow and Hayne JJ said about Mellifont in Director of Public Prosecutions (SA) v B (1998) 194 CLR 566 at 576: ‘[I]t was the relationship between the question reserved and the trial which was critical to the conclusion reached’. See also Re McBain (2002) 209 CLR 372 at 409 per Gaudron and Gummow JJ: ‘The decision of the Court of Criminal Appeal was held to involve the exercise of judicial power by that court because the procedure was directed to correcting errors in a criminal trial’.

‘Exceptions’ and ‘regulations’ 8.7.9E

Judiciary Act 1903 (Cth)

35 Appeal from courts of states (1) The jurisdiction of the High Court to hear and determine appeals from: (a) judgments of the Supreme Court of a state, whether given or pronounced in the exercise of federal jurisdiction or otherwise; or (b) judgments of any other court of a state given or pronounced in the exercise of federal jurisdiction; [page 1024] whether in civil or criminal matters, is subject to the exceptions and regulations prescribed by this section. (2) An appeal shall not be brought from a judgment, whether final or interlocutory, referred to in subsection (1) unless the High Court gives special leave to appeal. (5) The foregoing provisions of this section have effect subject to any special provision made by an Act other than this Act, whether passed before or after the commencement of this section, preventing or permitting appeals from the Supreme Courts of the states in particular matters … 35A Criteria for granting special leave to appeal In considering whether to grant an application for special leave to appeal to the High Court under this Act or under any other Act,

the High Court may have regard to any matters that it considers relevant but shall have regard to: (a) whether the proceedings in which the judgment to which the application relates was pronounced involve a question of law: (i) that is of public importance, whether because of its general application or otherwise; or (ii) in respect of which a decision of the High Court, as the final appellate court, is required to resolve differences of opinion between different courts, or within the one court, as to the state of the law; and (b) whether the interests of the administration of justice, either generally or in the particular case, require consideration by the High Court of the judgment to which the application relates.

8.7.10 Section 73 of the Constitution expressly contemplates that parliament can prescribe exceptions to and regulations in respect of the High Court’s appellate jurisdiction. Following legislative amendments during the 1980s, all appeals to the High Court from lower courts require a grant of special leave to appeal. Section 35 of the Judiciary Act sets out that requirement for appeals from state courts, and s 35A identifies the criteria for granting special leave to appeal. 8.7.11 Similar provisions to s 35 have been enacted in relation to appeals from territory courts (Judiciary Act 1903 (Cth) s 35AA); the Federal Court (Federal Court of Australia Act 1976 (Cth) s 33); and the Family Court: Family Law Act 1975 (Cth) s 95. The High Court also has jurisdiction to hear appeals from any justice or justices exercising the original jurisdiction of the High Court, but

leave is required where the appeal is brought from an interlocutory judgment: Judiciary Act s 34. Until the provision was repealed in 2005, there was also an unusual facility in the Family Law Act 1975 (Cth) (s 95(b)) which allowed the Full Court of the Family Court to grant a certificate for an appeal to be taken to the High Court. For a discussion of that provision, see DJL v Central Authority (2000) 201 CLR 226 at 236–40; MIMIA v B (2004) 219 CLR 365 at 393–4 per Gummow, Hayne and Heydon JJ; 411–13 per Kirby J. 8.7.12 The special leave process was unsuccessfully challenged in two cases heard together: Smith Kline & French Laboratories (Australia) Ltd v Commonwealth of Australia; Carson v John [page 1025] Fairfax & Sons Ltd (recs & mgrs appt’d) (1991) 173 CLR 194. Two principal arguments were put forward by the plaintiffs in support of the challenge to the validity of the special leave provisions. The first related to an appeal from a state Supreme Court. It was argued that the first paragraph of s 73 conferred a right of appeal to the High Court from a judgment of a state Supreme Court from which an appeal lay to the Privy Council at the establishment of the Commonwealth. The second paragraph of s 73, it was said, prevented the Commonwealth Parliament from depriving a litigant of that right. At the establishment of the Commonwealth, an appeal could be taken to the Privy Council from the Supreme Court of New South Wales pursuant to the Australian Courts Act 1828 (Imp) (9 Geo IV c 83) and the Order of Council of 13 November 1850.

8.7.13 However, there were monetary limits: a judgment for or in respect of a sum of £500 or involving a claim to or respecting property or any civil right amounting to £500. From a final judgment, the appeal was of right; from an interlocutory judgment, leave was required. Second, it was argued that the special leave process — whether in relation to a judgment of a state Supreme Court (Judiciary Act s 35(2)) or of the Federal Court (Federal Court of Australia Act s 33(3)) — was neither an ‘exception’ nor a ‘regulation’ for the purposes of s 73. 8.7.14C

Smith Kline & French Laboratories (Australia) Ltd v Commonwealth of Australia; Carson v John Fairfax & Sons Ltd (1991) 173 CLR 194

Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ: The first submission made by Mr Ellicott QC for the plaintiffs assumed that the first paragraph of s 73 confers an appeal as of right from a judgment of a Supreme Court and then asserted that the second paragraph prevents an exclusion or deprivation of that appeal as of right in those cases in which an appeal lay to the Privy Council at the establishment of the Commonwealth. The plaintiffs sought to find support for the submission in the notion that the High Court was established as an alternative court of appeal to the Privy Council, a notion said to be supported by the Australasian Federal Convention Debates and by authority. The Convention Debates provide strong support for the view that the establishment of the High Court as a national court of appeal was not intended to supersede or exclude the appeal to the Privy Council from the Supreme Courts of the states. That sentiment on the part of at least some of the delegates was

manifest in the Convention Debates. In conformity with that sentiment, the Constitution does not confine or restrict the right of appeal from the Supreme Courts of the states to the Privy Council. But it would be a mistake to say that the appeal to the High Court from the Supreme Court of a state for which s 73 provided was seen merely as an alternative to the right of appeal to the Privy Council. The prevailing sentiment of the delegates, as expressed in the Convention Debates, was that Australia should establish its own final court of appeal, just as the United States had established the Supreme Court of the United States, subject only to preserving the appeal to the Privy Council. Ultimately, s 74 preserved the prerogative appeal by special leave from the High Court to the Privy Council, but that appeal was qualified by the necessity for a certificate in relation to constitutional ‘inter se’ questions and was subject to the parliament’s power to make laws limiting the matters in which leave might be asked s 74, third paragraph. The Convention Debates do not support the plaintiffs’ contention that the second paragraph of s 73 was intended to ensure that a litigant would always have an appeal as [page 1026] of right to the High Court from a judgment of the Supreme Court of a state if, at the establishment of the Constitution, an appeal lay from that judgment to the Privy Council. The inclusion of the second paragraph of s 73 arose out of a concern expressed by some delegates that the words ‘with such exceptions and subject to such regulations as the Parliament prescribes’ in the first paragraph might enable Parliament to exclude appeals to the High Court to such a substantial extent as to leave it with a minimal appellate jurisdiction. Mr Barton encapsulated this concern when, with reference to cl 74 (as the draft of s 73 was then numbered), he said:

The difficulty about the clause as it stands is this: That it allows the Parliament to legislate in reference to the jurisdiction of the High Court in regard to appeals in such a way that, little by little, the High Court may become the mere shadow of a Court of Appeal [emphasis added by the court]. A little later he went on to say: What I object to is the retention of words which would enable parliament so to cut down the jurisdiction of the High Court in appeal cases as to leave, in some cases, a person who has a right practically without any remedy by way of appeal [emphasis added by the court]. Both Mr Glynn and Mr O’Connor expressed similar views, Mr Glynn making reference to attempts by Congress to exclude appeals to the Supreme Court of the United States. The concern of the delegates was not that the High Court might decline to hear appeals by refusing to grant leave or special leave in the exercise of power to do so conferred upon the court by Parliament; the concern was that Parliament might itself by prescribing ‘exceptions’ directly exclude appeals. The second paragraph was introduced with a view to confining the power of Parliament in this respect. The language of the paragraph confirms that this was its object. That language carefully reflects the language of the first paragraph — ‘no exception or regulation prescribed by the Parliament shall prevent the High Court from hearing and determining any appeal’ of the designated class. The purpose of the paragraph was to ensure that Parliament could not, in the exercise of its legislative power to prescribe exceptions from the court’s appellate jurisdiction and regulations to which that jurisdiction was subject, prevent the Court from hearing and determining any such appeal. The paragraph imposes a restraint on the exercise of that legislative power so that parliament cannot deprive the Court of jurisdiction to hear and

determine such an appeal. The paragraph is not expressed in terms appropriate to confer on a litigant a right to appeal as of course, free from a requirement of the grant of leave or special leave to appeal, in any matter in which at the establishment of the Commonwealth an appeal lay to the Privy Council. The words ‘exceptions’ and ‘exception’ are used in the first and second paragraphs in the sense of jurisdiction or matters excluded or taken away from the general grant of appellate jurisdiction conferred by the first paragraph. The words ‘regulations’ and ‘regulation’ signify ‘conditions’ and ‘restrictions’ that Parliament may prescribe, subject to which the appellate jurisdiction would be exercised. In other words, ‘regulation’ in the second paragraph corresponds with the words ‘conditions’ and ‘restrictions’ in the third paragraph. In this respect the third paragraph is of particular significance because the existing ‘conditions of and restrictions on appeals to the Queen in Council’ to which it refers include such requirements as pecuniary limitations, that the judgment appealed from be final rather than interlocutory and the grant [page 1027] of leave and special leave, imposed by Orders in Council in respect of Privy Council appeals. Equally, these requirements are ‘regulations’ within the meaning of the first paragraph. The third paragraph is significant in another respect. In accordance with the principle of constitutional interpretation which calls for a liberal reading of a grant of legislative power, the words ‘Until the Parliament otherwise provides’ should be construed as conferring upon Parliament the power to prescribe such conditions and restrictions on appeals to the High Court from judgments of the Supreme Courts of the states as it sees fit, so long as it complies with the second paragraph of s 73. There is, in our view, no reason for concluding that the exercise of the

power is to be confined to prescribing conditions and restrictions which are not more onerous than those prescribed by the Orders in Council regulating appeals from the Supreme Court of a state at the establishment of the Commonwealth. If it were otherwise, there would be a considerable and inconvenient limitation on the legislative power arising from the differences in the conditions and restrictions applicable under the Orders in Council in their application to appeals from the various Supreme Courts of the states. The Parliament, if it wished to prescribe conditions and restrictions operating uniformly throughout the states, would be confined to the prescription of conditions and restrictions no more onerous than any of those applicable to an appeal from a Supreme Court of a state to the Privy Council. Such an unlikely result could not have been intended. [Their Honours noted that their views were supported by the court’s early decision in Parkin v James (1905) 2 CLR 315, and continued:] Once the distinction between ‘exception’ and ‘regulation’ as earlier stated is accepted and the imposition of a requirement for the grant of special leave to appeal is seen as a condition of the appeal, thus constituting a ‘regulation’ of the appeal to this Court, it follows that neither s 35(2) nor s 33(3) ‘prevents’ this Court from hearing and determining any appeal which lies to the court under s 73. The Parliament does not prevent the court from hearing and determining any appeal when, by its legislation, it requires the grant of special leave to appeal as a condition of the appeal. The court is at liberty to hear and determine such appeals as it considers appropriate in accordance with the criteria or considerations relevant to the grant or refusal of special leave.

Appeals to the Privy Council

8.7.15 Section 74 of the Constitution prohibits an appeal to the Privy Council from a decision of the High Court upon any inter se question; that is, a question ‘as to the limits inter se of the Constitutional powers of the Commonwealth and those of any state or states, or as to the limits inter se of the Constitutional powers of any two or more states’. However, the section also provides for the granting of a certificate by the High Court authorising such an appeal. With the enactment of the Privy Council (Limitation of Appeals) Act 1968 (Cth), the Privy Council (Appeals from the High Court) Act 1975 (Cth) and the Australia Acts 1986 (Cth) and (UK), the only possibility for an appeal to the Privy Council lies in the granting of a certificate under s 74. However, the High Court has made it clear that such a possibility is purely theoretical. [page 1028]

8.7.16C Kirmani v Captain Cook Cruises Pty Ltd (No 2) (1985) 159 CLR 461 Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ: This Court’s power to grant a certificate under s 74 of the Constitution is the vestigial remnant of the hierarchical connexion which formerly existed between Australian courts exercising federal jurisdiction and the Privy Council. From the beginning it was recognized that the provisions of s 74 which prevented an appeal to the Privy Council on inter se questions were ‘designed, in the first place, to safeguard the right of the people who had framed it, and had voted upon it, to

interpret it, and to bring to an end conflicts between Commonwealth and states, by the decision of the Court which that Constitution was calling into existence …’: Deakin v Webb [(1904) 1 CLR 585 at 628], per Barton J. And, as Kitto J later observed in Western Australia v Hamersley Iron Pty Ltd [No 2] [(1969) 120 CLR 74 at 84]: ‘The terms of the section and the nature of the questions to which it applies, relating as they do to the inter-relation of the organs of government within the Australian federation, were enough to ensure from the beginning that a proper case for the High Court to transfer to the Privy Council the task of final elucidation could seldom if ever arise.’ Only once has this Court granted a certificate, and that was seventy-three years ago in Colonial Sugar Refining Co v The Commonwealth [(1912) 15 CLR 182]. The fundamental reason which has led the Court to refuse applications over the years was succinctly stated in the judgment of the Court delivered by Dixon CJ in Whitehouse v Queensland [(1961) 104 CLR 635]. Dixon CJ [at 637–8] said that the principle which lies at the root of the section is ‘that experience shows — and that experience was anticipated when s 74 was enacted — that it is only those who dwell under a Federal Constitution who can become adequately qualified to interpret and apply its provisions’. In accordance with that approach this court has rigorously insisted on maintaining its ultimate constitutional responsibility to decide conflicts between the Commonwealth and the states without the intervention of Her Majesty in Council. The last occasion on which an application was made, and made unsuccessfully, was in Hamersley. At that time the Privy Council (Limitation of Appeals) Act 1968 (Cth) had been enacted. With the subsequent enactment of the Privy Council (Appeals from the High Court) Act 1975 (Cth) the hierarchical relationship between this Court and the Judicial Committee has effectively disappeared (Caltex Oil (Aust) v XL Petroleum (NSW) [(1984) 155 CLR72 at 79–80]); notwithstanding what Gibbs CJ, Mason, Wilson and Dawson JJ in Attorney-General v Finch [No 2] [(1984) 155 CLR

107 at 113] described as the ‘theoretical possibility’ of an appeal upon a s 74 certificate. It is impossible to suppose that this Court should by granting a s 74 certificate itself revive that relationship in abdication of its responsibility to decide finally questions as to the limits of Commonwealth and state powers, questions having a peculiarly Australian character and being of fundamental concern to the Australian people (cf per Gibbs J in The Commonwealth v Queensland [(1975) 134 CLR 298 at 314– 15]). Although the jurisdiction to grant a certificate stands in the Constitution, such limited purpose as it had has long since been spent. The march of events and the legislative changes that have been effected — to say nothing of national sentiment — have made the jurisdiction obsolete. Indeed an exercise of the jurisdiction now would involve this court in passing the responsibility for final decision to the Privy Council in that class of constitutional case which the Constitution marked out above all others as the class of case which should be reserved for [page 1029] the final decision of this court — and this at a time when, as a result of the legislative changes already referred to, no other constitutional cases can be taken to the Privy Council. The circumstances that a question is of great importance and that opinions are divided upon it provide no reason for granting a certificate. One of the questions involved in this case — the scope of the external affairs power — is a peculiarly Australian one. Another question — the effect of the Statute of Westminster — may, as Mr Davies clearly pointed out, have a wider significance. But that provides no reason for us to abdicate our duty finally to decide its effect on the constitutional law of Australia.

[See also Sue v Hill (1999) 199 CLR 462 at 492–3 per Gleeson CJ, Gummow and Hayne JJ.]

Chapter references Articles and book chapters Bateman and Stellios, ‘Chapter III of the Constitution, Federal Jurisdiction and Dialogue Charters of Human Rights’ (2012) 36 Melbourne University Law Review 1 Burmester, ‘Limitations on Federal Adjudication’ in Opeskin and Wheeler (eds), The Australian Federal Judicial System, Melbourne University Press, Carlton South, Victoria, 2000, p 227 Dixon, ‘The Law and the Constitution’ (1935) 51 Law Quarterly Review 590 Dziedzic, ‘Forge v Australian Securities and Investments Commission: The Kable Principle and the Constitutional Validity of Acting Judges’ (2007) 35 Federal Law Review 129 French, ‘Federal Courts Created by Parliament’ in Opeskin and Wheeler (eds), The Australian Federal Judicial System, Melbourne University Press, Carlton South, Victoria, 2000, Ch 5 Galligan, ‘Judicial Review in the Australian Federal System: Its Origin and Function’ (1979) 10 Federal Law Review 367 Hill, ‘The Demise of Cross-Vesting’ (1999) 27 Federal Law Review 547

Hill, ‘Revisiting Wakim and Hughes: The Distinct Demands of Federalism’ (2002) 13 Public Law Review 205 Irving, ‘Its First and Highest Function: The Framers’ Vision of the High Court as Interpreter of the Constitution in Cane (ed), Centenary Essays for the High Court of Australia, LexisNexis Butterworths, Sydney, 2004, p 17 Jones, ‘Federal Treaty Jurisdiction: A Belated Reply to Mark Leeming SC’ (2007) 18 Public Law Review 94 Leeming, ‘Federal Treaty Jurisdiction’ (1999) 10 Public Law Review 173 Mantziaris and McDonald, ‘Federal Judicial Review Jurisdiction After Griffith University v Tang’ (2006) 17 Public Law Review 22 Mason, ‘A New Perspective on Separation of Powers’ (1996) 82 Canberra Bulletin of Public Administration 1 [page 1030] McDonald, ‘Territory Courts and Federal Jurisdiction’ (2005) 33 Federal Law Review 57 Rose, ‘The Bizarre Destruction of Cross-Vesting’ (1999) 11 Australian Journal of Corporate Law 1 Stellios, ‘Exploring the Purposes of Section 75(v) of the Constitution’ (2011a) 34 University of New South Wales Law Journal Law Journal 70 Stellios, ‘Reconceiving the Separation of Judicial Power’ (2011b) 22 Public Law Review 113

Thomson, ‘Constitutional Authority for Judicial Review: A Contribution from the Framers of the Australian Constitution’ in Craven (ed), The Convention Debates 1891–1898: Commentaries, Indices and Guide, Legal Books, Sydney, 1986, p 173 Wheeler, ‘Constitutional Limits on Extra-Judicial Activity by State Judges: Wainohu and Conundrums of Incompatibility’ (2015) 37 Sydney Law Review 301 Zines, ‘Federal, Associated and Accrued Jurisdiction’ in Opeskin and Wheeler (eds), The Australian Federal Judicial System, Melbourne University Press, Carlton South, Victoria, 2000, p 265 Books and texts Carney, The Constitutional Systems of the Australian States and Territories, Cambridge University Press, Port Melbourne, 2006 Lane, The Australian Federal System, 2nd ed, Law Book Company, Sydney, 1979 Stellios, The Federal Judicature — Chapter III of the Constitution: Commentary and Cases, LexisNexis Butterworths, Sydney, 2010 Stellios, Zines’s High Court and the Constitution, 6th ed, The Federation Press, Sydney, 2015 Zines, Federal Jurisdiction in Australia, 3rd ed, The Federation Press, Sydney, 2002 Papers and reports Australian Law Reform Commission, The Judicial Power of the Commonwealth, Report No 92 (2001), pp 90–1

Constitutional Commission, Canberra, 1988

Final

Report,

AGPS,

Other Thomson, Judicial Review in Australia: The Courts and the Constitution, Thesis Publications, Sydney, 1988 Wheeler, The Separation of Federal Judicial Power: A Purposive Analysis, PhD thesis, 1999

[page 1031]

Express Rights and Freedoms

CHAPTER 9

INTRODUCTION 9.1.1 This chapter will focus on those express provisions in the Commonwealth Constitution commonly described as guarantees of rights and freedoms: ss 51(xxxi), 80, 92, 116 and 117. There has been considerable debate as to what interests or values these constitutional limitations protect. For example, ss 51(xxxi), 80, 116 and 117 and the intercourse limb of s 92 are often characterised as protecting the rights of individuals. The trade and commerce limb of s 92 was once viewed in a similar way. However, the Constitution primarily establishes a federal compact and, unsurprisingly, these provisions have also been seen as having federal dimensions and purposes. Section 92, for example, is now seen as protective — not of the individual trader’s right to trade — but of the federal interest in free trade. 9.1.2 Nonetheless, the idea that constitutional limitations protect individual rights continues to play an important role in our understanding of these express constitutional limitations and,

indeed, our understanding of the implied limitations dealt with in Chapter 10. Therefore, it is useful to begin this chapter by placing Australia’s experience with constitutional rights in context. The chapter will then turn to s 92 of the Constitution. While once seen as protective of individual traders, the High Court’s decision in Cole v Whitfield (1988) 165 CLR 360 9.4.13C transformed our understanding of the trade and commerce limb of that provision, although the protection of individual rights remains at the core of our understanding of the intercourse limb of s 92. The chapter will then consider the other express limitations: ss 51(xxxi), 80, 116 and 117. It will be seen that different conceptions of these provisions can be found throughout the decided cases. 9.1.3 There are, of course, other constitutional limitations that are dealt with elsewhere in this book that have a strong federal flavour: s 99 (which precludes discrimination between states or parts of states in laws of trade, commerce or revenue) and the parallel restriction in s 51(ii) were considered in Chapter 6; and the Commonwealth and state immunity principles were also considered in Chapter 6. [page 1032]

‘THE AUSTRALIAN RELUCTANCE ABOUT RIGHTS’ 9.2.1 As reflected in the title of an article by Hilary Charlesworth (1993), there has been a reluctance in Australia to

recognise and protect constitutional rights. Although the drafters drew heavily from the United States Constitution in the design and drafting of the Commonwealth Constitution, they did not seek to incorporate a Bill of Rights in the same terms as appears in the American instrument. There were a number of related reasons for that omission. First, the framers were primarily concerned with the drafting of a ‘federal compact’: an instrument that would govern the creation of a federal tier of government; the relations between the state governments and the new federal government; and the relations among the states themselves. The terms of the federal compact largely reflected those objectives. Although the Constitution imposes limitations on the exercise of government power, for the most part, those limitations ‘are no more than are to be accounted for by the fact that the Constitution is a federal pact’: Moore, 1900, p 40. 9.2.2 Second, the Constitution was drafted against the background of a particular constitutional tradition. Reflecting the writings of Dicey, ‘[t]hose who framed the Australian Constitution accepted the view that individual rights were on the whole best left to the protection of the common law and the supremacy of the Parliament’: Kruger v Commonwealth (Stolen Generations case) (1997) 190 CLR 1 9.7.21C at 61 per Dawson J. The distrust of the democratic process commonly attributed to the framers of the United States Constitution did not trouble the framers of the Commonwealth Constitution. Instead, faith was placed in the common law and the democratic process as mechanisms for the protection of rights. The contrast in constitutional models for rights protection between Australia and the United States was explained by Sir Owen Dixon when addressing the American Bar Association in 1942:

In this country men have come to regard formal guarantees of life, liberty and property against invasion by government, as indispensable to a free constitution. Bred in this doctrine you may think it strange that in Australia, a democracy if ever there was one, the cherished American practice of placing in the fundamental law guarantees of personal liberty should prove unacceptable to our constitution makers. But so it was. The framers of the Australian Constitution were not prepared to place fetters upon the legislative action, except and in so far as it might be necessary for the purpose of distributing between the States and the central government the full content of legislative power. The history of their country had not taught them of the need of provisions directed to the control of the legislature itself. The working of such provisions in this country was consciously studied, but, wonder as you may, it is a fact that the study fired no one with enthusiasm for the principle. With the probably unnecessary exception of the guarantee of religious freedom, our constitution makers refused to adopt any part of the Bill of Rights of 1791 and a fortiori they refused to adopt a Fourteenth Amendment. It may surprise you to learn that in Australia one view held was that these checks on legislative action were undemocratic, because to adopt them argued a want of confidence in the will of the people. Why, asked the Australian democrats, should doubt be thrown on the wisdom and safety of entrusting to the chosen representatives of the people sitting either in the federal Parliament or in the State Parliaments all legislative power, substantially without fetter or restriction? (Dixon, 1965, pp 101–2.)

Far from seeking to protect rights by limitation on governmental power, as alluded to by Dixon, the framers rejected efforts to impose such limits. Attempts by one of the framers, Tasmania’s [page 1033] Andrew Inglis Clark, to introduce a provision based on the American equal protection and due process clause (Fourteenth

Amendment) were rejected by the convention so as not to disturb the power of the states to continue to enact racially discriminatory laws: see La Nauze, 1972, pp 230–2. Third, the intellectual and political environment in which the Commonwealth Constitution was drafted and adopted did not encourage the development of a charter of individual rights. At the intellectual level, the fashion in political theory moved from the 18th century emphasis on natural rights (and the ‘Rights of Man’) to the 19th century utilitarian philosophy of Jeremy Bentham, in which progress, science and a rational balancing of competing interests dominated. The processes of legislation and governmental action were seen, not as a threat to liberty, but a mechanism through which the objectives of progress (the greatest happiness for the largest number) could be achieved. As Jeffrey Goldsworthy has written: … the climate of opinion in the late nineteenth century was quite different to that which had prevailed at the time of the American revolution. The objections of Bentham and his disciples had led to the almost total eclipse of the idea of natural rights in English political thought. After a century of increasing democratization, parliamentary democracy was widely believed to be the key to a more just and prosperous future. Progressive social thought optimistically assumed the forward march of history, guided by enlightened, scientific thinking. Government was not to be shackled, but used to alleviate the stresses of industrialization and other rapid social changes. In Australia, often described as a paradigmatically utilitarian society, a harsh environment was still being pioneered, and government was relied upon to underwrite enterprise, provide necessary infrastructure, and enact social regulation. (Goldsworthy, 1992, pp 153.)

See also Finn, 1987, p 3; Gageler, 1987, pp 171, 173.

9.2.3 Fourth, the colonial political experience was also uncongenial to the notion of fundamental guarantees. Almost all of the Australian colonies had achieved responsible self-government by the middle of the 19th century (and the last, Western Australia, in 1889) through processes of evolution and negotiation with the Imperial power, the United Kingdom. The federal movement was similarly evolutionary and was not resisted by the United Kingdom. There was none of the struggle against ‘oppression’ and ‘tyranny’ which, to the drafters of the American Bill of Rights, characterised their achievement of independence: Moffatt, 1965, pp 85–6. These related points were well captured by Gleeson CJ in Roach v Electoral Commissioner (2007) 233 CLR 162 at 172: The Australian Constitution was not the product of a legal and political culture, or of historical circumstances, that created expectations of extensive limitations upon legislative power for the purpose of protecting the rights of individuals. It was not the outcome of a revolution, or a struggle against oppression. It was designed to give effect to an agreement for a federal union, under the Crown, of the peoples of formerly self-governing British colonies. Although it was drafted mainly in Australia, and in large measure (with a notable exception concerning the Judicature — s 74) approved by a referendum process in the Australian colonies, and by the colonial Parliaments, it took legal effect as an Act of the Imperial Parliament. Most of the framers regarded themselves as British. They admired and respected British institutions, including parliamentary sovereignty.

[page 1034] 9.2.4 However, the drafters of the Commonwealth Constitution did include several provisions that resemble rights. Judges and

commentators have expressed different views as to how many of these rights-protective limitations there are in the Constitution; however, most accounts typically include ss 51(xxxi), 80, 92, 116 and 117. A discussion of these provisions forms the focus of the first part of this chapter. Provisions such as s 80 9.6.1E and s 116 9.7.1E have consistently received a narrow reading by the High Court: see Charlesworth, 1986, pp 54–5; O’Neill, 1987. Other provisions, such as s 51(xxxi) 9.5.1E and s 92 9.4.1E, have been read more expansively by the justices and have operated as a significant constraint on the actions of governments and legislatures. Section 117 9.8.1E was given a cramped reading by the High Court until 1989, when the decision in Street v Queensland Bar Association (1989) 168 CLR 461 9.8.5C revived that provision. As will be seen, the trade and commerce limb of s 92 was initially understood by the High Court as a limitation protective of the individual’s right to engage in interstate or overseas trade and commerce, allowing the High Court to strike down a number of important Commonwealth policies seeking to nationalise the banks and airlines in Australia. Since the court’s decision in Cole v Whitfield (1988) 165 CLR 360 9.4.13C, s 92 is now seen as prohibiting a narrower range of measures that discriminate in a protectionist way. The protection of rights, however, still has some role to play in the intercourse limb of s 92.

RIGHTS AND FREEDOMS AND THE STATES 9.3.1

The states do not have entrenched constitutional

provisions that protect individual rights. Attempts to argue that state parliaments were subject to implied constraints in the interests of individual rights have met with little success. In Grace Bible Church v Reedman (1984) 54 ALR 571, the South Australian Supreme Court held that the South Australian Parliament was not constrained in the exercise of its legislative powers by a common law right of religious freedom. White J, for example, pointed to the contrast with the Commonwealth Constitution’s specific protection of religious freedom in s 116 and observed that ‘[i]t takes something as powerful as a constitutional provision such as [s 116] to restrict the power of the Parliament’: 54 ALR at 571. He adopted a broad and unrestrained view of the state parliament’s powers (54 ALR at 581): [T]he opinion of the Parliament as to what laws are for the peace, welfare and good government of the State is paramount and conclusive as a matter of law. The Parliament’s opinion, as expressed in a particular statute, cannot be impugned in a court of law as being an invalid exercise of Parliament’s power.

9.3.2 The High Court has also confirmed that there is no ‘deeply rooted right’ to receive just compensation for property acquired under state legislation: Durham Holdings Pty Ltd v New South Wales (2001) 205 CLR 399 at 409–10 per Gaudron, McHugh, Gummow and Hayne JJ; 425 per Kirby J; 433 per Callinan J. The constitutional right to compensation under s 51(xxxi) applies only to Commonwealth laws, although it may affect a state acquisition of property where that acquisition is funded by a Commonwealth grant under s 96 (which is subject to the s 51(xxxi) constraint): see 9.5.4. See also the suggestion of Street CJ and Priestley JA in Building Construction Employees and Builders’ Labourers Federation v Minister for Industrial Relations

(1986) 7 NSWLR 372 that the New South Wales Parliament could not make laws which were inimical to the peace, welfare and good government of parliamentary democracy: 7 NSWLR at 387, 421–2. This suggestion was later described by the High Court as ‘somewhat [page 1035] surprising’ in Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at 9. Section 80, on its face, is only enlivened where there is an offence against a law of the Commonwealth. 9.3.3 The Commonwealth Constitution, however, operates to constrain the exercise of state legislative power in some respects. Section 92 guarantees the freedom of interstate trade, commerce and intercourse; and s 117 prohibits discrimination on the basis of residence in another state. It is also clear that state governments are subject to the limitations that arise from responsible and representative government — that is, the freedom of political communication (see 10.3.1–10.3.48) and rights to participate in the democratic process (see 10.3.49–10.3.63), and state courts must act in a manner that is compatible with the requirements of Ch III of the Commonwealth Constitution: see Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 8.5.17C. 9.3.4 However, apart from those constraints, state governments and parliaments are, it seems, free to develop policies that infringe on the fundamental freedoms of Australians. Although s 46 of the Constitution Act 1934 (Tas) ‘guarantees’ freedom of conscience

and religion, the Tasmanian Parliament is free to amend or repeal the section through its normal legislative processes.

FREEDOM OF INTERSTATE TRADE, COMMERCE AND INTERCOURSE 9.4.1E

Commonwealth Constitution

92 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.

Trade and commerce 9.4.2 For some 87 years, s 92 posed a serious obstacle to any government that undertook to regulate commercial activity in Australia. Until the High Court’s reassessment in Cole v Whitfield (1988) 165 CLR 360 9.4.13C, the conventional approach to that section could threaten a wide range of government programs, whether or not they were directed at regulating commerce, if those programs impinged in some way upon the freedom perceived to be guaranteed by s 92. We had seen, for example, the Privy Council declare invalid Commonwealth programs for the collective marketing of dried fruit and for the nationalisation of the banking industry: James v Commonwealth (1936) 55 CLR 1; Commonwealth v Bank of New South Wales (1948) 79 CLR 497. We had also seen the High Court strike down state requirements for local

pasteurisation of milk, a state registration fee on motor vehicles used for interstate transport, and a state registration system for travel agents: North Eastern Dairy Co Ltd v Dairy Industry Authority (NSW) (1975) 134 CLR 559; Finemores Transport Pty Ltd v New South Wales (1978) 139 CLR 338; Boyd v Carah Coaches Pty Ltd (1979) 145 CLR 78. On the other hand, the High Court had refused to invoke the section against Commonwealth controls on the importation of aircraft (essential for interstate air services) and state restrictions on the manufacture of margarine intended for interstate trade: R v Anderson; Ex parte Ipec-Air [page 1036] Pty Ltd (1965) 113 CLR 117; Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55. The impact of the section, as applied by the High Court, was not to frustrate all government initiatives. Rather than function as an obstacle to government regulation and control of commercial activity, s 92 and its case law came to resemble a maze through which governments were obliged to find a way if their regulatory attempts were to survive. 9.4.3 That maze had been built up over some 80 years of litigation, involving 140 decisions of the High Court and Privy Council. The many apparent inconsistencies and uncertainties within this body of law served only to encourage opportunistic litigation. Adding to difficulties in this area was the fact that the conventional view of s 92 prior to 1988 — as creating a zone of freedom for traders — rested uncomfortably with a widespread political appetite for increased government intervention. These

pressures, and their impact on the High Court’s approach to s 92, were described by Gibbs and Wilson JJ in Uebergang v Australian Wheat Board (1980) 145 CLR 266 at 300: Absolute freedom of interstate trade commerce and intercourse requires that the citizens of this Commonwealth shall within the framework of a civilised society be free to engage in these things. The difficulty is that the trend of political theory and practice is to develop and strengthen that framework more and more and often at the cost of individual liberty; but however conservative or reactionary it may seem to some, this Court cannot write s 92 out of the Constitution. It must therefore do its best to preserve a balance between competing interests, a balance which favours freedom of the individual citizen in the absence of compelling considerations to the contrary.

9.4.4 The view of s 92 as being concerned chiefly with ‘freedom of the individual citizen’ had come to prominence in Commonwealth v Bank of New South Wales (1949) 79 CLR 49. Previously there had been quite different, narrower (though hardly uniform) views as to what ‘freedom’ was guaranteed by s 92. The individual freedom approach was unequivocally abandoned in Cole v Whitfield (1988) 165 CLR 360 9.4.13C, where the court declared that s 92 did not immunise interstate traders from government controls but demanded an ‘equality of treatment’ as between local and interstate trade.

A clash of visions 9.4.5 A settled approach to s 92 did not come easily. This is perhaps not surprising, given that the section is, unhelpfully, expressed in the form of an incomplete proposition. It declares that interstate trade, commerce and intercourse are to be absolutely free

but fails to identify from what burdens or restrictions they are to be free. The placement of s 92 suggests that it was intended to protect interstate trade, commerce and intercourse from taxes and other fiscal charges which placed discriminatory burdens on interstate trading and movement. It appears in Ch IV of the Constitution (‘Finance and Trade’) in the company of provisions establishing uniform duties of customs, depriving the states of the capacity to levy customs and excise duties and to pay bounties on the production of goods, and providing for payment of ‘surplus revenue’ and ‘financial assistance’ from the Commonwealth to the states. There are, however, historical reasons to view s 92 as conferring a broader freedom; namely, freedom from laws which absolutely prohibited or discriminated against the movement of goods and persons across state borders. These could be discriminatory taxes (in effect, customs [page 1037] duties) or more subtle forms of protectionism: preferential freight charges on the state-owned railways; quarantine requirements for out-of-state goods; or import licensing schemes. It was this view of s 92, as proscribing government controls or burdens that discriminate against interstate trade and commerce, which the High Court ultimately endorsed in Cole v Whitfield. 9.4.6 There is no doubt that, in the final 30 years of the 19th century, the question of protection for local industries was a great

political issue that divided opinion within each colony and between the colonies. By 1877, Victoria (followed closely by South Australia and Tasmania, and at some distance by Queensland) had established a high level of protection for its industries. New South Wales, on the other hand, was firmly committed to free trade. The dispute over this issue and the pursuit by most of the colonies of a protectionist policy generated considerable friction between the colonies. Its elimination provided one of the greatest incentives for the federation movement (although it also raised difficult questions over such matters as the future tariff policy of a unified Australia and compensation for the lost revenues of the protectionist colonies): La Nauze, 1972, p 21. 9.4.7 The open-ended nature of s 92’s language made it possible to appeal to another aspect of its historical context. Nineteenthcentury economic liberalism — often described as the philosophy of laissez-faire — asserted the freedom of the individual. That freedom was, indeed, regarded by the United States Supreme Court as constitutionally enshrined in the Fifth and Fourteenth Amendments of the United States Constitution, so that neither Congress nor any state legislature could limit working hours to 60 per week, because that would restrict the employer’s freedom to purchase labour (Lochner v New York 198 US 45 (1905)), or protect union members from employer victimisation, because that involved an invasion of the employer’s ‘rights of liberty and property’: Adair v United States 208 US 161 (1908). Section 92’s broad language invited those judges who were attracted to laissez-faire philosophy to construe the section as demanding freedom for the individual to trade without government interference. One significant weakness of that reading is that s 92 confers absolute freedom only on interstate trade. Arguably, if the

provision had been intended to protect traders and commercial activity from government control its coverage would have extended to intrastate trade. 9.4.8 The earliest decisions on s 92 seemed to favour the free trade rather than a laissez-faire view of s 92. So, in Fox v Robbins (1909) 8 CLR 115, the High Court held that Western Australia could not discriminate against trade by fixing the fee for a liquor retailer’s licence at £50 where liquor from out of the state was sold, and at £2 where locally produced liquor was sold. 9.4.9 By the 1940s, some members of the High Court had begun to develop a theory of s 92 that stressed the individual rights of interstate traders to trade free of government controls. An attempt in 1945 by the federal Labor Government to secure the court’s commitment to a free trade interpretation of s 92 produced, instead, a strong judicial endorsement of the individual-right view: Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29. The ascendance of the individual right theory of s 92 was cemented in the next major case, prompted by the same Labor Government’s attempt to nationalise the banking industry: Bank of New South Wales v Commonwealth (1948) 76 CLR 1 (Bank Nationalisation case). The dispute centred on the validity of the Banking Act 1947 (Cth), which purported to place under Commonwealth control all of Australia’s private banks. While the High Court [page 1038]

relied principally upon s 51(xxxi) — the requirement of ‘just terms’ for any Commonwealth acquisitions of property (see 9.5.1E) — to invalidate most of the nationalisation scheme, a majority also took the view that s 92 had been infringed. This finding was only possible on an individual rights theory of s 92; as there was no distinction made between interstate and intrastate trade under the Banking Act, the nationalisation scheme would not have offended a free trade-based understanding of s 92. On appeal, the Privy Council endorsed the High Court’s interpretation of s 92: Commonwealth v Bank of New South Wales (1949) 79 CLR 497. 9.4.10 The ascendance of the individual right theory considerably enlarged the freedom guaranteed by s 92 and put at risk a wide range of government controls and programs, including transport regulation, consumer protection laws and price control measures. It also stimulated a remarkable increase in s 92 litigation. After Commonwealth v Bank of New South Wales, more than 90 High Court cases raised s 92 issues during the 35 years to 1984, compared with just over 40 cases in the 45 years before Commonwealth v Bank of New South Wales. 9.4.11 Despite some victories for individual traders, Commonwealth v Bank of New South Wales (1949) 79 CLR 497 did not have the dramatic effect on government controls of commercial activity that the individual right theory seemed to portend. Its effect was limited through the development by the High Court of two reservations put forward by the Privy Council. The first of these was the proposition that regulation of interstate trade was compatible with its absolute freedom, accompanied by the suggestion that, in some circumstances, even prohibition could be reconciled with absolute freedom: 79 CLR at

639, 641. The extent of permissible regulation was to remain largely untested for 20 years after the Bank case. However, the court’s eventual exploration of this idea, in cases such as Permewan Wright Consolidated Pty Ltd v Trewhitt (1979) 145 CLR 1 and Uebergang v Australian Wheat Board (1980) 145 CLR 266, confirmed its nature as essentially political and revealed deeply divided judicial opinion as to its content. The second reservation made by the Privy Council in Commonwealth v Bank of New South Wales raised conceptual questions rather than policy choices. Specifically, s 92 was said to strike down only direct or immediate restrictions of interstate trade; that is, an ‘indirect or consequential impediment which may fairly be regarded as remote’ did not violate the s 92 freedom: 79 CLR at 639. Most of the judicial development of s 92 over the succeeding 20 years focused on efforts to distinguish convincingly between direct and indirect burdens on interstate trade. It remained, however, a strained distinction that never attained the stability needed to stem the steady flow of s 92 litigation. 9.4.12 As dissatisfaction with the individual rights theory of s 92 spread, momentum grew within the High Court for a fundamental rethink of the provision. In Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556, both Mason and Deane JJ developed a substantial criticism of the individual rights theory of s 92. Justice Mason said that to read s 92 as a guarantee of individual rights seemed ‘to draw too heavily on the laissez–faire notions of political economy prevailing in 1900’: 161 CLR at 571. He pointed to ‘the divergence of views expressed by the members of the court’ in the especially confused decision in Uebergang v Australian Wheat Board (1980) 145 CLR 266, and observed (161 CLR at 571):

The judgments in that case demonstrate in convincing fashion that there is now no interpretation of s 92 that commands the acceptance of a majority of the court. There is

[page 1039] much to be said for the view that in this situation the court has a responsibility to undertake a fundamental reexamination of the section.

Deane J described the judicial decisions on s 92 as (161 CLR at 616): … an area where the ordinary processes of legal reasoning have had but a small part to play and where judicial exegesis has tended to confuse rather than elucidate. Indeed, it is as if many voices of authority have been speaking differently at the same time with the result that, putting to one side some basic propositions, it is all but impossible to comprehend precisely what it is that authority has said.

After noting the court’s failure in Uebergang to express an authoritative view on the constitutional validity of an important national scheme, Deane J observed that ‘somewhere along the line, things have gone wrong’ (161 CLR at 618): The section was, plainly enough, intended to serve the essential function of reinforcing the economic and social unity of an emerging nation by removing the barriers to commerce, trade and intercourse which the frontiers between the federating colonies had previously represented. It has been converted into a form of constitutional guarantee of the economics of laissez-faire and the politics of ‘small government’. The importance of the notion of ‘freedom as at the frontier’ which was recognised even in James v Commonwealth (1936) 55 CLR 1 at 58 as

lying at the heart of s 92 has been progressively discounted and disregarded.

The occasion for reconsideration was presented to the court a few months later (in June 1987) when Cole v Whitfield was argued.

Cole v Whitfield — a new start 9.4.13C

Cole v Whitfield (1988) 165 CLR 360

[Section 9 of the Fisheries Act 1959 (Tas) authorised the Governor to make regulations ‘prohibiting … the having or possession or control of … undersized … fish’. The Governor accordingly made the Sea Fisheries Regulations 1962, reg 31(1)(d) of which declared that no person should ‘have in his possession, or under his control’ male crayfish below 11 inches in size or female crayfish below 10.5 inches in size, ‘whether or not the fish was taken in State fishing waters’. Whitfield was the manager of Boomer Park Crayfish Farm, a business located in Tasmania which purchased and sold live crayfish. In October 1982, Whitfield purchased some live crayfish from a South Australian fishing business. The crayfish were all above the minimum size prescribed by South Australian legislation, but were below the minimum size prescribed by the Tasmanian regulations. In January 1983, a Tasmanian government inspector inspected the premises managed by Whitfield and discovered 97 crayfish below the minimum size prescribed by the Tasmanian regulations. Whitfield and Boomer Park were charged with possession of undersized crayfish. The magistrate dismissed the charges on the basis that Whitfield’s possession of the crayfish was protected by s 92 of the Commonwealth Constitution. The prosecutor applied to the Supreme Court of Tasmania for review of the magistrate’s order. This application was

[page 1040] removed to the High Court of Australia under s 40 of the Judiciary Act 1903 (Cth), where two questions were posed for the court’s decision (165 CLR at 382): (a) whether the possession in Tasmania by the respondents of 60 male and 37 female crayfish imported from South Australia is possession that is the subject of a transaction of interstate trade and commerce within the meaning of s 92 of the Commonwealth of Australia Constitution; (b) whether the provisions of reg 31(1)(d)(ix) and (x) of the Sea Fisheries Regulations 1962 made under the Fisheries Act 1959 (Tas), when applied to the possession of the aforesaid crayfish, are compatible with the freedom guaranteed by s 92 of the Constitution …?] Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ: If the view be taken that the guarantee of freedom contained in s 92 is one of substance rather than of legislative form, it may well be that the validity of the relevant provisions of the Sea Fisheries Regulations or their applicability to the respondents’ possession of the crayfish referred to in the complaint will depend on the general circumstances in which those provisions would operate. To cover that contingency, the court has been furnished with an agreed statement of those circumstances. The statement reads: 1.

2.

The conservation of crayfish stocks in Tasmania depends upon effectively enforced legal minimum size regulations. It is common in all States of Australia and throughout the world to protect many species of fish by limiting their taking (and/or possession) according to a minimum size. In Tasmania the breeding stock of crayfish is almost

3.

4.

5.

6.

7.

entirely made up of mature fish which are below the legal minimum size. Accordingly, fish may be taken above the minimum legal size without endangering the future of the fishery. In Tasmanian waters it takes approximately four years for a crayfish to reach maturity and be able to reproduce. The female crayfish has then a carapace length of approximately 70 mm, the male, a little greater. Measurement is made in the manner shown on the attached diagram. Studies show that the mortality rate for young crayfish is such that an average of four years of breeding is necessary to maintain the current population level. After that time, the average female carapace length is approximately 105 mm and the male, 110 mm. Those sizes are thus set as the minimum permissible size at which the fish may be taken, with the object of thereby preserving stocks and ensuring the viability of the industry. In South Australia the minimum size at which both male and female crayfish may be taken is 98.55 mm. Principally this reflects the fact that the reproduction of the species in South Australian waters is considered by the South Australian authorities to be protected by this minimum size of take in those waters. Three hundred and thirty five fishing vessels are licensed to use a total of approximately 10,000 pots to fish for crayfish in Tasmanian waters. These vessels operate out of 22 ports around the State. Total sales realise approximately $16 m per annum at current prices in an average year. At all relevant times to date, Tasmania had jurisdiction over fishing in coastal waters only to the three-mile limit. However, by virtue of a Commonwealth State agreement to become effective shortly, the jurisdiction will be

8.

extended to all waters in the ‘Australian Fishing Zone’ (ie, approximately 200 kms offshore) south of lat 39°12′ S. The State does not have the personnel to police the legal minimum size regulation by any means other than random inspection and measurement, both at sea and when [page 1041]

the catch is brought ashore. It is not possible on inspection to determine whether a particular crayfish has been caught in Tasmanian waters or elsewhere. 9. At all material times the second respondent’s business involved the year-round export of live crayfish and, to maintain its market, it was necessary for the second respondent to purchase live crayfish from interstate during the month of October because the Tasmanian season is closed during that month. 10. The subject crayfish were purchased pursuant to an oral contract by which the respondents agreed to take an entire catch of one of the vendor’s fishing vessels. It is unnecessary that we reproduce the diagram referred to in para 3 (above). The references in para 7 are, of course, to Tasmanian waters. No provision of the Constitution has been the source of greater judicial concern or the subject of greater judicial effort than s 92. That notwithstanding, judicial exegesis of the section has yielded neither clarity of meaning nor certainty of operation. Over the years the court has moved uneasily between one interpretation and another in its endeavours to solve the problems thrown up by the necessity to apply the very general language of the section to a wide variety of legislative and factual situations.

Indeed, these shifts have been such as to make it difficult to speak of the section as having achieved a settled or accepted interpretation at any time since federation. The interpretation which came closest to achieving that degree of acceptance was that embodying the criterion of operation formula which we shall subsequently examine in some detail. That formula appeared to have the advantage of certainty, but that advantage proved to be illusory. Its disadvantage was that it was concerned only with the formal structure of an impugned law and ignored its real or substantive effect. It was in vogue during the 25 years that began with Hospital Provident Fund Pty Ltd v Victoria (1953) 87 CLR 1 and continued through to Beal v Marrickville Margarine Pty Ltd (1966) 114 CLR 283 and Bartter’s Farms Pty Ltd v Todd (1978) 139 CLR 499, though the seeds of its decline were clearly visible in Pilkington v Frank Hammond Pty Ltd (1974) 131 CLR 124 and North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW (1975) 134 CLR 559. In more recent years various members of the court have declined to accept and apply the criterion of operation formula. This process culminated in the two decisions on the Wheat Stabilisation Scheme — Clark King & Co Pty Ltd v Australian Wheat Board (1978) 140 CLR 120 and Uebergang v Australian Wheat Board (1980) 145 CLR 266 — in which the members of the court were unable to agree upon a common or a majority approach to the construction of the section. The divergence of opinion expressed in the judgments in Uebergang led Mason J in Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 at 571 to say that ‘there is now no interpretation of s 92 that commands the acceptance of a majority of the court’. In the same case, Deane J observed … (161 CLR at 618): Clark King and Uebergang demonstrated that the outcome of all the past cases was that the court was unable to give authoritative guidance or to express an authoritative view about the process of reasoning which was relevant to determine the constitutional validity of a national scheme

which had been adopted by the Commonwealth and all the States for the marketing of one of the nation’s most important commodities. These comments cannot be gainsaid. They identify what we see as a quite unacceptable state of affairs. In these circumstances, it is not surprising that the court is now pressed to reconsider the approximately 140 decisions of this court and of the Privy Council which have attempted to illuminate the meaning and operation of the section. Nor is it surprising that the section [page 1042] should have defied judicial attempts to define enduring criteria of its application, for its enigmatic text does not state the area of immunity which it guarantees. Though the text of the section is more than familiar, it is convenient to set out the relevant parts again in order to facilitate the examination of its history to which we shall shortly turn: 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. … Reference to the history of s 92 may be made, not for the purpose of substituting for the meaning of the words used the scope and effect — if such could be established — which the founding fathers subjectively intended the section to have, but for the purpose of identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged.

[The court referred at length to the restrictions on inter-colonial trade which were a consequence of different external tariffs established by the Australian colonies; to the push for a free trade area embracing the colonies; and to the debates at the three Federal Conventions, of 1891, 1897 and 1898, where the Commonwealth Constitution was drafted.] The purpose of the section is clear enough: to create a free trade area throughout the Commonwealth and to deny to Commonwealth and States alike a power to prevent or obstruct the free movement of people, goods and communications across State boundaries. Free trade was understood to give ‘equality of trade’, which Mr McMillan (of the New South Wales delegation) asserted to be ‘one grand principle involved in the whole of our federation’: Convention Debates, Melbourne, 1898, vol II, p 2345. The enemies of free trade were border taxes, discrimination, especially in railway freight rates, and preferences. Higgins pointed out: ‘what will be the use of talking about free trade between the States, and diminishing the friction upon the borders, if we do not provide against a war of railway rates?’: ibid, p 1268. To complement the s 92 prohibition against discriminatory laws which prevented the free flow of trade, ss 99 and 102 were introduced to prohibit preferences. The difficulties which inhere in s 92 flow from its origin as a rallying call for federationists who wanted to be rid of discriminatory burdens and benefits in trade and who would not suffer that call to be muffled by nice qualifications. By refraining from defining any limitation on the freedom guaranteed by s 92, the Conventions and the Constitution which they framed passed to the courts the task of defining what aspects of interstate trade, commerce and intercourse were excluded from legislative or executive control or regulation. Rich J in James v Cowan (1930) 43 CLR 386 at 422 lamented: Some hint at least might have been dropped, some distant allusion made, from which the nature of the immunity

intended could afterwards have been deduced by those whose lot it is to explain the elliptical and expound the unexpressed. The creation of a limitation where none was expressed and where no words of limitation were acceptable was a task which, having regard to the diverse and changing nature of interstate trade, commerce and intercourse, was likely to produce a variety of propositions. And so it has. Sir Robert Garran contemplated that a student of the first 50 years of case law on s 92 might understandably ‘close his notebook, sell his law books, and resolve to take up some easy study, like nuclear physics or higher mathematics’: La Nauze, ‘Absolutely Free’, p 58 (quoting [page 1043] Garran, Prosper the Commonwealth, 1958, p 415). Some 30 years on, the student who is confronted with the heightened confusion arising from the additional case law ending with Miller v TCN Channel Nine (1986) 161 CLR 556 would be even more encouraged to despair of identifying the effect of the constitutional guarantee. Attention to the history which we have outlined may help to reduce the confusion that has surrounded the interpretation of s 92. That history demonstrates that the principal goals of the movement towards the federation of the Australian colonies included the elimination of intercolonial border duties and discriminatory burdens and preferences in intercolonial trade and the achievement of intercolonial free trade. As we have seen, apart from ss 99 and 102, that goal was enshrined in the various draft clauses which preceded s 92 and ultimately in the section itself. The expression ‘free trade’ commonly signified in the nineteenth century, as it does today, an absence of protectionism,

ie, the protection of domestic industries against foreign competition. Such protection may be achieved by a variety of different measures — eg, tariffs that increase the price of foreign goods, non–tariff barriers such as quotas on imports, differential railway rates, subsidies on goods produced and discriminatory burdens on dealings with imports — which, alone or in combination, make importing and dealing with imports difficult or impossible. Sections 92, 99 and 102 were apt to eliminate these measures and thereby to ensure that the Australian States should be a free trade area in which legislative or executive discrimination against interstate trade and commerce should be prohibited. Section 92 precluded the imposition of protectionist burdens: not only interstate border customs duties but also burdens, whether fiscal or non-fiscal, which discriminated against interstate trade and commerce. That was the historical object of s 92 and the emphasis of the text of s 92 ensured that it was appropriate to attain it. The two elements in s 92 which provide an arguable foundation for giving the section a wider operation with respect to trade and commerce than that foreshadowed by its history are the reference to ‘intercourse’ and the emphatic words ‘absolutely free’. A constitutional guarantee of freedom of interstate intercourse, if it is to have substantial content, extends to a guarantee of personal freedom ‘to pass to and fro among the States without burden, hindrance or restriction’: Gratwick v Johnson (1945) 70 CLR 1 at 17. If s 92 were to be viewed in isolation from its history, the attachment of the guarantee to trade and commerce along with intercourse might suggest that interstate trade and commerce must also be left without any restriction or even regulatory burden or hindrance. That is not to suggest that every form of intercourse must be left without any restriction or regulation in order to satisfy the guarantee of freedom. For example, although personal movement across a border cannot, generally speaking, be impeded, it is legitimate to restrict a pedestrian’s use of a highway for the purpose of his crossing or to authorise the arrest

of a fugitive offender from one State at the moment of his departure into another State. It is not necessary now to consider the content of the guarantee of freedom of various forms of interstate intercourse. Much will depend on the form and circumstance of the intercourse involved. But it is clear that some forms of intercourse are so immune from legislative or executive interference that, if a like immunity were accorded to trade and commerce, anarchy would result. However, it has always been accepted that s 92 does not guarantee freedom in this sense, that is, in the sense of anarchy: see eg, Duncan v Queensland (1916) 22 CLR 556 at 573; Freightlines & Construction Holding Ltd v New South Wales (1967) 116 CLR 1 at 4–5; [1968] AC 625 at 667. Once this is accepted, as it must be, there is no reason in logic or common sense for insisting on a strict correspondence between the freedom guaranteed to interstate trade and commerce and that guaranteed to interstate intercourse. [page 1044] What we have just said is likewise an answer to the objection that the words ‘absolutely free’ are inconsistent with any interpretation of the section that concedes to interstate trade no more than a freedom from burdens of a limited kind, whether discriminatory or otherwise. Implicit in the rejection of the notion that the words ‘absolutely free’ are to be read in the abstract as a guarantee of anarchy is recognition of the need to identify the kinds or classes of legal burdens, restrictions, controls or standards from which the section guarantees the absolute freedom of interstate trade and commerce. As we have seen, the failure of the section to define expressly what interstate trade and commerce was to be immune from is to be explained by reference to the dictates of political expediency, not by reference to a purpose of prohibiting all legal burdens, restrictions, controls or

standards. In that context, to construe s 92 as requiring that interstate trade and commerce be immune only from discriminatory burdens of a protectionist kind does not involve inconsistency with the words ‘absolutely free’: it is simply to identify the kinds or classes of burdens, restrictions, controls and standards from which the section guarantees absolute freedom. The task which has confronted the court is to construe the unexpressed; to formulate in legal propositions, so far as the text of s 92 admits, the criteria for distinguishing between the burdens (including restrictions, controls and standards) to which interstate trade and commerce may be subjected by the exercise of legislative or executive power and the burdens from which interstate trade and commerce is immune. The history of s 92 points to the elimination of protection as the object of s 92 in its application to trade and commerce. The means by which that object is achieved is the prohibition of measures which burden interstate trade and commerce and which also have the effect of conferring protection on intrastate trade and commerce of the same kind. The general hallmark of measures which contravene s 92 in this way is their effect as discriminatory against interstate trade and commerce in that protectionist sense. There can be no doubt that s 92 guarantees absolute freedom of interstate trade and commerce from all interstate border duties and other discriminatory fiscal charges levied on transactions of interstate trade and commerce. Indeed, the reference in each para of the section to uniform duties of Customs creates the impression that the provision is directed to fiscal charges and burdens. This impression is reinforced by the context provided by the surrounding provisions, ss 89–91 and ss 93–5. All these provisions deal with fiscal charges and burdens, appearing, as they do, in Ch IV of the Constitution which is headed ‘Finance and Trade’. But the section cannot be easily confined to such matters because protection against interstate trade and commerce can be secured by non-fiscal measures. In relation to both fiscal and non-fiscal measures, history and

context alike favour the approach that the freedom guaranteed to interstate trade and commerce under s 92 is freedom from discriminatory burdens in the protectionist sense already mentioned … [The justices referred to the Privy Council’s decision in James v Commonwealth (1936) 55 CLR 1, which had ‘provided support for the development of the doctrine of criterion of operation’: at 397. They continued:] The impact that the interpretation favoured by history and context would have on the Commonwealth’s legislative power under s 51(i) was not closely explored in argument in the present case. For this reason alone we would be reluctant to attempt to express an exhaustive opinion upon that topic, even if it were possible to do so, or to identify the precise effects of the interaction between ss 51(i), 90, 92, 99 and 102, a matter that has not been examined in the decided cases. It is, however, necessary for present purposes that we make some general reference to the relationship between s 51(i) and s 92 for the reason that the guarantee of the absolute freedom of interstate trade and commerce contained in s 92 must be read in the [page 1045] context of the express conferral of legislative power with respect to such trade and commerce which is contained in s 51(i). We do not accept the explanation suggested in Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55 at 77–8, that the key to the relationship between s 51(i) and s 92 is to be found in the presence of the words ‘with respect to’ in the opening words of s 51(i). The consequence of reconciling the two constitutional provisions in that way is to treat the legislative power conferred by s 51(i) as essentially peripheral in character.

In our view, any acceptable appreciation of the interrelationship between the two sections must recognise that s 51(i) is a plenary power on a topic of fundamental importance. That being so, the express conferral of legislative power with respect to interstate trade and commerce lends some support for the view that s 92 should not be construed as precluding an exercise of legislative power which would impose any burden or restriction on interstate trade and commerce or on an essential attribute of that trade and commerce. Obviously, the provision conferring legislative power (s 51(i)) and the provision restricting the exercise of legislative power (s 92) sit more easily together if the latter is construed as being concerned with precluding particular types of burdens, such as discriminatory burdens of a protectionist kind. That is not to suggest that, if s 92 were construed in that more limited sense of being concerned with discriminatory burdens upon interstate trade and commerce, the relationship between s 51(i) and s 92 would be freed from all difficulty. Upon analysis, however, the remaining difficulty would be largely superficial. Certainly it would not be any greater and it might be less than the difficulty of the relationship between s 51(i) and s 92 which is attendant upon other arguable constructions of the constitutional guarantee. The above concept of discrimination commonly involves the notion of a departure from equality of treatment. It does not follow that every departure from equality of treatment imposes a burden or would infringe a constitutional guarantee of the freedom of interstate trade and commerce from discriminatory burdens. Nor does it follow that to construe s 92 as guaranteeing the freedom of interstate trade and commerce from discriminatory burdens would mean that interstate trade and commerce was rendered immune from any regulation which did not affect like intrastate trade. Such regulation might not constitute a burden at all. Even if it did, it might not be discriminatory in the sense to which we have referred. In that regard, experience teaches that Commonwealth legislation is often directed to the regulation of all

trade within the Commonwealth’s legislative reach (eg, the Trade Practices Act 1974 (Cth)) or to the regulation of a particular trade to the extent that it is within that reach. There is far less likelihood that such regulatory legislation will properly be characterised as imposing a discriminatory burden on the trade and commerce with which it deals than is the case with State legislation which singles out interstate trade and commerce for particular treatment. That is not to deny that a Commonwealth law which is regulatory on its face may operate so as to discriminate against interstate trade and commerce. Even a law which applies indiscriminately to all trade and commerce within the reach of Commonwealth legislative power might, in some circumstances, impose a discriminatory burden upon interstate trade and commerce. Plainly, however, the construction which treats s 92 as being concerned to guarantee the freedom of interstate trade and commerce from discriminatory burdens does not involve the consequence that the grant of legislative power with respect to interstate trade and commerce is deprived of its essential content. The concept of discrimination in its application to interstate trade and commerce necessarily embraces factual discrimination as well as legal operation. A law will discriminate against interstate trade or commerce if the law on its face subjects that trade or commerce to a disability or disadvantage or if the factual operation of the law produces such a result. [page 1046] A majority of the court (Barwick CJ, Stephen, Mason and Jacobs JJ) so held in North Eastern Dairy (1975) 134 CLR at 588–9, 602, 606–7, 622–3. And the more recent decisions proceed upon that footing. The court looks to the practical operation of the law in order to determine its validity. Once this is recognised, it is difficult, indeed impossible, to deny that a

Commonwealth law dealing with interstate trade could operate in such a way as to work an impermissible discrimination against interstate trade, in particular the trade across State borders originating in a particular State. For reasons already given, we should not venture into this topic in any depth. However, we would add two comments. The first is that the possibility of factual discrimination by a s 51(i) law applying only in respect of interstate trade or commerce may well be eliminated in the context of a national scheme constituted by complementary Commonwealth and State law applying, by virtue of their combined operation, to all trade or commerce of the relevant kind. The second is that s 92 will obviously operate to preclude discriminatory burdens being imposed upon interstate trade or commerce by Commonwealth laws enacted pursuant to other general heads of legislative power (eg, trading corporations). [The justices said that the ‘criterion of operation formula’ had failed to command the acceptance of the court for several reasons:] The thrust of the criterion of operation was to make inapplicable to interstate trade, commerce and intercourse any law which ‘takes a fact or an event or a thing itself forming part of trade commerce or intercourse, or forming an essential attribute of that conception … and the law proceeds, by reference thereto or in consequence thereof, to impose a restriction, a burden or a liability’ which constitutes ‘a real prejudice or impediment to interstate transactions …’. The words quoted are taken from the formulation in Hospital Provident Fund (1953) 87 CLR at 17. The doctrine is highly artificial. It depends on the formal and obscure distinction between the essential attributes of trade and commerce and those facts, events or things which are inessential, incidental, or, indeed, antecedent or preparatory to that trade and commerce. This distinction mirrors another distinction equally unsatisfactory, between burdens which are direct and immediate (proscribed) and those that are indirect, consequential and remote (not proscribed). What is more, the first limb of the

doctrine as enunciated looks to the legal operation of the law rather than to its practical operation or its economic consequences. The emphasis on the legal operation of the law gave rise to a concern that the way was open to circumvention by means of legislative device … With the advantage of hindsight it is now obvious that such an artificial formula would create problems in the attempt to apply it to a variety of legislative situations. In a context in which the doctrine was seen as supporting a constitutional guarantee of the right of the individual to engage in interstate trade, it scarcely seemed to make sense to say that production for the purpose of trading interstate with the product (Grannall v Marrickville Margarine Pty Ltd; Beal v Marrickville Margarine Pty Ltd) and importation of aircraft with which to engage in interstate air transportation (R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177; Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54) fell outside the constitutional protection on the ground that the relevant activities were not essential attributes of interstate trade … In truth the history of the doctrine is an indication of the hazards of seeking certainty of operation of a constitutional guarantee through the medium of an artificial formula. Either the formula is consistently applied and subverts the substance of the guarantee; or an attempt is made to achieve uniformly satisfactory outcomes and the formula becomes uncertain in its application. [page 1047] What we have said explains some of the reasons the criterion of operation ceased to command the acceptance of members of the court, with the consequence that we do not see ourselves as constrained by authority to accept it. There are other features of the doctrine which compel its rejection as an acceptable

interpretation of s 92. First, in some respects the protection which it offers to interstate trade is too wide. Instead of placing interstate trade on an equal footing with intrastate trade, the doctrine keeps interstate trade on a privileged or preferred footing, immune from burdens to which other trade is subject … The second major reason for rejecting the doctrine as an acceptable interpretation of s 92 is that it fails to make any accommodation for the need for laws genuinely regulating intrastate and interstate trade. The history of the movement for abolition of colonial protection and for the achievement of intercolonial free trade does not indicate that it was intended to prohibit genuine non-protective regulation of intercolonial or interstate trade. The criterion of operation makes no concession to this aspect of the section’s history. In the result there has been a continuing tension between the general application of the formula and the validity of laws which are purely regulatory in character. Judged by reference to the doctrine, the validity of a regulatory law hinged on whether it imposed a burden on an essential attribute or on a mere incident of trade or commerce. To say the least of it, this was not an appropriate criterion of validity of a regulatory law divorced, as it is, from considerations of the protectionist purpose or effect of the impugned law. It is not surprising that the court found it necessary to develop a concept of a permissible ‘burden’ which was associated with a somewhat ill–defined notion of what is legitimate regulation in an ordered society: see Hughes and Vale (No 2) (1955) 93 CLR 127 at 217– 19; Samuels v Readers’ Digest Association Pty Ltd (1969) 120 CLR 1 at 19–20; North Eastern Dairy (1975) 134 CLR at 614–15, 621–2; Permewan Wright Consolidated Pty Ltd v Trewhitt (1979) 145 CLR 1 at 26. The problems which have arisen in this area culminating in Clark King (1978) 140 CLR 120 and Uebergang (1980) 145 CLR 266 are the inevitable consequence of any interpretation of s 92 which offers protection

to interstate trade going beyond immunity from discriminatory burdens having a protectionist purpose or effect. … Departing now from the doctrine which has failed to retain general acceptance, we adopt the interpretation which, as we have shown, is favoured by history and context. In doing so, we must say something about the resolution of cases in which no impermissible purpose appears on the face of the impugned law, but its effect is discriminatory in that it discriminates against interstate trade and commerce and thereby protects intrastate trade and commerce of the same kind. We mention first Commonwealth laws enacted under s 51(i) which govern the conduct of interstate trade and commerce. Such laws will commonly not appear to discriminate in a relevant sense if they apply to all transactions of a given kind within the reach of the Parliament. It is, however, possible for a general law enacted under s 51(i) to offend s 92 if its effect is discriminatory and the discrimination is upon protectionist grounds. Whether such a law is discriminatory in effect and whether the discrimination is of a protectionist character are questions raising issues of fact and degree. The answer to those questions may, in the ultimate, depend upon judicial impression. That is, however, merely a reflection of the absence from the text of s 92 of any criterion by reference to which ‘such regulations as may be necessary for the conduct of business’ (to recall Parkes’ original phrase) might be distinguished from laws which infringe the guarantee of free trade and the absence of protection. Indeed, the principal reason so much past judicial effort to elucidate and settle the content of the guarantee given by s 92 was foredoomed to fail was the impossibility of extracting from an intended guarantee of freedom from discriminatory [page 1048]

protectionism a formula which was capable of automatic application by reference to the formal operation of a law. In the case of a State law, the resolution of the case must start with a consideration of the nature of the law impugned. If it applies to all trade and commerce, interstate and intrastate alike, it is less likely to be protectionist than if there is discrimination appearing on the face of the law. But where the law in effect, if not in form, discriminates in favour of intrastate trade, it will nevertheless offend against s 92 if the discrimination is of a protectionist character. A law which has as its real object the prescription of a standard for a product or a service or a norm of commercial conduct will not ordinarily be grounded in protectionism and will not be prohibited by s 92. But if a law, which may be otherwise justified by reference to an object which is not protectionist, discriminates against interstate trade or commerce in pursuit of that object in a way or to an extent which warrants characterisation of the law as protectionist, a court will be justified in concluding that it nonetheless offends s 92. The adoption of an interpretation prohibiting the discriminatory burdening of interstate trade will not of course resolve all problems. It does, however, permit the identification of the relevant questions and a belated acknowledgment of the implications of the long-accepted perception that ‘although the decision [whether an impugned law infringes s 92] was one for a court of law the problems were likely to be largely political, social or economic’: Freightlines & Construction Holding Ltd (1967) 116 CLR at 5. Inevitably the adoption of a new principle of law, though facilitating the resolution of old problems, brings a new array of questions in its wake. The five traditional examples of protection of domestic industry which we gave earlier are by no means exclusive or comprehensive. The means by which domestic industry or trade can be advantaged or protected are legion. The consequence is that there will always be scope for difficult questions of fact in determining whether particular legislative or executive measures constitute discriminatory

interference with interstate trade. And acquisition of a commodity may still involve the potential for conflict with s 92. That problem does not now arise. The question which we must now determine is whether reg 31(1)(d) of the Sea Fisheries Regulations which reveals no discriminatory purpose on its face is impermissibly discriminatory in effect. In other words, whether the burden which the regulation imposes on interstate trade in crayfish goes beyond the prescription of a reasonable standard to be observed in all crayfish trading and, if so, whether the substantial effect of that regulation is to impose a burden which so disadvantages interstate trade in crayfish as to raise a protective barrier around Tasmanian trade in crayfish. The latter questions are questions of fact and degree on which minds might legitimately differ. The regulation neither operates at the border or frontier nor distinguishes between local and interstate trade or produce. However, the limitation on the size of crayfish that may be sold or possessed in Tasmania is unquestionably a burden on the interstate trade and commerce in crayfish caught in South Australian waters and sold in Tasmania. But does it bear the character of being discriminatory against that interstate trade and commerce? The prohibitions against the sale and possession of undersized crayfish apply alike to crayfish caught in Tasmanian waters and to those that are imported. In that respect no discriminatory protectionist purpose appears on the face of the law. Furthermore, the object of the prohibitions, in conjunction with the prohibition against catching undersized crayfish, is to assist in the protection and conservation of an important and valuable natural resource, the stock of Tasmanian crayfish. Although the legislation operates in this way to protect the Tasmanian crayfish industry, it is not a form of protection that gives Tasmanian crayfish production or intrastate trade and commerce a competitive or market advantage over imported crayfish or the trade in

[page 1049] such crayfish. And, even if the legislation were to give an advantage to the local trade by improving the competitive qualities of mature Tasmanian crayfish by eliminating undersized imported crayfish from the local market, the agreed facts make it clear that the extension of the prohibitions against sale and possession to imported crayfish is a necessary means of enforcing the prohibition against the catching of undersized crayfish in Tasmanian waters. The State cannot undertake inspections other than random inspections and the local crayfish are indistinguishable from those imported from South Australia. On the materials before the court, the legislation and the burden which it imposes on interstate trade and commerce are not properly to be described as relevantly discriminatory and protectionist. It follows that question (b) of the questions identified in the order of removal should be answered: Yes. We would therefore set aside the order of the magistrate dismissing the complaint and remit the matter to the Supreme Court of Tasmania.

9.4.14 The single judgment in Cole v Whitfield was clearly conceived by the court as providing a new start for the jurisprudence of s 92. In two significant ways, it cleared away the complex and confused structure developed through judicial construction and application of the section. First, the judgment unequivocally rejected the 39-year-old established reading of s 92 as offering to interstate traders a special protection against government controls. The function of the section, the court declared, was not to express the laissez-faire economic philosophy

that had dominated the judicial reading of the section since Australian National Airways Pty Ltd v Commonwealth (1945) 71 CLR 29. Rather, it was to express the concept of free trade, which had been one of the principal staples of colonial politics and had formed the basis for the earliest decisions on s 92, such as Fox v Robbins (1909) 8 CLR 115 and Duncan v Queensland (1916) 22 CLR 556. The new approach was justified as reflecting the history and original purpose of s 92; as removing the need (reflected in the concept of ‘reasonable regulation’) to qualify the section’s ‘absolute’ freedom; as eliminating the ‘protectionism in reverse’ that the ‘criterion of operation’ reading of s 92 gave to interstate trade; and as leaving more scope for necessary public interest regulation of trade and commerce. Second, the judgment endorsed the relevance of practical and economic considerations, rather than narrow legal analysis, to the resolution of s 92 problems. The court instituted a two-stage approach to determining whether a government control discriminated against interstate trade in a protectionist fashion. The first question would be whether a ‘law on its face’ subjected interstate trade to a disability: was it, in its legal operation, discriminatory? The second question would be whether ‘the factual operation of the law’ produced that result: 165 CLR at 399. Embedded in this reference to a dual approach (using legal analysis and an assessment of factual operation) was an ambiguity that emerged within a few weeks of Cole v Whitfield being decided, in Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 9.4.18C: were the two approaches alternative in a negative, invalidating sense or in a positive, validating sense? 9.4.15 Each of the basic propositions expressed in Cole v Whitfield had been foreshadowed by members of the court. The

return to a free trade, anti-discrimination reading of s 92 had been suggested by Mason and Jacobs JJ in Finemores Transport Pty Ltd v New South Wales (1978) 139 CLR 338 at 352, 354; and by Mason and Deane JJ in Miller v TCN Channel Nine Pty Ltd (1986) 161 CLR 556 at 571, 618. (A return to the free trade approach had also been urged by two of Australia’s most respected academic commentators on the Commonwealth [page 1050] Constitution: Coper, 1983, p 293; Zines, 1987, pp 143–5.) Further, the proposition that the court must consider the practical operation of legislation — its real impact on commercial transactions and relationships — had been endorsed by a majority of the court in North Eastern Dairy Co Ltd v Dairy Industry Authority of New South Wales (1975) 134 CLR 559. 9.4.16 What effect would the court’s adoption of these two basic propositions in Cole v Whitfield have on the catalogue of decisions accumulated over the previous 40 years? The revisionist impact of the new approach was demonstrated by the High Court’s decision in Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182. The Marketing of Primary Products Act 1983 (NSW) authorised the Governor of New South Wales to transfer ownership of any barley grown in the state to the Barley Marketing Board, to be marketed by the board as a pool, and declared invalid every contract for the sale of barley that was not made by the board. In a unanimous judgment, the High Court decided that the Act did not contravene s 92, even where growers would otherwise have sold their barley interstate. The court held that, although the

purpose and effect of the Act was to protect the barley industry in New South Wales, the Act did not do so by discriminating against commercial interests in other states. The legislation was not shown to restrict the supply of barley to out-of-state purchasers, nor to impose a greater burden on interstate traders than the burden on intrastate traders. The court noted that marketing schemes had often come into conflict with s 92, and that, under the pre-Cole approach, the price of validity of such schemes had been to concede freedom to producers to dispose of their product interstate. However, the earlier decisions on marketing schemes had ‘proceeded according to the so-called “individual rights” theory of s 92, namely, that the section guarantees the right of the individual to engage in interstate trade and commerce’. Once that theory was displaced by Cole v Whitfield, the authority of the earlier decisions was open to question: 171 CLR at 201. The court declined to follow two earlier decisions, Peanut Board v Rockhampton Harbour Board (1933) 48 CLR 266 and Australian Coarse Grains Pool Pty Ltd v Barley Marketing Board (1985) 157 CLR 605. 9.4.17 The court conceded in Cole v Whitfield that ‘[t]he adoption of an interpretation prohibiting the discriminatory burdening of interstate trade will not of course resolve all problems [because it] brings a new array of questions in its wake’: 165 CLR at 408. By the time Cole was delivered, the justices must have been close to settling the majority and minority judgments in Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411. The observation in Cole that ‘there will always be scope for difficult questions of fact’ in identifying discrimination (165 CLR at 409) was doubtless made with this next case in mind.

9.4.18C

Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411

[The Business Franchise (Tobacco) Act 1974 (Vic) prohibited a person from selling tobacco in Victoria, whether by wholesale or retail, unless licensed. The fees for a wholesale tobacco merchant’s licence and for a retail tobacconist’s licence were, apart from a small flat fee, equal to 25 per cent of the value of the tobacco sold by the applicant for the licence during a period that had passed: s 10(1). In calculating the fee for a retail tobacconist’s licence the value of certain tobacco was to be disregarded, namely ‘tobacco purchased in Victoria from the holder of a wholesale tobacco merchant’s licence’: s 10(1)(c), (d). [page 1051] Alston Holdings Pty Ltd carried on business as a retail tobacconist in Victoria. It did not hold a licence under the Business Franchise (Tobacco) Act. In January 1987, Alston Holdings purchased tobacco products with a value of $26,607.48 from a tobacco wholesaler in Queensland, and arranged for the tobacco to be transported to its premises in Victoria. In January and February 1987, Alston sold this tobacco by retail to members of the public in Victoria. (This series of transactions was typical of Alston Holding’s general method of business.) Bath, the Victorian Commissioner of Business Franchises, commenced proceedings in the Supreme Court of Victoria against Alston Holdings seeking an injunction to restrain Alston from selling tobacco otherwise than pursuant to a licence under the Business Franchise (Tobacco) Act. The proceedings were removed to the High Court of Australia by an order under s 40 of the Judiciary Act 1903 (Cth). Mason CJ, acting under s 18 of the Judiciary Act, reserved several questions for the consideration of the Full Court. The central question was whether s 10(l)(c) and (d) contravened s 92 of the Commonwealth

Constitution in that the fees which they imposed discriminated against interstate trade.] Mason CJ, Brennan, Deane and Gaudron JJ: … Stated in summary terms, Alston’s argument is that the Act discriminates against interstate trade in tobacco products and against interstate wholesalers by effectively selecting as the basis of calculation of the ad valorem content of the retailer’s licence fee the value of the actual or imputed sales of interstate products during the relevant earlier period. Reliance is placed upon Fox v Robbins (1909) 8 CLR 115. The starting point of a consideration of Alston’s argument is the plain fact that what is involved is the imposition of a tax. There is no question of mere regulation of the activities of sellers of tobacco products. Indeed, the Commissioner did not contend to the contrary. If the tax had been imposed directly on all retail sales of tobacco products in Victoria, it would not have infringed the injunction of s 92 of the Constitution. It would have been a tax which applied without differentiation or discrimination to interstate and intrastate products and transactions. Such a tax would, however, have been invalid in that it would have been an excise duty which it was beyond the constitutional competence of the Victorian parliament to impose (Constitution s 90). The tax imposed by the Act escapes invalidity as an excise duty only by reason of its character as a fee for a licence or franchise to carry on a business of selling tobacco products during a future period, calculated by reference to past actual or imputed sales (see Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529; Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177; Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311). Not surprisingly, the Commissioner does not seek to argue that the tax should be seen otherwise than as what it purports to be, namely, not a tax upon goods but a fee exacted from retailers of tobacco products for a licence essential for the lawful carrying on of their respective businesses. That being so, the essential question is

whether the statutory imposition upon a retailer of the obligation to pay a licence fee calculated in the manner provided by the Act is, in the circumstances, properly to be characterised as discriminatory against interstate trade and commerce in a protectionist sense (see Cole v Whitfield (1988) 165 CLR at 360). The requirement of the Act that a Victorian retailer of tobacco products be licensed applies indifferently to retailers of both local and interstate products. Of itself, the requirement does not contravene s 92 of the Constitution. If the Act imposed the ad valorem licence fee by reference to the value of all tobacco products sold by a retailer in the relevant period, the imposition of the fee would not contravene s 92 since it would not differentiate between [page 1052] tobacco purchased in Victoria and tobacco purchased outside Victoria; a fortiori it would not discriminate in a protectionist sense against the purchase of tobacco outside Victoria. The exclusion of tobacco purchased in Victoria from a licensed wholesaler from the total sale value of tobacco used as the basis of the calculation of the ad valorem licence fee does, however, involve an element of differentiation and at least prima facie discrimination. Since the effect of the Act is to require all Victorian wholesalers selling tobacco products in Victoria to be licensed, the tobacco products purchased by the ordinary Victorian retailer from a local wholesaler will, for practical purposes, be all purchased from the holder of a wholesaler’s licence under the Act. That being so, the exclusion of tobacco purchased in Victoria from the holder of a wholesaler’s licence from the value of tobacco sold in the relevant preceding period has the effect that, for practical purposes, the licence fee paid by a Victorian retailer will ordinarily consist of the flat fee of $50 (for

an indefinite licence: s 10(1)(c)) or $10 (for a monthly licence: s 10(1)(d)) together with an amount equal to 25 per cent of the value of any tobacco purchased from an interstate wholesaler. In other words, the retailer who sells only tobacco products purchased by him from a Victorian wholesaler will pay the appropriate flat fee for his licence, while a retailer who sells only tobacco products purchased from an interstate wholesaler will pay that flat fee plus 25 per cent of the value of tobacco sold in the preceding relevant period. It follows that, if they be viewed in isolation, the provisions of the Act imposing the obligation to pay a retail tobacconist’s licence fee of $50 or $10 plus an amount calculated by reference to the value of tobacco sold which has not been purchased in Victoria from a licensed wholesaler, discriminate against interstate purchases of tobacco in favour of purchases in Victoria. If it be viewed in isolation, that discrimination is undeniably protectionist both in form and substance. In form, the provisions of s 10(1)(c) and (d) select the fact that tobacco was ‘purchased in Victoria’ from a licensed wholesaler as the qualifying condition for exemption from inclusion in the products by reference to which liability to ad valorem tax is calculated. In substance, those provisions protect local wholesalers and the tobacco products they sell from the competition of an out of State wholesaler whose products might be cheaper in some other Australian market place for a variety of possible reasons, for example, that the laws of the State in which he carries on his business as a wholesaler either do not require that he hold a licence at all or exact a licence fee comparatively lower than the fee exacted from a Victorian wholesaler. Even when the provisions of the Act imposing the liability to pay the retail tobacconist’s licence fee are read in the context of the Act as a whole, they retain their discriminatory and protectionist character. Such a reading reveals the explanation for the exclusion from the basis of calculation of the retailer’s licence fee of tobacco products purchased within Victoria from a licensed wholesaler. That explanation is that the licence fee which the Act

requires Victorian wholesalers to pay to the Victorian Government will not have been paid to the Victorian Government by an out of State wholesaler who does not carry on business in Victoria and therefore does not require a licence in that State. The explanation tends, however, to underline, rather than remove, the protectionist character of the discrimination at the retail level effected by the provisions imposing the tax. If wholesalers of tobacco products in another State already pay taxes and bear other costs which are reflected in wholesale prices equal to or higher than those charged by Victorian wholesalers, the practical effects of the discrimination involved in the calculation of the retailer’s licence fee would be likely to be that the out of State wholesalers would be excluded from selling into Victoria and that the products which they would otherwise sell in interstate trade would be effectively excluded from the Victorian market. On the other hand, if out of State wholesalers pay less taxes and other costs than their Victorian counterparts, and in particular if they pay no (or a lower) wholesale [page 1053] licence fee, the effect of the discriminatory tax upon retailers will be to protect the Victorian wholesalers and the Victorian products from the competition of the wholesalers operating in the State with the lower cost structure. Either way, the operation and effect of the provisions of the Act imposing the retail tobacconist’s licence fee are discriminatory against interstate trade in a protectionist sense. For practical purposes, their operation is to impose on Victorian retailers who, during the relevant earlier period, purchased tobacco products both locally and in the markets of another State, an obligation to pay to Victorian consolidated revenue an ad valorem tax calculated by reference to the sale value of so much of those products as came from interstate. Ignoring the flat fee of $50 or $10, the effect of s

10(1)(c) and (d) is to discriminate against tobacco products sold by wholesalers in the markets of another State and to protect both Victorian wholesalers and the products which they sell from the competition of out of State wholesalers and their products. The wholesaler’s licence fee, imposed on local wholesalers by reference to all their local sales, does not infringe s 92 in that it does not discriminate against goods coming from another State. The ad valorem content of the retailer’s licence fee does infringe s 92 in that it discriminates against interstate trade and commerce in a protectionist sense by taxing a retailer only because of, and by reference to the value of, his actual or imputed purchases of products in any State other than Victoria. [Mason CJ, Brennan, Deane and Gaudron JJ rejected an argument that the tax on retailers was ‘equivalent’ to the tax on wholesalers, and intended simply to ensure that the tax fell indiscriminately on all goods sold in Victoria:] [I]t provides no answer to the question whether, for the purposes of s 92, a particular tax is properly to be characterised as discriminatory in a protectionist sense to say that it is but one method of collecting a ‘tax on goods’ which is imposed in an equal amount in respect of all local and imported goods of that kind. If a tax is challenged on the ground that it offends s 92, it is necessary first to identify what is the transaction or thing which attracts liability. If the tax is imposed, whether directly or indirectly, on a transaction in the chain of distribution of goods, the relevant inquiry is whether the tax is imposed only on transactions where the goods involved have come from or are going to another State or whether the tax is imposed on all transactions of the relevant kind without differentiation based on the source or destination of the goods involved. If the tax is imposed on transactions in a particular market — in this case, the Victorian retail tobacco market — it is the effect of the tax on transactions in that market which is material. In this case, the effect is on the supply of goods to that market. The effect

of an equivalent tax on transactions at another stage in the chain of distribution of the same goods or goods of the same kind is immaterial. That must be so unless s 92 permits the protection of an entire chain of distribution of goods within a State against competition from goods which might otherwise enter the chain from interstate. That proposition has only to be stated to be rejected. If that proposition were accepted, s 92 would present no impediment to the imposition of border duties — at all events if they did not exceed the amount necessary to place on interstate goods a tax burden equivalent to the tax burden earlier placed on similar goods already in the local chain of distribution. … [T]he fact that the price of local tobacco products to the retailers will reflect the burden of the licence fee imposed upon local wholesalers provides no answer to the attack upon the discriminatory ad valorem tax imposed upon retailers by reference to interstate purchases in the present case. Nor does the fact that s 92 invalidates the ad valorem content of the retailer’s licence fee mean that the section has re-emerged as a source of preference for interstate trade and commerce over local trade and commerce. The source of any such preference, if it exists, [page 1054] lies in the fact that the imposition of the wholesaler’s licence fee has placed local goods at a competitive disadvantage vis-à-vis goods which have passed through the wholesale stage of distribution in some other State. [The justices concluded that s 10(1)(c) and (d) were invalid to the extent that they calculated the fee for a retail tobacconist’s licence by reference to the value of tobacco sold by the applicant.] Wilson, Dawson and Toohey JJ: The defendant argued that the requirement that he hold a licence under the Act in order to

sell tobacco brought in from outside the State necessarily burdens interstate trade in a manner prohibited by s 92. In the light of Cole v Whitfield (1988) 165 CLR 360, the submission in that form cannot succeed. But the argument remains that the manner in which licence fees are calculated and imposed under the Act discriminates against interstate trade in tobacco by protecting Victorian trade in that product. That argument has a superficial plausibility in that tobacco purchased from another State is purchased from a person who is not the holder of a wholesale licence under the Act and the purchaser in Victoria, when he sells that tobacco, is therefore subject to the ad valorem component of the fee in relation to it. But to put the matter thus is to present an incomplete picture of the practical operation of the Act and, as was observed in Cole v Whitfield, it is the practical operation of the legislation which will largely determine whether there is discrimination upon protectionist grounds. What the argument put in that way leaves out of account is the fact that an interstate wholesaler is not subject to any franchise fee under the legislation and is able to sell tobacco to the Victorian retailer at a price which will reflect the absence of this expense. This advantage which the interstate wholesaler has is, however, balanced by the fact that the Victorian retailer who imports the tobacco will bear a fee calculated by reference to its value when it is sold in Victoria and this fee will be reflected in the price of the product to the ultimate consumer. The legislation does not seek to operate to the advantage or disadvantage of the retailer according to whether he obtains his tobacco within or outside the State. It is obvious that the reason the legislation imposes the fee at the wholesale level where it is possible to do so is because there is only a small number of wholesalers but many retailers and it is easier for that reason to collect the tax from the former rather than from the latter. But that does not suggest protectionism. The plain fact of the matter is that the object of the legislation is not to favour Victorian trade at the expense of interstate trade in the

product. All trade in tobacco in Victoria is subjected to the expense of the franchise fee at one point or another and the economic effect of the tax is the same, whether the tobacco is acquired by the retailer from within or outside the State. No doubt the form of the tax imposed by the Act was dictated by the need to avoid the imposition of an excise duty. Excise duties are denied to the States by s 90 of the Constitution. It is clear enough that in devising the franchise fee in question in this case the draftsman placed reliance upon the decisions of this court in Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529 [see 5.2.13C] and Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 [see 5.2.24C]. The distinctions drawn in those cases between a franchise fee and an excise duty may be a matter of debate (see Gosford Meats Pty Ltd v New South Wales (1985) 155 CLR 368), but it is not a debate which has any relevance in the context of s 92. The difficulties in relation to s 90 arise from the duty cast upon this court by the Constitution of defining the meaning of a concept — a duty of excise — which ‘has never possessed, whether in popular, political or economic usage, any certain connotation and has never received any exact application’. [Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 [page 1055] at 293, per Dixon J.] [see 5.2.9.]. Similar difficulties do not occur with s 92, which requires a consideration of consequences rather than concepts. The consequences which are relevant are economic consequences for it is largely the ultimate economic effect which will determine whether or not legislation has been enacted in pursuit of a protectionist object. But here, where the impost applies to all trade in tobacco in Victoria, interstate and intrastate alike, there is no basis upon which to discern any element of protectionism. It is not to be found in the alternative

methods of collecting the tax which produce the same ultimate effect in economic terms. … If the argument were to be accepted that the manner in which licence fees are calculated and imposed under the Act discriminates against interstate trade in a protectionist manner, two alternatives would exist to cure the defect. On the one hand the legislation might be amended to exclude the value of tobacco purchased in the course of interstate trade from the calculation of the ad valorem component of the retail tobacconist’s licence fee. This would, however, result in a preference being given to interstate trade and s 92 can scarcely be read as requiring such a result. On the other hand, the collection of the fee could be restricted to the retail level and be calculated upon the value of all sales of tobacco. The practical result produced by the second alternative is no different in economic terms from that produced by the Act in its present form, save that the tax would be a great deal more difficult to collect. Consideration of these alternatives serves to demonstrate the danger of restricted analysis in any attempt to ascertain whether the legislation gives rise to discrimination of a protectionist kind. Our conclusion, therefore, is that the agreed or established facts fail to demonstrate that the Act is protectionist in character. It is wholly valid and each of the questions reserved should be answered in the negative.

9.4.19 In Cole v Whitfield (1988) 165 CLR 360, the court had indicated that there were two ways in which a law could be found to discriminate against interstate trade in a protectionist manner: if the law so discriminated on its face, through its legal operation; ‘or if the factual operation of the law produces such a result’: 165 CLR at 399. The court repeated more than once this reference to the

need to consider substantive effect as well as legal form: see, for example, 165 CLR at 408, 409. One interpretation of these references is that the substantive effect of the law will conclude the issue of its validity; that is, a law that is discriminatory in legal form but not in substantive effect would be held to be consistent with s 92. Another interpretation was suggested by the majority’s decision in Bath v Alston Holdings Pty Ltd; namely, the references to legal form and substantive effect are meant as alternatives in the sense that a law might be found to contravene s 92 if it discriminated against interstate trade either in legal form or in substantive effect. The majority’s reasoning in Bath v Alston Holdings Pty Ltd might be taken to support the second interpretation. Not only did the discriminatory form of the Business Franchise (Tobacco) Act (s 10(1)(c) and (d) in particular) correspond to the majority’s characterisation of the legislation, but the majority also stressed the need, in the case of a tax challenged as offending s 92, ‘to identify what is the transaction or thing which attracts liability’: 165 CLR at 428. However, when that statement is read in context, it does not appear that the majority treated the legal form of the Victorian legislation as conclusive of invalidity. Rather, the majority said that it was ‘the effect of the tax on transactions in [the Victorian retail tobacco] market which is material’: 165 CLR at 428. In the present case, that effect confirmed the discriminatory form of the legislation. [page 1056] 9.4.20

In concluding that the Victorian legislation did operate

so as to discriminate against interstate trade in tobacco by protecting Victorian wholesalers of tobacco, the majority in Bath laid some emphasis on the (hypothetical) cost structures of tobacco wholesalers in states other than Victoria, including those wholesalers’ liability to pay other states’ taxes. The majority said that the practical effect of the formally discriminatory tax on tobacco retailers would be to protect Victorian wholesalers against competition from interstate wholesalers by further adding to the effective cost structure within which interstate wholesalers attempted to trade in Victoria. This would be particularly so where the interstate wholesalers’ cost structures included taxes or licence fees paid under the laws of other states: 165 CLR at 426. Is it appropriate to take into account these other elements in a trader’s cost structure when calculating the discriminatory or protectionist effect of state controls? If the Victorian tobacco tax system were recast as an exclusively retail licence (tax) system, could the same objection (that the system operated so as to protect local wholesalers from interstate competition) be used to challenge its validity? At an early point in their judgment in Bath, the majority had asserted that a tax ‘imposed directly on all retail sales of tobacco products in Victoria … would not have infringed the injunction of s 92 of the Constitution’: 165 CLR at 424. However, that assertion is not easy to reconcile with the majority’s analysis of the practical effects of s 10(1)(c) and (d). If Victorian wholesalers were not subject to any tax, but Victorian retailers were obliged to pay a licence fee calculated on the basis of all their purchases of tobacco from Victorian and interstate wholesalers, it is at least possible (indeed, likely) that the effect of this tax would be to disadvantage interstate wholesalers who may already have been obliged to pay wholesale licence fees in other states and who would, in most cases, face

higher transport costs than the Victorian wholesalers. (This point was made by the minority, who said the practical result of a licence fee calculated on the value of all sales of tobacco would be ‘no different in economic terms from that produced by the Act in its present form’: 165 CLR at 434.) In other words, abandoning the superficially discriminatory form of s 10(l)(c) and (d) in favour of an apparently non-discriminatory tobacco retail licence fee would not preclude a judgment that the licence fee worked a protectionist effect. 9.4.21 Was the majority in Bath right, in analysing the effect of s 10(1)(c) and (d), to factor in costs to interstate wholesalers that arose from causes outside the state of Victoria and beyond the influence of Victorian legislation? Perhaps, in assessing the validity of s 10(1)(c) and (d), the question of economic or practical effects should have concentrated more closely on the question whether the tax imposed by those paragraphs, in their legislative context, fell equally on local and interstate traders. This was the approach adopted by the minority, who noted that ‘[a]ll trade in tobacco in Victoria is subjected to the expense of the franchise fee at one point or another’, at the point of either the wholesale or the retail sale, ‘and the economic effect of the tax is the same, whether the tobacco is acquired by the retailer from within or outside the State’: 165 CLR at 432. 9.4.22C Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 [The Beverage Container Act 1975 (SA) provided that the purchaser of any beverage must pay to the retailer of that beverage a deposit on the

container in which the beverage was supplied. In the case of glass containers, the deposit was refundable by a retailer who [page 1057] sold beverages in containers of that type; in the case of other containers, the deposit was refundable by a collection depot. Regulations made under the 1975 Act exempted refillable beer bottles from the deposit requirement. Several brewers of beer competed within the South Australian market in bottled beer. The South Australian Brewing Co Ltd (SAB) and Cooper and Sons Ltd (Coopers) were located in South Australia and used mostly refillable bottles; Carlton & United Breweries Ltd (CUB) was located in Victoria and used refillable bottles for its South Australian sales of beer; and the Bond Brewing Group (Bond) was located in Queensland, New South Wales and Western Australia and used non-refillable bottles for all of its beer. In January 1986, Bond began a marketing campaign in South Australia and, within 2 months, had increased its share of the market for packaged beer from less than 0.1 per cent to 4 per cent, at the expense of SAB, whose share of the South Australian market fell from 77.4 per cent to 73.5 per cent. On 1 October 1986, the Beverage Container Act Amendment Act 1986 (SA) came into operation. The 1986 Act made substantial amendments to the 1975 Act. Under the amended 1975 Act and regulations made under that Act, the following deposits were required to be paid by purchasers of beverages: on non-refillable beer containers: 15c per container; on non-refillable soft drink containers: 5c per container; on non-refillable low-alcohol wine containers: 15c per container; and on refillable glass beer containers: 4c per container.

The amended Act and the Regulations required retailers of beer in non-refillable containers to accept the return of all such containers and refund deposits on those containers. No such obligation was imposed on retailers as to refillable containers. The deposit paid on refillable containers was refundable at collection depots, which could not refund deposits paid on non-refillable containers. Three companies owned by Bond began proceedings in the High Court of Australia against the State of South Australia, seeking a declaration that the amendments to the 1975 Act and the regulations were invalid in their application to Bond’s trade and commerce by reason of s 92 of the Constitution. The parties agreed to a special case which was stated for the opinion of the Full Court.] Mason CJ, Brennan, Deane, Dawson and Toohey JJ: The 1986 Act and the new regulations disadvantaged the Bond brewing companies in two respects. First, their non-refillable bottles became subject to a refund amount of 15 cents whereas the refillable bottles of their competitors, CUB and the South Australian brewers, were subject to a refund amount of 4 cents only. According to the defendant, a refund of 6 cents per nonrefillable bottle for twelve months and thereafter a refund of 4 cents per non-refillable bottle would have been sufficient to ensure the return of non-refillable bottles at the same rate as refillable bottles. This concession may have been prompted by the circumstance that regulations providing for refunds of that order were tabled in the South Australian Parliament in November 1986. These regulations were disallowed in the Legislative Council but their introduction was in apparent recognition of the fact that the existing regulations providing for refunds of 15 cents and 4 cents for non-refillable and refillable bottles respectively invited challenge in this court. The plaintiffs believe that a 4 cent deposit would be immediately effective to ensure the return of non-refillable bottles at the same rate as refillable bottles with a 4 cent deposit. According to the special case, a 4 cent deposit is now sufficient to ensure

[page 1058] a reasonable and adequate rate of return of refillable bottles. The difference between the prescribed amounts of 15 cents and 4 cents resulted in a price differential which made the Bond brewing companies’ product non-competitive. Before the commencement of the 1986 Act, the ‘bottle cost’ (excluding transport costs but including deposit and costs of return or disposal system) of the products of the Bond brewing companies was 16 cents per bottle. The ‘bottle cost’ in the case of SAB was 16.65 cents per bottle. Following the introduction of the 1986 Act and the regulation imposing a 15 cent deposit on nonrefillable bottles, the ‘bottle cost’ of the products of the Bond brewing companies was 26 cents per bottle. The ‘bottle cost’ in the case of SAB remained at 16.65 cents per bottle. Secondly, the Bond brewing companies’ non-refillable bottles were not eligible to be exempted from the application of s 7 whereas the refillable bottles of the South Australian brewers were eligible for such exemption and were so exempted. Those retailers selling the Bond brewing companies’ beer in non-refillable bottles were obliged to comply with s 7, accept delivery of such bottles and pay the refund amount of 15 cents per bottle. On the other hand, retailers selling South Australian brewed beer in refillable bottles, not being obliged to comply with s 7 in relation to such bottles, were not bound to accept delivery of them or to pay the refund of 4 cents per bottle. A customer seeking to obtain a refund for such a bottle could return it to a collection depot and obtain a refund from the depot. The natural result of the requirement that retailers pay the refund amount was that they were inclined not to stock a beer when the volume of sales of a particular brand was not high. There was no limit to the number of empty bottles of a particular brand sold by a retailer which he would be bound to accept by way of return and for which he would be liable to pay the refund amount. The fact that the

customer returning the bottle may have bought the bottle elsewhere was irrelevant to the retailer’s liability. The Bond brewing companies could alleviate but not eliminate the burden imposed upon the retailers who were willing to stock their beer by establishing their own collection depots. The establishment of such depots would not have altered the retailers’ obligations under s 7. Moreover, the establishment of such depots would have increased the ‘bottle cost’ in the case of the Bond brewing companies by about 5 cents per bottle, making a total of 31 cents per bottle as against the ‘bottle cost’ in the case of SAB of 16.65 cents per bottle. The practical effect of the 1986 Act and regulations and the notice under s 5b was to prevent the Bond brewing companies obtaining a market share in packaged beer in South Australia in excess of 1 per cent whilst their competitors used refillable beer bottles. It is uneconomic for the Bond brewing companies to convert their existing interstate plants to use refillable bottles. It is common ground between the parties that the object and effect of the 1986 Act was to make the sale of beer in nonrefillable bottles commercially disadvantageous. The plaintiffs go further and assert that the effect of the 1986 Act, the regulations and the notice under s 5b was to discriminate against the sale in South Australia of packaged beer brewed interstate and to protect the beer brewed in South Australia from interstate competition. On the other hand the defendant claims that the 1986 Act and regulations promoted litter control and conserved energy and resources. According to the defendant, this effect was achieved by the imposition of a deposit on non–refillable containers in an amount judged sufficient to ensure their return and discourage their use and by providing a refund point — in practice any place of sale — to encourage return and to discourage manufacturers from using such containers. Thus the defendant contends that the objects of the legislation were: (1) to promote litter control by forcing non-glass containers and non-refillable bottles into a

return system by encouraging return; and (2) to promote energy and resource conservation by [page 1059] discouraging the use of non-refillable containers by imposing a higher deposit and by requiring acceptance of returns at the point of sale (thus discouraging retailers from handling them). The special case mentions that the use, return and refilling of refillable bottles generally results in a proportionate reduction in the release into the atmosphere of carbon dioxide from the burning of natural gas in the production of glass containers. However, the defendant does not claim that this is an independent object of the legislation. [Mason CJ, Brennan, Deane, Dawson and Toohey JJ said that the present case stood on a different footing from Cole v Whitfield, because Bond brewing companies were disadvantaged in the two ways identified (at 462–3), ‘which gave the South Australian brewers a competitive or market advantage’: 467. They said that the decision in Bath v Alston Holdings Pty Ltd ‘is an example of one form of discriminatory protectionism. But it does not touch the issues which arise for decision in this case’: at 468. After reviewing several decisions of the United States Supreme Court, their Honours said:] Although the American cases cannot be treated as an accurate guide to the interpretation of s 92, they identify in a useful way considerations which may be relevant in the process of characterization which an Australian court is called upon to undertake. So, the fact that a law regulates interstate and intrastate trade evenhandedly by imposing a prohibition or requirement which takes effect without regard to considerations of whether the trade affected is interstate or intrastate suggests that the law is not protectionist. Likewise, the fact that a law, whose effects include the burdening of the trade of a particular

interstate trader, does not necessarily benefit local traders, as distinct from other interstate traders, suggests that the purposes of the law are not protectionist. On the other hand, where a law on its face is apt to secure a legitimate object but its effect is to impose a discriminatory burden upon interstate trade as against intrastate trade, the existence of reasonable non– discriminatory alternative means of securing that legitimate object suggests that the purpose of the law is not to achieve that legitimate object but rather to effect a form of prohibited discrimination. There is also some room for a comparison, if not a balancing, of means and objects in the context of s 92. The fact that a law imposes a burden upon interstate trade and commerce that is not incidental or that is disproportionate to the attainment of the legitimate object of the law may show that the true purpose of the law is not to attain that object but to impose the impermissible burden. The particular question in the present case is: how should the Court approach the determination of the validity of State legislation which attempts on its face to solve pressing social problems by imposing a solution which disadvantages the trade in beer brewed outside the State as against the trade in beer brewed within the State? The central problems addressed by the legislation are the litter problem and the need to conserve energy resources. If the South Australian legislation were not attempting to provide a solution to these problems, the burden on interstate trade would be discriminatory in a protectionist sense because its operation would be discriminatory and protectionist in effect, even though the legislation on its face would treat interstate and intrastate trade evenhandedly. What difference then does it make that the burden is imposed by legislation which on its face appears to be directed to the solution of social and economic problems, not being the uncompetitive quality or character of domestic trade or industry? Is the burden non-discriminatory in the relevant sense on that account? If so, how is that conclusion to be justified?

In determining what is relevantly discriminatory in the context of s 92, we must take account of the fundamental consideration that, subject to the Constitution, the legislature of a State has power to enact legislation for the well-being of the people of that State. In that [page 1060] context, the freedom from discriminatory burdens of a protectionist kind postulated by s 92 does not deny to the legislature of a State power to enact legislation for the well-being of the people of that State unless the legislation is relevantly discriminatory. Accordingly, interstate trade, as well as intrastate trade, must submit to such regulation as may be necessary or appropriate and adapted either to the protection of the community from a real danger or threat to its welfare or to the enhancement of its welfare. It would extend the immunity conferred by s 92 beyond all reason if the Court were to hold that the section invalidated any burden on interstate trade which disadvantaged that trade in competition with intrastate trade, notwithstanding that the imposition of the burden was necessary or appropriate and adapted to the protection of the people of the State from a real danger or threat to its well-being. And it would place the Court in an invidious position if the Court were to hold that only such regulation of interstate trade as is in fact necessary for the protection of the community is consistent with the freedom ordained by s 92. The question whether a particular legislative enactment is a necessary or even a desirable solution to a particular problem is in large measure a political question best left for resolution to the political process. The resolution of that problem by the Court would require it to sit in judgment on the legislative decision, without having access to all the political considerations that played a part in the making of that decision,

thereby giving a new and unacceptable dimension to the relationship between the Court and the legislature of the State. An analogous field is the legislative implementation of treaty obligations under s 51(xxix) of the Constitution. The true object of the law in such a case is critical to its validity. The Court has upheld the validity of legislative provisions if they are appropriate and adapted to the implementation of the provisions of the treaty: The Commonwealth v Tasmania (the Tasmanian Dam case) [(1983) 158 CLR 1, at 130–31, 172, 232–3, 259–61] [see 4.3.22C]; Richardson v Forestry Commission [(1988) 164 CLR 261 at 292, 295–6, 303, 311–12, 326, 336, 344–6] [see 4.3.30C]. See also Herald and Weekly Times Ltd v The Commonwealth [(1966) 115 CLR 418 at 437]. But if the means which the law adopts are disproportionate to the object to be achieved, the law has not been considered to be appropriate to the achievement of the object: the Tasmanian Dam case [(1983) 158 CLR at 278]; South Australia v Tanner [(1989) 166 CLR 161 at 165, 178]. There is a compelling case for taking a similar approach to the problem now under consideration. If we accept, as we must, that the legislature has rational and legitimate grounds for apprehending that the sale of beer in nonrefillable bottles generates or contributes to the litter problem and decreases the State’s finite energy resources, legislative measures which are appropriate and adapted to the resolution of those problems would be consistent with s 92 so long as any burden imposed on interstate trade was incidental and not disproportionate to their achievement. Accordingly, the validity of the 1986 legislation rests on the proposition that the legislative regime is appropriate and adapted to the protection of the environment in South Australia from the litter problem and to the conservation of the State’s finite energy resources and that its impact on interstate trade is incidental and not disproportionate to the achievement of those objects. The first objection to this proposition is that the discrepancy between the 15 cents refund amount prescribed by reg 7(d) for

non-refillable beer bottles and the 4 cents refund amount prescribed by reg 7(c) for refillable bottles goes beyond what is necessary to ensure the return of non-refillable bottles at the same rate as refillable bottles. The discrepancy means that the ‘bottle cost’ of the Bond brewing companies’ product is 26 cents per bottle as against a ‘bottle cost’ of 16.65 cents for the SAB product. The defendant’s acknowledgment that a refund amount of 6 cents per non-refillable bottle for the first twelve months, reducing to 4 cents [page 1061] thereafter, would have been sufficient to achieve that purpose is significant. The magnitude of the discrepancy indicates that the object of fixing the 15 cents refund amount went further than ensuring the same rate of return of non-refillable and refillable bottles and that the object was to disadvantage the sale of beer in non-refillable bottles as against the sale of beer in refillable bottles. If, in order to protect the environment from the litter problem presented by the sale of beer in non–refillable bottles, the legislature had enacted a law whose object and effect was simply to discourage the sale of beer in such bottles, the fact that the law had a more adverse impact on interstate brewers than domestic brewers because interstate brewers sell beer in such bottles would not make the law a discriminatory or protectionist law, if that impact was incidental and not disproportionate to the resolution of the litter problem. In such a case the competitive disadvantage sustained by the interstate brewer would be merely incidental to and consequential upon a regulatory measure whose object and effect was not discriminatory in a protectionist sense. However, this is not a case in which it is possible to characterize the legislative regime simply and comprehensively as one designed to discourage the sale of beer in non-refillable

bottles. The legislative regime is one which has as its immediate purpose the return and collection of containers generally, including refillable and non-refillable bottles. The solution to the litter problem sought to be achieved by the legislature lies in the successful operation of the scheme for the return and collection of containers and it is by reference to that scheme that the validity of the law must be determined. And that is how the defendant has presented its case. In this context, the plaintiffs assert that, in the light of the difference in the refund amount, the purpose in disadvantaging the sale of beer in non-refillable bottles was to discriminate against the Bond brewing companies as interstate brewers in favour of the domestic brewers in South Australia. The defendant resists this conclusion for three reasons: first, that 15 cents is also fixed by reg 7(b) as the refund amount for a nonrefillable container for a low alcohol wine-based beverage; secondly, that the fixing of the refund amount at 15 cents advantaged CUB as much as the domestic brewers so long as CUB supplied beer in refillable bottles; and, thirdly, that the need to conserve energy resources requires or justifies more severe burdens on the sale of beer in non-refillable bottles. The first reason given by the defendant is not persuasive. If the refund amount fixed for non-refillable beer bottles far exceeded what was thought necessary to ensure the success of the scheme for the return and collection of containers, the relevant provision was not appropriate and adapted to that end; the fact that a like refund amount is fixed for non-refillable containers for low alcohol winebased beverages cannot affect that conclusion. As for the second reason, the impact of the provision on CUB might tend to suggest that the intended legislative object was not to discriminate against interstate brewers. However, it is not a conclusive consideration. It does not negate the purpose of discriminating against interstate trade consisting, in the main, of the trade of the Bond brewing companies (cf Exxon Corporation v Governor of Maryland [437 US 117 (1978) at 126]). After all, it was the

growing market share of those companies, not CUB, that threatened the market share of the domestic brewers. Discrimination in the relevant sense against interstate trade is inconsistent with s 92, regardless of whether the discrimination is directed at, or sustained by, all, some or only one of the relevant interstate traders. Before considering the third answer given by the defendant to the plaintiffs’ objections based on the difference in the refund amounts, it is convenient to consider the second objection to the 1986 legislation, which relates to s 5b(2). That provision enables the Minister to exempt by notice refillable bottles from the operation of the retail return scheme provided [page 1062] for by s 7, without enabling the Minister to make a corresponding exemption for non-refillable bottles. Such an exemption disadvantages the interstate supplier of beer in refillable bottles by requiring it to make arrangements to transport its bottles back to its brewery for refilling as a condition of being eligible for an exemption from s 7. As it happens, this disadvantages CUB, without affecting the Bond brewing companies as they do not sell beer in refillable bottles. What is relevant is that the Minister exempted the refillable bottles (used by the South Australian brewers and by CUB) by notice given under s 5b(2) so that retailers were relieved of the obligation to accept delivery of their bottles and refund the prescribed amount in respect of such containers. On the other hand, retailers remained under the obligation imposed by s 7 with respect to the non-refillable bottles of the Bond brewing companies. The natural effect of this discrimination was to discourage retailers from stocking the Bond brewing companies’ beer in non-refillable bottles. It was a discrimination which effectively protected the domestic brewers and their intrastate trade at the expense of the Bond brewing

companies because the retailers were under no similar obligation in relation to the refillable bottles of the domestic brewers. The effect of the differential treatment resulting from the giving of the notice under s 5b(2) was that the refund amount was obtainable only from collection depots in respect of the refillable beer bottles of the domestic brewers. Yet no justification for this difference appears. If the collection depot system yielded inadequate returns, then there was no reason for exempting the bottles of the domestic producers from the operation of s 7. If the collection system generated adequate returns, then there was no reason for not exempting the non-refillable bottles of the Bond brewing companies, along with the refillable bottles of the domestic producers. The defendant seeks to overcome this difficulty by relying on the history of the collection depot system in South Australia and pointing to its success in promoting the return of containers. Granted that this is so, neither the history of that system nor its success explains why it was necessary to subject the Bond brewing companies’ products to the regime of retail return under s 7 when it was not necessary to take similar action in relation to the bottles of the domestic brewers. That regime is therefore not capable of justification as a means of achieving litter control. It remains for us to consider the defendant’s argument that any disadvantage sustained by the Bond brewing companies is merely incidental to the implementation of a legislative regime which has as its object the conservation of finite energy resources. The facts recited in the special case, so far as they relate to this issue, are extremely meagre and do little to substantiate the defendant’s argument. If all beer bottles manufactured in South Australia were non-refillable bottles, the extra energy consumption in the State would be between 0.06 per cent and 0.12 per cent of the total energy consumption in the State. If all beer bottles manufactured in South Australia were non-refillable bottles, then natural gas consumption in the State would increase by about 0.24 per cent. However, as the Bond brewing companies

use bottles manufactured outside the State, any increase in their market share in South Australia would reduce the use of the State’s resources, including natural gas, in the manufacture of bottles. If, in the light of these facts, the legislature reasonably apprehended that the sale of beer in refillable bottles manufactured in South Australia constituted a threat to the State’s reserves of natural gas, one might have expected the legislature to introduce legislation prohibiting the sale in the State of beer in non-refillable bottles produced in the State. Alternatively, and more directly, the legislature might have legislated to prohibit the manufacture in South Australia of such bottles with the use of natural gas, or at all. But none of these means was adopted. [page 1063] Instead a regime was introduced which subjected the Bond brewing companies’ interstate trade to serious competitive disadvantages by reason of their selling beer in non–refillable bottles, even though those bottles are manufactured outside the State and do not, as far as we know, involve the use of South Australian natural gas. It may be that the result is that local trade and commerce may need to be harmed if State gas reserves are to be protected. But if that is the case, it should not be surprising, because local businesses are likely to be significant users of those reserves. It follows that neither the need to protect the environment from the litter problem nor the need to conserve energy resources offers an acceptable explanation or justification for the differential treatment given to the products of the Bond brewing companies. Accordingly, in our view, that treatment amounted to discrimination in a protectionist sense in relation to their interstate trade.

9.4.23 Gaudron and McHugh JJ delivered a separate judgment, in which they agreed ‘that the practical effect of the [South Australian legislation] was to confer a significant competitive advantage in the South Australian market upon beer produced in that state over beer brewed by the first three plaintiffs interstate. The regime is therefore protectionist and, if also discriminatory, it infringes s 92 of the Constitution’: 169 CLR at 478. Their Honours said that a law was discriminatory (169 CLR at 478): … if it operates by reference to a distinction which is in fact irrelevant to the object to be attained; … if, although it operates by reference to a relevant distinction, the different treatment thereby assigned is not appropriate and adapted to the difference or differences which support the distinction [and] if, although there is a relevant difference, it proceeds as though there is no such difference, or, in other words, if it treats equally things that are unequal — unless, perhaps, there is no practical basis for differentiation.

Gaudron and McHugh JJ concluded (169 CLR at 480): [T]he essence of the legal notion of discrimination lies in the unequal treatment of equals and, conversely, in the equal treatment of unequals. Thus, if there is no inequality or relevant difference between the subject matter of interstate trade and the subject matter of intrastate trade, a law which is appropriate and adapted to an objective and burdens interstate trade only incidentally and not disproportionately to that objective will, in our view, offend against s 92 if its practical effect is protectionist — particularly if there exist alternative means involving no or a lesser burden on interstate trade. In the present case the questions posed in the joint judgment of Mason CJ, Brennan, Deane, Dawson and Toohey JJ reveal, for the reasons given by their Honours, that neither the objective of litter

control nor the objective of energy conservation provides an acceptable explanation or justification for the different treatment assigned in the legislative regime for beverage containers.

9.4.24 The High Court’s new approach to s 92 in Cole v Whitfield (1988) 165 CLR 360 might have been expected to diminish the extent of s 92’s protection of interstate traders. Their privileged immunity from governmental controls was removed and they could, post-Cole, be regulated and controlled in the same way as intrastate traders. However, the new reading of s 92 also presented new dangers for public regulation of commercial activities. In Castlemaine Tooheys, the High Court made clear that it would analyse the practical operation and effect [page 1064] of governmental regulation, taking into account the arrangements adopted by traders. The court accepted the Bond brewing companies’ investment in non-refillable packaging as a given, against which the practical effect of the South Australian legislation had to be tested. To some minds, the intense judicial scrutiny of public regulatory controls entailed by the post-Cole approach to s 92 could present an even greater threat to government control of economic activity than did the ‘individual right’ approach. 9.4.25 The High Court’s assertion, in the post-Cole s 92 context, of its responsibility to consider the practical operation of challenged legislation should not be viewed in isolation. The same assertion has been made by the court in the context of ss 90 (Philip

Morris Ltd v Commissioner for Business Franchises (1989) 167 CLR 399) and 117 (Street v Queensland Bar Association (1989) 168 CLR 461) of the Constitution. Nor should the significance of the assertion be underrated. It is not simply a matter of the justices claiming the right to look at legislation in the context of the social and economic environment, and considering the impact that the legislation has within that environment. As the reasoning in Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 demonstrates, the court is undertaking to weigh competing economic and social interests. In that case, the interest of South Australia in conserving natural resources and minimising environmental degradation was weighed against the interest of interstate traders in free access to the South Australian market. This overt process of balancing competing social interests also featured prominently in Street v Queens/and Bar Association (see 9.8.5C) where several judgments accepted that the s 117 protection against discrimination must sometimes cede to legitimate state interests. Professor Zines wrote (Zines, 2008, p 197) that, in the context of s 92: While the court has declared that it is not its concern to determine the social benefits or otherwise of legislation that impinges on interstate trade, it is clear that a degree of balancing of social interests, in some cases at any rate, is inevitable.

Section 92 and the modern economy 9.4.26 The advent of the internet has had a transformative impact on the national (and international) economy. Internet-based trade and commerce has created national markets, where state borders no longer have the significance that they had in 1900.

These dynamics of the modern economy have presented new challenges for the operation of s 92. These challenges have been addressed by the High Court in three cases concerning internet gambling. The first of these was Betfair Pty Ltd v Western Australia (2008) 234 CLR 418. Betfair operates a betting exchange in Tasmania using a telephone call centre and computers connected to the internet. A betting exchange is a relatively new model of wagering, facilitated by the rise of the internet. The betting exchange operator acts as a matchmaker between gamblers wanting to place bets on different outcomes and takes a small commission on each bet. Hence the business model depends, for profitability, on a high volume of betting activity. Western Australian legislation amended in 2006 made it illegal to place bets via a betting exchange and denied access to Western Australian race field information (lists of entrants in horse or greyhound races) to anyone without a permit. Betfair’s application for such a permit was rejected, and it challenged the validity of the Western Australian betting controls on the basis that they infringed s 92. [page 1065] The court held that the Western Australian provisions were invalid because they imposed a discriminatory and protectionist burden on interstate trade, by operating to protect Western Australian bookmakers from the competition that Betfair would present. 9.4.27C

Betfair Pty Ltd v Western Australia (2008) 234 CLR 418

Gleeson, Gummow, Kirby, Hayne, Crennan and Kiefel JJ: Since 10 January 2006 the first plaintiff (Betfair) has held a licence under Tasmanian law to operate a ‘betting exchange’. A registered customer of Betfair (whom it describes as a ‘registered player’) may place bets by a call to a telephone call centre at premises of Betfair in Hobart or by use of a computer connected by the internet to a computer server operated by Betfair at its Hobart premises. Customers may be located outside Tasmania and Betfair seeks to attract such customers located in States of the Commonwealth including Western Australia. Thus there is an interstate dimension to the operation by Betfair of its betting exchange. The second plaintiff, Mr Erceg, is a resident of Western Australia, and is a registered player. During the period 28 August 2006–24 January 2007 he used a computer connected to the internet to place with Betfair bets on horse and greyhound racing and other sporting events in Western Australia and other States. Over that period substantial amounts were bet with Betfair by registered players in Western Australia using telephones and the internet. The total sum, as to races in that State was more than $3.6 million, as to races elsewhere in Australia more than $9.6 million, and as to sporting and other events in Australia more than $2.5 million. However, by amendment to the law of Western Australia, which came into effect on 29 January 2007, it became an offence to bet through the use of a betting exchange. In addition, Betfair subsequently was refused the permission required under the amended law of Western Australia to make available important information, being ‘a WA race field’ of horses or greyhounds, for facilitation of the making or receiving of offers by internet communication between the Hobart premises of Betfair and a place in another State … The plaintiffs (with the support of Tasmania, one of the interveners) challenge the validity of the relevant provisions of the

law of Western Australia, principally by reliance upon s 92 of the Constitution. They put their case for the application of s 92 upon two bases. The first is that the legislation of Western Australia impermissibly precludes, with respect to internet transactions having a geographical connection with that State, that increase in competition, on the supply side, within the national market for betting services which would be provided, on the demand side, by the presence within Western Australia at any one time of such persons as Mr Erceg. The second is that the legislation also applies to deny to the out-of-State operator in the position of Betfair access for the purposes of its Australia-wide operations to information respecting race fields which is generated by racing operators in Western Australia, whilst in-State wagering operators do not suffer that disadvantage. As will appear in these reasons, the case formulated by the plaintiffs in these terms should be accepted. Continuity, change and s 92 All parties accept as the source of present doctrine respecting s 92 what was said twenty years ago in Cole v Whitfield (1988) 165 CLR 360 and further developed and applied in the authorities decided shortly thereafter, namely Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411, Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 and Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182. [page 1066] [After reviewing the history of free trade policies in the Australian colonies in the 19th century and reviewing the United States authorities on freedom of trade and commerce, their Honours continued:] In Western Australia, bookmakers are required to pay an annual licence fee calculated as a percentage of annual turnover,

and a levy to those racing clubs on whose course the bookmaker conducts business, again calculated as a percentage of turnover. Racing clubs conducting on-course totalisators are also required to pay an annual licence fee calculated in the same way. There are currently forty-seven bookmakers licensed in Western Australia; all are licensed to accept bets on races conducted in that State and elsewhere. Some eighteen are licensed to accept bets by telephone or over the internet. Of that group seventeen are licensed to accept bets over the internet by a website operated by Best Bookies Pty Ltd which is accessible to any person with an internet connection. An essential difference between fixed odds betting conducted by Betfair and that conducted by bookmakers is that Betfair does not ‘hold a book’ and does not carry any risk on the outcome of the event. Another is that whilst punters cannot back an entrant to ‘lose’ when placing bets with a bookmaker (or on a TAB), they can do so with Betfair. Betfair uploads on to its computer server information about each racing and sporting event in Australia on which wagers may be placed; the information includes, with respect to racing, the race field. Betfair charges a commission of generally between 2 and 5 per cent of net winnings, which is provided by registered players. Betfair requires registered players to deposit sufficient funds to cover the bets they wish to make. Betfair uses its computer program to match opposing bets by other registered players which have not been previously matched. Payments are made from a ‘Hobart account’ of Betfair to the nominated bank account in Australia of the registered player concerned. The arrival in Australia of the betting exchange In the Summary provided in the Report to the Racing Ministers to which reference has been made, the following appeared: 1. The appeal to punters of betting exchanges on racing lies mainly in:

—

2.

The fact bets are struck at fixed odds — in contrast to totalisator (TAB) betting. — Availability of better odds — relative to bookmakers and TABs. These attractive odds are available partly because punters are able to transact directly with each other (no intermediary required to bear the risk of the wager) and, as is currently the case with Betfair’s London-based operations on Australian racing, for example, betting exchanges benefit from operating in regimes characterised by low (or nil) contributions to the racing industry and betting taxes. — The facility for punters to bet against (lay) runners. — Punter-friendly commission structures. — Punters’ anonymity viz-a-viz each other (in contrast to betting with bookmakers). If betting exchanges are allowed to (continue to) operate on Australian racing under circumstances where they are able to operate profitably while charging customers an advertised commission rate ranging from 5% down to 2% (on net winnings per event), betting exchanges will likely prove a popular alternative to betting on Australian racing with TABs or licensed Australian bookmakers. This will likely be at significant expense to these existing operators and hence to the racing industry and State/Territory revenue streams from wagering. [page 1067]

The extent of betting exchanges’ future popularity among Australian punters will depend to a degree upon whether one or more betting exchange operators are able to acquire an ‘authorisation’ from the Australian racing industry and/or

Australian Governments to operate on Australian racing (or sport) and accept bets from Australian punters. Under the heading ‘Commercial and revenue repercussions’ the Report read: Some advocates of betting exchanges suggest that exchange operations on Australian racing will ‘create a purely additive revenue stream for the (racing) industry’, ie the turnover through betting exchanges will be entirely ‘new money’. The Task Force is not convinced. Rather, it concludes that betting exchanges on Australian racing would pose a serious threat to current betting turnover levels of the three categories of licensed wagering operator in Australia — TABs, traditional bookmakers and corporate bookmakers. Hypothetically, in the extreme scenario of a national, fully ‘authorised’ betting exchange on Australian racing operating under a local regime similar to that presently applying in Britain, the Task Force forecasts that, over the medium term (five years), transfers of racing betting turnover from existing licensed Australian wagering operators could be as high as 20% in the case of TABs and traditional bookmakers, rising to 30% in the case of corporate bookmakers. The 2005 Tasmanian legislation represented the legislative response to these considerations by one State. The subsequent response in Western Australia was quite different. [Their Honours reviewed the Tasmanian legislation, which embraced betting exchanges, and the Western Australian legislation, which was designed to prevent their operation in Western Australia. The analysis included detailed reference to government reports on gambling that pointed to the increasing market share of internet gambling, and the risk that internet gambling posed to state revenues derived from traditional bookmaking.]

Acceptable explanation or justification? The reasons for the policy adopted by Western Australia were spelled out in the legislative preamble as being ‘to prohibit betting through, and the establishment and operation of, betting exchanges’. Those reasons had been expressed earlier by an answer given by the Minister for Racing and Gambling to a question asked in the Legislative Assembly on 4 May 2005. The Minister had said: The racing industry is very important to the state of Western Australia. It is one of the six biggest industries in the state. It employs thousands of citizens across the state. It provides a great deal of interest and enjoyment for many hundreds of thousands of Western Australian citizens. … The reasons we are opposed to betting services are that, first, they make no contribution to the racing industry in Australia and, secondly, betting exchanges allow punters to bet on any of the racing codes and lose. That means that the integrity of the racing industry is put under threat by betting exchanges. They are absolutely opposed by all three racing industry codes in Western Australia. They are opposed by the government. They are opposed by virtually all state governments. However, we have a problem: we cannot control the Internet. We have written to the federal [page 1068] government and to the minister for communications asking whether she will ensure that betting exchanges are made illegal under the Interactive Gambling Act. She has declined to do so (emphasis added). First, as to the absence of contribution to the racing industry in Australia, so far as that may be relevant. The evidence shows that

by agreement with the Victorian regulator, Betfair undertook to return an amount equivalent to 1 per cent of the value of bets taken by it on races in Victoria; this is the same level of return as that required from bookmakers in that State. Betfair has been meeting that obligation. There is no reason to doubt the assertion by Betfair that it remains ready to undertake obligations of this kind in Western Australia and to ensure that the organisers of races in that State obtain a reward from Betfair as well as from other wagering operators in that State. In its submissions Western Australia also contended that any practical effect of the impugned legislation in protecting the turnover of in-State operators from diminution as a result of competition from Betfair, with consequent prejudice to the returns to the racing industry and in-State revenue provided by it, could not be protectionist in nature. But a proposition which asserts that an object of revenue protection of this kind may justify a law which discriminates against interstate trade is contrary to authority [Bath v Alston Holdings Pty Ltd (1988) 165 CLR 411 at 426–7; Sportodds Systems Pty Ltd v New South Wales (2003) 133 FCR 63 at 80]. And it is contrary to principle, for such a justification, if allowable, would support the reintroduction of customs duties at State borders. Much effort on this branch of the case was expended in developing the second reason to which the Minister referred in the above passage. This was to the effect that Betfair’s operations, if permitted by the law of Western Australia, would or would be likely to have, or were reasonably apprehended to have, an adverse effect upon the integrity of the racing industry conducted in that State. It was said to be easier to lose a multiparty sporting event than to win it. To permit punters to back an entrant to lose rather than to win, as does Betfair, was said in the Report to pose a threat to the integrity of the process above that which might be thought to be present already in the racing industry. It was this alleged threat to the integrity of the racing

industry which was said by Western Australia to justify the course taken by its legislation. What is involved here is an attempt at an evidentiary level to measure something of an imponderable. But, allowing for the presence to some degree of a threat of this nature, a method of countering it, which is an alternative to that offered by prohibition of betting exchanges, must be effective but non-discriminatory regulation. That was the legislative choice taken by Tasmania and it cannot be said that that taken by Western Australia is necessary for the protection of the integrity of the racing industry of that State. In other words, the prohibitory State law is not proportionate; it is not appropriate and adapted to the propounded legislative object … In that setting, it cannot be found in this case that prohibition was necessary in the stated sense for the protection or preservation of the integrity of the racing industry. Both the plaintiffs and Tasmania put the case initially at the level that the protection of integrity was not a ‘substantial purpose’ or ‘the real object’ of the legislation. It is unnecessary to decide the case by ruling on that submission. This is because these parties also submitted that even if that object be seen as legitimate, the means adopted, prohibition, was not appropriate and adapted to achieve it given the avenue of regulation in a nondiscriminatory manner. [page 1069] The market The evidence shows that there is a developed market throughout Australia for the provision by means of the telephone and the internet of wagering services on racing and sporting events. Indeed, the evidence shows that such a market may be international. Within the Commonwealth the events may take

place in one State, the customer be in another and the licensed bookmaker or TAB be in a third. Before the commencement of the legislation of Western Australia which is under challenge, this market included the services supplied by the betting exchange which Betfair had established under licence in Tasmania. In the other States this remains the case. The inhibition to competition presented by geographic separation between rival suppliers and between supplier and customer is reduced by the omnipresence of the internet and the ease of its use. The apprehension expressed in the Report as to the operations of betting exchanges, with lower commission rates, upon the revenue streams derived by TABs and licensed bookmakers, is indicative of cross-elasticity of demand and thus of close substitutability between the various methods of wagering [see Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 215 CLR 374 at 455]. The effect of the legislation of Western Australia is to restrict what otherwise is the operation of competition in the stated national market by means dependent upon the geographical reach of its legislative power within and beyond the State borders. This engages s 92 of the Constitution … [Heydon J also held the Western Australian provisions invalid.]

9.4.28 Following its success in the 2008 Betfair case, Betfair Pty Ltd instituted proceedings to challenge provisions of the Racing Administration Act 1998 (NSW) which provided for the imposition of a fee for the use of betting information in relation to races held on racecourses in New South Wales. That challenge was rejected by a Full Court of the Federal Court (Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356), and an appeal to the High Court was heard concurrently with a challenge to the

same New South Wales provisions by another betting agency, Sportsbet Pty Ltd. 9.4.29 The Racing Administration Act 1998 (NSW) deals with the licensing of racecourses in New South Wales and the use of race field information in relation to races held in New South Wales. The Act also provides for the licensing of bookmakers and totalisators, but does not deal with the licensing of betting exchanges (the only one in Australia being operated by Betfair). The Act provides that Racing New South Wales (RNSW) and Harness Racing New South Wales (HRNSW), each a ‘relevant racing control body’ for the purposes of the Act, may impose a fee for the use of New South Wales race field information. Section 33 of the Act prohibits the use of New South Wales race field information unless a ‘wagering operator’ (defined to mean a bookmaker, totalisator or betting exchange) has been authorised by an approval under s 33A. The relevant racing control body may grant approval subject to conditions, and one of the conditions that may be imposed is for the payment of a fee: s 33A(2)(a). Clause 16(2) of the Racing Administration Regulation 2005 prescribed the level of fee to be paid by a wagering operator. In relation to a use in Australia of New South Wales race field information, the relevant racing control body may impose ‘a fee that does not exceed 1.5 per cent of the [wagering operator’s] wagering turnover’ and, in relation to any other use of New South Wales race field information, a fee determined by the relevant racing [page 1070] control body. ‘Wagering turnover’ is defined in cl 14(1) of the

regulations to mean ‘the total amount of wagers made on the backers side of wagering transactions made in connection with that race or class of races’. In determining an approval application, the relevant racing control body ‘must not take into account the location in Australia that the applicant has its head office or principal place of business’ and ‘must take into account whether or not the applicant holds a licence or authority … under State or Territory legislation to carry out its wagering operations’. Thus, as the joint judgment of French CJ, Gummow, Hayne, Crennan and Bell JJ observed at (2012) 249 CLR 217 at 258: ‘The clause so operated that RNSW and HRNSW were required not to take into account that Betfair had its head office in Victoria and its principal place of business in Tasmania; nor could they take into account that Betfair, while holding a licence to carry out its wagering operations in Tasmania, did not do so under the New South Wales legislation’. Betfair challenged s 33A(2) of the Act on the ground that it breached s 92 of the Constitution. It was argued that the imposition of the fee at a fixed rate of 1.5 per cent of wagering turnover resulted in a greater percentage of its revenue being taken when compared with the amounts taken from wagering operators with a higher margin. As the only betting exchange operating in Australia, its wagering operations were run at a lower margin than other ‘wagering operators’ in the market, that is, bookmakers and totalisators. Thus, Betfair relied upon an argument that, despite the nondiscriminatory terms of the fee, the fee operated in a discriminatory way. The court rejected the challenge. 9.4.30C Betfair Pty Ltd v Racing New South Wales (Betfair No 2) (2012) 249 CLR 217

French CJ, Gummow, Hayne, Crennan and Bell JJ: This litigation is a sequel only in a general sense to that in this Court in Betfair [(2008) 234 CLR 418]. The Act, unlike the legislation of Western Australia which was in contention in the earlier case, does not erect against a betting exchange operator a barrier to entry by making it an offence for a person in New South Wales to make by telephone or electronic means a bet with a betting exchange outside that State, or by forbidding such a betting exchange to deal by those means with customers in New South Wales; nor does the Act forbid, subject only to an illusory approval system, the publication by an out of State wagering operator of State field information. Betfair does not make a case that it wishes to set up and operate a betting exchange sited in New South Wales and that s 92 of the Constitution renders invalid any law of that State which would stand in the path of it doing so. Rather, the dispute concerns the validity of the fees imposed by and payable to RNSW and HRNSW for use of New South Wales race field information. It is in this respect that Betfair places reliance upon s 92 … It will be apparent that between those on the demand side and the supply side of wagering services with respect to horse racing there is cross-elasticity of demand and thus close substitutability between the various methods of wagering [Betfair (2008) 234 CLR 418]. That is so, notwithstanding the presence of differences between the conduct of the businesses of a bookmaker, a totalizator and a betting exchange, so that, for example, profit margins may be assessed in varying ways. It is upon the differing business models with respect to profit margins that Betfair lays a foundation of its case … The standard fee for use of NSW race field information is imposed by RNSW and HRNSW by reference to the total amount of wagers made on the backers side and has several

[page 1071] distinct characteristics. First, on its face, the fee is neutral as between the various wagering operators, the bookmakers, totalizators such as TAB and Betfair. Secondly, the fee is imposed without distinction between the activities of wagering operators and customers located in New South Wales or elsewhere. Thirdly, no distinction is drawn between use of NSW race field information in wagering activities which form part of trade between the States and those which do not do so. It will be necessary later in these reasons to refer further to this facial neutrality of the standard fee. In the course of the litigation Betfair abandoned its contentions that the burden of the fee is such that it cannot continue profitably to offer wagering services on New South Wales thoroughbred racing and harness racing and that it is likely to exit from that market … As it is likely that there will be continued participation by Betfair in interstate wagering transactions using NSW race field information, it is for Betfair to point to a relevant differential treatment which it can show is likely to discriminate in a protectionist sense between interstate and intrastate wagering transactions which utilise NSW race field information. The Full Court identified the basis of Betfair’s complaint as follows [(2010) 189 FCR 356, 364–5]: Betfair argues that a fee [of 1.5%] calculated as a percentage of the amount wagered necessarily has a greater impact on it in comparison with operators with higher margins. That is because a greater percentage of the low margin operator’s price and revenue from the wagering operation is taken by the 1.5% fee. Thus, so it is said, the uniform imposition of a fee of 1.5 per cent of the

amount wagered discourages low margin operators and price competition to the benefit of high margin operators. HRNSW imposes similar conditions on its approvals. The effect of these provisions is to require all those who used New South Wales race field information, including bookmakers, the TAB, and Betfair, to pay 1.5% of the total value of all back bets associated with New South Wales race events. This fee is subject to a fee-free threshold of $5 million for RNSW approvals and $2.5 million for HRNSW approvals (emphasis added). Their Honours in the Full Court said of this emphasis upon Betfair as a low cost operator [(2010) 189 FCR 356, 389]: Because the price of a wagering operator’s services is relative, it is more accurate to speak of Betfair as a lower cost operator than its competitors. In order to demonstrate that the fee is likely to diminish the competitive advantage enjoyed by Betfair, it would be necessary to demonstrate that the fee which is imposed at a uniform rate on all wagering operators taking bets on horse races in New South Wales is likely to operate in fact to disturb Betfair’s low margin operation relative to the other wagering operators. This Betfair did not do (emphasis in original). Discrimination and s 92 If, despite the submissions by RNSW and HRNSW, it was accepted that the licence fee had a greater impact upon the business Betfair conducted than upon those of its non-betting exchange competitors, this might tend to support a proposition that the fee is discriminatory. It would be so in the sense of treating alike the impact to be expected upon all species of wagering operators, whereas the nature of the business of a betting exchange operator differs, in particular, from that of totalizator operators. This proposition seemed to be the gravamen of

[page 1072] Betfair’s case. But it should be emphasised immediately that it would not necessarily follow from acceptance of the proposition that there was any engagement of s 92 of the Constitution. No doubt the term ‘discrimination’, in its legal sense of ‘discrimination against’ [Street v Queensland Bar Association (1989) 168 CLR, 570–1], may be applied where there is a relevant difference between the entities or activities which are the object of a law, yet the law applies as if there is no such difference. But in order for Betfair to make good its case for the engagement of s 92, RNSW and HRNSW correctly submit, with the support of various interveners, that Betfair must do more. Not every measure which has an adverse effect between competitors will attract the operation of s 92. The ‘confined area’ in which s 92 operates was emphasised in Cole v Whitfield [(1988) 165 CLR 360, 406–7]. Betfair must establish that the fee conditions imposed upon it by RNSW and HRNSW were unauthorised because their practical effect is to discriminate against interstate trade and thereby protect intrastate trade of the same kind [Cole v Whitfield (1988) 165 CLR 360, 407, 409]. What is posited here is an essentially objective inquiry [APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322, 394, 462]. It is the concept of protectionism which supplies the criterion by which discriminatory laws may be classified as rendering less than absolutely free trade and commerce among the States. At various stages in its submissions, Betfair appeared, by emphasising notions of discrimination, to seek to diminish the requirement of protectionism. It is important to note, as emphasised in Cole v Whitfield, that whether a facially neutral law in question is discriminatory in effect, and whether the discrimination is of a protectionist character, ‘are questions raising issues of fact and degree’ [(1988) 165 CLR 360, 407–8] …

Conclusions respecting the application of s 92 The nature of the questions of fact and degree to be answered by Betfair with respect to the fee structure provided under the Regulations is indicated by the following passage in the final section of the reasons in Cole v Whitfield [(2008) 165 CLR 360, 409]: The question which we must now determine is whether reg 31(1)(d) of the Sea Fisheries Regulations which reveals no discriminatory purpose on its face is impermissibly discriminatory in effect. In other words, whether the burden which the regulation imposes on interstate trade in crayfish goes beyond the prescription of a reasonable standard to be observed in all crayfish trading and, if so, whether the substantial effect of that regulation is to impose a burden which so disadvantages interstate trade in crayfish as to raise a protective barrier around Tasmanian trade in crayfish (emphasis added). The questions presented in the present appeal thus become: (i) whether the practical operation of the fee structure shows an objective intention to treat interstate and intrastate trade in wagering transactions alike, notwithstanding a relevant difference between them; and, if so, (ii) whether the fee structure burdens interstate trade to its competitive disadvantage; and, if so, (iii) whether that burden nonetheless is reasonably necessary for New South Wales to achieve a legitimate non-protectionist purpose. If an affirmative answer were given to (i) and (ii) then, unless (iii) be answered in the negative, the conclusion would be that the fee structure gives to intrastate wagering transactions which utilise NSW race field information such a competitive or market advantage over those interstate wagering transactions which also do so, as to raise a protective barrier around those intrastate transactions. For the reasons which follow the case presented by

Betfair fails at step (i), and, in any event, at step (ii), so step (iii) is not presented for decision. [page 1073] Betfair relied upon the decision in Castlemaine Tooheys [(1990) 169 CLR 436], that the law of South Australia prescribing 15 cents as the refund amount in relation to non– refillable beer bottles, where four cents was payable for refillable bottles used by the competitors of the plaintiffs, the Bond brewing companies, was contrary to s 92 of the Constitution. It was said in the joint reasons [(1990) 169 CLR 436, 477] that this regime ‘subjected the Bond brewing companies’ interstate trade to serious competitive disadvantages by reason of their selling beer in non-refillable bottles’, and that [(1990) 169 CLR 436, 464]: The practical effect of the [regime] was to prevent the Bond brewing companies obtaining a market share in packaged beer in South Australia in excess of 1 per cent whilst their competitors used refillable beer bottles. It is uneconomic for the Bond brewing companies to convert their existing interstate plants to use refillable bottles. These conclusions, however, were facilitated by what was laid out in pars 77 and 79 of the Case Stated. This has no counterpart with respect to the case presented by Betfair. Paragraph 77 read [(1990) 169 CLR 436, 449]: By reason of the unavailability to the Bond Brewing Companies in and subsequent to October 1986 of plant capable of use for refilling refillable bottles for the South Australian market combined with its extra transport costs of returning bottles to the breweries for refilling, the Bond Brewing Companies would incur substantial extra costs in

using refillable bottles for that market compared with its major competitors in that market. By reason of the increased prices that it would be necessary to charge for the products of the Bond Brewing Companies to recover these increased costs, the Bond Brewing Companies would be unable to obtain a market share in excess of about 1 per cent of the market in packaged beer in South Australia even if they used refillable bottles for their products. Paragraph 79 read [(1990) 169 CLR 436, 449]: ‘The object and effect of the [regime] has been to make the sale of beer in non– refillable bottles commercially disadvantageous.’ In the present case, the circumstance that the fee structure adopted by Betfair for its wagering operations differed from that adopted by other wagering operators did not constitute a relevant difference which, consistently with s 92, could not be disregarded by treating alike interstate and intrastate wagering transactions utilising NSW race field information. All that Betfair established was that by maintaining its current pricing structures, and given its low margin, the fees imposed by RNSW and HRNSW absorbed a higher proportion of its turnover on interstate transactions than that of the turnover of TAB, the principal intrastate wagering operator. Nor did Betfair demonstrate that the likely practical effect of the imposition of the fees will be loss to it of market share or profit or an impediment to increasing that share or profit. As the Full Court emphasised [(2010) 189 FCR 356, 389], Betfair did not: seek to show that, as a matter of fact, it is likely that this possible effect will be sufficiently significant in the demand side of the market — which is assumed to be made up of both sophisticated and unsophisticated punters — to affect adversely Betfair’s niche in the supply side of the market — which includes operators on a higher margin than Betfair who must also choose whether or not to pass on the 1.5 per cent

fee to punters. We are unable to conclude that, notwithstanding the ex facie uniform application of the fee, it is apt to diminish Betfair’s competitive advantages in a material way. … [page 1074] Heydon J: The evidence showed that the appellant was engaged in interstate trade or commerce. It also showed that the fee of 1.5 per cent of back bet turnover resulted in the appellant paying a larger proportion of its gross revenue from gambling on New South Wales thoroughbred or harness racing than TAB Ltd, a local trader, did of its gross revenue from that type of gambling. But did the evidence show that a competitive disadvantage was imposed, not on the appellant, a single interstate trader, but on all interstate trade? The appellant pointed to no evidence which showed how the fee reduced the competitive advantage of interstate trade. It pointed to no evidence which showed how the fee increased the competitive advantage of intrastate trade. It pointed to no evidence of how the fee nullified or reduced a competitive disadvantage of intrastate trade. The appellant took the court to a great deal of evidence. But it did not analyse the forms which the relevant intrastate and interstate trade took. It did not examine how its case fitted in with the fluid and dynamic environment of the relevant trading activities. Those who experience the desire to gamble have many outlets at which to gratify that desire beyond those that the appellant and TAB Ltd provide. Even if the interstate and intrastate trade is limited to gambling on horseracing, which is questionable, those who desire to gamble on horseracing have available to them many persons prepared to provide the facilities to do so apart from the appellant and TAB Ltd. The focus of the appellant was on its own position. That

approach might have been legitimate if the appellant’s position were typical of the relevant interstate trade or, as the appellant put it, ‘the lens through which one looks at the effect on interstate trade’. But the singular position of the appellant negated that possibility. The appellant’s approach might also be legitimate if it occupied so dominant a position in interstate trade that an impact on its position was sufficiently substantial to burden interstate trade to an extent significantly greater than the burden on intrastate trade. In that regard, the appellant drew an analogy between itself and the Bond brewing companies in Castlemaine Tooheys [(1990) 169 CLR 436]. It sought to portray itself in the manner that the Bond brewing companies portrayed themselves in that case, namely as a new challenger with a small share of sales that was vigorously shaking up a stagnant trade [Castlemaine Tooheys 169 CLR 436 at 475]. But the evidence did not bear out the analogy. It pointed the other way, suggesting complex and vigorous trading activity across the nation in which there were numerous participants in diverse circumstances. The appellant also submitted that there ‘is no other way of analysing the effect on the market … than via its effect on particular traders, otherwise it becomes an abstract exercise, an artificial one’. Up to a point, that may be so. But it does not justify limiting the traders examined to just one. Even if the inquiry is limited to the appellant’s own position, the evidence was not favourable to its case. Its chief executive officer, whose credibility was praised by the trial judge, admitted that the fee had not reduced the number or type of New South Wales thoroughbred or harness races on which the appellant sought wagers. He accepted that the appellant had not altered its commission structure in response to the fee. He acknowledged that the appellant had not introduced a premium charge in response to the fee. He admitted that there was no connection between the introduction of the fee and the odds offered by the appellant’s customers. He also admitted that since the fee came in there had been no change of substance in the commissions

which the appellant charged or the odds it offered. He further admitted that the appellant had not altered its ‘marketing spend’ in response to the fee. He agreed that the fee had not caused the appellant to lose a single dollar of back bet turnover and that the fee had not caused the appellant to lose a single dollar of commission. [page 1075] He admitted that the fee had not caused the appellant to change its competitive behaviour in any way in relation to its dealings with customers and its attempts to win business away from competitors. He admitted that though an examination of the appellant’s future conduct in the event of defeat in these proceedings was under way, no plan for change had been developed. And he agreed that the appellant’s planning documents projected the achievement of ‘very substantial’ and ‘healthy’ targets notwithstanding the imposition of the fee. He did not assert that the appellant would cease to compete or to trade profitably, either at all or in relation to horse races in New South Wales. Nor did he assert that the appellant would not continue to gain market share. [In a separate judgment, Kiefel J rejected the s 92 challenge. There had been some suggestion that the court’s 2008 Betfair decision signalled a return to an individual rights view of s 92. However, the court made it clear that that was not the case. The plurality reiterated the rejection of the individual rights theory of s 92 in the following terms:] French CJ, Gummow, Hayne, Crennan and Bell JJ: Individual rights? There is a further difficulty in Betfair basing its case upon s 92. This is presented by its reliance upon the particular

circumstances of its business activities, so as to characterise the fee as a protectionist measure which imposes a discriminatory burden on interstate trade. At times, and despite its disclaimers, in the argument presented by Betfair to this Court, it appeared to rely upon the ‘individual rights’ theory of s 92 which was left behind in Cole v Whitfield [(1988) 165 CLR 360]. The relevant distinction here appears in the discussion by Professor Zines, writing in 1987, before Cole v Whitfield, in the 2nd edition of The High Court and the Constitution [at 101], of the treatment by the Privy Council in The Commonwealth v Bank of New South Wales [(1949) 79 CLR 497, 635; [1950] AC 235] of the earlier triumph of Mr James in the Privy Council [James v The Commonwealth (1936) 55 CLR 1; [1936] AC 578]. Professor Zines wrote: On any view s 92 will invalidate some forms of legislation and thus give an individual the right to ignore it and in appropriate cases to seek judicial remedies if it is attempted to enforce the void legislation against him. In that sense the individual is protected, but the fact that James won his case does not mean that the Privy Council decided it on the basis that s 92 guaranteed a right to each individual to engage in interstate trade free from governmental control or even free from governmental control that does not constitute a ‘regulation’ of his trade. He might have won it (and it is thought he did) because the Commonwealth Act was aimed at restricting interstate trade in dried fruits. (emphasis added; footnote omitted) It is in the limited sense indicated in this passage that one trader may be a surrogate or representative of a particular class of activity. Here Betfair conducts the only betting exchange based in Australia. In the joint reasons in Castlemaine Tooheys [(1990) 169 CLR 436, 475] their Honours observed that discrimination in the relevant sense against interstate trade is inconsistent with s

92, regardless of whether it is sustained by all, some or only one of the relevant traders. But that does not mandate an outcome driven by the particular business methods adopted by any particular trader. [page 1076] In the present case, the Full Court pointed as follows to what it held was a fatal defect in Betfair’s case [(2010) 189 FCR 356, 388]: The relevant inquiry as to whether a law or other governmental measure operates in fact to impose a protectionist burden on interstate trade contrary to s 92 of the Constitution is not concerned to vindicate a right in individual traders to carry on their business as they wish. The inquiry is whether the individual trader, as a participant in interstate trade, is subject to a differential burden by reason of the operation of the law or measure in the common circumstances of the trade. The differential burden must be imposed by the law or executive measure in the common circumstances of the milieu in which the trade occurs: the inquiry is as to whether there is a denial by the law or measure of a competitive advantage in trade, not whether an individual trader’s particular circumstances are such that its trade may be adversely affected by a law of general application to all traders. In the course of argument in this Court, the emphasis by Betfair upon its particular circumstances attracted further submissions, particularly by Victoria, which should be accepted. First, emphasis upon the circumstances of particular traders, and upon features which may be accidental to those circumstances and to the interstate transactions in which the traders may

engage, risks characterisation of the law in question not by its effect upon interstate trade, the constitutional issue, but by its effect upon particular traders. Secondly, where a competitor, such as TAB in this case, engages in both intrastate and interstate commerce, the plaintiff does not clearly advance its case for invalidity of the law which applies both to it and to all the activities of the competitor by agglomerating those activities and asserting, as Betfair does of TAB, that the law gives TAB preferential treatment in a protectionist sense. Thirdly, attempts to classify a trader, such as TAB, as an intrastate trader because its principal place of operation is located in one State and its business receives protection by the law of that State (here, New South Wales) are apt to yield inconclusive results. What, for example, is the significance of the position of TAB as the subsidiary of a Victorian listed public company? The point may be illustrated by reference to what was decided in revenue cases such as O Gilpin Ltd v Commissioner for Taxation (NSW) [(1940) 64 CLR 169]. The taxpayer in that case was incorporated in Victoria, where its central management and control was located. But it carried on business as a draper at retail shops in four States including Victoria and New South Wales. This Court held that where a business ordinarily consists of selling goods (and, it might have been added, of supplying services), the contracts with consumers are of the essence of the business. The result was that, despite the location in Victoria of the central management and control, the taxpayer carried on trade in New South Wales where contracts were made and it derived income in that State. Thus the central management and control, in the sense used in these revenue cases, of a trader may be in one State but the operations of the business may be conducted from locations in several States, none or only one of which is the first State. These considerations underline the proposition that the subject

of s 92 is interstate trade, not traders, whose transactions may or may not consist wholly of interstate transactions or of intrastate transactions. [Heydon J (at 271) and Kiefel J (at 278) also rejected a return to the individual rights view of s 92.]

[page 1077] 9.4.31 In Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298, the appeal to the High Court was from a decision of a Full Court of the Federal Court (Racing New South Wales v Sportsbet Pty Ltd (2010) 189 FCR 448) setting aside the decision of the primary judge that the fee provisions of the Racing Administration Act 1988 (NSW) were invalid. Sportsbet has its registered office and principal place of business in the Northern Territory. It holds a bookmaking licence under the Racing and Betting Act (NT) and is authorised to accept bets (including by telephone and over the internet) on races, including races using New South Wales race field information. It runs its business through a call centre in Darwin. This appeal was heard concurrently with the Betfair No 2 appeal. However, as the joint judgment of French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ indicated, there were two important differences between the cases (249 CLR 298 at 315): The first is that Sportsbet does not operate a betting exchange and is not a ‘low cost operator’ in the sense used in the Betfair appeal. Sportsbet conducts business as a corporate bookmaker, so that its ‘wagering turnover’, for the purpose of computation of the fees payable to RNSW

and HRNSW, differs from that of Betfair. The second distinction is that … s 92 of the Constitution, which speaks of trade and commerce ‘among the States’, cannot be directly engaged in this appeal.

As to this second difference, because Sportsbet operated its business from the Northern Territory the terms of s 92 (‘among the States’) were not engaged. However, s 49 of the Northern Territory (Self-Government) Act 1978 (Cth) provides that ‘[t]rade, commerce and intercourse between the Territory and the States … shall be absolutely free’. As had been accepted in AMS v AIF (1999) 199 CLR 160 at 176, discretions conferred by state provisions (like the power to impose a fee under s 33A of the Racing Administration Act 1998 (NSW)) would have to be confined so as not to be inconsistent with the ‘positive rule’ set out in s 49 of the Commonwealth Act. Otherwise, s 109 of the Constitution would be triggered: 249 CLR 298 at 316. 9.4.32 Thus, the central question for the court was whether ‘the power of approval, upon conditions as to payment of a fee, which is conferred by s 33A(2) of the Act upon RNSW and HRNSW, is confined, lest s 33A of the Act “alter, impair or detract” from the operation of the positive rule created by s 49 of the SelfGovernment Act that trade and commerce between the Territory and the States shall be free from discriminatory restraints and interferences of a protectionist kind’: 249 CLR 298 at 317. Of relevance to Sportsbet’s appeal was the position of TAB Limited (TAB), a body established by the Totalizator Agency Board Privatisation Act 1997 (NSW). TAB holds an exclusive licence under the Totalizator Act 1997 (NSW) to conduct a totalisator in New South Wales in relation to race betting at any racecourse within or outside Australia. The joint judgment of French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ noted that

‘Sportsbet has conducted its case by treating TAB as the proxy for intrastate wagering transactions; the corollary in its case has been that the alleged preference given to TAB stamps the New South Wales legislation as a protectionist measure’: 249 CLR 298 at 314. The court rejected the challenge. [page 1078]

9.4.33C

Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298

French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ: The substance of the case pleaded by Sportsbet was: (a) that the State legislation imposed a burden or disadvantage on trade and commerce between the Northern Territory and New South Wales which was not imposed on intrastate trade and commerce of the same kind; and (b) that (i) the legal effect, or (ii) the practical effect, of the State legislation was to protect wagering operators ‘in’ New South Wales ‘from competition from wagering operators in the [Northern Territory]’. The focus of the pleading upon the situs of wagering operators in a particular political and geographic subdivision in Australia tends to mislead where, as is the case here, wagering operators and their customers conduct transactions across the borders of those subdivisions, as well as wholly within them. It misleads by distracting attention from the impact of the New South Wales law, as a legal and practical matter, upon trade and commerce represented by wagering operations conducted between the Territory and the State. Further, the New South Wales law, as emphasised in the reasons in the Betfair appeal, is facially neutral. Its legal effect is not discriminatory in a

protectionist sense. The question then becomes whether, as a matter of its practical operation or effect, the Act does have that character. Practical operation or effect In the period before the adoption of the prevailing doctrine in the Court, when s 92 was to be interpreted with regard to the ‘criterion of operation’ of the impugned law [Zines, The High Court and the Constitution, 2nd ed, 1986, 106–7], nevertheless there were decisions which appeared to rest upon the substance of a law as a protectionist measure rather than upon its form. For example, in Vacuum Oil Co Pty Ltd v Queensland [(1934) 51 CLR 108], the terms of the Queensland law which was held to be invalid required the licensing of persons who sold motor spirit for delivery in that State and required licensees to buy an amount of power alcohol manufactured in Australia proportionate to the quantity of motor spirit sold by the licensee. The plaintiff had no use for power alcohol in its business, except in negligible quantities. In fact, power alcohol was produced only in Queensland, from sugar cane. No petrol motor fuel was produced in that State; the plaintiff imported petrol from New South Wales for sale in Queensland. Thereafter, the concept of ‘circuitous device’ was put forward as an addendum to the ‘criterion of operation’. This, as Mason J explained in Miller v TCN Channel Nine Pty Ltd [(1986) 161 CLR 556, 575] was done ‘because that doctrine, with its focus on the legal, rather than on the practical, operation of a law, was vulnerable to circumvention.’ His Honour added [at 575–6]: But the concept was not developed in such a way that it became a doctrine in its own right, grounded in the practical operation of a law, identifying practical or economic consequences as impediments to interstate trade. As I shall show by reference to the decided cases, the concept seems to have been virtually devoid of content. No law has ever

been struck down on the expressed ground that it burdened interstate trade by means of a circuitous device, though it has been suggested that Vacuum Oil Co Pty Ltd v Queensland [(1934) 51 CLR 108]; Fish Board v Paradiso [(1956) 95 CLR 443], and Wilcox Mofflin Ltd v New South Wales [(1952) 85 CLR 488], may be capable of explanation on this footing. [page 1079] The term ‘practical operation’, in its present use as a criterion of constitutional validity, is not ‘virtually devoid of content’. However, its imprecision in meaning and application is apt to generate significant differences of opinion when the term is applied in particular disputes. Both in this case and Betfair the appellant fixes upon the practical operation of the fee structure in the State licensing systems upon its business operations as an interstate (or extra-Territorial) trader and contrasts this with the position of what it categorises as one or more competitors who are intrastate traders. But the minute analysis of business models, as applied from time to time, which this approach invites distracts attention from the concern of s 92 with effect upon trade, not prejudice to particular traders. The point is further illustrated by the division between Mason CJ, Brennan, Deane and Gaudron JJ, and Wilson, Dawson and Toohey JJ, in Bath v Alston Holdings Pty Ltd [(1988) 165 CLR 411]. The case was argued immediately after Cole v Whitfield [(1988) 165 CLR 360] and judgment was given a month after that in the latter case. The minority in Bath emphasised that if regard were had to the practical operation of the Business Franchise (Tobacco) Act 1974 (Vic), it would be seen that the object of the legislation was not to favour Victorian trade at the expense of the interstate trade in

tobacco. All trade in tobacco in Victoria was subjected to the franchise fee at one point or another, whether wholesale or retail, and the economic effect of the tax was the same, whether the retailer acquired the tobacco from a local wholesaler who was liable to pay the tax, or an out of state wholesaler who was not liable to pay it [(1988) 165 CLR 411, 431–2]. On the other hand, the majority directed attention to a particular market — ‘the Victorian retail tobacco market’ — and to the effect of the tax on the supply of goods to that market. Their Honours added that [(1988) 165 CLR 411, 428–9]: [t]he effect of an equivalent tax on transactions at another stage in the chain of distribution of the same goods … is immaterial.” It may perhaps be said, and it is unnecessary to pursue the matter here, that, by the focus upon a ‘market’ solely at the retail level, the majority in Bath favoured the legal operation of the tax at the expense of the practical operation of the statute as a whole. In the present case, the primary judge appears to have gone beyond the distinctions which divided this Court in Bath. His Honour appears to have based his decision that the approvals granted by RNSW and HRNSW were invalid upon the premise that the evidence supported the inference that each of the State of New South Wales, RNSW and HRNSW had intended to engage in discriminatory protectionism [(2010) 186 FCR 226, 239–40], and that RNSW and HRNSW had intended that neither TAB nor New South Wales on-course bookmakers would be economically affected by the fee for use of NSW race field information [(2010) 186 FCR 226, 256–7]. These conclusions were reached, notwithstanding his Honour’s appreciation that ‘the concepts in play are constitutional concepts’ [(2010) 186 FCR 226, 239]. To that may be added the point that to attribute an ‘intention’ to a body politic is to apply something of a fiction [Singh v The Commonwealth (2004) 222 CLR 322, 385]. The Full Court [(2010) 189 FCR 448, 474], held that these findings by the primary judge were not open on the pleadings or

as the case had been conducted. Their Honours added, with respect correctly, that, in any event ((2010) 186 FCR 226, 483): … whether the imposition of the fee by RNSW and HRNSW as a condition of Sportsbet’s approval is contrary to s 49 of the [Self-Government] Act does not depend upon the subjective intentions or motives of those responsible for the adoption of the measure; the operation of s 49 depends upon the effect of the measure, not on whether those responsible for its adoption and implementation were correct in their understanding of the operation of s 92 of the Constitution. The crucial issue in this [page 1080] case concerns the objective effect of the imposition of the fee upon interstate trade relative to intrastate trade. RNSW and HRNSW add to what was said by the Full Court, in the passage just set out, by emphasising that the proper inference to be drawn from the evidence was a concern to remedy the situation where interstate wagering transactions by operators who were not licensed in New South Wales but who used NSW race field information did not supply any revenue to support the generation of the New South Wales racing spectacles. There was no concern to advantage intrastate wagering transactions at the expense of the interstate activities. Something now should be said of the practical operation of the fee condition upon on–course bookmakers and TAB. On-course bookmakers The fee condition imposed by RNSW gave to all wagering operators the benefit of an exemption in respect of the first $5 million of turnover. Locally based wagering operators, such as on-

course bookmakers, with a turnover of less than $5 million were not liable to pay the fee. Out of State based wagering operators likewise escaped liability if their turnover was below the threshold. All operators paid the fee on so much of their turnover as exceeded $5 million. With respect to the HRNSW fee, those operators with a turnover in excess of $2.5 million on New South Wales harness racing paid a fee on the whole amount of turnover. Respecting the practical operation of the $5 million and $2.5 million exemptions, there was evidence that: (a) 17 locally based wagering operators (TAB and 16 on-course bookmakers) and 22 wagering operators based outside the state (seven totalizator operators, Betfair, 10 corporate bookmakers and four on-course bookmakers) have a turnover on New South Wales thoroughbred racing in excess of $5 million and thus paid the fee; and (b) the fee would be payable on approximately the same percentage of wagering turnover, within and without the State, on New South Wales harness racing (95.9 per cent to 98.7 per cent). The practical operation of the thresholds is not to provide a protectionist measure to insulate New South Wales on-course bookmakers from the economic burden of the fee. Both intrastate and out of State competitors could benefit from the threshold, and, in any event, there was no necessary connection between the location from which a wagering operator conducted its business and the turnover of that business.

9.4.34 The plurality then turned to consider the remaining contention that TAB was insulated from liability to bear the fees as a result of an agreement between TAB, RNSW and HRNSW that was in existence at the time the statutory licensing scheme was enacted. Pursuant to the Racing Distribution Agreement (RDA), TAB was entitled to a royalty free licence to use New South Wales racing information. In consideration of such a licence, TAB had agreed to pay substantial fees. During the period 1 September 2008

to 30 June 2009, TAB paid substantial fees under the statutory licensing scheme along with payments under the RDA. TAB then objected to the payment of the statutory fees, claiming that it had been given a royalty free licence to use the information under the RDA. The dispute was subsequently settled, with the payment by RNSW and HRNSW of amounts to TAB. These amounts, however, were much less than the amount payable by TAB under the statutory licensing scheme. It had been held by the Full Court of the Federal Court that ‘TAB did not obtain a discriminatory advantage, protectionist or otherwise, over Sportsbet by virtue of the payment’. The payment had been made to vindicate TAB’s pre-existing entitlements, ‘not because it was an intrastate [page 1081] trader, but because it had been, since the execution of the RDA in 1997, obliged to make substantial contributions to horse racing in New South Wales in return for rights correlative to its contributions’: 189 FCR 448, 476. The High Court agreed, adding that the settlement of the dispute was limited to fees charged under the Act for the period 1 September to 30 June 2009: 249 CLR at 323. The conclusion reached by the plurality was that the ‘practical operation of the Act with respect to the fees payable by Sportsbet was not to alter, impair or detract from the “positive rule” mandated by s 49 of the Self-Government Act, and s 109 of the Constitution was not engaged’: 249 CLR at 324. In a separate judgment, Heydon J also rejected the challenge. 9.4.35

The plurality in Sportsbet was, as the extract above

indicates, at pains to underline two key propositions concerning the operation of s 92 that they saw as in need of clarification. First, that s 92 is concerned with a provision’s practical effect and not with its legal operation. The plurality in Sportsbet was critical of the majority in Bath v Alston Holdings Pty Ltd for restricting its focus to the retail level of the tobacco market in Victoria, saying that this resulted in an analysis that placed too much emphasis on legal form. The Bath minority’s wider conception of the relevant ‘market’, which incorporated the wholesale stage and the tax incurred there, was said to provide a more accurate picture of the practical effect of the impugned provision. This analysis seems to imply that Bath was wrongly decided, rather than being, as often assumed, authority for the proposition that legal form is a relevant consideration when the impugned law takes the form of a tax. If so, this positioning by the plurality in Sportsbet may clear up one of the enduring ‘loose ends’ within the post-Cole s 92 jurisprudence, being the question of what Bath stands for, and why. The second proposition emphasised in Sportsbet is that s 92 is concerned exclusively with practical effect and not at all with apparent purpose. The plurality in Sportsbet were quick to extinguish any inference that might be drawn from the decision at first instance as to the relevance of a protectionist motive in the application of s 92 — whether directly or via s 49 of the Northern Territory Self-Government Act 1978 (Cth). The primary judge had indicated ((2010) 186 FCR 226 at 266–7) that a finding as to subjective intent — that is, the purpose for which a provision was enacted or a decision was made might in some circumstances be of indirect assistance in ascertaining a measure’s practical effect, where the latter was not clearly established on the evidence. His Honour had said ((2010) 186 FCR 226 at 267): ‘[W]here the nature of [a measure’s] effect is unclear, intention might have a part to play as a

factual indicator on the basis that the correct characterisation of a set of events often bears some relationship with the intentions of those events’ authors.’ This statement was prefaced by an explicit acknowledgement that subjective intent was of no direct relevance in ascertaining discriminatory protectionism. The High Court plurality, however, saw no such tiebreaker role for considerations of purpose in this context. Their Honours concluded, as had the Full Federal Court, that the primary judge’s reasoning was erroneous to the extent that it gave consideration, even if only indirectly, to the evident purpose underlying the impugned New South Wales rules and decisions. In view of this emphatically declared position, it is perhaps curious that the very similarly constituted plurality judgment in Betfair No 2, handed down on the same day, chose to make ‘objective intention’ an explicit part of its inquiry in that case: 249 CLR at 269. Leaving this anomaly aside, while some commentators have argued that the court should embrace purpose as a touchstone in the s 92 context (see Simpson, 2005 and citations therein), Sportsbet seems a decisive rejection of purpose as even a second-line consideration. For a more detailed consideration of how s 92 jurisprudence might best be reconciled with the changing nature of markets for goods and services in Australia, see Stellios, 2015, pp 177–84. [page 1082]

An expanded operation for s 92 — national markets?

9.4.36 Amelia Simpson wrote the following about the 2008 decision in Betfair. The most significant feature of the joint judgment is its restatement of s 92’s purpose and scope, in order to better reflect the circumstances of the ‘new economy’ centred around the internet. As the joint judgment acknowledged, geographic boundaries are a much less significant feature of trading activity in this new economy than they were when the Constitution was drafted. The rise of the new economy also post-dates the High Court’s consideration of s 92 in the leading cases of Cole and Castlemaine Tooheys. To keep pace, then, with the changing nature of trade and commerce, the joint judgment saw a need to de-emphasise State boundaries within s 92 doctrine. Channelling the broad concepts of political economy that motivated the inclusion of s 92 in the Constitution, the joint judgment explained the provision’s role in terms of policing interference with supply and/or demand within a particular national market, where that interference had anti-competitive (protectionist) consequences. This was considered the best contemporary expression of s 92’s ultimate object, framed as the ‘creation and fostering of national markets’ to serve the political goal of ‘national unity’ within the federation … The de-emphasising of geographic boundaries, evident in these criticisms and the re-formulation of principle, could herald an expansion of s 92’s domain … On the Betfair formulation, an anti-competitive law might trigger s 92, even where there is no discernible geographic element to the protectionism worked. (Simpson, 2008, p 193.)

9.4.37 These observations raise two related questions about the operation of s 92 in the ‘new economy’. First, to what extent are competition law principles relevant to s 92 analysis? Neither the plurality in Betfair No 2 nor the plurality in Sportsbet engaged with this point. However, the separate judgments of Heydon J and Kiefel J in Betfair No 2 seem to have come out on opposite sides of the debate. Heydon J (249 CLR at 272–3) appeared to resist any

appeal to competition law principles as guiding the application of s 92. On the other hand, Kiefel J (249 CLR at 293–4) appeared to accept the utility of such principles in the s 92 context. See also, extra-curially, Kiefel, 2010. Second, did the 2008 Betfair decision signal a shift in the operation of s 92 away from prohibiting State-based protectionist discrimination to preventing protectionism in a borderless national market? The court created some level of expectation that it would address this explicitly in deciding Betfair No 2. At the conclusion of argument the court asked the parties to make further written submissions on several questions, one of which was framed as follows: In the past, protectionist measures found to offend against s 92 have discriminated against interstate trade and protected intrastate trade, that is, local trade carried on within State borders. How does the concept of protectionism apply to trade carried on in a national market without reference to State borders?

Was the court contemplating a significant revision of the s 92 principle, to improve its fit with the ‘new economy’? Whatever the thinking at the time, the opportunity to move in this direction was not taken up in Betfair No 2, nor in Sportsbet soon after. The question was at least acknowledged by Kiefel J (249 CLR at 291–3) and the plurality (249 CLR at 271) in Betfair No 2, but their Honours left this ‘large question … for another day’. When that day arrives, the court will have to tread carefully if it resolves to contradict the unanimous view expressed in Barley Marketing Board (NSW) v Norman (1990) 171 CLR 182, 202–3 (Mason CJ, Brennan,

[page 1083] Deane, Dawson, Toohey, Gaudron and McHugh JJ) that a law does not infringe s 92 merely because it is anti-competitive.

Freedom of intercourse 9.4.38 So far the focus of this chapter has been on the ‘freedom of trade’ and ‘freedom of commerce’ dimensions of s 92. However, s 92 also protects ‘freedom of intercourse’. The constitutional concept of intercourse in s 92 was first considered in R v Smithers; Ex parte Benson (1912) 16 CLR 99. A New South Wales law made it a criminal offence for persons convicted and sentenced to a term of imprisonment of 1 year or longer to enter New South Wales within 3 years after completing their term of imprisonment. Benson was charged with the offence upon entering New South Wales 3 weeks after his release from a Victorian prison where he had served 10 months of a 1-year sentence for vagrancy. The High Court quashed his conviction. Justice Isaacs characterised freedom of intercourse as ‘a personal right in an Australian’ that was not limited to commercial contexts: 16 CLR at 113–14. Higgins J took a similar approach, saying that ‘[n]o due effect can be given to the word “intercourse” unless it be treated as including all migration or movement of persons from one State to another — of children returning for [sic] their holidays, of friends visiting friends, as well as of commercial travellers returning to their warehouse’: 16 CLR at 118. In obiter, Griffith CJ and Barton J each suggested that s 92 provides a right of access to the seat of government (16 CLR at 108–10) — a point later referred to in Pioneer Express Pty Ltd v

Hotchkiss (1958) 101 CLR 536 at 550 and Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 166. 9.4.39 Justice Higgins’s comment about visiting friends was prescient. In Gratwick v Johnson (1945) 70 CLR 1, the High Court considered the constitutional validity of an Order made under defence regulations that prohibited interstate travel without a permit granted by a federal agency (travel for defence purposes was exempted). Johnson travelled to Perth from Sydney without a permit to visit her fiancé. The appellant, a Commonwealth officer, argued that s 92 must be read down in times of war so as to permit regulations for the efficient prosecution of war including, in this instance, ensuring that transport systems were available for defence purposes. This argument was rejected on these facts. Chief Justice Latham characterised the federal provision as a ‘direct negation’ of s 92. Justice Starke said that s 92 conferred freedom ‘to pass to and fro among the States without burden, hindrance or restriction’: 70 CLR at 17. (This statement was endorsed by a unanimous court in Cole v Whitfield (1988) 165 CLR 360 at 393 9.4.13C.) Justice Dixon noted that the challenged Order did not ‘depend in any degree for its practical operation or administration upon the movement of troops, munitions, war supplies, or any like considerations’; rather, it was ‘simply based on the “inter–Stateness” of the journeys it assumes to control’: 70 CLR at 19. In Dixon J’s view, it was ‘going a long way to suggest that the imperative demands of national safety necessitate a general prohibition operating in every part of the continent of travelling without a permit by public conveyance’: 70 CLR at 20. McTiernan J described the regulation as a ‘direct interference’ with s 92: 70 CLR at 21.

9.4.40 The court in Gratwick indicated that there may be circumstances when the ‘absolutely free’ intercourse contemplated by s 92 might be permissibly restricted. Specifically, a law that is directed to some other legitimate end and imposes only an incidental burden or restriction on interstate intercourse may be valid. So, in AMS v AIF (1999) 199 CLR 160, the court considered the validity of provisions of Western Australian legislation that empowered the [page 1084] Western Australian Family Court to make orders preventing a parent from changing the principal residence of a child; in this case, such an order prevented a custodial parent from moving from Perth to Darwin. The ambit of s 92 of the Constitution was relevant to the case because s 49 of the Northern Territory Self-Government Act 1978 (Cth) provides that ‘[t]rade, commerce and intercourse between the Territory and the States, whether by means of internal carriage or ocean navigation, shall be absolutely free’. The court held that a law that impedes protected intercourse will not contravene s 92 if: (1) that effect is, in the circumstances, merely incidental to the pursuit of some other policy goal; and (2) the impugned law does not go beyond what is reasonably required to achieve that goal: 199 CLR at 178–9 per Gleeson CJ, McHugh and Gummow JJ; Hayne J agreeing at 232–3, similarly Gaudron J at 193 and Kirby J at 217. 9.4.41 This approach was again endorsed by the High Court in APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322, where the court upheld the Legal Profession Regulation 2002

(NSW) in so far as it prohibited the advertising by barristers and solicitors of legal services relating to personal injuries. It was accepted that Pt 14 of the Regulation covered interstate advertising, which included both commercial and non-commercial advertising. The plaintiffs had relied upon a range of constitutional arguments, including that the Regulation breached s 92. To the extent that the advertising constituted trade and commerce, the court held that Pt 14 of the Regulation did not discriminate in a protectionist way and, thus, was not offensive to the trade and commerce limb of s 92. On the other hand, to the extent that interstate advertising could instead be characterised as intercourse, a majority (224 CLR at 353 per Gleeson CJ and Heydon J; 393 per Gummow J; 462 per Hayne J) applied an approach similar to that taken in AMS v AIF: asking, first, whether the purpose of the law is to burden interstate intercourse; and, even if it is not, second, whether the law imposes a burden on interstate intercourse greater than that reasonably required to achieve the purpose of the legislation. In holding that there was no contravention of the intercourse limb, it was considered that: (1) Pt 14 of the Regulation was non-discriminatory and, therefore, did not target interstate advertising; and (2) the object of the Regulation could not be achieved without some incidental impediment upon interstate advertising. For further discussion of the intercourse limb of s 92, see Stellios, 2006.

ACQUISITION OF PROPERTY 9.5.1E

Commonwealth Constitution

51 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: … (xxxi) 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: …

Section 51(xxxi): role and relationship to other Commonwealth powers 9.5.2 Section 51(xxxi) seems to have been placed in the Commonwealth Constitution so as to ensure that parliament would have undisputed power to legislate for the compulsory [page 1085] acquisition of property. However, it also seems that the provision’s reference to ‘just terms’ was intended to provide a restraint on the power of compulsory acquisition; it was ‘intended to recognise the principle of the immunity of private and provincial property from interference by the federal authority, except on fair and equitable terms’: Quick and Garran, 1901, p 641. The presence of the

contingent right in s 51(xxxi) means that the requirement of just terms operates at any time the Commonwealth makes a compulsory acquisition of property under the section: Johnson Fear & Kingham v Commonwealth (1943) 67 CLR 314 at 318. In Bank of New South Wales v Commonwealth (1948) 76 CLR 1 9.5.12C at 349–50, Dixon J expressed the orthodox view of s 51(xxxi): Section 51(xxxi) serves a double purpose. It provides the Commonwealth Parliament with a legislative power of acquiring property: at the same time, as a condition upon the exercise of the power, it provides the individual or the State affected with a protection against governmental interferences with his proprietary rights without just recompense … In requiring just terms s 51(xxxi) fetters the legislative power by forbidding laws with respect to acquisition on any terms that are not just.

In Clunies-Ross v Commonwealth (1984) 155 CLR 193, Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ referred to s 51(xxxi) as having ‘assumed the status of a constitutional guarantee of just terms [which] was to be given the liberal construction appropriate to such a constitutional provision’:155 CLR at 202. 9.5.3 The constraints that, it is now acknowledged, s 51(xxxi) imposes on Commonwealth acquisition of property are not relevant where the Commonwealth negotiates, rather than imposes, an acquisition. In other words, s 51(xxxi) is concerned with compulsory acquisition; acquisition by ‘the method of requisition’ and not by ‘the method of agreement’: John Cooke & Co Pty Ltd v Commonwealth (1924) 34 CLR 269 at 282. As Stephen J said in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 9.5.15C and 9.5.16C, where the Commonwealth acquires property

through agreement, it is assumed that the terms agreed to by the owner of the property are ‘just terms’: 142 CLR at 417. 9.5.4 Section 51(xxxi) is not directed at acquisitions effected by the states under their state constitutions: Pye v Renshaw (1951) 84 CLR 58 at 79–80. However, if the Commonwealth makes a grant under s 96 of the Constitution to a state to effect an acquisition, then that arrangement may be subject to the ‘just terms’ requirement: 84 CLR at 83. It is now established that the power conferred by s 96 ‘does not extend to the grant of financial assistance to a State on terms and conditions requiring the State to acquire property on other than just terms’: ICM Agriculture Pty Ltd v Commonwealth of Australia (2009) 240 CLR 140 at 170 per French CJ, Gummow and Crennan JJ. 9.5.5 That proposition was first established in PJ Magennis Pty Ltd v The Commonwealth (1949) 80 CLR 382. In that case, a majority of the High Court (Latham CJ, Rich, Williams and Webb JJ; Dixon and McTiernan JJ dissenting) held that the War Service Land Settlement Agreements Act 1945 (Cth) was a law with respect to the acquisition of property and, because it did not provide for ‘just terms’, the Act was invalid. The Act approved an agreement made between the Commonwealth and New South Wales governments, under which the latter [page 1086] government was to acquire land (for distribution to discharged members of the defence forces) at 1942 values. Latham CJ said (80 CLR at 401):

The constitutional provision is not limited in terms to laws providing for the acquisition of property by the Commonwealth itself … It is obvious that the constitutional provision could readily be evaded if it did not apply to the acquisition by a corporation constituted by the Commonwealth or by an individual person authorized by a Commonwealth statute to acquire property. Further, the present case shows that the constitutional provision would be quite ineffective if by making an agreement with a State for the acquisition of property upon terms which were not just the Commonwealth Parliament could validly provide for the acquisition of property from any person to whom State legislation could be applied upon terms which paid no attention to justice.

Williams J (with whom Rich J agreed) said (80 CLR at 423–4): In my opinion the paragraph applies to all Commonwealth legislation the object of which is to acquire property for a purpose in respect of which the Commonwealth Parliament has power to make laws. It is immaterial whether the acquisition is to be made by the Commonwealth or by some body authorized to acquire the property by the Commonwealth or a State by agreement with the Commonwealth. In order to be legislation with respect to the acquisition of property within the meaning of s 51(xxxi) of the Constitution, the Commonwealth or some body authorized by the Commonwealth must no doubt have an interest in the acquisition of the property. Otherwise the acquisition could not be for a purpose in respect of which the Commonwealth Parliament has power to make laws. But the interest need not be a proprietary interest. Any legal interest including a contractual interest would be sufficient if it made the acquisition one for such a purpose.

9.5.6 This position has been endorsed more recently by the court in circumstances where the requirement is revealed in an intergovernmental agreement between the Commonwealth and a state or in the terms and conditions imposed on the grant by the

Commonwealth: see ICM Agriculture Pty Ltd v Commonwealth of Australia (2009) 240 CLR 140 at 170 per French CJ, Gummow and Crennan JJ; 206 per Heydon J. 9.5.7 However, Pye v Renshaw (1951) 84 CLR 58 is authority for the proposition that an informal arrangement ‘decoupled’ from the formal intergovernmental agreement or grant could include an understanding that a state would acquire property without s 51(xxxi) being implicated. In Magennis, the War Service Land Settlement Agreements Act 1945 (Cth) authorised the making of intergovernmental agreements with states providing for the acquisition by the states of land otherwise than on just terms. A majority held the Commonwealth law to be one with respect to acquisition of property. An amended scheme that was ‘decoupled’ from any arrangement or agreement with the Commonwealth was then upheld in Pye. The ‘decoupling’ and the difference in outcome between Magennis and Pye was explained in the following way by French CJ, Gummow and Crennan JJ in ICM Agriculture Pty Ltd v Commonwealth of Australia (240 CLR at 168–9): That there was some understanding or arrangement reached between the Commonwealth and the State after Magennis later appeared from Gilbert v Western Australia [(1962) 107 CLR 494]. There, Dixon CJ, Kitto and Windeyer JJ in the course of explaining the sequel to Magennis referred to correspondence at the Ministerial level and went on:

[page 1087] In one letter (dated 19th December 1951) the Prime Minister [Mr Menzies], having in mind that the decision in Magennis’s Case [(1949)

80 CLR 382] was regarded as having struck down Commonwealth participation in the 1945 Agreement, said: ‘The Commonwealth wishes to avoid, for constitutional reasons disclosed by the Magennis Case, any arrangement of a formal character.’ … And ‘In all the circumstances we feel strongly that the best legal foundation for future action can be provided by means of a grant of financial assistance pursuant to s 96 of the Constitution supplemented by an informal arrangement (in the form say of an exchange of letters) between governments setting out the conditions to be observed.’ This proposal was adopted.

The assumption being made was that the terms and conditions attached to a s 96 grant may sufficiently be disclosed in an informal fashion, falling short of an intergovernmental agreement of the kind seen in this case in the Funding Agreement. It is unnecessary to consider whether that reflected a correct understanding of s 96 and of its relation to s 61 of the Constitution. Further, it is significant — as the Victorian Solicitor-General stressed — that, in Pye v Renshaw, Magennis was not said to be overruled and that the reason why the Court found it unnecessary to do so is to be found in the ‘decoupling’ effected by the changes to the legislation in the intervening period. In Pye v Renshaw [(1951) 84 CLR 58 at 79] the Court referred to the deletion from all relevant State legislation of all reference to any agreement with the Commonwealth and all reference to any direct or indirect participation of the Commonwealth in any scheme of soldier settlement. In the companion decision upon the Victorian soldier settlement legislation, Tunnock v The State of Victoria [(1951) 84 CLR 42], Williams and Webb JJ, who had been in the majority in Magennis, concluded [at 56] that the Victorian Parliament had not intended the power of acquisition conferred by its statute ‘to be mere machinery’ for carrying out the agreement with the Commonwealth.

9.5.8 In ICM Agriculture, French CJ, Gummow and Crennan JJ at 168–70 doubted the conclusions reached in Pye. The possibility that the court might revisit Pye was highlighted by the court in Spencer v Commonwealth of Australia (2010) 241 CLR 118 at 133 per French CJ and Gummow J; 138 per Hayne, Crennan, Kiefel and Bell JJ; 142 per Heydon J, where the High Court set aside a Federal Court order dismissing proceedings claiming compulsory acquisition otherwise than on just terms in circumstances where there was an informal arrangement or understanding between the state and the Commonwealth. Given the doubts expressed about Pye by French CJ, Gummow and Crennan JJ in ICM Agriculture, the court in Spencer held that the Federal Court proceeding could not be dismissed, as it was, on the basis of there being no reasonable prospect of success. 9.5.9 Consistent with the fundamental character of s 51(xxxi), other Commonwealth legislative powers will not support legislation that acquires property on less than ‘just terms’. Dixon CJ expressed the point as follows in Attorney-General (Cth) v Schmidt (No 1) (1961) 105 CLR 361 at 372: [W]hen you have, as you do in par (xxxi), an express power, subject to a safeguard, restriction or qualification, to legislate on a particular subject or to a particular effect, it is in accordance with the soundest principles of interpretation to treat that as inconsistent with any construction of other powers conferred in the context which would mean that they included the same subject or produced the same effect and so authorized the same kind of legislation but without the safeguard, restriction or qualification.

[page 1088]

For example, after a period of uncertainty, it was accepted in Wurridjal v Commonwealth (2009) 237 CLR 309 that s 122 is subject to the just terms limitation in s 51(xxxi). (A detailed consideration of the relationship between s 122 and s 51(xxxi) can be found in the 9th edition of this book at 4.4.1–4.4.19C.) However, that proposition is not absolute. The High Court has determined that several other heads of legislative power will, in certain circumstances, support an acquisition of property that does not provide just terms.

What constitutes ‘property’? 9.5.10C

Minister of State for the Army v Dalziel (1944) 68 CLR 261

[Regulation 54 of the National Security (General) Regulations authorised the Commonwealth Government to enter into exclusive possession of privately owned land for an indefinite period. Regulation 60H authorised the minister to make orders determining the basis for the assessment and payment of compensation to the owner of any land affected by the Commonwealth’s entry into possession. The minister made an order directing that ‘in assessing compensation loss of occupation or profits shall not be taken into account’. Dalziel was the weekly tenant of vacant land in Sydney, used by him as a commercial car park. He had occupied and used the land for this purpose for 13 years. In May 1942, the Minister for the Army took possession of the land under reg 54 of the National Security (General) Regulations. Dalziel claimed compensation, to cover his rental payments and lost profits during the period of the Commonwealth’s occupancy of the land. Acting under the minister’s order made under reg 60H, a Commonwealth official determined that Dalziel should be

paid compensation limited to his rental liability, and that he should receive no compensation for his loss of profits. Dalziel applied to the Supreme Court of New South Wales for a review of the compensation (a review for which reg 60G provided). The Supreme Court held that the Commonwealth’s taking of possession was an acquisition of property within s 51(xxxi) and that reg 60H did not provide for just terms. The Minister for the Army appealed to the High Court.] Rich J: The placitum which is in question is concerned with the legislative power of the Commonwealth Parliament. One of the characteristic features of a fully sovereign power is its legal right to deal as it thinks fit with anything and everything within its territory. This includes what is described in the United States as eminent domain (dominium eminens), the right to take to itself any property within its territory, or any interest therein, on such terms and for such purposes as it thinks proper, eminent domain being thus the proprietary aspect of sovereignty. The Commonwealth of Australia is not, however, a fully sovereign power. Its legislature possesses only such powers as have been expressly conferred upon it, or as are implied in powers which have been expressly conferred. The subject of eminent domain is dealt with by the placitum now in question (s 51(xxxi)), which is in the following terms: ‘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 — 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.’ What we are concerned with is not a private document creating rights inter partes, but a Constitution containing a provision of a fundamental character designed to protect citizens from [page 1089]

being deprived of their property by the Sovereign State except upon just terms. The meaning of property in such a connection must be determined upon general principles of jurisprudence, not by the artificial refinements of any particular legal system or by reference to Sheppard’s Touchstone. The language used is perfectly general. It says the acquisition of property. It is not restricted to acquisition by particular methods or of particular types of interests, or to particular types of property. It extends to any acquisition of any interest in any property. It authorized such acquisition, but it expressly imposes two conditions on every such acquisition. It must be upon just terms, and it must be for a purpose in respect of which the Parliament has power to make laws. In the case now before us, the Minister has, in adversum, assumed possession of land of which Dalziel was weekly tenant. With all respect to the argument which has been addressed to us to the contrary, I am quite unable to understand how this can be said not to be an acquisition of property from Dalziel within the meaning of the placitum. Property, in relation to land, is a bundle of rights exercisable with respect to the land. The tenant of an unencumbered estate in fee simple in possession has the largest possible bundle. But there is nothing in the placitum to suggest that the legislature was intended to be at liberty to free itself from the restrictive provisions of the placitum by taking care to seize something short of the whole bundle owned by the person whom it was expropriating. Possession vaut titre in more senses than one. Not only is a right to possession a right of property, but where the object of proprietary rights is a tangible thing it is the most characteristic and essential of those rights … It would, in my opinion, be wholly inconsistent with the language of the placitum to hold that, whilst preventing the legislature from authorizing the acquisition of a citizen’s full title except upon just terms, it leaves it open to the legislature to seize possession and enjoy the full fruits of possession, indefinitely, on any terms it chooses, or upon no terms at all. In the case now before us, the Minister has seized and taken away from Dalziel

everything that made his weekly tenancy worth having, and has left him with the empty husk of tenancy. In such circumstances, he may well say: You take my house, when you do take the prop That doth sustain my house; you take my life, When you do take the means whereby I live. [Rich J referred to the distinction drawn in United Kingdom and state legislation between the ‘permanent appropriation of property’ and the ‘temporary assumption of the possession of adjacent property’, and continued:] But, with all respect, I fail to see how the practice of such legislatures, or the language used by judges in referring to their legislation, throws any light upon the construction or operation of placitum xxxi, occurring, as it does, in a Constitution which confers powers which are both limited and conditional. I venture to repeat what I said in Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77 at 106, 107: ‘It is by the Constitution itself that the acquisition is required to be on just terms, and, since Parliament is bound by the Constitution, by no artifice or device can it withdraw from the determination by a court of justice the question whether any terms which it has provided are just, that is, terms which secure adequate compensation to those who have been expropriated …’. If the argument which has been addressed to us on behalf of the Minister were allowed to prevail, the Commonwealth Parliament could authorize the Executive to take possession of not only all or any of the private property of citizens but also the property of the States and keep it indefinitely without paying a farthing of compensation to any one. To accede to this argument would be in effect to strike placitum xxxi out of the Constitution.

[page 1090] 9.5.11 Rich J held that reg 60H was invalid because it was ‘intended to confer upon the Minister an arbitrary discretion even when the Minister dispossesses a citizen not only of some, but of all, his rights of property in a particular subject-matter’: 68 CLR at 289. It followed that the minister’s order, limiting the amount of compensation payable, was also invalid. He held that the appeal should be dismissed. Starke, McTiernan and Williams JJ held that reg 54 provided for an acquisition of property within s 51(xxxi). Latham CJ dissented, holding that s 51(xxxi) was concerned with ownership and that ‘possession and ownership of land, though closely connected, are not identical’: 68 CLR at 276. McTiernan and Williams JJ also held that reg 60H and the minister’s order were invalid and that the appeal should be dismissed. Latham CJ and Williams J held that reg 60H and the minister’s order were valid, and would have allowed the appeal. 9.5.12C Bank of New South Wales v Commonwealth (1948) 76 CLR 1 [The Banking Act 1947 (Cth) provided a comprehensive legislative scheme under which the Commonwealth was to take over the business of private banks operating in Australia. Division 2 of Pt IV of the Banking Act authorised the Commonwealth Bank to purchase shares in private banks (s 12); authorised the Commonwealth Treasurer to direct that Australian shares in a private bank be vested in the Commonwealth Bank (s 13); and directed the Commonwealth Bank to pay fair and reasonable compensation for any acquisition of shares under s 13: s 15. Division 3 of Pt IV of the Banking Act provided that,

on a date to be specified, the directors of private banks should cease to hold office (s 17); that the Governor of the Commonwealth Bank with the approval of the Commonwealth Treasurer could appoint directors to fill the places of the removed directors (s 18); and that the newlyappointed directors should have full power to manage, direct and control the business and affairs of the bank of which they were directors, including a power to dispose of the business of the bank to the Commonwealth: s 19. All the private banks and several of their shareholders began an action in the High Court, seeking a declaration that the Banking Act was invalid.] Dixon J: [Dixon J referred to the provisions of Pts 2 and 3 of Div IV and continued:] [I]t will be seen that a notice by the Treasurer under s 13(1) operates to set in motion a process which expropriates the shares localized in Australia and at the same time displaces the authority over the affairs of the company, not only of the directors chosen by the shareholders, but of the shareholders themselves. It places all the property and all the activities of the company under the supreme control of the nominees of the Treasurer and the Bank and leaves them in entire control indefinitely with complete powers of disposition and complete power to bind the company as to the recompense it will receive for its assets. The corporate entity of the company remains and in it the legal property in the assets continues to reside. Shareholders are entitled to dividends if the nominees see fit to declare any. In a winding up, if there be one, shareholders remain entitled to participate as contributories. But in all other respects the beneficial enjoyment and control of the undertaking has been placed in the hands of agents of the Commonwealth, or of the Commonwealth Bank if the distinction is insisted on and in this matter can be clearly maintained. The purpose of removing the directors appointed by the shareholders and replacing them with nominees of the Treasurer and of the Governor of the Bank is

that agents of the Commonwealth may take command of the undertaking of [page 1091] the banking company and carry it on in the public, as opposed to private, interests pending decisions, in which they will play a part, concerning the acquisition of the assets by or their disposal to the Commonwealth Bank, the settling of the amount of compensation or the purchase price, and the transfer of the staff. The purposes of the whole operation authorized by Division 3 appear to me to be public. No doubt there is no interference with the ultimate right of the shareholders as contributories in a winding up to receive as a component of the distributable surplus so much profit as may have been earned under the regime of the nominees and as they have not chosen to distribute as dividend. But that and the legal conceptions involved in the continuance of the corporate existence of the banking company as the repository of the title to the undertaking is all that is left. In other words the undertaking is taken into the hands of agents of the Commonwealth so that it may be carried on, as it is conceived, in the public interest. The company and its shareholders are in a real sense, although not formally, stripped of the possession and control of the entire undertaking. The profits which may arise from it in the hands of the Commonwealth’s agents are still to be accounted for and in some form they will be represented in what the shareholders receive. But the effective deprivation of the company and its shareholders of the reality of proprietorship is the same. It must be remembered that complete dispositive power accompanies the control of the assets which passes to the nominees. It is as if an intending purchaser were enabled to put a receiver in possession of an estate and also to take a power of sale in the receiver’s name, remaining however accountable, until he pays the purchase money, for the rents and profits, which

nevertheless he may apply towards the upkeep of the property and, subject thereto, accumulate. Upon consideration I have reached the conclusion that this is but a circuitous device to acquire indirectly the substance of a proprietary interest without at once providing the just terms guaranteed by s 51(xxxi) of the Constitution when that is done. I take Minister of State for the Army v Dalziel [(1944) 68 CLR 261] to mean that s 51(xxxi) is not to be confined pedantically to the taking of title by the Commonwealth to some specific estate or interest in land recognized at law or in equity and to some specific form of property in a chattel or chose in action similarly recognized, but that it extends to innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property. Section 51(xxxi) serves a double purpose. It provides the Commonwealth Parliament with a legislative power of acquiring property: at the same time as a condition upon the exercise of the power it provides the individual or the State, affected with a protection against governmental interferences with his proprietary rights without just recompense. In both aspects consistency with the principles upon which constitutional provisions are interpreted and applied demands that the paragraph should be given as full and flexible an operation as will cover the objects it was designed to effect. Moreover, when a constitution undertakes to forbid or restrain some legislative course, there can be no prohibition to which it is more proper to apply the principle embodied in the maxim quando aliquid prohibetur, prohibetur et omne per quod devenitur adillud. In requiring just terms s 51(xxxi) fetters the legislative power by forbidding laws with respect to acquisition on any terms that are not just. In my opinion the provisions of s 13(1) and ss 16, 18, 19 amount to an indirect means of doing what the paragraph does not allow.

[Dixon J said that ss 13(1), 17, 18 and 19 operated to place ‘agents of the Commonwealth or of the Commonwealth Bank in control of the undertaking and arming them with powers’ over the private banks, and continued:] [page 1092] From that point of view I think they amount to an attempt to defeat the operation of s 51(xxxi). But the powers of disposition given by s 19 are themselves open to independent attack under s 51(xxxi). They are exercisable in favour of the Commonwealth Bank. When they are so exercised the Commonwealth Bank will acquire the Australian business of the private banking company in respect of which s 13(1) has been invoked or perhaps the whole undertaking of that company. It will do so on terms agreed between the nominees whom the Governor of the Commonwealth Bank has appointed with the approval of the Treasurer. Further, if the Treasurer gives a notice under s 22(1) and, whether before or after that notice, the nominees are appointed in consequence of a notice given under s 13(1), the nominees may make an agreement under s 22(5), or they may suffer an acquisition under s 24(4) and agree on the compensation under s 43(2), or fail to request a reference to the Court of Claims under s 44(3) and so accept the offer of the Commonwealth Bank. I cannot see how the powers of the nominees under s 19 can be reduced by any process of interpretation based on s 6 so as to avoid all or any of those positions. In my opinion each of them involves a conflict with s 51(xxxi). In each case the amount payable by the Commonwealth Bank for the assets of the private bank is left to the judgment of the nominees of the Commonwealth Bank. However high may be the level to which their legal duty may be raised, even if they be treated as full fiduciaries for the creditors and shareholders, it is all left to their judgment. In every case the acquisition by the

Commonwealth Bank should, in my opinion, be regarded as on the side of the company an involuntary disposition. For it would, I think, be quite wrong for the purposes of s 51(xxxi) to separate out the steps by which it is accomplished and exclude from consideration the compulsory superseding of the company’s directors chosen by the shareholders and the substitution of nominees of the Treasurer and the Governor. The fact that these officers may be free to act according to their own discretion in disposing of the company’s assets or in binding it to an amount of purchase money as compensation, appears to me to be nothing to the point. They are not agents appointed by the company. Any relation of agency on behalf of the company is compulsory and the work of statute. Their appointment would have been against the authentic will of the company. In substance they are agents of the Commonwealth armed by statute with power to bind the company. I think that the powers conferred by s 19 involve a conflict with s 51(xxxi). [Latham CJ, Rich, Starke, McTiernan and Williams JJ also held that Div 3 of Pt IV did not comply with s 51(xxxi) and was, accordingly, invalid. The court also held that the Banking Act was invalid because it infringed the separation of judicial power required by Ch III of the Constitution and because it denied the absolute freedom of interstate trade and commerce guaranteed by s 92.]

9.5.13 In Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297, the court held that claims in contract and tort are choses in action and, accordingly, are considered to be ‘property’ for the purposes of s 51(xxxi) of the Constitution. A law that prevented a person with such a claim from recovering damages for non-economic loss and prevented recovery of full economic loss was held to be invalid. It was considered that an ‘“acquisition” in s 51(xxxi) extends to the

extinguishment of a vested cause of action, at least where the extinguishment results in a direct benefit or financial gain … and the cause of action is one that arises under the general law’: 179 CLR at 305 per Mason CJ, Deane and Gaudron JJ. These conclusions were endorsed in Smith v ANL Ltd (2000) 204 CLR 493. [page 1093]

Acquisition where property interest taken by others 9.5.14 In view of the decision in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397, a law may be one for the acquisition of property, even though the Commonwealth takes no legal interest in the property in question. 9.5.15C Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 [Section 47(1) of the Trade Practices Act 1974 (Cth) prohibited a corporation from engaging in the practice of exclusive dealing. Section 76(1) of the Act provided for a ‘pecuniary penalty’ for breaches of s 47(1), and s 80 provided for an injunction to restrain breaches of s 47(1). Section 47(9)(a) of the Act provided that a corporation engaged in the practice of exclusive dealing if it refused to renew a lease of land for the reason that the other party to the lease was doing business with a competitor of the corporation.

Tooth & Co Ltd, a brewery and owner of many licensed hotels in New South Wales, leased those hotels to various tenants. A standard clause in the lease obliged the tenants not to purchase any alcohol or other drinks from any person other than Tooth & Co Ltd. According to evidence before the Federal Court of Australia, ‘on an average several leases expire in every week’. Tooth & Co Ltd began an action in the Federal Court of Australia for a declaration that it was not obliged to comply with s 47(1) and (9)(a) of the Trade Practices Act. A majority of the Full Court of the Federal Court held that s 47(9)(a) was invalid because it amounted to an ‘acquisition of property’ without ‘just terms’. The Trade Practices Commission appealed to the High Court of Australia.] Aickin J: [Aickin J said that it was assumed that, if s 47(9)(a) involved an acquisition of property, it would not be on just terms. He continued:] The argument before us was concerned with two questions only. First whether the operation of s 47(9)(a) of the Act when read with ss 76, 77 and 80, in relation to the renewal of a lease, comprised the acquisition of property within the meaning of s 51(xxxi). In such a case the lease would be granted, not to the Commonwealth or its agent, but to some other person or corporation. The second point was whether in the circumstances the requirement of just terms was applicable to this Act, but it was not contended for the appellants that if the operation of the Act produced an ‘acquisition’ it was on just terms. The cases establish that the concept of property in par (xxxi) is a wide one, see Minister of State for the Army v Dalziel (1944) 68 CLR 261 and that it includes interests in land which fall far short of full ownership. There can be no doubt that a leasehold interest in land is property, nor that a law requiring that the owner of land grant a lease to the Commonwealth would be an acquisition of property where that interest is by the operation of the legislation carved out of the larger interest of the landowner who holds the fee simple …

It was conceded that this court had in earlier decisions dealt with s 51(xxxi) by treating it as abstracting from other heads of power (including the incidental power) all content which would otherwise have enabled the compulsory acquisition of property, and as subjecting the power with respect to the acquisition to an obligation to provide just terms. Thus the paragraph ensured that whenever property was compulsorily acquired pursuant to a law of the Commonwealth just terms must be provided. It was acknowledged that the consequence was that no other head of power included a power to acquire property compulsorily for the [page 1094] purposes of that head of power because the totality of the power of compulsory acquisition was embodied in s 51(xxxi). The view so expressed is in my opinion plainly right … The question whether par (xxxi) applies to legislation which compulsorily acquires property … that it vests in some person other than the Commonwealth or an agency of the Commonwealth must now be regarded as settled. It was first referred to in Jenkins v The Commonwealth (1947) 74 CLR 400 by Williams J sitting in the original jurisdiction. He said: [(1947) 74 CLR at 406] ‘Section 51(xxxi) of the Constitution is not limited to acquisitions by the Commonwealth.’ The question arose again in McClintock v The Commonwealth (1947) 75 CLR 1 where Rich J, Starke J and Williams J all expressed the view that s 51(xxxi) was not limited to the acquisition of property by the Commonwealth itself but extended to the acquisition of property for any purpose in respect of which the Commonwealth has power to make laws. [Aickin J quoted passages from the judgments of Starke J and Williams J, and continued:]

With respect this view appears to me to be soundly based. It would be a serious gap in the constitutional safeguard which is the manifest policy of par (xxxi) if the Parliament could legislate for compulsory acquisition of property without just terms by statutory bodies which were not the Commonwealth itself or its agents or by persons or bodies having no connexion with the government. Neither the words of s 51 nor the context require the adoption of so anomalous a view. Accordingly the fact that under s 47(9)(a) of the Act the lease compulsorily acquired vests in a private individual or a company provides no reason why just terms need not be provided …

Acquisition vs regulation of property 9.5.16C Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 [The background to the litigation is set out at 9.5.15C.] Stephen J: What the legislature has done in s 47 is to proscribe in very broad terms a particular practice in trade. In doing so it has deprived all those to whom it is directed, whether they be landlords or one of the many other classes of persons capable of imposing the practice of exclusive dealing upon others, of the freedom to impose that practice … Many, if not all, of these instances involve restraints upon the free exercise of proprietary rights. Are, then, all these to be regarded as acquisitions subject to s 51(xxxi) and hence requiring for their validity the provision of just terms? If not, is there some special feature of sub-ss (8) and (9) or of such of their provisions as relate to the renewal of leases which so requires?

I would answer ‘No’ to each of the questions posed above. One may, I think, approach the first question by two rather different routes, each of which has led me to the same conclusion. The first is a route not dissimilar from that followed by their Lordships in Belfast Corporation v OD Cars Ltd [1960] AC 490. Their Lordships were there concerned with the town planning legislation of Northern Ireland and with types of restrictions which have of recent years become familiar in legislation of that character. The impairment of the rights of owners to develop and use their land which such legislation effected was not regarded by their Lordships as a [page 1095] ‘taking’ falling within s 5(1) of the Government of Ireland Act, 1920, which forbade the local legislature from enacting any law so as to ‘take any property without compensation’. Viscount Simonds [[1960] AC at 517] did not regard such restrictions upon the use of property in a particular way either as a ‘taking’ of ‘property’, as those words were commonly understood, or as within the phrase ‘take property without compensation’ in s 5(1). Having referred to the fact that from earliest times restraints had been imposed upon the use of property and that in modern times the very many instances of the necessary subordination of individual rights to the public interest did not encourage the giving of any enlarged meaning to that phrase, his Lordship went on to refer to American authority. He described as a clear guide in distinguishing between mere regulation of property rights and the ‘taking’ of property the dissenting judgment of Brandeis J in Pennsylvania Coal Co v Mahon 260 US 393 (1922) [67 Law Ed 322]. His Honour had there said: [260 US at 417 (1922): 67 Law Ed at 326–7]: Every restriction upon the use of property … deprives the

owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use. Viscount Simonds also cited from the judgment of Holmes J, who had said [260 US at 415 (1922): 67 Law Ed at 326] ‘The general rule at least is, that, while property may be regulated to a certain extent, if regulation goes too far it will be recognised as a taking’. His Lordship recognized that the distinction between regulation and confiscation might be one of degree but was in no doubt but that the instant case was of the former kind … [Stephen J referred to a passage from a United States encyclopaedia of law, Corpus Juris Secundum, on the distinction between ‘regulation’ and ‘taking’:] There is no set formula to determine where regulation ends and taking begins; so the question depends on the particular facts and the necessities of each case and the court must consider the extent of the public interest to be protected and the extent of regulation essential to protect that interest. On the one hand, many measures which in one way or another impair an owner’s exercise of his proprietary rights will involve no ‘acquisition’ such as pl (xxxi) speaks of. On the other hand, far reaching restrictions upon the use of property may in appropriate circumstances be seen to involve such an acquisition … In each case the particular circumstances must be ascertained and weighed and, as in all questions of degree, it will be idle to seek to draw precise lines in advance. With this in mind I turn to a statement of why it is that I do not regard the general effect of sub-ss (1) to (9) of s 47 as involving any acquisition of property. An important consideration is that these sub-sections are clearly directed only to the prevention of a noxious use of

proprietary rights. It is only to the extent that, in the exercise of those rights, the prohibited goal of exclusive dealing is sought to be attained that any restraint is imposed. So long as the supply of goods or services or the exercise of those powers which a lessor or potential lessor possesses is not made the occasion for the imposition of exclusive dealing no question of restraint occurs. In this sense the restraints imposed by s 47 are less sweeping in their impact upon proprietary rights than are those customarily imposed in, say, town planning legislation. In the latter it is common absolutely to prohibit certain uses of land, albeit in the public interest. The prohibitions contained in s 47 are never absolute but depend for their effect upon the mode of exercise: it is only when a particular mode of exercise [page 1096] of proprietary rights is in question, one that the legislation identifies as tending to promote exclusive dealing, that the prohibition takes effect. … The loss of freedom of action in relation to proprietary rights which s 47 involves is narrowly confined to the suppression of what the legislature has judged to be the noxious practice of exclusive dealing. Not only is there no question of the acquisition of property for its own sake; whatever restraints the section does impose upon the free exercise of proprietary rights apply only where, and to the extent to which, but for their existence, the aim of the legislature would be defeated. These considerations serve to confirm the initial impression gained from a reading of the section and an understanding of its operation: that s 47 effects no acquisition of property within pl (xxxi) … In this respect the section is no more an acquisition of property within pl (xxxi) than would be a law against racial discrimination which, in its application, might operate so as to

prevent a trader or lessor from refusing to sell goods to, or lease premises to, persons upon the ground of their particular race, colour or creed. The second route which may be pursued, and which has led me to the same conclusion, employs concepts some of which differ little from those already considered. It is founded upon an analysis of the phrase ‘acquisition on just terms’, which is central to pl (xxxi). The reference to ‘just terms’ throws light upon the particular meaning of ‘acquisition’ in the placitum. Despite early dicta to the contrary it is now well established that pl (xxxi) contemplates acquisition by ‘the method of requisition’, not by ‘the method of agreement’ (John Cooke & Co Pty Ltd v The Commonwealth (1924) 34 CLR 269 at 282 and see Poulton v The Commonwealth (1953) 89 CLR 540 at 573, per Fullagar J) … Section 51(xxxi) involves ‘a compound conception, namely acquisition-on-just-terms’ (Grace Bros Pty Ltd v The Commonwealth (1946) 72 CLR at 290, per Dixon J). An integral part of that conception is the need for just terms. The existence of that need presupposes an inability on the part of the owner of the property to insist upon payment of whatever amount he may nominate as the price of the thing acquired. The possession by an owner of an ability to so insist goes further than to deny the need for just terms, which he will then be in a position to secure for himself. It effectively denies recourse by the would-be taker to ‘the method of requisition’ since the owner can, by advancing his price, deter the taker at least to the point at which the obtaining of the price becomes more attractive than retention of the property. At that point requisition necessarily ceases to have meaning and becomes, of its own accord, agreement. Bearing in mind this feature of pl (xxxi), s 47 (references in sub-ss (8) and (9) to renewal of leases aside) can be seen nowhere to deprive the owner of property of insisting upon his own price for any property rights which he is otherwise obliged to

part with. The only exception to that proposition is the case of a differential price demanded by an owner of property as a means of compelling acceptance by the buyer of some exclusive dealing arrangement. [Barwick CJ delivered judgment to the same effect as Aickin J. Mason J agreed that s 47(9)(a) involved an acquisition of property, but held that the acquisition was on just terms, because it left a corporation free to negotiate the terms and conditions (other than a term insisting on exclusive dealing) of any renewed lease: 142 CLR at 433. Gibbs and Murphy JJ delivered separate judgments to the same effect as Stephen J. In the result, the High Court held by a majority (Barwick CJ and Aickin J dissenting) that s 47(9)(a) was valid.]

[page 1097] 9.5.17 In Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 4.2.22C and 4.3.22C, Tasmania argued that several pieces of Commonwealth legislation effected an acquisition of the state’s property because the legislation prevented the state from using land for a wide variety of purposes without the consent of the Commonwealth. Four members of the High Court considered this argument. Mason J said that the legislation restricted the uses to which Tasmania could put its land, giving a Commonwealth minister the power of veto; but it did not give to ‘the Commonwealth nor anyone else a proprietary interest of any kind in the property’, nor was there ‘a vesting of possession in the Commonwealth’ so that there was no acquisition of property: 158 CLR at 145. Murphy and

Brennan JJ adopted a similar approach: 158 CLR at 181 per Murphy J; 247–8 per Brennan J. 9.5.18 Deane J took a broader view of the type of legislation that could be caught by s 51(xxxi) and held that two pieces of legislation did acquire Tasmania’s property in the land in question. They were s 11 of the World Heritage (Properties Conservation) Act 1983 (Cth), which prohibited interference with any site of significance to people of the Aboriginal race, and regulations made under the National Parks and Wildlife Conservation Act 1975 (Cth), which prevented any construction works on identified state land. Deane J said that the restrictions on the use of the property imposed by the two pieces of legislation were so comprehensive that they were equivalent to a restrictive covenant, even though the Commonwealth was not taking for itself any material benefit of a proprietary nature. It was enough, Deane J said, to amount to an acquisition of property within s 51(xxxi) that the Commonwealth had, through its legislation, ‘brought about a position where the [state] land is effectively frozen unless the [Commonwealth] Minister consents to development of it’: 158 CLR at 286. 9.5.19C Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 [Uranium deposits were discovered at Coronation Hill in the Northern Territory in 1953. The traditional owners of the land and environmental groups opposed mining the deposits. Newcrest Mining held a number of mining leases at Coronation Hill granted from the Commonwealth between 1947 and 1974 under the Mining Ordinance 1939 (NT), which was made under the Northern Territory (Administration) Act 1920 (Cth). Following the grant of self-

government in 1978, the Northern Territory legislature passed the Mining Act 1980 (NT) repealing the 1939 Ordinance. The Northern Territory (Self-Government) Act 1978 s 50(2) provided that compulsory acquisition of property within the territory should not be made otherwise than on just terms. In 1979, the Commonwealth Government made a proclamation under s 7(2) of the National Parks and Wildlife Conservation Act 1975 (Cth), declaring an area that included part of the Newcrest leases to be a park (Stage 1 of Kakadu National Park) for the purposes of the Act. In 1987, the Commonwealth Parliament enacted the National Parks and Wildlife Conservation Amendment Act 1987, which inserted s 10(1A) in the principal Act. Section 10(1A) provided: ‘No operations for the recovery of minerals shall be carried on in Kakadu National Park’. Section 7 of the Amendment Act provided: ‘Notwithstanding any law of the Commonwealth or of the Northern Territory, the Commonwealth is not liable to pay compensation to any person by reason of the enactment of this Act.’ The [page 1098] Commonwealth Government subsequently extended the Kakadu National Park in what became known as Stage 3 of Kakadu National Park. Further proclamations were made on 13 November 1989 and 21 June 1991. The result of the proclamations and the Amendment Act was to prevent Newcrest from exercising its mining rights under its leases and to deprive it of any compensation for the deprivation. Newcrest commenced proceedings in the High Court in 1992, seeking a declaration that the proclamations and the provisions under which they were made were invalid. Newcrest argued that the Commonwealth had effected an acquisition of Newcrest’s interests in the land and the minerals, and that the provisions in the legislation that prevented Newcrest obtaining compensation for the deprivation of its interests amounted to an acquisition of property other than on just

terms contrary to s 51(xxxi) of the Constitution. The Commonwealth denied that any acquisition had occurred and contended that, if any acquisition had occurred, it was valid because it was made under the power conferred under s 122 of the Constitution, which was not subject to the requirement of just terms in s 51(xxxi). Mason CJ reserved the constitutional question relating to the operation of s 51(xxxi) and s 122 after remitting to the Federal Court the question of the validity of the leases. In May 1996, Brennan CJ ordered that the constitutional issue be reserved for consideration by the Full Court of the High Court. On the relationship between ss 51(xxxi) and 122, see the 9th edition of this book at 4.4.1–4.4.19C. On the question of whether the Commonwealth proclamations and provisions effected an acquisition of property other than on just terms, Brennan CJ, Toohey, Gaudron, Gummow and Kirby JJ concluded that they did. Gummow J offered the most extensive analysis on the issue.] Gummow J: None of the provisions relied upon by the appellants is expressed in direct language as effecting an acquisition of any property. However, the question is whether, even if not formally, the appellants effectively have been deprived of ‘the reality of proprietorship’ by the indirect acquisition, through the collective operation of the provisions of the Conservation Act, of ‘the substance of a proprietary interest’. I have referred earlier in these reasons to the passage in the judgment of Dixon J in Bank of NSW v The Commonwealth [(1948) 76 CLR 1 at 349] which supports these propositions. The appellants refer to the rights enjoyed in respect of the mining tenements under the 1939 Ordinance. These included, in the terms of the grants in the prescribed forms, a grant and demise of the relevant parcel of land and all the mines, veins, seams, lodes and deposits of the relevant minerals in, on or under the land, together with: … the rights, liberties, easements,

advantages and appurtenances thereto belonging or appertaining, excepting and reserving out of this demise all such portions of the said piece or parcel of land as are now lawfully occupied by persons other than the lessee, or any portion thereof which is now used for any public works or buildings whatsoever. The appellants say that, in substance, the Commonwealth and the Director acquired identifiable and measurable advantages. In the case of the Director, those advantages were the acquisition of the land freed from the rights of Newcrest to occupy and conduct mining operations thereon and, in the case of the Commonwealth, the minerals freed from the rights of Newcrest to mine them. In accordance with the authorities, that is sufficient derivation of an identifiable and measurable advantage to satisfy the constitutional requirement of an acquisition [Commonwealth v Tasmania (1983) 158 CLR 1 at 246–7, 283–3 (the Tasmanian Dam case)]. [page 1099] There is no reason why the identifiable benefit or advantage relating to the ownership or use of property, which is acquired, should correspond precisely to that which was taken [Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 279]. This is not a case in the category considered in Health Insurance Commission v Peverill [(1994) 179 CLR 226] where what was in issue were rights derived purely from statute and of their very nature inherently susceptible to the variation or extinguishment which had come to pass. I have referred to the proviso in the prescribed forms under the Mining Regulations made under the 1939 Ordinance. They disclose that there was an inherent but limited liability to impairment of the rights conferred by the mining tenements. But what was done was not in exercise of the rights of the Crown under that proviso and went far beyond that which could have been brought about by those means.

Further, the history of the Territory, beginning with the surrender and acceptance effected pursuant to s 111 of the Constitution, shows that the Commonwealth (or the Crown in right of the Commonwealth) acquired a radical title in the sense known to the common law and thereafter the Commonwealth dealt with the subject land in exercise of its rights of dominion over it. This involved the use of statute to carve out interests from the particular species of ownership enjoyed by the Commonwealth and, after self-government, by the Territory in the manner identified earlier in these reasons. It is not correct, for the purposes of the application of s 51(xxxi), to identify the property held by Newcrest as no more than a statutory privilege under a licensing system such as that considered in such decisions as Minister for Primary Industry and Energy v Davey [(1993) 47 FCR 151; 119 ALR 108] and Bienke v Minister for Primary Industries and Energy [(1996) 63 FCR 567]. Nor is this a case where there was merely an impairment of the bundle of rights constituting the property of Newcrest. An example of such impairment is found in Waterhouse v Minister for the Arts and Territories [(1993) 43 FCR 175; 119 ALR 89]. There, the prohibition on export of the painting in question left the owner free to retain, enjoy, display or otherwise make use of the painting and left him free to sell, mortgage or otherwise turn it to advantage subject to the requirement of an export permit if the owner or any other person desired to take it out of Australia. Here, there was an effective sterilisation of the rights constituting the property in question. That this is so is only emphasised upon a consideration of the contrary submission made by the Commonwealth and the Director. It is true, as they submit, that the mining tenements were not, in terms, extinguished. It is true also that Kakadu extended only 1,000 metres beneath the surface. But, on the surface and to that depth, s 10(1A) of the Conservation Act forbade the carrying out of operations for the recovery of minerals. The vesting in the Commonwealth of the minerals to that depth and the vesting of the surface and balance

of the relevant segments of the subterranean land in the Director had the effect, as a legal and practical matter, of denying to Newcrest the exercise of its rights under the mining tenements. [Gaudron and Toohey JJ agreed with Gummow J’s conclusions on the question of acquisition. Kirby J expressed a similar view at 638–9. Brennan CJ reached a similar conclusion (at 530) on the question of acquisition (although his Honour ultimately held that the provisions were supported by s 122 and not affected by the just terms requirement in s 51(xxxi):] Brennan CJ: By force of the amendments of the Conservation Act effected by the Conservation Amendment Act, the Commonwealth was left in undisturbed possession of the minerals on and under the land included in Kakadu National Park. The Commonwealth’s [page 1100] interest in respect of the minerals was enhanced by the sterilisation of Newcrest’s interests therein. In my opinion, by force of the impugned proclamations, the Commonwealth acquired property from Newcrest [Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 176, 223; Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305–306, 311–12]. The property consisted not in a right to possession or occupation of the relevant area of land nor in the bare leasehold interest vested in Newcrest but in the benefit of relief from the burden of Newcrest’s rights to carry on ‘operations for the recovery of minerals’. [Dawson J expressed no concluded view on the question of acquisition; his Honour assumed there to be an acquisition of property other than

on just terms, but decided the case on the basis that s 122 is not affected by the limitation in s 51(xxxi): at 552. In dissent on the question of acquisition, McHugh J referred (at 573) to the observations of Mason J in Commonwealth v Tasmania (Tasmanian Dam case) (1983) 158 CLR 1 at 145, to the effect that s 51(xxxi) did not apply merely because a pre-existing right was affected; either the Commonwealth or another must acquire an interest in property, and continued:] McHugh J: Newcrest’s right to mine was adversely affected by the proclamations. But what interest in property did the Commonwealth acquire? Newcrest’s interest in the lease was not forfeited or transferred to the Commonwealth or the Director. They already owned the interests in reversion in the minerals and land. Until the leases expired, the property interests of Newcrest in the land and minerals would continue as before. The effect of the proclamations was merely to impinge on Newcrest’s rights to exploit those interests. But even if there was effectively a diminution or extinguishment of all or part of Newcrest’s interests, there was no gain by the Commonwealth (or the Director). Both as a matter of substance and of form, the Commonwealth obtained nothing which it did not already have. In colloquial terms, Newcrest lost but the Commonwealth did not gain.

9.5.20 The Commonwealth’s Tobacco Plain Packaging Act 2011 (Cth) was the subject of challenge in JT International SA v Commonwealth (2012) 250 CLR 1. The Act regulated the way in which tobacco companies packaged their tobacco products, imposing strict requirements on the colour, shape and appearance of packaging. The colour to be used had to be a drab dark brown; health warnings had to be displayed across the packaging and the use of logos was prohibited. The plaintiffs challenged the validity of these provisions, claiming that their property rights, constituted

by various statutory and non-statutory intellectual property rights and their rights to use and control the packaging space, were compulsorily acquired without just terms in contravention of s 51(xxxi). A majority of six judges (Heydon J dissenting) rejected the challenge. Common to all judgments was that the intellectual property rights constituted ‘property’ for the purposes of s 51(xxxi). However, for the majority justices, there was no ‘acquisition’ by the Commonwealth or anyone else of any interest, benefit or advantage of a proprietary character. Consequently, the guarantee was not enlivened and just terms were not owed. [page 1101]

9.5.21C

JT International SA v Commonwealth of Australia [2012] HCA 43

[Gummow J’s judgment on the question of ‘acquisition’ is indicative of the way in which the majority resolved the issue.] Gummow J: In the Tasmanian Dam Case [(1983) 158 CLR 1 at 145–6] Mason J said of the federal legislation there under challenge: In terms of its potential for use, the property is sterilized, in much the same way as a park which is dedicated to public purposes or vested in trustees for public purposes, subject, of course, to such use or development as may attract the consent of the Minister. In this sense, the property is ‘dedicated’ or devoted to uses, ie, protection and conservation which, by virtue of Australia’s adoption of the

Convention and the legislation, have become purposes of the Commonwealth. However, what is important in the present context is that neither the Commonwealth nor anyone else acquires by virtue of the legislation a proprietary interest of any kind in the property. The power of the Minister to refuse consent under the section is merely a power of veto. He cannot positively authorize the doing of acts on the property. As the State remains in all respects the owner the consent of the Minister does not overcome or override an absence of consent by the State in its capacity as owner. Brennan J concluded [at 248]: Unless proprietary rights are acquired, par (xxxi) is immaterial to the validity of the impugned Commonwealth measures. Though the Act conferred a power upon the Minister to consent to the doing of acts which were otherwise prohibited on or in relation to land, that power was not a proprietary right. These statements exemplify the application of the established doctrine of the Court respecting s 51(xxxi). The objects of [the Act] stated … include the improvement in public health by discouraging people from using tobacco products and from relapsing if they have stopped such use, and by reducing exposure to smoke from tobacco products. Parliament desires to contribute to achievement of those objects by regulating the retail packaging and appearance of tobacco products to reduce their appeal to consumers, increasing the effectiveness of health warnings thereon and reducing the ability of retail packaging to mislead consumers about the harmful effects of using tobacco products.… Another object … is the giving of effect to certain obligations upon Australia as a party to the WHO Framework Convention on Tobacco Control, done at Geneva on 21 May 2003 (‘the Convention’).

JTI submits (i) there can be an ‘acquisition’ within s 51(xxxi) which is not proprietary in nature and (ii) the pursuit of the legislative purposes … of [the Act] confers the requisite advantage upon the Commonwealth to satisfy the requirement of an ‘acquisition’. Proposition (i) should be rejected as inconsistent with the authorities discussed above. As to (ii), pursuit of the legislative objectives stated in … [the Act] does not yield a benefit or advantage to the Commonwealth which is proprietary in nature. No doubt the implementation in municipal law of a treaty obligation of sufficient specificity may be a ‘purpose in respect of which the Parliament has power to may make laws’ within [page 1102] the meaning of s 51(xxxi). However, the reasoning and outcome in the Tasmanian Dam Case indicates, as is apparent from the passage in the reasons of Mason J set out above, that the mere discharge by the Commonwealth of a treaty obligation itself is insufficient to provide an ‘acquisition’ by the Commonwealth. JTI also points to the benefit to the Commonwealth in expected reduction in public expenditure on health care. But … the realisation of such an expectation is conjectural. So also is any suggested enhancement of goodwill attached to the Quitline logo already appearing in the health warnings on the packaging of the plaintiffs’ products. These outcomes would depend upon a complex interaction of regulatory, social and market forces …. In its submissions Philip Morris contended that it was sufficient that there has been obtained no more than some identifiable benefit or advantage, which, while not of a proprietary character, is at least a benefit or advantage ‘relating to the ownership or use of property’ (emphasis added). For this proposition Philip Morris relied upon the use of such words by Deane and Gaudron JJ in Mutual Pools & Staff Pty Ltd v The Commonwealth [(1994)

179 CLR 155 at 185]. Philip Morris then submitted that ‘the Act’ conferred such a benefit on the Commonwealth because the statutory regime ‘controlled’ the exploitation of the trade marks on the packaging even though the Commonwealth itself did not exploit the trade marks; it was sufficient that the control related to the use of the trade marks. … However, as Hayne and Bell JJ explain in passages in their reasons with which I agree [at [180]–[188]], to characterise as ‘control’ by ‘the Commonwealth’ compliance with federal law which prescribes what can and cannot appear on the retail packaging of tobacco products diverts attention from a fundamental question presented by s 51(xxxi) of the Constitution. Compliance with the federal law does not create a relationship between ‘the Commonwealth’ and the packaging which is proprietary in nature. Moreover, the major premise which Philip Morris sought to derive from the passage in the reasons of Deane and Gaudron JJ in Mutual Pools is not soundly based upon it. The passage in their Honours’ reasons in Mutual Pools reads [at 185]: Nonetheless, the fact remains that s 51(xxxi) is directed to ‘acquisition’ as distinct from deprivation. The extinguishment, modification or deprivation of rights in relation to property does not of itself constitute an acquisition of property. For there to be an ‘acquisition of property’, there must be an obtaining of at least some identifiable benefit or advantage relating to the ownership or use of property. On the other hand, it is possible to envisage circumstances in which an extinguishment, modification or deprivation of the proprietary rights of one person would involve an acquisition of property by another by reason of some identifiable and measurable countervailing benefit or advantage accruing to that other person as a result.

Deane and Gaudron JJ were distinguishing two species of benefit, each sufficient for an ‘acquisition’. The first would be exemplified by the acquisition of land by a resuming authority, where what was taken was received by the authority. The second would be exemplified by cases of a countervailing benefit or advantage of a proprietary nature. An example is the benefit or advantage to the obligee of an extinguished or modified chose in action, as in Georgiadis [(1994) 179 CLR 297] and ANL [(2000) 204 CLR 493]. In the latter case, Gleeson CJ said that the combined legal effect of the two statutory provisions in question was that ‘the appellant’s pre-existing common law right was modified; and a corresponding benefit was conferred on the respondent’ [at 500]. [page 1103] That is the sense in which the passage in the reasons of Deane and Gaudron JJ in Mutual Pools was understood by French CJ, Gummow and Crennan JJ in ICM Agriculture Pty Ltd v The Commonwealth [(2009) 240 CLR 140]. [His Honour concluded that there had been no acquisition of property. Gummow J referred with approval to what was said by Hayne and Bell JJ about whether the regulation of the packaging constituted an acquisition]. Hayne and Bell JJ: The tobacco companies’ submissions direct attention to the relationship between the Commonwealth, as the putative acquirer, and the object, in these cases the tangible object, in which it is said that the Commonwealth has obtained a proprietary interest. It is therefore necessary to examine in more detail how it was said that the Commonwealth gained the ‘use’ of, or ‘control’ over, the packaging in which tobacco products are sold. Though variously expressed, the tobacco companies submitted

that [the Act] gives the Commonwealth the use of, or control over, tobacco packaging because the Commonwealth or [the Act] (the submissions did not clearly identify which) required certain things to be done or not done on the packaging. But the requirements of [the Act] are no different in kind from any legislation that requires labels that warn against the use or misuse of a product, or tell the reader who to call or what to do if there has been a dangerous use of a product. Legislation that requires warning labels to be placed on products, even warning labels as extensive as those required by [the Act], effects no acquisition of property. When the seller or the maker of a product puts a warning on the packaging, the seller or maker cannot ‘exploit’ that part of the packaging by putting something else where the warning appears. And as the tobacco companies pointed out, [the Act] greatly restricts, even eliminates, their ability to use their packaging as they would wish. In the terms the tobacco companies used, they cannot exploit their packaging. But contrary to the central proposition that underpinned these arguments, no-one other than the tobacco company that is making or selling the product obtains any use of or control over the packaging. The tobacco companies use the packaging to sell the product; they own the packaging; they decide what the packaging will look like. Of course their choice about appearance is determined by the need to obey the law. But no-one other than the tobacco company makes the decision to sell and to sell in accordance with law. By prescribing what can and cannot appear on retail packaging [the Act] affects that packaging and those who produce and sell the tobacco products. But to characterise this effect as ‘control’ diverts attention from the fundamental question: does [the Act] give the Commonwealth a legal interest in the packaging or create a legal relation between the Commonwealth and the packaging that the law describes as ‘property’? Compliance with [the Act] creates no proprietary interest. …

[The

Act]

neither

permits

nor

requires

the

Commonwealth to use the packaging as advertising space. The Commonwealth makes no public announcement promoting or advertising anything. The packaging will convey messages to those who see it warning against using, or continuing to use, the product contained within the packaging. Statutory requirements for warning labels on goods will presumably always be intended to achieve some benefit: usually the avoidance of or reduction in harm. But the benefit or advantage that results from the tobacco companies complying with [the Act] is not proprietary. The Commonwealth acquires no property as a result of their compliance with [the Act]. [page 1104] [French CJ, Crennan and Kiefel JJ expressed similar conclusions. Heydon J dissented. There was disagreement on whether the Act effected a taking of the property interests. French CJ (at 34) and Gummow J (at 59–61) took the view that the Act imposed a substantial restriction on the enjoyment of intellectual property rights and thus constituted a taking. Crennan J disagreed: the intellectual property rights retained significant value despite the burden of regulation. For her Honour, s 51(xxxi) was not intended to preserve the value of property interests: at 106. Hayne and Bell JJ, and Kiefel J, avoided the issue.]

Resolving or adjusting competing claims 9.5.22 In Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155, the High Court held that the Commonwealth Parliament could legislate so as to limit the right of a manufacturer to recover from the Commonwealth moneys paid by the

manufacturer by way of an unconstitutional tax. The legislation was supported by s 51(ii) of the Constitution, the High Court held, and did not contravene s 51(xxxi). Mason CJ said that, generally, s 51(xxxi) required that the other legislative powers of the Commonwealth be read so as not to authorise the making of laws for the acquisition of property on other than just terms: 179 CLR at 169. However, a contrary indication might be read in the Constitution, either because of an express indication or because such an indication was implied in the very nature of such heads of power, such as s 51(xvii) (bankruptcy and insolvency), s 51(vi) (defence) and s 51(ii) (taxation): 179 CLR at 170–1. Mason CJ said that, if an acquisition was authorised by one of those other heads of power, they would not be restricted by the ‘just terms’ requirement; and that acquisitions under those heads of power commonly ‘provided a means of resolving or adjusting competing claims, obligations or property rights of individuals as an incident of the regulation of their relationship’: 179 CLR at 171. 9.5.23 More recently, the justification for statutory variation of property rights reflected in the phrase ‘genuine adjustment of competing rights, claims or obligations of persons in a particular relationship’ has been criticised as reflecting circular reasoning, and as ‘little more than a fiction intended to beautify what is disagreeable to the sufferers’: Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 299 per Gummow J, adopting the language of a justice of the United States Supreme Court in Tyson & Brother v Banton 273 US 418 at 446 (1927). See also 202 CLR 133 at 312 per Callinan J. If this criticism is right, then the question is whether it is possible to locate any unifying theme in the exceptional acquisitions referred to by the justices in the cases, such as the

acquisitions identified by Deane and Gaudron JJ in Health Insurance Commission v Peverill (1994) 179 CLR 226 9.5.27C. Or is the situation that ‘acquisitions’, understood in their broadest sense, are effected for a variety of purposes, and the most sensible approach is to isolate which purposes are susceptible to the ‘just terms’ guarantee, and which purposes are not, rather than to look for a unifying theme in the exceptions? 9.5.24 An approach that emphasises the purposes for which an acquisition is effected may be preferable, given that acquisitions are effected under many different powers in many different contexts. So, in Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134, the High Court held that the Circuit Layouts Act 1989 (Cth), which gave the designer of an electronic circuit the right to restrain other persons from using that circuit, was not a law for [page 1105] the acquisition of the property of those persons who were prevented from using the circuit. Mason CJ, Brennan, Deane, Toohey, Gaudron and Toohey JJ said that a law was not likely to be characterised as a law with respect to the acquisition of property within s 51(xxxi) if the law was ‘concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity’: 181 CLR at 161. They concluded that the Circuit Layouts Act was ‘a law for the adjustment and regulation of the competing claims, rights and liabilities of the designers or first makers of original circuit layouts and those who take advantage of, or benefit from, their work’; and was, therefore, beyond the reach of s 51(xxxi): 181 CLR at 161. At

base, the court believed that if the intellectual property power could be used to create intellectual property rights, then it could also be used to modify or extinguish those rights. 9.5.25 More recently, one judge has criticised this approach, at least in reference to intellectual property. In Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 70–1, Gummow J noted that intellectual property rights are defined as rights of personal property under federal laws, and it is only the modification (relevantly, the reduction in the content of such a right) by statute that might operate to immunise the modification from the ‘just terms’ requirement of s 51(xxxi). For that reason, the proposition that a right that has no existence apart from a law of the Commonwealth is therefore inherently subject to modification or diminution by later Commonwealth statute is ‘too broad’: 194 CLR at 70. The true distinction is between acquisition of a right and reduction in the content of that right: the former action is subject to s 51(xxxi) and the latter is not. 9.5.26 A focus on the purpose for which the acquisition was made characterised the High Court’s decision in Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133. In that case, the court considered the validity of a statutory lien imposed on aircraft to ensure payment of statutory charges under air navigation laws. The High Court concluded that the regulation, which was otherwise authorised by s 51(i) of the Constitution, did not attract the s 51(xxxi) requirement of ‘just terms’ because the charges were ‘appropriate and adapted’ to the regulation of air navigation (202 CLR at 180–1 per Gleeson CJ and Kirby J); ‘part of the regulatory scheme for civil aviation safety’ (202 CLR at 300 per Gummow J); or ‘concerned with the

adjustment of competing rights, claims or obligations of persons in a particular area of activity’: 202 CLR at 304–5 per Hayne J. McHugh J adopted a different approach: he said that the first question was not whether the impugned law could be characterised as a law with respect to another head of power but whether the law fell within s 51(xxxi); but, ‘[i]f the circumstances are such that the notion of fair compensation to the transferor is irrelevant or incongruous, the law is not a law with respect to s 51(xxxi)’: 202 CLR at 251. Here, the common law provided the reference point against which questions of irrelevance or incongruity were judged.

Rights inherently susceptible to variation 9.5.27C

Health Insurance Commission v Peverill (1994) 179 CLR 226

[The Health Insurance (Pathology Services) Act 1991 (Cth), which took effect from 1 August 1986, reduced the amount of Medicare benefits payable under s 20 of the Health Insurance Act 1973 (Cth) to a pathologist for performing rubella tests. Peverill, a pathologist [page 1106] who had performed rubella tests and claimed from the Health Insurance Commission the amounts then payable under the 1973 Act during the period from 1986–1991, sued the commission to recover the amounts payable under the 1973 Act. Peverill argued that the 1991 Act was invalid because it amounted to an acquisition of his property on other than just terms. In the Federal Court, Burchett J upheld Peverill’s objection to the 1991 Act: Peverill v

Health Insurance Commission (1991) 104 ALR 449. Burchett J decided that Peverill’s claim to payment of Medicare benefits was ‘property’ within s 51(xxxi); that the 1991 Act had the effect of acquiring Peverill’s property; and that acquisition did not provide Peverill with just terms. The Health Insurance Commission appealed to the Full Court of the Federal Court. The appeal was removed to the High Court under s 40 of the Judiciary Act 1903 (Cth).] Mason CJ, Deane and Gaudron JJ: The assignments, pursuant to s 20a of the Principal Act, by patients to Dr Peverill of their entitlements to medical benefits vested a statutory right in Dr Peverill to receive payment by the appellant Commission from consolidated revenue. But the acquisition of that statutory right by Dr Peverill was not an acquisition of property which fell within s 51(xxxi). That provision is directed, in our view, to requisition, not to voluntary acquisition [John Cook and Co Pty Ltd v Commonwealth (1924) 34 CLR 269 at 282]. The assignments were voluntary; there was no element of legislative compulsion about them … It may be accepted that the entitlement to payment for each service is a valuable ‘right’ or ‘interest’ of a kind which constitutes ‘property’ for the purposes of that paragraph [Minister of State for the Army v Dalziel (1944) 68 CLR 261]. But it does not follow that the legislative substitution of another and less valuable statutory right to receive a payment from consolidated revenue for that previously existing brings about an ‘acquisition’ of the earlier right for the purposes of s 51(xxxi) … There is no doubt that the derivation by the Commonwealth of a financial advantage in association with the extinguishment of a right to receive a payment from the Commonwealth may constitute an acquisition of property for the purposes of s 51(xxxi) of the Constitution [see Mutual Pools & Staff (1994) 179 CLR 155]. That could even be so in some cases in which extinguishment of the right takes place in the context of

some genuine adjustment made in the common interests of competing claims, rights and obligations between another party and the Commonwealth. However, here, the extinguishment of the earlier right to receive payment of a larger amount has been effected not only by way of genuine adjustment of competing claims, rights and obligations in the common interests between parties who stand in a particular relationship [see Mutual Pools & Staff (1994) 179 CLR at 171–2] but also as an element in a regulatory scheme for the provision of welfare benefits from public funds. The Amending Act seeks to correct a defect in the administration of the Principal Act in that, according to the decision of the Federal Court, the payments for the relevant tests carried out by Dr Peverill which it provided for were thought to be excessive … What the Amending Act does in this situation is to bring about the position that was thought by the Commission to have existed before the Federal Court decision. By achieving that result, the Amending Act brought about a genuine legislative adjustment of the competing claims made by patients, pathologists including Dr Peverill, the Commission and taxpayers. Clearly enough, the underlying perception was that it was in the common interest that these competing interests be adjusted so as to preserve the integrity of the health care system and ensure that the funds allocated to it are deployed to maximum advantage and not wasted in ‘windfall’ payments. [page 1107] It is significant that the rights that have been terminated or diminished are statutory entitlements to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognized by the general law. Rights of that kind are rights which, as a general rule, are inherently susceptible of variation. That is particularly so in the case of both the nature

and quantum of welfare benefits, such as the provision of medicare benefits in respect of medical services. Whether a particular medicare benefit should be provided and, if so, in what amount, calls for a carefully considered assessment of what services should be covered and what is reasonable remuneration for the service provided, the nature and the amount of the medicare benefit having regard to the community’s need for assistance, the capacity of government to pay and the future of health services in Australia. All these factors are susceptible of change so that it is to be expected that the level of benefits will change from time to time. Where such change is effected by a law which operates retrospectively to adjust competing claims or to overcome distortion, anomaly or unintended consequences in the working of the particular scheme, variations in outstanding entitlements to receive payments under the scheme may result. In such a case, what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property. More importantly, any incidental diminution in an individual’s entitlement to payment in such a case does not suffice to invest the law adjusting entitlements under the relevant statutory scheme with the distinct character of a law with respect to the acquisition of property for the purposes of s 51(xxxi) of the Constitution. [See Mutual Pools & Staff (1994) 179 CLR 155.] Brennan J: The Principal Act confers on assignee practitioners a right to be paid medicare benefits subject to the conditions prescribed but it does not create a debt. The right so conferred on assignee practitioners is not property: not only because the right is not assignable (though that is indicative of the incapacity of a third party to assume the right) but, more fundamentally, because a right to receive a benefit to be paid by a statutory authority in discharge of a statutory duty is not susceptible of any form of repetitive or continuing enjoyment and cannot be exchanged for or converted into any kind of property.

On analysis, such a right is susceptible of enjoyment only at the moment when the duty to pay is discharged. It does not have any degree of permanence or stability. That is not a right of a proprietary nature, though the money received when the medicare benefit is paid answers that description. [See Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300] … What the assignee practitioner acquires is a statutory right which, as between the practitioner and the Commonwealth (or the Commission), is a gratuity … [W]here a pecuniary benefit payable out of Consolidated Revenue is gratuitously provided by the Parliament to the beneficiary, the amount of the benefit remains until payment within the unfettered control of the Parliament. The distinction between a debt and the right conferred on assignee practitioners by the Principal Act is the difference between something owned and something expected, the fulfilment of the expectation being dependent on the continued will of the Parliament.

9.5.28 Dawson J held that no acquisition of property had occurred. He referred to the existence of a distinction between ‘taking’ and ‘acquisition’ (179 CLR at 248); the voluntary nature of the assignment (179 CLR at 249–50); the need for any acquisition to be for a Commonwealth purpose (179 CLR at 250–1); and the fact that although the Commonwealth’s liability has been reduced, conferring a financial advantage upon it, ‘nothing which answers the description of property’ has been acquired: 179 CLR at 251. [page 1108]

Toohey J said that although Dr Peverill’s interest was a chose in action which answered the description of property, no ‘acquisition of property’ had taken place because it was ‘impossible to identify any property or interest in property acquired by the Commission’: 179 CLR at 256. The Act was part of a ‘complex regime of health insurance’, and if the reduction had taken place but no assignment of benefit from patient to doctor had occurred, there would not have been any acquisition of property from the patient: 179 CLR at 256. 9.5.29 McHugh J referred to his comments in Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 where he had emphasised that not all acquisitions of property by the Commonwealth fall within s 51(xxxi), especially if they are ‘an inevitable consequence of a power conferred by s 51’ or ‘a reasonably proportional consequence of a breach of a law passed under such a power’: 179 CLR at 259. He said although the right to payment was property (179 CLR at 263), the amendment was in the nature of an alteration of a gratuitous statutory entitlement created by parliament (179 CLR at 260) which, consistent with the United States case law, was not in the nature of a vested right, and could be subject to change by parliament in the same way as it could alter an age pension: 179 CLR at 262–3. 9.5.30 This approach was applied in Commonwealth v WMC Resources Ltd (1998) 194 CLR 1, where a majority of the High Court (Brennan CJ, Gaudron, McHugh and Gummow JJ; Toohey and Kirby JJ dissenting) held that Commonwealth legislation, which reduced the area covered by a petroleum exploration permit issued under the Petroleum (Submerged Lands) Act 1967 (Cth)

and held by the respondent, was not an acquisition of property that was subject to the requirement of just terms expressed in s 51(xxxi). The permit had authorised WMC Resources Ltd to explore for petroleum in the Timor Gap (between Australia and the former Portuguese colony of East Timor) and, according to the 1967 Act, gave WMC Resources Ltd priority in the issue of a licence to recover any petroleum that might be located in the relevant area. The legislation reducing the area covered by the exploration permit was enacted in 1991 in order to give effect to an agreement between Australia and Indonesia, which established a Zone of Cooperation in the Timor Gap, in which petroleum exploration and recovery was to be jointly administered by Australia and Indonesia. In separate judgments, Gaudron, McHugh and Gummow JJ stressed the fact that the rights formerly held by WMC Resources Ltd had been created by statute; and, because those rights depended for their creation on statute, they could be removed by statute. For example, Gaudron J noted that, in Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297, Mason CJ, Deane and Gaudron JJ pointed out that, prima facie at least, a statutory right is inherently susceptible of statutory modification or extinguishment and no acquisition of property is effected by a law that simply modifies or extinguishes a statutory right that has no basis in the general law. In Gaudron J’s view, the legislation reducing the area covered by the exploration permit ‘simply modified a statutory right which had no basis in the general law and which was inherently susceptible to that course and, thus, did not effect an acquisition of property’: 194 CLR 1 at 38. McHugh J expressed his conclusion in wider terms (194 CLR at 51):

The power to make laws with respect to a subject described in s 51 carries with it the power to amend or repeal a law made on that subject. A property interest that is created by federal legislation, where no property interest previously existed, is necessarily of an inherently determinable character and is always liable to modification or extinguishment by a subsequent federal enactment. Section 51(xxxi) therefore does not ordinarily withdraw

[page 1109] from the parliament the authority to use another s 51 power to revoke or amend legislation that has been passed under that power, even when the legislation has created a property right. The fact that the Commonwealth or some other person might be viewed as benefiting from that alteration or revocation is irrelevant.

9.5.31 However, more recently, doubts have been expressed about this line of reasoning. In Smith v ANL Ltd (2000) 204 CLR 493, Smith was a merchant seaman injured while working for the respondent in December 1988. In 1999, legislation was enacted removing his right to bring an action. Following the High Court’s decision in Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297, a majority of the Court in Smith v ANL (Gleeson CJ, Gaudron, Gummow, Kirby and Callinan JJ; McHugh and Hayne JJ dissenting) held that there had been an acquisition of property (despite a transitional provision allowing the action to be commenced within 6 months of the enactment of the provisions). In the course of their judgment, Gaudron and Gummow JJ concluded that this was not a case involving rights which were inherently susceptible to variation (204 CLR at 514):

The point of distinction is that Mr Smith complains of the legislative impairment of his common law rights which were subsisting at the commencement of that legislation. The anterior rights which were reduced by subsequent legislation upheld in Health Insurance Commission v Peverill [(1994) 179 CLR 226] were the statutory rights of patients to payment of Medicare Benefits. These rights, pursuant to express statutory provision enabling this to be done, had been assigned to Dr Peverill …. Common law rights were not at stake as they are in the present litigation. The interests created by legislative regulatory schemes may inherently be susceptible of variation. However, in The Commonwealth v WMC Resources Ltd [(1998) 194 CLR 1 at 17, 29, 36– 8, 51–5, 68–75, 92–4. See also The Commonwealth v Mewett [(1997) 191 CLR 471 at 504–5], various views were expressed as to whether the submission that the enjoyment of any right created solely by a law of the Commonwealth always is contingent upon subsequent legislative abrogation or extinguishment, is too wide. The matter need not be further pursued here.

9.5.32 Callinan J expressed concerns about judgments that have emphasised the susceptibility of statutory rights to modification as a reason for the inapplicability of s 51(xxxi) (204 CLR at 551): I have, with respect, several concerns about the ways in which their Honours have stated the various propositions to which I have referred. Very few enactments over time remain unamended. I do not think that because an enactment may make specific reference to the possibility of a change to it, or to the nature of rights and interests created by or arising under it, that enactment is necessarily to be singled out from other legislation silent about such a possibility. The position might be different if the legislation were to make provision, in terms, at the outset, for the possible extinguishment, without compensation of rights and interests created by or arising under it … The Commonwealth, in order to undertake the ordinary business of government enters into innumerable commercial engagements. This is a matter of heightened significance in current times in which some corporations are either

wholly or partly owned and controlled by government but are exhorted to deal and act commercially …, and in which ‘outsourcing’ is strongly encouraged. The capacity of the Commonwealth to engage and act in this way, and the attractiveness of it as a contracting party to others, must depend, even without recourse to the Constitution, upon an underlying assumption that the Commonwealth will neither arbitrarily nor otherwise generally repudiate its obligations,

[page 1110] however created, without compensation. The Constitution should, and in my opinion does, by s 51(xxxi) underpin that assumption as a literal guarantee of it. … It follows that I do not think that a right to compensation should turn upon the way in which rights have originally arisen or have been created, whether by statute or otherwise.

9.5.33 These concerns were addressed in Attorney-General (NT) v Chaffey (2007) 231 CLR 651, where the High Court rejected any broad proposition that statutory rights are always inherently susceptible to modification and thus incapable of forming the basis of an acquisition for the purposes of s 51(xxxi). 9.5.34C

Attorney-General (NT) v Chaffey (2007) 231 CLR 651

[In Chaffey, the court considered the application of s 50 of the Northern Territory (Self Government) Act 1978 (Cth). Section 50(1) provides that the legislative power of the Northern Territory Legislative Assembly ‘does not extend to the making of laws with respect to the acquisition of property otherwise than on just terms’, and s 50(2)

provides that ‘the acquisition of any property in the Territory which, if the property were in a State, would be an acquisition to which paragraph 51(xxxi) of the Constitution would apply, shall not be made otherwise than on just terms.’ Mr Chaffey was injured at work while employed by Santos Ltd in September 2003. Section 53 in Pt V of the Work Health Act 1986 (NT) provided that, ‘subject to this Part’ where a worker becomes injured, his or her employer is to pay, ‘in accordance with this Part, such compensation as is prescribed’ by the Act and regulations. Section 52 provided that the statutory compensation scheme operated to the exclusion of certain common law actions that may have arisen. A component of the prescribed compensation was calculated by reference to a worker’s ‘remuneration’. In Hastings Deering (Australia) Ltd v Smith (2004) 18 NTLR 1, the Northern Territory Court of Appeal interpreted ‘remuneration’ to include a worker’s superannuation contributions. In 2004, the Northern Territory Legislative Assembly amended the Work Health Act to reverse the decision in Hastings: ‘remuneration’ for the purposes of calculating prescribed benefits was not to include superannuation contributions. The amendments commenced operation on 26 January 2005, but were to have retrospective operation in some circumstances, including in those of Mr Chaffey. The Full Court of the Northern Territory Supreme Court held that the amendments, in their application to Mr Chaffey, constituted an acquisition of his property contrary to s 50 of the Northern Territory (Self-Government) Act. On appeal, the High Court held that s 50 had no application to the change made by the 2004 Act. Although the case did not involve an application of s 51(xxxi), the court accepted that the principles applicable to s 50 were the same as those applicable to s 51(xxxi). The appellants argued that the words in the legislative scheme, ‘subject to this Part’ and ‘in accordance with this Part, such compensation as is prescribed’, were ‘naturally to be construed as identifying Pt V as amended from time to time’ and ‘as a reference to such compensation as is prescribed from time to time’. Thus, it was argued that ‘the amount of compensation payable to a worker by an employer had not been fixed in permanent form at the date of the injury

to Mr Chaffey and was always subject to variation’: at 662. The court accepted these submissions.] [page 1111] Gleeson CJ, Gummow, Hayne and Crennan JJ: In the Industrial Relations Act Case [(1996) 187 CLR 416 at 559] Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ observed: It is well established that the guarantee effected by s 51(xxxi) of the Constitution extends to protect against the acquisition, other than on just terms, of ‘every species of valuable right and interest including … choses in action’… It has been held to prohibit the extinguishment of vested causes of action … At least that is so if the extinguishment results ‘in a direct benefit or financial gain … and the cause of action is one that arises under the general law’… Further, contraction in what otherwise would be the measure of liability in respect of a cause of action or other ‘right’, may constitute an ‘acquisition’ of property for the purposes of s 51(xxxi) [see The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 16 [15], 29–30 [56], 37 [81]–[83], 49 [128]; Smith v ANL Ltd (2000) 204 CLR 493 at 499–500, 504–506, 525–526]. Hence the change brought about by the 2004 Act in the content of the ‘remuneration’ by reference to which the right of Mr Chaffey to compensation had been measured since 2003 could, all else being equal, constitute an ‘acquisition’ of property in the necessary sense. But these appeals do not turn upon the notion of ‘acquisition’. They depend upon the identification of the ‘property’ to which s 50 of the Self-Government Act is said to apply.

Counsel for Santos properly emphasised that the first task is to identify that bundle of rights which is said to constitute the ‘property’ to which s 50 of the Self-Government Act applies. Counsel for Mr Chaffey did not dispute this. The term ‘property’ is used in various settings to describe a range of legal and equitable estates and interests, corporeal and incorporeal [Yanner v Eaton (1999) 201 CLR 351 at 388–389]. In its use in s 51(xxxi) the term readily accommodates concepts of the general law. Where the asserted ‘property’ has no existence apart from statute further analysis is imperative. It is too broad a proposition, and one which neither party contended for in these appeals, that the contingency of subsequent legislative modification or extinguishment removes all statutory rights and interests from the scope of s 51(xxxi). Newcrest Mining (WA) Ltd v The Commonwealth [(1997) 190 CLR 513] is an example to the contrary. That case concerned the use of statute to carve out mining interests from the radical title enjoyed by the Commonwealth upon the acceptance of the Territory pursuant to s 111 of the Constitution. Again, a law reducing the content of subsisting statutory exclusive rights, such as those of copyright and patent owners, would attract the operation of s 51(xxxi) [The Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 70–71]. On the other hand, the statutory licensing scheme for off-shore petroleum exploration the validity of which was upheld in The Commonwealth v WMC Resources Ltd [(1998) 194 CLR 1. See also Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 163–165; Bienke v Minister for Primary Industries and Energy (1996) 63 FCR 567 at 585–587] was constructed so as to subject the scope and incidents of licences to the form of the legislation from time to time. In WMC, as with Pt V of the Work Health Act, by express legislative stipulation in existence at the time of the creation of the statutory ‘right’, its continued and fixed content depended upon the will from time to time of the legislature which created that ‘right’ …

The appellants’ construction of s 53 of the Work Health Act as it stood at the time of the injury suffered by Mr Chaffey is correct. The consequence is that his rights to [page 1112] compensation under that statute were of a nature which rendered them liable to variation by a provision such as that made by the 2004 Act. Once this nature of the ‘property’ involved is understood it is apparent that there was no ‘acquisition’ spoken of in s 50 of the Self-Government Act.

9.5.35 Callinan J agreed with the construction of the provisions by the joint judgment and their orders, but again emphasised that not all statutory rights will be immune from the operation of s 51(xxxi), and reiterated his concerns about the state of the law on s 51(xxxi): 231 CLR at 672. Kirby and Heydon JJ agreed that the statutory rights were inherently liable to variation, but also considered that the law was designed to adjust the competing rights, claims and obligations of persons in the particular relationship of employment and not a law with respect to acquisition (a claim that the joint judgment did not consider). Heydon J made the point that the rights were liable to variation, not because of the terms of the statute, but because those affected by the legislation would not have had expectations that the rights under the scheme would not be altered: 231 CLR at 673. The court’s decision in Telstra Corporation Ltd v Commonwealth of Australia (2008) 234 CLR 210 shows how difficult and subtle the constitutional analysis on s 51(xxxi) can be.

9.5.36C Telstra Corporation Ltd v Commonwealth of Australia (2008) 234 CLR 210 [Telstra instituted proceedings in the original jurisdiction of the High Court challenging the validity of certain provisions in Pt XIC of the Trade Practices Act 1974 (Cth): ss 152AL(3) and 152AR. Section 152AL(3) provided that the Australian Competition and Consumer Commission (ACCC) could declare a ‘carriage service’ (a service for carrying telecommunications) to be ‘declared services’. Section 152AR then provided that providers of declared services must comply with ‘standard access obligations’. These obligations essentially required providers to provide carriage services to other service providers to allow those other service providers to provide carriage services. The object of Pt XIC of the Trade Practices Act was ‘to promote the long-term interests of end-users of carriage services or of services provided by means of carriage services’. Part XIC was inserted into the Trade Practices Act shortly after the enactment of the Telecommunications Act 1997 (Cth), the main object of which was to provide a regulatory framework that promotes the long-term interests of end-users and the efficiency and international competitiveness of the Australian telecommunications industry. The public switched telephone network (PSTN) (the telephone infrastructure throughout Australia), including the local loops (the twisted pairs of wire running from a user’s premises to a local exchange) was owned by Telstra. The ACCC declared the local loops to be declared services under s 152AL(3) and, consequently, Telstra was required under s 152AR to comply with standard access obligations. Access by other carriage service providers to Telstra’s local loops required the physical disconnection of the local loop from Telstra’s equipment and the connection of the local loop to the equipment of the other provider. Telstra relied on this physical disconnection and lost use of its property in support of its argument that ss 152AL and 152AR resulted in an acquisition of its property. Thus, it argued that

compliance with the standard access obligations would deny it use of its loops. [page 1113] The history of the provision of telecommunications services in Australia was central to the resolution of the claim. Following federation, the Postmaster-General was given the exclusive privilege under the Post and Telegraph Act 1901 (Cth) to erect and maintain telegraph lines and transmit telegraphic and telephonic communications. By the enactment of the Telecommunications Commissions (Transitional Provisions) Act 1975 (Cth), the Commonwealth assets constituting the PSTN were transferred to the Australian Telecommunications Commission (renamed the Australian Telecommunications Corporation in 1989), a body corporate, established under the Telecommunications Act 1975 (Cth), which was subject to ministerial direction. The commission maintained the exclusive privilege of constructing, maintaining and operating telecommunications installations. Telstra was incorporated under the Corporations Law of the Australian Capital Territory in November 1991, with the Commonwealth being sole shareholder. All the property and rights of the Australian Telecommunications Corporation, including the PSTN, were vested in Telstra in February 1992. Prior to the incorporation of Telstra, the Commonwealth enacted the Telecommunications Act 1991 (Cth). The object of the Act included the promotion of competition in the telecommunications industry and enabling carriers to compete with each other on an equal basis. To that end, carriers (including Telstra) were given the right to access services supplied by other carriers. As the court in Telstra said at 223: Thus the PSTN was vested in Telstra, and Telstra operated as a ‘carrier’ under the 1991 Telecommunications Act, under a regulatory regime by which other carriers had the right to interconnect their facilities to Telstra’s network and to obtain

access to services supplied by Telstra, and Telstra had like rights with respect to other carriers. Telstra’s ownership of the assets of the PSTN vested in it in 1992 was subject to the statutory rights of access to the use of those assets by other carriers. Telstra remained wholly owned by the Commonwealth until the Commonwealth sold the majority of its shares through three share offerings in 1997, 1999 and 2006. The remaining shares were transferred to the Future Fund established by Commonwealth legislation in 2006. Section 152EB of the Trade Practices Act contained a standard form provision designed to avoid a claim that a Commonwealth provision effects an acquisition of property other than on just terms: (1) If: (a) a determination would result in an acquisition of property; and (b) the determination would not be valid, apart from this section, because a particular person has not been sufficiently compensated; the Commonwealth must pay that person: (c) a reasonable amount of compensation agreed on between the person and the Commonwealth; or (d) failing agreement — a reasonable amount of compensation determined by a court of competent jurisdiction. (2) In assessing compensation payable in a proceeding begun under this section, the following must be taken into account if they arise out of the same event or transaction: (a) any damages or compensation recovered, or other remedy, in a proceeding begun otherwise than under this section; (b) compensation awarded under a determination. (3) In this section:

acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution. [page 1114] The court held that s 152EB was applicable to Telstra’s claim. Thus, if ss 152AL(3) and 152AR effected an acquisition of property, just terms were afforded by s 152EB. Thus, Telstra’s claim for invalidity failed. In an event, the court held that there was no acquisition of property otherwise than on just terms.] Gleeson CJ, Gummow, Kirby, Hayne, Heydon, Crennan and Kiefel JJ: It is well established that s 51(xxxi) of the Constitution is concerned with matters of substance rather than form and that ‘acquisition’ and ‘property’ are to be construed liberally [Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 276 per Latham CJ, 284–5 per Rich J; Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 349–50 per Dixon J; Attorney-General (Cth) v Schmidt (No 1) (1961) 105 CLR 361 at 370–2 per Dixon CJ; Clunies-Ross v Commonwealth (1984) 155 CLR 193 at 201-2 per Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ; Georgiadis v Australian and Overseas Telecommunications Corp (1994) 179 CLR 297 at 303–4 per Mason CJ, Deane and Gaudron JJ; Commonwealth v WMC Resources Ltd (1998) 194 CLR 1 at 49 per McHugh J]. Moreover, ‘acquisition’ is to be understood in the ‘compound conception, namely, “acquisition-on-just-terms”’ [Grace Brothers Pty Ltd v Commonwealth (1946) 72 CLR 269 at 290 per Dixon J]. In the present case it is also useful to recognise the different senses in which the word ‘property’ may be used in legal discourse. Some of those different uses of the word were identified in Yanner v Eaton [(1999) 201 CLR 351 at 365–7 per

Gleeson CJ, Gaudron, Kirby and Hayne JJ; 388-9 per Gummow J]. In many cases, including at least some cases concerning s 51(xxxi) [Dalziel at CLR 285 per Rich J], it may be helpful to speak of property as a ‘bundle of rights’. At other times it may be more useful to identify property as ‘a legally endorsed concentration of power over things and resources’ [K Gray, ‘Property in Thin Air’, (1991) 50 CLJ 252, p 299 cited in Yanner at CLR 366 per Gleeson CJ, Gaudron, Kirby and Hayne JJ]. Seldom will it be useful to use the word ‘property’ as referring only to the subject-matter of that legally endorsed concentration of power … [The court noted that Telstra had advanced arguments relying upon the physical disconnection of the local loops from its equipment and the physical connection of the loops to a competitor’s equipment, and that a competitor would take possession of the loops — characterisations which sought ‘to draw analogies with other, more familiar forms of dealing with property’ (at 231), and continued:] It is not productive to analyse analogies of the kind just identified with a view to identifying the extent to which they are apt. And it is not useful to attempt to resolve the constitutional issues which a represented by applying descriptive expressions of the kinds deployed in argument (‘Telstra … loses control of and the ability to use the infrastructure’). Especially is this so where the defendants submit, as they did, that the rights in issue in this case, rights of use of local loops, were statutory rights inherently susceptible of change, that there was no compulsory acquisition and that there was ‘no deprivation of the reality of proprietorship’ of the local loops. Each of these branches of the defendants’ arguments sought to invoke particular elements of the long line of cases in this court in which s 51(xxxi) has been considered. At times argument proceeded as if discrete exceptions to the application of s 51(xxxi) can be identified as established in those decisions. So to approach the application of s 51(xxxi) may invite error. Rather

than begin from some constructed taxonomy of rule and exceptions to a rule, it is necessary to begin by recognising the force of the observation by Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ in Victoria v Commonwealth (the Industrial Relations [page 1115] Act case) [(1996) 187 CLR 416 at 559, cited in AttorneyGeneral (NT) v Chaffey (2007) 231 CLR 651 at 663] that: It is well established that the guarantee effected by s 51(xxxi) of the Constitution extends to protect against the acquisition, other than on just terms, of ‘every species of valuable right and interest including … choses in action’ [Dalziel at CLR 290. See also Bank of New South Wales at CLR 299 at 349; Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 509; Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 172, 176, 184, 194, 201, 222]. Further, references to statutory rights as being ‘inherently susceptible of change’ must not be permitted to mask the fact that ‘[i]t is too broad a proposition … that the contingency of subsequent legislative modification or extinguishment removes all statutory rights and interests from the scope of s 51(xxxi)’ [Chaffey (2007) 231 CLR 651 at 664]. Instead, analysis of the constitutional issues must begin from an understanding of the practical and legal operation of the legislative provisions that are in issue. In the particular circumstances of this case it is of special importance, in undertaking that task of understanding the operation of the relevant provisions, to recognise that the particular provisions of Pt XIC that are impugned in this litigation

must not be divorced from their statutory context, and must not be understood in isolation from the history of the provision and regulation of telephone and telecommunications services in Australia. There are three cardinal features of context and history that bear upon the constitutional issues which are raised. First, the PSTN which Telstra now owns (and of which the local loops form part) was originally a public asset owned and operated as a monopoly since federation by the Commonwealth. Second, the successive steps of corporatisation and privatisation that have led to Telstra now owning the PSTN (and the local loops that are now in issue) were steps which were accompanied by measures which gave competitors of Telstra access to the use of the assets of that network. In particular, as noted earlier in these reasons, the step of vesting assets of the PSTN in Telstra, in 1992, was preceded by the enactment of the 1991 Telecommunications Act. At all times thereafter Telstra has operated as a carrier, first under the 1991 Telecommunications Act, and later under the 1997 Telecommunications Act, within a regulatory regime by which other carriers have the right to interconnect their facilities to Telstra’s network and to obtain access to services supplied by Telstra, and Telstra has like rights with respect to other carriers. Telstra has never owned or operated any of the assets that now comprise the PSTN except under and in accordance with legislative provisions that were directed to promoting … competition in the telecommunications industry generally and among carriers’ [Section 136 (1) (a) of the 1991 Telecommunications Act] and sought to achieve this goal by ‘giving each carrier the right … to obtain access to services supplied by the other carriers’ [Section 136(2)(b)(ii) of the 1991 Telecommunications Act]. And the third feature of context and history which is of cardinal importance is that in 1992, when the assets of the PSTN were vested in Telstra, Telstra was wholly owned by the Commonwealth. When proper account is taken of these three considerations, it

becomes apparent that Telstra’s argument that there is an acquisition of its property otherwise than on just terms is, as Dixon J said in British Medical Association in Australia v Commonwealth [(1949) 79 CLR 201 at 270], ‘a synthetic argument, and … unreal’. The argument is synthetic and unreal because it proceeds from an unstated premise that Telstra has larger and more ample rights in respect of the PSTN than it has. But Telstra’s ‘bundle of rights’ in respect of the assets of the PSTN has never been of the nature and amplitude which its present argument assumes. [page 1116] Telstra’s bundle of rights in respect of the PSTN has always been subject to the rights of its competitors to require access to and use of the assets. And the engagement of the impugned provisions (ss 152AL(3) and 152AR) does not impair the bundle of rights constituting the property in question in a manner sufficient to attract the operation of s 51(xxxi) [Smith v ANL Ltd (2000) 204 CLR 493 at 505-6 per Gaudron and Gummow JJ]. Telstra succeeded to the ownership of the assets comprising the PSTN under legislative arrangements which may be described (not inaccurately) as requiring Telstra and its predecessors to buy, and pay for, those assets. It was not (and could not be) suggested that vesting those assets (and the associated liability to pay for the assets) in Telstra was other than a transfer of the assets to be held and used in accordance with and subject to the then regulatory regime contained in the 1991 Telecommunications Act. And it was not (and could not be) said that any question of acquisition of property was presented by the legislation which vested the assets in Telstra. Those assets were held by a Commonwealth statutory corporation and had previously been held directly by the Executive Government. The 1991 laws vesting the PSTN and other assets in Telstra, and establishing a

regulatory regime providing for access by Telstra’s competitors to Telstra’s network and services, were not laws with respect to the acquisition of property. In so far as those laws dealt with matters of property, they effected alterations in the property interests of, on the one side, a Commonwealth statutory corporation and, on the other side, a corporation wholly owned by the Commonwealth. It matters not that the latter corporation was taken not to have been incorporated or established for a public purpose or a purpose of the Commonwealth, was taken not to be a public authority or an instrumentality or agency of the Crown and, subject to some exceptions whose content is not now important, was not entitled to any immunity or privilege of the Commonwealth. What is important is that the rights in the assets vested in Telstra were rights to use the assets in connection with the provision of telecommunications services, but those rights were always subject to a statutory access regime which permitted other carriers to use the assets in question. The subsequent repeal of the 1991 Telecommunications Act and enactment of the 1997 Telecommunications Act altered the regulatory regime in various ways, but in one critical respect the regulatory regime did not change. Under the 1997 Telecommunications Act, as under the earlier legislation, other participants in the telecommunications market have access rights to Telstra’s network. The legislative provisions for exercise of those rights effect no acquisition of Telstra’s property in the local loops in issue.

No acquisition where just terms incongruent 9.5.37 It has long been established that certain acquisitions do not permit of just terms or are incapable of being characterised as an acquisition of property requiring just terms. For example, in

their joint judgment in Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155, Deane and Gaudron JJ listed acquisitions of property that had been held or indicated not to be subject to s 51(xxxi). These included: the imposition of a tax and provisional tax; the forfeiture of illegally imported goods in the hands of an innocent party; the imposition of a pecuniary penalty by way of civil proceedings; the seizure of property of subjects of a former enemy to be used in paying reparations; and vesting a bankrupt’s estate in an Official Receiver: 179 CLR at 187–8. The following cases explain this category and offer an explanation of why their facts did not involve acquisitions that come within s 51(xxxi). [page 1117]

9.5.38C Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 Aickin J: The cases dealing with bankruptcy, taxation and penalties require some examination. One general observation may however be made by way of introduction. Such subject matters may properly be said to involve, at least in some instances, the passing of the legal title and in others both the legal and the beneficial title to the Commonwealth, or its officers or to designated persons, but nonetheless the processes involved are not such as would ordinarily in 1900 or today be described as the ‘acquisition of property’ or as falling within its ordinary meaning. Taxation involves the compulsory payment of money to the Commonwealth according to prescribed criteria applicable to

persons who fall within the specified categories in a manner capable of testing in the courts. Its imposition creates a debt but does not compulsorily acquire property. No doubt when payment is made property in the cash or cheque passes to the Commonwealth but it is not a process capable of being categorized or described as ‘acquisition of property, save in a very unusual sense of that expression. It is thus not surprising to find that in Moore v The Commonwealth (1951) 82 CLR 547 and Federal Commissioner of Taxation v Clyne the Court held that legislation classified as laws with respect to taxation or imposing taxation were not laws with respect to the acquisition of property within the meaning of s 51(xxxi). In the latter case Dixon CJ said [(1958) 100 CLR at 263]: Little need be said of the argument based upon s 51(xxxi) of the Constitution. The argument is that ‘provisional tax’ is paid provisionally and returned without interest in the event of no tax accruing due. That is said to be an acquisition of property on terms not just. Once it is held that provisional tax is authorised by s 51(ii) it seems absurd to say that, within the meaning of s 51(xxxi), the sums paid or payable as provisional tax constitute property acquired for a purpose in respect of which Parliament has power to make laws. The purpose of the power itself which is conferred by s 51(ii) is to acquire money for public purposes and that is no less so if the money is raised provisionally and in advance of the actual accrual of the tax as debitum in praesenti solvendum in praesenti. In Burton v Honan (1952) 86 CLR 169 the court dealt with forfeiture of prohibited imports under the Customs Act. Dixon CJ said [(1952) 86 CLR at 180–1]: The short answer to this contention is that the whole matter lies outside the power given by s 51(xxxi). It is not an acquisition of property for any purpose in respect of which

Parliament has power to make laws. It is nothing but forfeiture imposed on all persons in derogation of any rights such persons might otherwise have in relation to the goods, a forfeiture imposed as part of the incidental power for the purpose of vindicating the Customs laws. It has no more to do with the acquisition of property for a purpose in respect of which the Parliament has power to make laws within s 51(xxxi) that has the imposition of taxation itself, or the forfeiture of goods in the hands of the actual offender. The other members of the court agreed with those reasons and did not deliver separate reasons for judgment. I take Dixon CJ in that passage and in another passage on the same page to use the expression ‘the acquisition of property for a purpose in respect of which the Parliament has power to make laws within s 51(xxxi)’ to indicate that in so far as the application of [page 1118] the Customs Act involves the passing of property to the Commonwealth it is not by ‘acquisition’ within the meaning of that term in s 51(xxxi). The same would be true of fines imposed by the courts for breaches of Acts of the Commonwealth Parliament and of various statutory penalties, including those referred to in s 76 of the Act. Both forfeiture under customs legislation and the imposition of fines by way of punishment for criminal offences were well known in 1900 and would not then or now ordinarily be described as the ‘acquisition of property’

9.5.39 The case of Theophanous v Commonwealth of Australia (2006) 225 CLR 101 provides a more recent example of this

category of laws, with the court concluding that ‘just terms’ would be ‘inconsistent’ or ‘incongruous’. 9.5.40C Theophanous v Commonwealth of Australia (2006) 225 CLR 101